14th Parliament · 1st Session
Mr. Speaker (Hon. G. J. Bell) took the chair at 2.30 p.m., and read prayers.
– In view of the widespread concern at the recent rise of interest rates, will the Prime Minister statewhether the Cabinet will consider the advisibility of asking the Royal Commission on the Monetary and Banking Systems of Australia to suspend its present inquiries with a view to making a specific inquiry into the subject of interest rates, and furnishing an interim report to the Government?
– From time to time suggestions are made to the Government with a view to the variation of the terms of reference to royal commissions. I have always regarded such variations as unwise, believing that commissions should be allowed to conduct their investigations in their own way. I consider that such a policy should be followed in this case. I have no doubt that the Royal Commission on the Monetary and Banking Systems will have its attention drawn to the particular subject of interest rates, and will make some inquiry into it. I prefer to leave the matter in its hands.
. -by leave - In view of the present European situation, and of the importance of the attitude of the German Government to the proposals of the other Locarno Powers, published in London on the 20th March, I desire to make a short statement to the House.
The substance of the note communicatedby the German Government yesterday regarding the Locarno situation is as follows: - “ The German Government, being convinced that by the Franco-Soviet military alliance the legal and political assumptions on which the Locarno Treaty was based have been removed, has determined to restore its full sovereignty over its entire territory. It considered that the entry of German troops into the Rhineland zone was necessary to provide for Germany the conditions of complete equality under which alone it could become a party to a new agreement for a clear and reasonable organization of peace in Europe. There are differences in the legal values of treaties to victors and vanquished by reason of the inequality of the conditions under which they are negotiated, and Germany, by restoring its sovereignty in its own territory, has now created the necessary conditions for negotiations. Germany still abides by its own proposals, but considers the proposals of the Locarno Powers as being based on a new discrimination and, therefore, unacceptable. The German Government sets more value upon a peace guaranteed for a long period as one of the securest bases for the revival of prosperity of the nation than on any assistance or relief negotiated as a result of economic conferences. In order to comply with the suggestion of the Government of the United Kingdom, by presenting new proposals, the German Government hopes to contribute its solution in due course, as soon as the elections in Germany are over. In the meantime, it has sent Herr von Ribbentrop again to London for verbal discussions. Its full proposals will be presented on the 31st March.”
I may add that the full text of the proposals placed before the German Government by the Locarno Powers is being laid on the table of the Library for the information of honorable members.
Mr.W ATKINS . - Will the Minister for Defence state whether it is a fact that the Government intends to proceed with the construction of sloops and destroyers as a part of its defence policy? If so, does it intend to have these vessels constructed in Australia?
– The proposals of the Naval Board for the future are not yet before the department. I shall keep in mind the suggestion of the honorable member.
– Will the Minister foi Defence consider the establishment of radio beacons at .Narromine and other imporrant centres on established air routes (
– I shall. 1 consider that radio beacons are of great value in connexion with aviation, and shall be very glad to establish, them as rapidly as finances will permit, especially in centres such as those referred to by the honorable member.
– “Will the Minister for Defence state whether it is a fact that the £7,000,000 programme in connexion with the rearmament of Australia and the improvement of its defences generally, which was intended to be spread over a period of three years, is now to embrace a very much shorter period? If so, is the honorable gentleman in a position to say why that lias become necessary, or to make a general statement on the matter?
– The sum of approximately £4,000,000 was set aside from the surplus of certain years for expenditure in connexion with defence, on a plan extending over a period of three years. That was in addition to amounts hypothecated from annual revenue. The third year of the programme is about to be entered upon. There has been no acceleration of the plan. The amount set aside at the beginning of it is being expended in the three years fixed, according to the original intention. What is now being done is to plan for a further three years; but no reliable details are yet available.
– In view of to-day’s press statement that alterations are to be carried out to strategic points of defence in Australia by re-modelling and bringing up to date the fortifications of such places as Sydney and Fremantle, and of a high military opinion that Hobart is one of the strategic points of defence in the Commonwealth, will the Minister for Defence say whether Fort Nelson will be brought up to date?
Mr. ARCHDALE PARKHILL.Some little time ago the honorable member asked me a question concerning the defences of strategic points, and 1 explained to him that Hobart was not regarded as one of the most important PO nts, but that its case would be dealt with in the next programme.
– lt is recognized by high military authorities as a strategicpoint.
– It is recognized by higher military authorities that it is of comparatively secondaryimportance.
– The honorable member for Werriwa (Mr. Lazzarini), during the* adjournment on Wednesday evening, expressed dissatisfaction with a reply furnished by the Prime Minister (Mr. Lyons) on the 18th March in connexion with the alleged export from Great. Britain to Italy of raw materials for the manufacture of high explosives and poison gases. The honorable member’s: question was : -
To which the Prime Minister replied: -
I may say that “ high explosives “ may mean complete shells and bombs, or the explosive material contained therein. Materials used for shells, bombs, and munitions of war are prohibited under Sanction 4, viz. : -
Bauxite, aluminium and alumina (aluminium oxide), iron ore and scrap iron;
Chromium, manganese, nickel, titanium, tungsten, vanadium, their ores and ferroalloys (and also ferro-molybdenum, ferrosilicon, ferro-silico-manganese and ferrosiliconmanganesealuminium ) :
Tin and tin-ore.
The list above includes all crude forms of the minerals and metals mentioned and their ores, scrap and alloys. Further, Proposal No. 1a includes -
Plume-throwers unci till other projectors used for chemical or incendiary warfare;
Mustard gas, lewisite, ethyldichlorarsine, methyldiehlorarsine, and all other products destined for chemical ov incendiary warfare;
Powder for war purposes, and explosives.
The information in the possession of the Government is to the effect that every part of the British Empire is closely observing the conditions of all sanctions, and the United Kingdom, especially, is losing more by their application than any other country. I submit, therefore, that information of a misleading nature was not given to the honorable member.
– In the event of Australia’s trade balance overseas necessitating a curtailment of imports, will the Government take drastic steps to restrict imports from the United States of America and other unsatisfactory customers, rather than restrict trade generally, which would affect good and bad customers alike?
– The honorable member will recognize that as a definite decision on tariff matters has not yet been reached, it would be unwise to answer the honorable member’s question at this stage. I can only say that when the Government finds it necessary to act, it will consider every aspect of the subject.
– Is the Treasurer yet in a position to inform the House whether the excellent improvement in the position of our London funds indicated by the Prime Minister (Mr. Lyons) the week before last has been maintained during the second and subsequent weeks of March?
– Yes. The improvement has quite definitely been maintained, and at the end of the third week in March the balance of exports over imports amounted to £20,100,000 sterling.
– Can the Treasurer give the total amount of London funds at the end of the third week in March, held by the Commonwealth Bank and by the private trading banks? On a previous occasion the question was evaded.
– The question was not evaded. Information as to the total London funds held by private banks is not available to the Government.
– Can the right honorable the Prime Minister inform the House of the approximate date on which honorable members may expect to receive printed copies of the report by the honorable member for Parramatta (Sir Frederick Stewart) on national insurance and hours of labour?
– I understand that printed copies will be available shortly.
– In view of the complaints of aviators as to the inadequate provision in the matter of hangars at Canberra, will the Minister for Defence see that proper accommodation for aeroplanes is provided at the Canberra aerodrome?
– I shall be glad to confer with the Minister for the Interior (Mr. Paterson) on the subject.
– I desire to direct a question to the Minister representing the Acting Attorney-General. I shall preface my question by directing the attention of the Minister to a recent decision of the High Court of Australia in connexion with an attempt to challenge the validity of the Transport Workers Act and the regulations under that act. The. decision was reached by four members of the High Court bench ; the two dissenting members being Mr. Justice Evatt and Mr. Justice Dixon. In connexion with the decision, Mr. Justice Evatt said : -
The disadvantages imposed upon the employees necessarily confer direct and distinct advantages upon the employers. The principle of “ compulsory labour “ typical of the “ servile State “, and vigorously condemned by Mr. Justice Higgins-
– Order !
– The quotation is necessary in order to make the position clear. It continues - . . but embodied in the present regulations it gives the employers specially valuable control over the human agency necessary to the profitable carrying on of their enterprise.
Mr. Justice Evatt who is recognized
– Order ! I am sure that the honorable member is sufficiently familiar with the Standing Orders’ governing the asking of questions to know that in asking a question he is not entitled to give information or offer opinions on the ability of a judge or any one else.
– I bow to your ruling, sir, but I recognize that in this Parliament
– The honorable member must ask his question without commenting upon my ruling.
– I was merely referring to the ability of one member of the High Court Bench-
– Order ! I ask the honorable member to resume his seat. The question is disallowed.
The following papers were presented : -
Commonwealth Bank Act - Treasurer’s Statement of combined accounts of Commonwealth Bank and Commonwealth Savings Bank at 31st December, 1035, together with certificate of the AuditorGeneral.
Seat of Government Acceptance Act and Seat of Government (Administration) Act; - Police Ordinance - Regulations Amended.
.- I move -
That, having regard to the fact that, by reason of the non-enactment of appropriate Commonweath legislation, the Divorce Court of each State must deny relief to a petitioner who, though domiciled in Australia is not domiciled in that State, this House is of opinion that legislation should be forthwith introduced to provide for a Commonwealth matrimonial domicil
I trust that the unprepossessing and technical exterior of this motion will not deter honorable members from interest in it because, if they will bear with me, I think I can show them that it is not only of great importance, but also of great human interest. Involved in it are questions of the validity of marriages of men and women and the legitimacy of children born of those marriages. At the federal conventions, this matter was discussed in great detail, and it was generally felt that it was of the utmost importance that the Federal Parliament should have the power to pass laws relating to divorce and matrimonial causes. We live in a world to-day in which people move about fairly freely; at any rate, in what we call ‘the western civilized communities, freedom of movement is exercised more and more as time goes on. As married people, or people living together and claiming to be married, move from country to country, questions arise as to whether their marriages are real and should be recognized, and whether the children horn of such marriages are legitimate or illegitimate. In order to settle this matter upon a more satisfactory basis which would have universal international recognition, the courts of the world have evolved the rule of the personal law. Each man and woman and each child has a personal law acquired from the community of which they are members. It is not some territorial law which may change from time to time; it is a personal law which attaches to the individual either by birth or by choice. The nations have adopted <this rule. Consequently if people are validly married according to the personal law, their marriage is universally recognized. Conversely, if they are not validly married according to the personal law, their union will not be recognized in every country. Similarly, children born of a marriage valid under the personal law are recognized as legitimate, and those born of a marriage not so recognized will not be recognized everywhere as legitimate. Because it deals with the status of men, women and children all over the world, this matter, as I have said, is one of the utmost human importance. Having said that all nations agreed upon the final test of the personal law, I have to refer to the regrettable fact that all the nations do not apply the same personal law. The obvious natural personal law is the law of nationality. Countries in continental
Europe, such as France, Germany, Spain, Italy, and, I think, Russia, apply that rule. They say that the personal law of a man is the law of nationality, and that the personal law of a woman is the law of her husband’s nationality. If that rule could be universally applied the existing difficulties could be simply overcome; but, unfortunately, special conditions in the British Commonwealth of Nations and the United States of America make it impossible for those countries to apply that rule. The British Commonwealth of Nations consists of a vast number of communities, some of which are self-governing, but all of which have different law districts; that is to say each has its own courts, divorce authority and marriage laws. In the British Isles alone there are, I think, seven law districts - Scotland, England, Northern Ireland, the Irish Free State, the Isle of Man, Jersey and Guernsey, each administering its own marriage laws. What is true of the British Isles is also true of Australia in which I think we have at least eight law districts - six State and two territorial. Each province of Canada and South Africa constitutes a separate law district. Then we have the Crown Colonies and India. In the United States of America, every one of the separate States is a separate law district. Consequently, the British Commonwealth ot Nations and the United States of America cannot apply the test of nationality, but have to rely on the older test of what is called domicil, which continental nations have already abandoned. Under that law, if a marriage is valid according to. the law of domicil of the husband, it is valid everywhere; if a divorce is valid by the law of the husband’s domicil, it is valid everywhere; and the offspring of a marriage valid by the law of domicil is legitimate everywhere. Domicil is ordinarily regarded by people as being somewhat the same as residence; but in the course of time it has come to mean something different, residence in most cases, residence, plus some other factor, in others, and not residence at all in some cases. Because everybody must have a personal law, the United States of America and British communities have had to evolve rules dealing with the matter. We start with the position that everybody in the world has a. domicil every child born in the world has a domiCil and every male and female child, acquires the domicil of its father and cannot change that domicil until the child becomes of full age or, if a female child, until that child marries. That is called the domicil of origin. A person never actually loses his domicil of origin ; no matter where he may go in the world he still retains it. The utmost that may be said is that domicil of origin may for the time being be suspended. It can be suspended if a person, leaving the country of his birth or original domicil, goes to another country and lives in that country in such a way as to show that he has chosen it as his permanent home; in short, if he has, of his own free will, made that country his permanent home. That is inferred, not only from the language he has used, or from what he has said but also from -what he has said and done, and from the way in which he is living and the circumstances and conditions in which he is residing in that new country. If he has satisfied the new conditions, he acquires a domicil of choice in that new country. If he leaves it, his domicil of choice parts from him and his domicil of origin returns to him.
Suppose that a man born in Scotland, and having a Scottish domicil of origin, comes to Australia and makes his permanent home in Victoria. He acquires a Victorian domicil of choice. He then leaves Victoria, and, as soon as he does so, although he may intend to reside in another Australian State, his Scottish domicil of origin returns to him. The law of Scotland applies to him, to his marriage, to his wife, and to his children, and he will not acquire another domicil of choice until he has evinced an intention permanently to reside in another community, and does reside there. The result of this is the problem with which we are faced in Australia, and to which I have referred in the motion before the House. Domicil of origin is acquired at birth. It is never actually lost. When a person who has a domicil of origin has acquired a domicil of choice by voluntarily residing in another country with the intention of making that his permanent home, his domicil of origin goes to sleep until it is awakened by his leaving his domicil of choice. As soon as he decides no longer to reside in his domicil of choice, the domicil of origin is revived until he has acquired another domicil of choice. In a country like Australia, with the mobility of its population and the contiguity of the several States, there is often considerable doubt whether a person coming from Great Britain has acquired a domicil anywhere in this country, and whether a person leaving one State thereafter acquires a domicil anywhere in Australia. The position of a married woman is that she depends on her husband’s status; she has the domicil of her husband. A man may come here from Scotland with a Scottish domicil of origin and may never acquire a domicil of choice in any Australian State, because although he may show an intention to live here, he may not show an intention to prefer one State to another. That man may marry in Australia, and yet his wife’s rights are determined by Scottish law. She may not apply to a Victorian court, or to another in Australia, for relief, because the statutory exception made in favour of deserted wives does “not apply. There is a statutory exception made in every State, by which a woman who is deserted in one State may sue there, being domiciled there at the time of the desertion ; but this does not give any protection to a. woman who has married a man with a British dom ici 1 and is seeking to divorce him.
Whether we believe in divorce or not, we have to remember that it is universally recognized. Practically every country in the world has divorce laws and courts administering them. Even in those countries where there are no divorce courts and divorce laws, marriages may be dissolved by the legislature. For example, the constitution of South Carolina forbids any court to dissolve a marriage. Yet marriages can be dissolved there, and often are, by the State legislature. In Northern Ireland there is no court which lias power to dissolve marriages, but residents who are wealthy enough can have their marriages dissolved by the legislature. Although, in the Canadian province of Quebec, there are no divorce courts and divorce laws, on looking through the statutes of Canada last year, I noticed that 35 persons living in Quebec had had their marriages dissolved by the Canadian Parliament. There is no doubt, of course, that the legislature of the Irish Free State could, if it desired, dissolve marriages.
– By legislation?
– Yes. With those few exceptions, every civilized country has divorce courts and divorce legislation. Consequently, divorce is a fact that we have to face. Marriages will be dissolved, and the persons whose marriages are dissolved are free to contract new marriages, and become the parents of children. Unless these new marriages and the children resulting from them are to be universally recognized, we have the scandal of marriages being recognized in one community and not in another, and of children being legitimate in one community and illegitimate in another.
To the special conditions existing in Australia, I have already referred. Let me mention them again. This is a country inhabited by people of one language and of practically one race. Our people have similar institutions, and move about freely. Men may lea’ve a State in which their homes are situated without indicating preference for any other State, and without having chosen one State as their permanent home. Persons of the same race and language, and having similar institutions to those of ourselves, are attracted here from overseas. They may come to Australia and make it their permanent home, without having shown a distinct preference for one State over another. But, in these circumstances, there is no domicil acquired by choice.
A person from overseas may retain his domicil of origin, and never acquire a. domicil anywhere in Australia. An Australian born in Victoria may find that in Queensland he is still regarded as having a domicil of origin in Victoria. This position we have power to remedy by legislation. I am not suggesting, at the present time, that there should be uniform divorce legislation throughout Australia, although I think that is desirable. It was to that end that power to pass laws with respect to divorce was given to the Commonwealth Parliament. T do not propose to go into details in dealing with this matter, because I should be trespassing upon a province that will be adequately developed by my seconder, who, I know, will tell the House of the considerations which moved the Federal Convention to place this power in the Constitution, and refer to the various comments made by the State courts and (he High Court upon the failure of the Commonwealth Parliament to act. The only time this Parliament legislated regarding this matter was in 1919, when it passed the Matrimonial Causes (Expeditionary Forces) Act, in which it applied to Australia a British temporary act, which provided that where members of dominion forces had married in Britain, although they were domiciled in a dominion, their marriages could be dissolved in that part of Britain in which they had been celebrated. We adopted that measure, but it was only of a temporary character, and expired at the end of one year. Other legislation has been introduced in this Parliament, but it ha? never gone far. The South African Union introduced a divorce bill in 1911, but abandoned the attempt to secure universal divorce laws. Although I am not contending for a universal divorce law, I urge that this Parliament should exercise its power over divorce so far as to provide for Commonwealth domicil and thus remove the difficulties to which 1 have referred.
I propose that we should have an Australian domicil and that a person who comes to Australia and lives in any part of it and chooses Australia as his permanent, final and definite home, should be regarded as domiciled in Australia, and that this should be acceptable in any State court. The present position is .that a woman or a. man may petition in the State in which she or he has been residing and find that, for some reason, the domicil is not in that State at all, but may be in the State in which the husband was born many years ago, although he has long since left the place and ceased to reside there. Or, again, the domicil may be in Great Britain or Ireland. My proposal will remedy that, and the court would be certain that as the person concerned had voluntarily and definitely chosen Australia as his permanent home, Australia was his domicil. If a person made this choice it would not matter, under my proposal, in which State or territory of Australia he made his home. It might be that he had not made a definite home or had not definitely chosen any particular State or territory. The conditions of his life-might oblige him to travel from one part of the Commonwealth to another but he would be part of the Australian community. As he had shown a definite choice for Australia, that would be regarded as his permanent home.
But we could not altogether stop there for we should have to provide each State court with Home test of jurisdiction in each case, so that a man or a woman would not need be unfairly brought from one end of the continent to another to answer a petition. One possible test would bc the place of celebration of the marriage, ft might be provided that the parties must go to that part of Australia where the marriage was celebrated. A difficulty of that test would be in relation to marriages celebrated overseas. I think, therefore, that we shall have to reject that test. Another possible test is one that used to be applied before the doctrine of domicil had hardened into its present technical form. That test was provided in the case of Niboyet v. Niboyet, and was to the effect that if the parties were ordinarily resident in Great Britain, and not casually resident there, and if the husband were actually there, the British court would have jurisdiction. That is not the law to-day. It has been discarded by all courts as the results of various decisions of the House of Lords and the Privy Council, but it offers a possible basis for a test. Another criterion is that provided by the Indian and Colonial Divorce Jurisdiction Act of 1926. Before 1921 the Indian courts had been in the habit of divorcing persons merely resident in India without paying regard to their domicil. In 1920, the Probate Division Court of England, decided that it could not recognize as valid divorces granted in India to persons domiciled in Great Britain. The British Parliament then passed an act in 1921, giving retrospective validity to divorces granted in India and in Kenya Colony. In 1926 the
Indian and Colonial Divorce Jurisdiction Act provided that the courts of India and other British dependencies to which it applied, but not including self-governing dominions, could, under the authority of the British Act, divorce persons domiciled in Great Britain but resident in India or the other dependencies affected. The condition was tL at in the case of Indian actions the petitioner must be resident in India at the time of the divorce proceedings, that India must be the last place of residence together, and that either the marriage must have been celebrated in India or the matrimonial offence involved must have taken place there. We thu3 have various tracks already laid down on which we could tread, and various tests, already used. The point is that we must have some tests as to which State should exercise jurisdiction, but the test should not be domicil. The domicil of a person should be settled once and for all by this Parliament, and the ‘States, in order to determine jurisdiction, should, under Commonwealth law, adopt such a test of jurisdiction - probably that of the usual place of residence.
It is of the greatest importance that, something shall be done in this matter. Although these laws affect probably only a few persons in any one year, those few persons have their lives to live and their rights to be considered. There are to be considered, for example, the woman who marries a divorced man, and the divorced woman who marries again, and also the children born of such a marriage. The status of the woman and children should be put beyond doubt, and that can easily be done in this country. I believe that it was in order that such a matter could be put beyond doubt, that this Parliament was invested with -the power contained in paragraph xxii of section 51 of the Constitution.
I wish to refer to one objection that I understand has been already raised by the Acting Attorney-General (Senator Brennan). This is that one State of Australia might, under such a proposal as I have made, become the Reno of Australia and, by making special laws which the other States of the Commonwealth would probably reject, attract divorce seekers to it. The answer to that contention is that such a procedure would be impossible within the Commonwealth. Reno became possible in the United States of America because there was no general control of marriage and divorce legislation in that country. The framers of our Constitution no doubt had in mind the scandal that existed in America, where each State has its separate divorce laws, and where there was no possibility of federal control, and determined that, in order that such a condition of affairs should not prevail in Australia, the Commonwealth Parliament should have control of marriage and divorce laws. This power was given tothe Commonwealth Parliament to make it impossible for any one State to imitate North Dakota or Nevada. If one Australian State did make conditions of divorce so attractive that people might be expected to flock to it to obtain divorces, this Parliament could effectively counteract such action; but in my opinion, it is not possible for any one State to provide conditions of divorce which the people as a. whole would not adopt. That is all I wish to say on that aspect of the subject.
I hope that I have invested this difficult and technical subject with some of the human interest which really belongs to it.
– I second this motion with a great deal of pleasure, not only because of its intrinsic merit, but also because it has behind it a great volume of legal authority and expert legal opinion, as I hope to show in the course of my remarks. I believe that I shall be able to indicate to honorable members that, for a long time, there has been strong and consistent advocacy of the principle underlying this proposal. Notwithstanding the very lucid exposition of the legal aspects of the subject by the mover of the motion (Mr. Blackburn), some honorable members may not have appreciated many of the practical difficulties which need to be overcome. I propose, therefore, to submit some illustrations to indicate the inconvenience experienced under the present system. I shall take hypothetical cases, although it would be possible to produce many actual cases that would conform to the various con- ditions which I shall outline. For purposes of illustration, let up suppose that a married couple is domiciled in Queensland; that is to say, they are living in Queensland and have their permanent home in that State. The husband leaves the wife under such circumstances that would give her grounds for divorce. Let us assume that he takes up his residence in Western Australia and lives there for a number of years. The wife, if she is in a position to produce evidence to show that she has grounds for a divorce, has to decide whether her husband has his permanent home in Western Australia, or whether he continues to retain his Queeusland domicil. Her lawyer may advise that in his opinion the husband has a Western Australian domicil. In order to take divorce proceeding against him, the wife may then be obliged to proceed with her counsel and witnesses to Western Australia and endeavour to prove her case in the courts of that State. The judge who hears the action may find that the husband has never lost his Queensland domicil. and will refuse to hear the case of the grounds that the Western Australian court has no jurisdiction in the matter. If the wife is still desirous of proceeding against her husband, she is then obliged to return with her retinue of witnesses and legal advisers to Queensland and recommence proceedings in that State. I can quote honorable members a similar instance of this very occurrence; it is cited in the 1934 volume of the Law Institute Journal, page 1S5, under the heading of “ Uniform Divorce Law “ -
A case (Kither v. Kither) recently tried before Mr. Justice Henchman once again illustrates the desirability of having uniform divorce law throughout the Commonwealth. A wife sued for divorce on the ground of adultery with a. woman unknown. The husband appeared to contest the jurisdiction of the Queensland court to dissolve the marriage, and on the evidence supplied by the wife alone, the judge was forced to the conclusion that the domicil of the plaintiff and defendant was in South Australia and not in Queensland.
The defendant was born in South Australia, the parties were married there and later had como to Brisbane to live. The defendant had deserted the plaintiff in Queensland and had returned to Adelaide where he had remained with his parents. Although His Honour found the misconduct established, the petition was dismissed with the result that if the plain tiff desires to obtain a divorce she will have to have recourse to the courts of South Australia.
The article proceeds -
How much simpler and more convenient would it be if the Federal Parliament would exercise its right of establishing uniform divorce law through the length and breadth of Australia.
There would be only one dom ici 1 for pinposes of divorce and one set of grounds for dissolution of marriage. It would be unnecessary for a plaintiff wife living in, say, Queensland, to have recourse to the courts of her husband’s domicil, e.g. Western Australia. She. would be able to sue in the Federal court, set up by the act in Queensland and thus save herself much worry and needless expense.
The peculiar part about the matter is that although most people favour the idea, the question is continually shelved, and looks like remaining shelved until there is a sufficiently powerful agitation to force the Commonwealth’s hand. All political parties seem afraid that by introducing a hill they will rend asunder their party; but it is a matter which should not admit of a party vote, but on which each member should be allowed to vote as he chooses.
Certain advantages of such legislation as is advocated will immediately suggest themselves to honorable members. In the first place, the law would obtain certainty; and, as I have had occasion to state earlier this week, certainty is an essential requirement of any legal system. But in matters of divorce, the present law of Australia lacks that desired element. If the omission were rectified, numbers of litigants would benefit by the saving of considerable expense and inconvenience, and many practical difficulties which now exist would be removed. It is inevitable that the rapid improvement in communications - the advance in the progress of which we see every day - creates difficulties of this kind, and may be expected to accentuate them in the future. The time has arrived for’ this National Parliament to take cognizance of the fact that the framers of the federal Constitution gave the Commonwealth certain powers over matrimonial matters, recognizing that such difficulties would arise in the future and that there would be a need for the introduction of legislation to meet them. We should examine our obligations in this matter with a view to giving effect to these powers. The general support which has been accorded to these suggestions, I shall endeavour to explain to the House in some short references that I shall cite in the next few minutes. Later, I propose to deal with some of the suggested objections which have been raised against the proposal of the honorable member for Bourke. The most lengthy reference which I shall quote to the House is that of Mr. Justice Isaacs, as he then was, in the case of Fremlin and Fremlin decided by the High Court of Australia in 1913. Sir Isaac Isaacs enjoys a reputation in this House, not only as a a political figure and as a public man, but also as a jurist of a renown ranking among the highest in the history of the Commonwealth. Therefore, his remarks on this subject, in view of the fact that he was closely connected with the foundation of federation, must carry considerable weight. On page 230 of volume 16 of the Commonwealth Law Reports, Mi. Justice Isaacs states -
Since domicil is. as a general principle, essential to jurisdiction, at all events to jurisdiction that will be recognized elsewhere, and as that depends so largely on the view that any particular tribunal takes of the facts, it is iri the highest degree desirable that the danger of a mistake should bc obviated so far as possible. And further, provided a real and substantial cause for divorce exists, it will he conceded that preliminary, though vital, obstacles to redress, and the risk of multiplicity of litigation, ought to be lessened or removed so far as law will permit. Uncertainty in matrimonial relations is altogether to be deprecated, and it is a scandal, as Lord Penzance said in a passage approved by the Privy Council in Lc Mcsurier v. Le Mesurier “ when a man and woman are held to be man and wife in one country, and strangers in another”. For the purposes of divorce jurisdiction, the Australian States arc still different countries. The difficulty must be faced where, as the Teamed lord said in the same passage, different communities have different views and laws respecting matrimonial obligations, ami a different estimate of the causes which should justify divorce. J£ut section 51, subsection (xxii) of the federal Constitution gives the Commonwealth Parliament power to make laws with respect to “divorce and matrimonial causes “, and I would wish to draw the attention of the Commonwealth Parliament to the question in order that consideration may be given to the desirability of allowing the present state of things to continue in the Australian community.
Sir William Harrison Moore, on page 45 of his classic work, Commonwealth of Australia, points out -
There is a good deal of diversity in the divorce laws of the States; and it is quite possible, so long as the States remain separate law districts, that parties may be married persons in the view of one State and single persons according to the law of another. The matter is complicated by the fact that the relation is principally governed by domicil, and in countries like Australia the conditions of life make it peculiarly difficult to ascertain the domicil.
He refers to disadvantages that exist in Australia under the present system of having one people with a common tradition, a homogeneous people, mixing freely with one another, and having a common code of morals. It would not be so easy to apply the law of common domicil to, say, European States in close proximity to one another where people of different nationalities are living. Sir John Quick, in the Legislative Powers of the Commonwealth and States of Australia, page 502, writes -
The necessity of a federal law relating to domicil has been frequently commented upon in divorce and matrimonial cases, both by the judges and counsel.
Wynes, a recognized authority on the Australian Constitution, in the Legislative and Executive Powers in Australia, page 160, also refers to this matter -
The desirability of action being taken to enact uniform legislation on the subjects of marriage and divorce in order to prevent the confusion attendant upon inconsistent rules in a number of contiguous communities, has often been the subject of comment.
To obtain the general feeling of the Australian legal profession, we may finally consider the Australian Law Journal, volume 5, page 215, under the heading, “Domicil and a Federal Divorce Law “-
Out of the matrimonial discords of sailors have sprung many decisions on the law of domicil. In a. recent case before the Ne” South Wales Full Court (Schache v. Schacho) , in which judgment was delivered on 9 Ot] October, not only was an important question nf domicil decided, but the desirability of federal intervention in this field was urged.
In concluding a judgment which was concurred in by Davidson and Halse Rogers, J.J., Street, G.J.. said: - “Before parting from’ the case I should like to say that I concur entirely with Pike. J., in expressing the hope that the Legislature of the Commonwealth may see its way to give consideration to the desirableness of allowing the present state of thing* as regards divorce jurisdiction, and domicil in that connexion, to continue in Australia. Upwards of eighteen years ago in Fremlin v. Fremlin (ig C.L.R. 212 at page 230), Isaacs,
J., as he then was, pointedly drew the atten tion of the Legislature to the matter, but up till the present time his suggestions have apparently remained unheeded.”
From those authorities it is evident that there is a crying need for the legislation contemplated in this motion. I have been unable to find any opinion to the contrary expressed by any other legal authority in Australia. On this question, there is unanimity of opinion in legal circles and among those social workers who have had experience of the domestic tragedies which have resulted from the parties not being able to obtain the redress to which they were justly entitled.
I now anticipate one or two objections which may be raised, and point out, first, that this legislation does not contemplate easier divorce, in the sense that the grounds for divorce are to be made easier. All that is contemplated is that, where the parties can establish that there are clear grounds for divorce, according to the law of their domicile, those parties should not be prevented from obtaining legal redress by reason of the fact that machinery difficulties stand in their way. It has been suggested that legislation of this kind would create an Australian Reno. It might even happen that “ tourists “ would be attracted to Canberra were this city to become the Australian divorce centre. Any objection to the proposal on that score falls to the ground when we consider the power that resides in the Commonwealth Parliament. The Acting Attorney-General (Senator Brennan) cited the United States of America as a country in which a divorce is easier to obtain in some States than in others, and suggested that that might happen here. In my opinion, the honorable gentleman has overlooked the fact that in the United States of America there is not the same federal control over matrimonial causes that there is in the Commonwealth. If any Australian State made the securing of a divorce so easy that persons would be attracted to it from other States in order to take advantage of those conditions, the Commonwealth could step in and remedy the position by the exercise of the power which it possesses. It was clearly contemplated by the founders of the federation that some such universal marriage law as the motion contemplates would inevitably have to be passed. In their innocence and guilelessness, they thought that the matter would be attended to within a few months. That point was dealt with by the Honorable E. E. 0’Connor. whose opinion I quote from the official report of the debates of the Australasian Federal Convention, at page 1080-
If there is one blot which stands out more than another in the American Constitution, it is that, by their Constitution, they arc not able to deal with this question in a uniform way; and we all know that this has led to a condition of things socially of a most deplorable character. Persons who, according to the law of the State in which they reside, would have no chance of being divorced, may become domiciled in another State by living there a certain time, and then, according to the laws of that State, may obtain divorce for reasons which, in their own State, would have been ludicrous as a ground of divorce.
He went on to say that such a state of affairs would be impossible were the divorce legislation uniform throughout the federation. I shall not detain the House longer, because I think that it has already been shown that the suggested objections to such a measure fall to the ground on the most cursory examination. There is undoubtedly need for some such legislation as this motion contemplates. The views expressed by the mover of the motion and myself are supported by the full force of legal opinion from the foundation of the federation to the present time. The Government would do well to give this subject serious and immediate consideration.
Debate (on motion by Mr. Hughes) adjourned.
Motion (by Mr. Archdale Parkhill) put -
That the Standing and Sessional Orders be suspended to enable government business to take precedence over general business for the remainder of this sitting.
The House divided. (Mr. Speaker - Hon. G-. j. Bell.)
Majority . . . . 20
– There being an absolute majority of the members of the House voting with the “ Ayes “, I declare the question so resolved in the affirmative.
SUPPLY (Formal). Yugoslav Newspaper.
Motion (by Mr. Archdale Parkhill) proposed -
That Mr. Speaker do now leave the chair.
.- In November of last year an application was made by the Federation of Yugoslav “Workers Educational Clubs for permission to publish a newspaper in Australia in the Croatian language. Permission has to be obtained before a newspaper in any foreign language can ‘be published in Australia, and already newspapers are published in this country in the Italian, German, Greek, Maltese, and Jewish languages. These are issued freely, and I do not think any harm results from their circulation. The application to which I am now referring has been refused and, although a question was put recently to the Minister by the honorable member for Melbourne Ports (Mr. Holloway) on this matter, no reason was given for the refusal. The Government should have a very strong reason to justify the refusal of this application, because the Yugoslav residents in Australia are among the most peaceable, orderly, and industrious people in this country, and also because it has granted permission to other nationals to publish newspapers. Furthermore, I point, out that if this application be granted the permit can be withdrawn at any time if the newspaper offends against the spirit of the permit, as was done last year in the case of a newspaper which published an article subversive of the British Empire. I suggest that the Minister should give the real reason for the refusal of this application.
Motion (by Mr. Archdale Parkhill) agreed to -
That the question be now put.
Original question resolved in the negative.
Customs Tariff Amendments Nos. 3 and 4
In Committee of Ways and Means: Consideration resumed from the 25th March (vide page 584) on the motion by Mr. White (vide page 2044, Volume 147)-
That the schedule to the Customs Tariffs 1933-
And on further motion by Mr. White (vide page 441) -
That the schedule to the Customs Tariffs 1033 … be further amended as hereunder set out . . .
Item 137 (Aluminium angles, &c, nickel angles, &c).
Item 136, including sub-items e andf were agreed to last night. The committee is now dealing with item 137.
– The rates provided in the 1932 tariff for these subitems are not varied by the present proposal, the effect of which is to bring within the scope of the provisions of sub-items 137 a 2 and 137 a 3 goods of the description mentioned in those items when imported in a plated, polished or decorated condition. This has been accomplished by a re-drafting of the subitem. Previously, such goods were covered by the sub-items under discussion only when not plated, polished or decorated ; otherwise they were subject to duty under item 146.
.- We have had one experience of items dealing with fencing wire and wire for the purpose of making rabbit netting being put through without an opportunity being provided to discuss them. I want to know whether anything is involved in the present item other than appears.
– There is nothing else.
Item agreed to.
Item 138 agreed to.
By omitting the whole of sub-item (b) and inserting in its stead the following sub-item: - “(b) Angles, bars, channels, pipes, plates, rods, sheets, strips, tees and tubes, not further manufactured than plated polished or decorated; wire per lb., intermediate, 31/2d. ; general, 31/2d.; and ad valorem, British, 22) per cent.; intermediate, 221/2 per cent.; general, 271/2 per cent.
And in respect of sub-item (b) -
For each £1 by which the equivalent in Australian currency of £100 sterling is less than £125 at the date of exportation -
An additional duty of- ad valorem - British, . 4 per cent: intermediate, 4 per cent.; general, . 4 per cent.”
– I move -
That that portion of the tariff resolution introduced in the House of Representatives on the 20th March, 1936, relating to sub-item (b) of Item 130 be incorporated in the present proposals as on and from the 2lst March, 1936, in lieu of sub-item (b) of Item 139 of the tariff resolution introduced into the House of Representatives on the 28th November, 1 935.
The sub-item was amended by the resolution of the 28th November, 1935, and the amendment just proposed is made in order that that part of the resolution of the 20th March, 1936, relating to this sub-item may now be debated.
– What is it all about?
– This proposed sub-item provides at the present rate of exchange for an increase of 33/4 per cent, in the British preferential tariff on all the articles mentioned herein other than pipes, tubes and wire, which will continue at 221/2 per cent., as represented previously by 30 per cent., less one-quarter exchange adjustment. The general tariff rate has been increased from 50 per cent, for pipes, tubes and wire, and 421/2 per cent, for the remainder, to 31/2d. per lb., plus 271/2 per cent, ad valorem. An increase of 5 per cent, ad valorem over the general tariff rate recommended by the board has been made to provide for trade treaty negotiations. Provision is made for an increase of 10 per cent, in each tariff rate should the Australian-London exchange return to par. Sub-item b incorporates the goods specified under sub-items b, c, in the 1933 tariffs. The Tariff Board considers that there is no sound reason for differentiating between the duties on some of these products as the raw materials are the same, and marketing methods are similar.
– Will the Minister explain why the duties have been increased ?
– It is merely a small drafting change, and does not affect the duties except to raise them slightly.
Amendment agreed to.
Item, as amended, agreed to.
By omitting the whole of sub-item (c) and inserting in its stead the following sub-item : - “(c) Angles, bars, pipes, plates, rods, sheets, strips, tees and tubes, not further manufactured than plated polished or decorated; wire including stranded or twisted wire, per lb., Intermediate,6d. ; general,6d. ; - and ad valorem, British, 50 per cent. ; intermediate, 50 per cent.; general, 621/2 per cent. subject to a reduction by an amount per ton calculated by multiplying the determined price of copper at the date of exportation of the goods by 0.55 (British preferential tariff and intermediate tariff) and 0.6875 (general tariff).
And in respect of sub-item (c) -
For each £L by which the equivalent in Australian currency of £100 sterling is less than £125 at ,he dato of exportation -
An additional duty of ad valorem, British, 1 per cant.; intermediate, 1 per cent.; general. I per cent.; subject to a reduction by an amount per ton calculated by multiplying the determined price of copper at the date of exportation of the goods by .011.
For the purposes of this sub-item the determined price of copper shall be the weekly average, as determined by the Minister, of the London metal exchange quotations for one ton nf electrolytic copper wire bars.
– I move -
That that portion of the tariff resolution introduced into the House of Representatives on the 20th March, 1930, relating to sub-item (c), of item 140. be incorporated in the present proposals as on and from the 21st March. 193(i, in lieu of sub-item (c) of item 140 of the tariff resolution introduced into the House of Representatives on the 28th November, 1935.
The ad valorem equivalent of the duties varies to such an extent owing to the fluctuation of copper prices and the variety of products covered by the item, that no general indication of the ad valorem equivalent can be made. However, the duty on actual importations on 24 lines represented from 8.4 per cent, to 29.5 per cent. British preferential tariff, and 87 per cent, to 113 per cent., general tariff.
.- Members of the commercial community in Melbourne have complained to me of the complexity of this item, and I therefore ask the Minister to refer it back to the board for the purpose of having it simplified, if possible. Honorable members will note that the item states that the duties are - ‘ . . subject to a. reduction by the amount per ton calculated by multiplying the determined price of copper at the date of exportation of the goods by 0.55 (British Preferential tariff and intermediate tariff) und 0.0875 (general tariff).
The difficulty is that persons tendering for construction jobs have the greatest difficulty in working out their prices when they are unable to find out what materials covered by this item will cost. The concluding paragraph of the item states -
For the purposes of this sub-item the determined price of copper shall bc the weekly average, as determined by the Minister, of the London metal exchange quotations for one ton of electrolytic copper wire bars.
Surely it is possible to devise some simpler method of calculation so that those who import goods of this kind may know what the cost will be. The tariff should be made as simple as possible, not only in the interests of the commercial community, but also in the interests of customs officers.
– The honorable gentleman’s complaint is unique. The prices of copper are fixed each week, and this system generally has proved satisfactory to the trade. The purpose of these amendments is merely to include polished articles in addition to the unpolished. If the honorable member will supply to me. particulars from the firm he mentioned, his complaint will be further investigated.
Amendment agreed to.
Item, as amended, agreed to.
Item 143a agreed to.
By omitting the whole of sub-item (b) and inserting in its stead the following sub-item: - “ (b) Sheet, and zinc tubing, not further manufactured than plated polished or decorated, ad valorem - British, free: intermediate, 15 per cent.; general, 15 per cent.”
– I move -
That that portion of the tariff resolution introduced into the House of Representatives on the 20th March, 1930, relating to sub-item (u) of item 144 be incorporated in the present proposals as on and from the 21st March, 1930, in lieu of sub-item (b) of the tariff resolution introduced into the House of Representatives on the 28th November, 1935.
The sub-item was amended by the resolution of the 28th November, 1935, and the amendment just proposed is made in order that that, portion of the resolution of the 20th March, 193 G, relating to this subitem, may now be discussed.
As with the amendment to the previous item, the purpose of this amendment is to include polished as well as unpolished metals.
.- Under Item 144a the duty on bars, blocks and ingots is 30s. a ton, but the rates on plain zinc and spelter sheet and zinc tubing are - British, free; intermediate and general, 1.3 per cent. Is there any reason why manufactured zinc should be free whilst the raw material carries a tariff hurden of 30s. a ton? Are none of these items manufactured in Australia, and, if there are, why should they not have protection when the raw material is protected ?
– Zinc bars and blocks are made in Australia, but zinc sheets and ;:inc tubing are not.
Amendment agreed to.
Item, as amended, agreed to.
By omitting the whole item.
– Item 146 of the original schedule is omitted, the pur-‘ pose being to include polished plate sheets and pipes and rods in the other items which have preceded it.
Item agreed to.
Item 151 agreed to.
Item 162 (Iron and steel tubes or pipes).
.- I notice that the British duty has been increased from free to 10 per cent, and the foreign from 15 per cent, to 40 per cent. I am not sure whether the item covers water piping for irrigation and reticulation or not. I should be glad to have an explanation of the increase.
.- A deferred duty of 40 per cent, to 50 per cent, was provided under this item in the schedule of 1926. The Scullin Government, after inquiry, decided to make the duty operative in 1931, but was defeated just before the duty came into operation. Under very great difficulties, from 1932 to 1934, the manufacture of the pipes was carried on with the protection afforded by exchange and primage. The present duty was imposed on the 7th December, 1934, as the result of an investigation by the Tariff Board. There are at present two companies in Australia engaged in the manufacture of these pipes. Concerning them I wish to mention a few facts because certain members of the Country party claim that as soon as an Australian firm starts manufacture a substantial increase of the price to the consumer results. As with numerous other instances which I could mention, that has not been the result in this instance. The protectionist policy led to the establishment in this country of a branch of the English firm, Stewart and Lloyd; which formerly exploited the market by exporting from England the Australian requirements. That company decided that it had to get inside the tariff wall and it started works at Newcastle. Both of the companies now operating in Australia are turning out articles equal in quality to the British products. Each of the companies employs about 400 persons, and, directly and indirectly, about 1,000 persons, making a total of 2.800 persons. When they started to produce in Australia, the overseas combine - that is the tube cartel - gave a discount of 15 per cent, on all sales in Australia to users. When it encountered the competition of the local manufacturers, the discounts were increased to 55 per cent. The prices of the imported article were reduced suddenly, the exporters in Great Britain endeavouring by this means to wipe out the local industry. The pipes are used for gas, water, irrigation works of all kinds, for the pastoral and mining industries, and for steam. But for the local industry the prices of the imported product would not have been reduced. Comparing 1931 with 1934, the price of artesian casing, which is not made in Australia and is being supplied solely by the British combine, instead of dropping as did the prices of all the other pipes supplied by the combine, increased by 50 per cent., namely, from 3s. 3d. to 4s. 9d. That was because the Australian users were at the mercy of importers. Artesian casing will eventually be made in Australia, and no doubt a similar reduction of price will follow. At the present time the English and Australian prices of pipes quoted to Australian users are the same, but the local manufacturers are able to hold the market because there is a feeling that their product is equal to the imported ; accordingly, Australian buyers give preference to the local manufacturer. Any whittling away of the protection now enjoyed would be disastrous to this industry, which gives direct employment to 800 persons, and indirect employment to 2,000.
.- Tie amendment will mean a slight increase of the duties on water pipes. These pipes are utilized a great deal, particularly in Western Australia, where they are used to carry water supplies to the farmers. In that State settlement has taken place in areas where subterranean water is difficult to obtain, but providentially nature has provided granite outcrops which act as a huge catchment; these arc surrounded by cement guttering and dams from which the water is carried by pipes for from five to ten miles in varying directions. Anything, therefore, that would increase the cost_of these pipes would hinder the development of the country. I had hopes that the Government would grant a concession in respect of these pipes. I am wondering whether the Minister can, under any of the powers conferred upon him, admit duty free pipes of this description, which are so essential for the development of pastoral and agricultural areas. I do not care whether they are manufactured in Great Britain or foreign countries; my concern is to see that people who are engaged in the development of out-back country are notpenalized by a high tariff on essential requirements. I am very displeased at the inclusion of this sub-item imposing a duty on this class of goods. We must remember that the Broken Hill Proprietary Company Limited is largely interested in the firm which started the manufacture of these pipes in Australia. There is no reason why iron and steel tubes or pipes should not be manufactured in this country a.* cheaply as elsewhere, and there is no justification whatever for the duties levied under this sub-item. Primary producers in Western Australia are further handicapped through having to pay freight charges on the tubes and pipes from New South Wales. This increases substantially the cost of local irrigation schemes.
.- The industry affected by this item is an excellent example of efficiency. By economic production, Tulloch’s Phoenix Iron Works, Sydney, was able, without very much assistance in the way of protection, to reduce the cost of iron and steel tubes to users, chiefly primary producers, to such an extent that overseas manufacturers were obliged eventually to expend approximately £1,000,000 in the establishment of works and plant in Australia to obtain their share of the local market. Prior to the establishment of the local industry, the requirements of Australian users of this class of goods were met by overseas importers. Following the establishment of the Australian industry, Stewart and Lloyd were obliged to offer 15 per cent, discount to purchasers. Later they increased the discount to 55 per cent., and even then were unable to capture the local market. Quite recently I was privileged to inspect Tulloch’s Phoenix factory in Rhodes, and was impressed by its magnitude and efficiency. As the Deputy Leader of the Opposition (Mr. Forde) has told the committee, a deferred duty was imposed, but it did not become operative, so the only protection which the Australian manufacturers enjoyed was represented by 25 per cent, exchange and primage. Therefore, I contend that the Government is justified in increasing the duty, and I commend it for its action.
.- Welded conduit pipes and tubes, and close-jointed iron or steel pipes and tubes, which are covered by sub-item it 1 were the subject of inquiry by the Tariff Board in 1933. The main case against the then existing duties was that under them British manufacturers were unable to compete, and the charge was made that Australian manufacturers were inefficient. Thi3 conduit is used for electric wiring - not irrigation purposes.
In regard to the claim for relief under the Ottawa agreement, it was contended by the Australian manufacturers that the provisions of the agreement were not relevant as all the raw material is drawn from British resources, and a reduction of duties would merely have effected the transfer of the actual manufacturing from Australia to Great Britain. It was further claimed, on behalf of Australian manufacturers, that protection by way of fixed duties was necessary because of the possibility - which has since become an actual fact - of the importation of British conduit sold in England for export at price’s well below the current domestic selling price.
That the Australian manufacturers of welded and close-jointed conduit have ample plant and facilities to cater for the whole of the Australian requirements is undoubted, and internal and overseas competition has, at all times, ensured the maintenance of prices that are reasonable and fair to users. Since the removal of the fixed duties, British manufacturers have been quoting absurdly low prices - much lower, it is understood, than those at which they are prepared to supply for home consumption in Great Britain.
At present, the strip steel for the making of the conduit has to be imported; but I understand that arrangements arc being made for the production of this material locally. In the meantime, however, British suppliers, through their agents in Australia, are offering -J inch conduit at 5s. 3d. per 100 feet - a price at which it is not possible for local manufacturers to compete, although every effort has been made to reduce costs, the two Australian companies having gone so far as to enter into a working arrangement under which one company manufactures the5/8 inch conduit, the size most in demand, and the other company confines its operations to other sizes.
Unless some protection greater than that provided for in the schedule is given to this industry it will, in a very short time, be forced to close down. Overseas manufacturers are concentrating on the size most called-for,5/8 inch, which, because of the greater output, is naturally the most profitable. While local manufacturers are admittedly making reasonable profits on other sizes, the5/8 inch constitutes such a large proportion of their trade that obviously they cannot indefinitely depend on the profits from the other sizes to cover the losses they are making on the5/8 inch if they attempt to meet overseas competition on its present basis. Letters from merchants, with whom the Sterling Tube Companyhas been doing business, indicate the position. The following letter was written by John Danks and Son
Proprietary Limited, Melbourne, on the 12th March, 1936 : -
Wo are very concerned with the present position in that it means we are distributing your products, in the main, at a very low margin of profit, and in instances it amounts to a loss. This has been brought about by one or two electrical houses importing tubing.
As you know we have, right from the day your factory opened, supported you, and have not attempted, at any time, to import from overseas. It is incredible to us that these outside houses are able to sell tubingat such low figures and conduct what we consider is legitimate business. We do not think that any one can be considered trading legitimately unless a profit ismade on the sale of their goods.
Take as an instance5/8 inch plain round tubing. This is being offered by our competitor at 5s. 3d. per 100 feet. We are informed - and you will be able to confirm this - that this size conduit cannot be landed from overseas under this price. Invariably the cost is higher.
We feel that some steps should be taken by you whereby further tariff protection is obtained so that this unfair competition can be eliminated.
Communications in somewhat similar terms were addressed to this company by W. G. Watson Company Limited, electrical engineers and merchants, Melbourne ; Lawrence and Hanson Electrical Company Limited. Hobart; Noyes Brothers, Melbourne; and A. H. Gibson (Electrical) Company Proprietary Limited, Melbourne. I hope that the Minister will refer the matter to the Tariff Board for further investigation and report.
– Investigations show that only 12 per cent, of Australian requirements are being imported. Certainly a price war is in progress; but the majority of businesses have to meet such competition in some form or other. In an interview, this firm supplied to me the information that the honorable member for Capricornia (Mr. Forde) has just placed before the committee. Its comments have been sent to the Tariff Board for any reply it may think fit to make.
Item agreed to.
Item 154 agreed to.
That items 161 to 167 be considered together. 165. By omitting the whole item and inserting in its stead the following item: -
Stripper harvesters, ad valorem - British, 5 per cent.; intermediate, 35 ];cr cent.: general, 35 per cent., or each - British, free; intermediate. £13; general, £13; whichevery rate returns the higher duty.
And in respect of sub-item (u) -
Pr.r each £1 by which the equivalent in Australian currency of £100 sterling is less than £125 at thu date of exportation -
An additional duty of - ad valorem - British. .S per cent.; intermediate, .1 per cent.; general, .1 per cent.”
– I move-
That the item be amended by adding the following to sub-item (c) - “And on and after 27”th March, I93(i -
Stripper harvesters each. intermediate, £13: general, £13; or ad valorem - British, 5 per cent.; intermediate. 35 per cent; general. 35 per cent.
And for each £1 by which the equivalent in Australian currency of £100 sterling is less than £125 at the date of exportation -
An additional duty of ad valorem, British, .8 per cent.; intermediate, . I per cent. ; general, .1 per cent.; whichever rate returns the higher duty.”
The last schedule included an automatic righting factor designed to deal with the position which would bc caused should Australian currency move toward sterling. It applied, not only to the ad valorem rate, but also to the specific rate of £13. That was an error; it should not have applied to the specific rate. This amendment makes it apply only to the ad valorem rate.
.- I am pleased to note that the Government has accepted the recommendation of the Tariff Board to make reductions of duties on British machines. I would inform honorable members, however. that very little British agricultural machinery is in demand among Australian farmers. Whenever there has been competition it has come from cither Canada or the United States of America, and has tended to keep at a moderate figure the prices charged by Australian manufacturers. The Tariff Board inquired very fully into these items, and made specific recom mendations for a general reduction, not only of the British rate, but also of the foreign rate. I regret that the Government has not accepted its recommendations in regard to the foreign rate, and that Canada is now in the same category as the United States of America in regard to any manufactures in this class which it. may desire to send to Australia. The latest price list issued by one of the biggest machinery manufacturers in Australia shows a rise of prices for several of the principal harvesting machines. Austraiian farmers, who have to compete in the world’s markets with their wheat, should be able to secure their machinery on a competitive basis;. yet when the Tariff Board was inquiring into the relative prices of machines and products, it found that for the purchase of a binder nearly twice as many bushels of wheat were required in Australia as in Canada. A further investigation into costs of production revealed that those in Australia we’re not in excess of those in Canada. The prices of pig iron, steel bars, coal and coke are less in Australia than in Canada. The only material which is dearer in Australia is black sheets. In such circumstances, the Australian manufacturer is on an equal footing, but the Australian wheat-grower is at a disadvantage. The Government might very well have had regard to the recommendation of the Tariff Board in relation to machinery imported from Canada. The whole tone of its report shows that, compared with those in Canada, costs of production in Australia are not excessive. Yet, so far as the binder is concerned, the prices of the relative articles are 22 per cent, higher in Australia than in Canada. The price of a horse rake is 32 per cent, higher, that of a mower, 60 per cent, higher, that of harrows, 8 per cent, higher, and that of cultivators, 6 per cent, higher, even though we have reached the mass-production stage. It is obvious that these prices can be maintained only because there is excessive protection against overseas competition. The Tariff Board has stated that Australian prices are about equal to those at which imported machinery could be landed free of duty. The Australian manufacturer has a natural pro- tection of from 60 per cent, to 65 per cent, for the Canadian manufacturer is involved in payment for cases, heavy railage to the sea coast, exchange against Australia, and sea freight to Australia.
– What about the price of labour ?
– It is less in Australia than in Canada. The demands upon Australian manufacturers lessened considerably during the years of the depression. It is certain that if the present price of wheat is maintained, or improves there will be a boom in the manufacture of farm machinery, because many of the machines now in use are obsolete and worn out. They have been kept in use during the last five years in order to maintain production, although their use has been uneconomic. The manufacture of machinery decreased to an average of £1,450,000 annually for the five years of the depression, compared with an average of over £3,000,000 for the preceding seven years. I think we can reasonably assume that a return to normal times and prices would be accompanied by a big increased demand for machinery, equivalent to a production of at least £3,000,000. If that should eventuate, the overhead costs of Australian manufacturers would be proportionately reduced, and obviously .they would have a better opportunity to compete with Canada. The makers have a natural protection of from 60 per cent, to 65 per cent.; therefore the farmer should be given some consideration. If our secondary industries require expensive machinery to enable them to produce competitively with outside manufacturers, they are permitted to import free of duty under by-law. Wheat-growers have to produce in competition with those who can obtain their machinery at a cheaper rate, and yet they are not placed on this footing. They must buy in a protected market and sell at world parity. I ask the Government to give the assurance that the excessive rates upon imports are being maintained for the specific purpose of arranging a reciprocal treaty with Canada, or that it will review the matter and alter the schedule in conformity with the recommendations of the Tariff Board.
.- I propose to move an amendment that the duty on agricultural implements should be made to conform with the recommendations of the Tariff Board, unless the Government can advance solid reasons for not implementing those recommendations. If the assurance which I seek is not forthcoming, the Government can expect no loyalty or assistance from me in .the future. I presented to the Tariff Board the case in connexion with these duties, and was able to prove conclusively that the prices of the raw materials required were cheaper in Australia than in Canada. I also showed that Canada had to import most of its coal from Great Britain, its imports amounting to from 900,000 to 1,000,000 tons a year, whereas we have the coal right alongside the smelters, and that the raw iron deposits of Canada cannot be compared with those of Australia. Yet the price of this machinery in Australia is nearly double the price charged to .the farmer in Canada and the United States of America. The statistics issued by the Commonwealth Statistician show that the rate of wages paid to the artisan in Canada is 8£d. an hour more than is paid in Australia. The report of the Tariff Board for 1925 stated that it was the duty of the Australian farmer to buy from the Australian manufacturer; even though one manufacturer was able to make profits equal to the whole of his capital within a period of two years. I knew the McKays when they were boys, and am proud of the fact that they were able to build up such a magnificent industry. But that they have done good work is no reason why they should exploit tEe community and amass a huge fortune. It is for that reason that we suggest that the duties should be reduced. I consider that they should be even lower than those recommended by the Tariff Board. Outside manufacturers have to meet the cost of exchange and also pay duty and primage on the casing. I have before me an invoice amounting to £5,617 18s. for imported harvester threshers, which, with the usual 10 per cent, or £561, rnakes a total of £6,179, while on the fixed rate imposed in 1914 the duty would have amounted to £420. Under the present schedule, the duty on goods of the same value would he £2,627, duty on casing £68, and primage at 10 per cent., £22, making a total of £2,717. The Tariff Board now recommends duties ranging from 15 per cent, to 25 per cent., which, plus the natural protection in the form of insurance, freight and exchange, should surely be sufficient. Some time ago, the Government promised that the duty on casing would bo removed, but, because some manufacturers had, what the department termed the impertinence to pack tool boxes in the same cases as the machines, the impost was continued, and primage duty has also been charged. I do not know the attitude to be adopted by supporters of the Government, but I contend that the Australian Parliament should cease pandering to these big corporations, which are quite able to compete with overseas manufacturers without the protection proposed. Why should this Parliament impose unnecessarily heavy duties upon imported agricultural machinery, and thus enable Australian manufacturers to become even more strongly entrenched, and to charge whatever prices they choose? I move - 161(a).
That item he amended by inserting the following: -
And on and after 27th March, 1936 - “ (a) Agricultural, horticultural and viticultural machinery and implements, n.ei. ; cane loaders, cane unloaders and cane harvesters; channelmaking graders; garden and field spraying machines not including spray pumps operated by hand or foot; garden and field rollers: garden hose reels; horse road rollers and machines; lawn sweepers; road scoops and scrapers; scoops; stump extractors; fibre scutching machines; milking machines ; potato raisers or diggers; potato sorters; root cutters pulpers and graters; straw stackers; sub-surface packers - ad valorem, British, 8 per cent.: intermediate, 15 per cent.; general, 15 per cent.
I suggest that the amendment moved by the Minister (Mr. White), which is now before the committee, be temporarily withdrawn.
– I am agreeable.
Amendment (by Mr. . White) temporarily withdrawn.
.– The Opposition cannot support the amendment moved by the honorable member for Swan(Mr. Gregory) to reduce the intermediate and general tariff from 30 per cent, to 15 per cent. One becomes fired of the complaint made by the honorable member for Swan against the Australian agricultural implement makers, who he contends, are exploiting the primary producers. The honorable member made similar statements before the Tariff Board, when it was conducting a most searching inquiry into the agricultural implement industry. Evidence was also given by Mr. Gates, the secretary of the Tariff Reform League, Mr. Westmore, the secretary of the General Committee for Tariff Revision, the secretaries of chambers of commerce, and the representative of the Graziers’ Association. They all complained of the manner in which the primary producers are being exploited by the Australian agricultural implement manufacturers. The honorable member for Swan supports the recommendations of the Tariff Board when reductions of duty are involved, but is opposed to its recommendations when increases are proposed. At the conclusion of a most searching public inquiry in each State, the Tariff Board reported -
Not a tittle of evidence had been placed before the board to support the contention of Mr. Gregory, M.H.R., that the cost of agricultural implements had advanced 04 pur cent, since 1914.
The board, which was clear and definite in its findings, went on to say -
There should be taken into consideration the fact that Australian-made implements are told cheaper in this country than imported implements in New Zealand or Argentine, so it is reasonable to assume that if there were no implement industry here the farmer would also be paying a higher price for implements. It may be safely said, therefore, that the tariff on agricultural implements is imposing no burden on the primary producer.
I submit the following table showing the prices in New Zealand for various American implements, and the prices paid by Victorian farmers for comparable implements of Australian manufacture : -
The New Zealand farmers pay £71 5s. for a 6-ft. binder manufactured by the International Harvester Company of America, while .the Victorian farmers pay £68 5s. for a machine manufactured hy H. V. McKay-Massey-Harris Proprietary Limited. In addition to giving to our farmers a price advantage, the Australian industry employs over 4,000 persons, all of whom spend a good proportion of their earnings in purchasing primary products. The Australian agricultural implement industry, which pioneered secondary production in Australia, should have the support of every ardent protectionist, more particularly as about 142 factories are in operation producing goods to the value of £1,700,000 per annum. A study of the Tariff Board’s report shows that agricultural implements manufactured in Australia are cheaper than those produced overseas. Imported implements are sold cheaper in Australia, where there is a protective tariff, than in Argentina, where no duty is imposed. The prices in this country are probably much lower than they would be if no duties were imposed and the industry were not established locally. The existence of the agricultural implement industry in Australia is in the best interests of primary producers, who have derived material benefit from it ever since it was established.
In a bulletin issued by the Department of Commerce of the Government of the United State3 of America, the follow ing striking testimonial to the value of Australian implement factories appears : -
The enormous increase in wheat-growing in Australia would hardly have been possible had not suitable machinery been evolved capable of satisfactorily handling the matured crop under the climatic and labour conditions prevailing in that country. The entire credit for the development and perfection of the stripper and later of the stripper-harvester is due to the Australians themselves, as both of these machines were invented and first perfected and built in that country. When it is considered that these machines as built at present arc but little different from the first ones built, and that under ordinary conditions they work in a most excellent manner, it must be admitted that Australian agricultural engineers are second to none when given an equal opportunity.
That statement was made, not by an Australian, but by an overseas authority. In view of the fact that approximately £14,000,000 has been paid to wheatgrowers during recent years, surely their representatives in this chamber should cease to oppose the imposition of reasonable duties on imported implements. Their complaints are so frequent and so unjustified that they become nauseating.
.- I support the request of honorable members that the Minister should explain why full effect has not been given to the recommendation of the Tariff Board. The Deputy Leader of the Opposition (Mr. Forde) has already quoted from the Tariff Board’s report snowing that the Australian agricultural implement industry is highly efficient, and that it is of advantage to Australian primary producers. I agree that it is, and I should not ask the Government to do anything which would jeopardize it in any way. Some explanation should be given as to why the Government is not adopting the recommendation of the Tariff Board.
– Increased wages and shorter hour3 would involve a greater increase.
– I should be reluctant to do anything to decrease the spending power of the Australian people, but we should be informed -why the protection recommended by the Tariff Board is not being adopted, and why the industry is being unnecessarily sheltered, thus enabling it to make larger profits than are justified. There are various ways in which customs duties affect producers, particularly primary producers engaged in export, and if the tariff is mishandled in any way, duties may have a serious effect upon our trade with other countries. At the moment the countries from which conceivably machinery might be imported into Australia are not countries that we need to consider in that respect at all. To that extent I think the Government would receive support from the representatives of farming districts if it were able to show that the duties were kept at their present level for the purpose of improving our trade relations with some other countries. But it cannot do that, because no implements worthy of consideration come from countries other than those with which our trade position is a long way from being satisfactory. The other way in which the tariff, if it is not very carefully watched, may affect the great export industries, which really are the barometers of employment of the primary and secondary industries of Australia, i3 by increasing the cost of production, thus lowering the power of our export industries to compete against the products of other countries. It is in that respect that farmers generally are somewhat doubtful as to the motives which actuated the Government in not giving effect to the recommendation of the Tariff Board, because, when the Government’s failure to do so was made known and the price was raised - the Minister says it was slightly raised - it was just then that farming conditions were slightly better and more purchases of implements were taking place. Actually, there was just that improvement in turnover which should have made it possible for the implement-makers to manufacture, if not more cheaply, at any rate at a cost that would offset the improved wages and other conditions granted to their employees as the result of awards of the Arbitration Court. It is very important that this great industry should, as far as possible, take its recovery from the depression by increased turnover, and, to foster the use of its product, sell at the lowest possible price. The main iron and steel industry has done that to a very considerable extent. As its turnover has improved it has lowered the price of its product to the public, in that way still further improving its turnover. That has benefited all sections of the community, and has made for increased employment in the secondary industries because in turn they have also been able to increase their sales. When it is possible to manufacture at a reduced rate, it is very disconcerting to find in these cases even a small increase of price. After reading the Tariff Board’s report, and considering the market which the industry has, the cheapness of our raw materials, and the saving in freight, I have no doubt that a slight lowering of the protection against foreign competitors, such as was recommended by the Tariff Board, would not have had the effect of reducing employment or of bringing about an increase of imports, but, on the contrary, would have led to an automatic check being imposed upon a rise of price. It would have automatically assured us that this great manufacturing industry, with its thousands of employees, would have taken its recovery in the form of low prices, better sales, more employment, and better service to all sections of the community. I hope that the Minister can give some very definite assurance that these matters will be fully considered, that the public will be protected against further rises of prices, that some improvement of our trade position and some benefit in the marketing of export products are in sight to justify the Government’s departure from its election policy that it would follow the recommendations of the Tariff Board, and that the hopes which that policy held out to producers will be realized.
– This subject is so important that I feel impelled to reply to some of the statements made by honorable members. Lu the first place, the inquiry by the Tariff Board into this industry was a very full and comprehensive one, and its recommendations in respect of British machinery were accepted. That is an obligation under the Ottawa agreement, and the Government has never hesitated to accept the board’s recommendation in respect of British duties. But in respect of foreign duties other considerations have to be taken into account. As I empha- sized yesterday, when dealing with the cotton industry, where increases are recommended by the Tariff Board, matters such as finance and trade balance, which do not concern the board, have to be seriously considered by the Government. In this case, had the board’s recommendations, regarding the foreign duties, been accepted, the beneficiaries would have been the United States of America and Canada, two countries whose trade balance with Australia are very favorable to themselves. One of these countries, the United States of America, not being within the British Empire, is most unfavorable in its attitude towards Australian exports, so much so that the honorable member for Flinders (Mr. Fairbairn) only this morning asked if the Government would take steps to curtail imports from that country.
– ‘Why not?
– The honorable member asks me that question and at the same time is asking for reduced duties in respect of all countries. How can he justify his attitude? He knows very well that tariff reductions may mean increased importations. Sweden, which was referred to in the Tariff Board’s report as an exporter to Australia, is the location of the assembly plant of a large American implement works, the International Harvester Company, which manufactures its product in America, and Sweden.
Under the existing AustralianCanadian trade agreement, general tariff rates are applicable to Canadian implements, and until that agreement comes up for review it will not be possible to deal with the question of granting more liberal treatment to Canada.
– Does the Minister say that Canadians would object to concessions being given ?
– On the contrary, they would take, with both hands, all they could get. Trade negotiations are proceeding between Canada and Australia at the present time, and, as was stated by the Minister directing negotiations for trade treaties (Sir Henry Gullett), recently, when shortly the Canadian delegation comes to Australia that aspect of the matter will be fully considered.
– Will concessions in the duties on machinery be offered to Canada ?
– The honorable member surely does not expect me to say what is to be offered to any country, any more than he would expect me to forecast proposed tariff changes.
– The Minister has now proposed an intermediate duty.
– That is for general treaty purposes. At present the foreign rates apply to Canada. Under the terms of the Ottawa agreement Canada does not enjoy the British preferential tariff. The honorable member for Wakefield said that this industry should not enjoy such excessive profits.
– I did not use those words.
– That is the inference I drew from the honorable member’s remarks. I draw the attention of the honorable member to the report of the Tariff Board on this aspect of the matter.
– The Minister should refer to the last page of the board’s report.
– I remind the honorable member that there are three agricultural implement-makers in South Australia, and they deserve every credit for their enterprise. They have specially studied the problems of the man on the land, and their product is appreciated in the honorable member’s own electorate. I hope the honorable member would not advocate a policy which would jeopardize the operations of these companies.
– That is not suggested by the Tariff Board.
– But the honorable member for Barker, himself, suggested it by his interjection. Dealing with profits the Tariff Board reported as follows: -
A fina! and very important check of the reasonableness or otherwise of local manufacturers’ prices is afforded by a review of their trading results. There is no doubt that a large proportion of the capital employed in the industry represents pro/its made in boom years, when demand was high and farmers, favoured with good seasons and high prices for their products, were able to pay the prices demanded. The board, however, ia dealing with the present state of the industry, and is quite satisfied that, during the last three or four years, very little profit has been made by the manufacturers.
In 1928 six of the largest manufacturers were employing approximately £3,000,000 in the industry, represented by subscribed capital, reserves and loans. A profit of £210,000 - or 7 per cent, on the capital employed - was made during the year on sales of roughly £2,000,000.
– Very few primary producers get7 per cent.
– I suggest that the honorable member got more than that for his wool in 1928. The report continues -
The worst year of the depression in the implement industry was 1932, when the sales of the six manufacturers fell to approximately £.1.000.000, and the loss was approximately £90,000.
In 1933 the capital employed by the six manufacturers (including now the Massey Harris interests) was £2,700,000, but the profit was less than £50,000 on sales aggregating £1,600,000.
There is no need to stress the importance of this industry, but at this stage, a survey of it as a subsidiary of the great agricultural industries would not be out of place. In 1933-34 the manufacturing industry provided direct employment for 1,900 persons to whom £670,000 was paid in wages. It used Australian materials to the value of £800,000, and its output was valued at £1,700,000. In addition it provided a considerable amount of indirect employment. The following quotation in regard to prices from the Tariff Board’s report will, I think, explain the Government’s case. The Tariff Board’s report reads -
After making allowances for all circumstances that might affect the comparisons, the board has arrived at the conclusion that at the present time the Australian farmers are obtaining their requirements of harvesting implements at prices which are lower than those paid by farmers in New Zealand.
No agricultural implement-making industry is established in New Zealand, and obviously the farmers of that dominion are paying more for agricultural implements than they should.
Since 1923 retail prices have shown a consistently downward trend. Over a group of representative implements retail prices in 1935 were 21 per cent. lower than those operating in 1923.For example, the price in 1935 of a stripper harvester was £109 10s. as against £136 in 1923. In 1923 a four-furrow mouldboard plough sold at £48 10s., whereas the 1935 price was £40 10s. A similar variation has taken place in respect of the prices of other implements. On the other hand, prices are now rising slightly by reason of increased costs occasioned by wage increases. In March, 1935, wages advanced by 2s. a week, and from the 1st March, 1936, the factory working period in Victoria was reduced from 48 hours to 46 hours a week, thus further increasing production costs. Whilst these factors increased the factory cost of agricultural implements by almost 3 per cent., retail prices have been increased on the average by only 1 per cent. The Tariff Board’s report shows conclusively that this industry, if it can be criticized in some measure with regard to its prices, is a great national asset to Australia. The employees in the industry are the consumers of primary products which are sold here at higher prices than are obtained for them overseas. On pages 10 to 19 of its report, the board states. (Page 10) - The manufacture of agricultural implements is one of the pioneering efforts’ of secondary industry in Australia and it now ranks as one of the major industries in the Commonwealth …. The industry, generally, is efficiently organized. (Page 11 ) - There can be no doubt of the general satisfactoriness of the Australian made machines which compare favorably with similar machines manufactured in other parts of the world. (Page 14) - The industry is well organized and efficient, and is conducted by men of capacity and insight. (Page 17) - It is clear that excessive profits are not now being made. (Page 19) - There is no evidencethat if the existing duties were removed the farmers would be able to purchase mowers at prices lower than the present prices.
For those reasons the Government accepted the British preferential duties recommended by the board, but not the recommendation regarding the general tariff.
– The Minister has gone to some trouble to explain why the Government did not wholly accept the recommendations of the Tariff Board with respect to the duties on agricultural implements. The report of the board reminds me of the Scriptures or the Koran, for it is said that a verse can be found in either to justify almost anything. The Minister picked out a few quotations to show that the farmers are getting on fairly well under present conditions, but he was careful to overlook a statement on the last page of the report in which the Board pointed out that a set of implements which cost £720 to manufacture cost- £266 to sell, whilst, in addition, the administration and general expenses amounted to £101, and the profit was £53.
– The makers have to service the machines, too.
– The purchasers get a lot of service ! It seems remarkable that the amount allowed for administration and selling should be so large. This feature is adversely commented on by the board, although it admits that it is not in a position to provide a remedy for the disability; nor do I contend that it is the duty of the board to do so. The Minister referred to the profits of the manufacturers in 1928, and to their losses in 1932, but the committee should consider that the losses would not have been incurred had it not been for the selling methods adopted. The manufacturers did not hesitate to send their travellers out into any part of the country, and, without regard to the farmers’ capacity to pay, unloaded their implements on timepayment conditions, and on almost any terms required. The industry cannot escape its responsibility for the losses incurred owing to the selling methods which it deliberately adopted. My criticism applies to the importers as well as to the local manufacturers.
No honorable member on this side of the chamber contends that the industry in Australia ought to be severely treated by Parliament. My opinion is that the industry has acted fairly towards the farming community in many respects, but let us recognize that the factories have been paid good prices for their machines. The Deputy Leader of the Opposition (Mr. Forde) referred to the great wisdom and ingenuity of Australian agricultural engineers. I remind him that by far the largest percentage of acceptable inventions and innovations have come from the man on the land, and not from the engineers employed in the factories. The Minister spoke of the increase of the prices of implements being only 1 per cent. I am indebted to one of my colleagues for a list of the latest quotations by H. V. McKay Limited. An 8-ft. stripper-harvester, with chokecutter, which was priced at £143 last year, has increased to £148 this year.
– According to a list before me, the price is £111.
– Will the Minister take an order for a dozen of these machines at that figure?
– The price is even better than that; it is less 1 per cent.
– The Minister had better start in the business. A 6-ft. reaper and binder has gone up since last year from £72 to £75, which represents an increase of about 4 per cent. A 16-disc grain fertilizer drill has increased from £58 10s. to £59 ; a 16-row cultivator drill from £67 10s. to £70; a 10-disc Sundercut cultivator from £49 to £50; a 3-furrow Sunny disc plough, with heavy wheels, from £28 to £29; and a Diamond harrow, 4-section with bar, from £5 14s. to £5 18s. I have had a good deal to do with agricultural implements in my time, and with people who have used them, and I could not help noticing that the Minister had very little to say concerning spare parts. The Tariff Board’s report contains the following table showing the difference between the cash price of implements and the price of the representative parts: -
The difference between these prices was commented on adversely from one end of South Australia to the other, and also in the north-western portion of Victoria, by all sections of the farming community, when I was moving about with the Wheat Commission.
– That difference is not so pronounced now. Extras are now provided with the complete machine.
– A farmer could carry away the extras in his waistcoat pocket, apart from the tools, which, of course, are charged for as a separate item. The industry has something to explain with regard to the cost of spare parts. I have never heard the Minister state why the difference between the cost price of a header or harvester and that of a stripper is not great, although there is an enormous difference between the quantity of material and the amount of work represented in these machines. Perhaps the explanation is that a stripper seldom, requires spare parts, whilst a header or harvester needs frequent replacements.
The committee is entitled to a statement as to why, in regard to this particular industry, the Government has deviated from the recommendations of the Tariff Board. Reference has been made to a proposed trade agreement with Canada. If the Minister hopes to obtain success in that direction, members of the Country party will immediately withdraw their opposition to the duties. We have no desire to embarrass the. Government in any negotiations for trade agreement?, which must ultimately benefit the primary producers, but it seems invidious that the Government should adopt the board’s recommendations with regard to the duties against the United States of America, from which we purchase little or no agricultural machinery, whilst discrimination is shown against Canada. It is astounding to discover that Canada, a British dominion, is classed as a foreign country, so far a3 the Australian tariff is concerned. New Zealand, too, I believe, is placed within the same category. The time has come when there should be a more broad-based definition of British trade than is provided in the tariff schedule.
– Should not that be a matter for mutual arrangement?
– Yes. Points of this kind could have been dealt with at the Ottawa Conference. I understand that a sort of second Ottawa conference will be held next year. Honorable members from country electorates, whether they belong to the United Australia party or the United Country party, will have to answer to the wheat-growers and other users of agricultural implements for the Government’s attitude to these duties.
.- Honorable members generally know that I have always taken a keen interest in the agricultural implement, manufacturing industry, and 1 feel that I ought to say a word on this item. The Government need not look far afield for reasons for refraining from giving to the United States of America the advantage of the reduced duties recommended by the Tariff Board. Our heavy adverse trade balance with that country is sufficient justification.
– Does the Minister think that it would mean the importation of more American implements?
– I do not think it would cause any great increase; but at the same time, it must be borne in mind that our adverse trade balance with the United States of America, excluding interest payments, is over £11,000,000. In these circumstances, we are justified in the action we have taken. The position of Canada is somewhat different from ‘that of the United States of America. It is true that we have an adverse trade balance with Canada, but it is not quite so heavy as with the United States of America. Moreover, Canada has given Australia some special preferences of considerable advantage to the man on the land in this country. For example, the preference on dried fruits has resulted in a. substantial increase of our trade with Canada with raisins, sultanas, lexias and other dried fruits. The Canadian, preference to Australia on canned fruits has also been valuable.
My feeling is that, in view of the impending visit to Australia of a delegation from the Government of Canada for the purpose of reviewing the existing reciprocal trade treaty, the Government has acted wisely in deferring the taking of action in connexion with the agricultural implement duty. The visit of this delegation will provide an early opportunity to discuss the proposed reduction of duty, along with other trade questions, and should be of mutual advantage to both countries. For that reason I approve of the course the Government is taking.
– I have listened with a good deal of interest to the discussion of this item, and particularly to tha reply of the Minister for Trade and Customs (Mr. White) to the honorable member for Swan (Mr. Gregory). I do not suggest that the Government should take any action likely to increase our adverse trade balance with the United States of America, and, in regard to Canada, I sincerely hope that the remarks just made by the Minister for the Interior (Mr. Paterson) may be regarded as a forecast. My main concern is whether, in consequence of the higher duties now being imposed, local manufacturers will unduly increase the price of their implements to the Australian farmers. It lias been pointed out that since these new duties were announced the price of implements has risen in this country, and I fear that other increases may follow. It may be quite true that increases of wages are the main reason for the advanced prices which manufacturers are asking for their implements; but it is significant that when the reduction of wages occurred three or four years years ago the implement manufacturers did not simultaneously reduce the price of their implements. Why, then, should there he an immediate increase of implement prices now that a slight increase has occurred in wage rates? If the Minister for Trade and Customs will give me an assurance that if the manufacturers increase the price of their implements still further the Government will review the existing duties with the object of giving effect to the lower rates recommended by the Tariff Board, I shall be prepared to accept the present proposals; but, failing such an undertaking, I fear that the farmers of this country are likely to be exploited. The reduction of duties recommended by the Tariff Board would not increase the importations of American and Canadian implements to Australia to any great extent. I consider that the object of the Tariff Board in recommending the lower duties was to police the industry to some extent and to indicate to local manufacturers that they must not increase prices beyond a fair level. The lower duties recommended would introduce an element of competition which would be to the advantage of the farmers.
.- -I should not have spoken again in this debate except for the sneering way in which the Deputy Leader of the Opposition (Mr. Forde) referred to my having brought the duties on agricultural implements under the notice, first of the Government, and then of the Tariff Board. With Mr. Reseigh, of Victoria, I presented a case to the Tariff Board which was complete in every respect, and the board, though apparently reluctant to recommend a reduction of duty, felt the absolute necessity to do so. The board’s recommendations are clear and distinct.” The Deputy Leader of the Opposition referred to the price of agricultural implements in other countries, including New Zealand. I have, time and time again, heard comparisons of the price of certain implements in New Zealand with that of implements sold in Australia; but the Deputy Leader of the Opposition must be well aware that the reapers and binders used in .New Zealand are entirely different from those used in Victoria. Sworn evidence to this effect was given to the Tariff Board some year& ago by Mr. Paterson, of the MasseyHarris Company. The Australian manufacturers endeavoured, in 1928-29, to develop a trade with New Zealand in reapers and binders, and it exported in that year to the sister dominion implements valued at £l,!>i>i. But the next year only spare parts of a total weight: of 2 lb. were exported to New Zealand. Why was this so? The answer is that the type of machine used in New Zealand is different from that used in Australia; the latter type being quite unsuitable for dominion conditions. I have no desire to reflect in any way upon the Australian-made implements, but there is no doubt that they are different from those used in New Zealand. Numerous reports have appeared in the press recently regarding our trade with South Africa, and reference has been made to the value of the locally-made implements imported into that dominion over that of other countries. Values were compared on the weight of the machines as if it were of special interest that increased power should he a compulsory requirement. Some attempt has been made also to encourage the use of higher-powered tractors there; but why should a farmer use a heavier tractor than is needed to draw his implements ?
It is significant that immediately the Government announced the new duties on agricultural implements, the Austraiian manufacturers increased their prices to the farmers of this country. The Tariff Board pointed out in its report that a mower which costs £19 18s. 9d. in America is subjected to duty and other charges totalling £7 18s., which would bring the price of that implement in Australia to £30 16s. 9d. Why should the Australian farmer be placed at a disadvantage compared with the American and Canadian farmer? If the duties recommended by the Tariff Board were applied, competition would soon force Australian manufacturers to sell their implements at lower prices. I realize, of course, that the cost of Australian iron and steel, and also our freight rates tend to make implements dearer in Australia than they need be; but a reduction of duties as recommended by the Tariff Board would undoubtedly help the position. The majority of the agricultural implements used in Australia are manufactured in Victoria, and the Western Australia farmers who buy them are obliged to pay anything from 9 per cent, to 12 per cent, more for them than do the Victorian farmers. This is represented by freight and other charges.
– -Why not establish a manufacturing unit in Western Australia ?
– There is a government implement works in Western Australia, but it is not doing very well and never will; for no government enterprise of that description can succeed. It is quite unsatisfactory that the Western Australia farmers have to pay so much more for their implements than do the Victorian farmers. I shall call for a division on this item, and I trust that the support I receive will be so substantial that the duties recommended by the Tariff Board, after an exhaustive examination, will be approved.
– In reply to the request of the honorable member for Grey (Mr. McBride) for an assurance that the Government will take appropriate action if the price of Australianmade agricultural implements is unduly increased, I say definitely that the Government will watch the price variations most carefully. The figures given by the honorable member for Barker (Mr. Archie Cameron) of price increases of certain locally-manufactured implements do not contradict anything I said. Careful departmental investigation shows that the increase over the whole range of implements is only 1 per cent.
– It is 5 per cent, on some implements.
– Over the whole range the average increase is 1 per cent. At the same time, there has been a rise of price in competing countries. In Canada, in the case of the MasseyHarris Company, the average increase has been 3.48 per cent. ; in the United States of America, it has been 5.2 per cent.
– Then so much protection will not be required.
– Honorable members must realize that increases have taken place in many imports. I emphasize again that the trade-balance aspect of this matter is a very important consideration indeed to the Commonwealth, and one which honorable members should not overlook in this connexion. The Government cannot accept the amendment moved by the honorable member for Swan.
Items 161, 162 and 163 agreed to.
Amendment (by Mr. White, vide page 606) agreed to.
Item, as amended, agreed to.
Items 166, 167, 170, 171, 172 and 173 agreed to.
– I desire to bring under the notice of the Minister for Trade and Customs (Mr. White) the position of firms in Australia which are manufacturing machinery for wood-working purposes. The firm of Wolfenden Brothers, Footscray, had an extensive business for some considerable time; but latterly, owing to the reduction of the tariff, its operations have been considerably reduced, and it may not be able to carry on for much longer. About four weeks ago I accompanied a representative of that firm on a deputation to the Minister and reasons for a reversion to the original duties against the imported article were submitted to him. As the result of that interview, 1 understand that the firm’s claim was referred to the Tariff Board, which again submitted an adverse report. The firm manufactures appliances for use in connexion with wood-working. Under Tariff Item 174 - “Machines, machine tools and appliances for use in connexion therewith as presented by the departmental bylaws “ machines peculiar to various trades are admitted at free British preferential and 15 per cent, general tariff. By the addition to the list of wood-working machines unde’r item 174 w of 6 d, sash and door cramping machines, power operated; 17 d, finger-feed attachments; 21 b, belt-sanding machines, oscillating, vertical ; 21 /, triple drum -Sanders ; 22 c, cross-cut benches, swing saw, designed for cross-cutting in box and case-making ; and 26, tenoning machines, double-ended, the manufacture of these machines, which has been undertaken in Australia on a commercial basis, will probably be discontinued. This firm, which has carried on the manufacture of woodworking machinery for many years in Australia, has proved a valuable asset to the building trade. The placing of these machines on the free list will increase imports to an extent that will keep the available market stocked for years hence, and thus partially close an avenue of employment to Australian workmen. According to evidence which Wolfenden Brothers submitted to the Tariff Board, the firm employed 35 hands at the close of work in February, 1935; but the deputation which waited on the Minister showed that for the first time in many years the firm was then without orders for new machinery. As the result of the reduction of the tariff on this item, the enterprise is being restricted in its efforts to carry on. Comparatively few wood-working machines are required in Australia, and to have men skilled in the manufacture of them thrown out of work is a distinct and definite disadvantage. The Government should bear in mind this important con sideration. The majority of the employees engaged in the manufacture of this machinery live in my electorate, and now that they are faced with unemployment it is obvious that the revision of the tariff on this item is detrimental to their interests and to the firm which employs them. As I have stated, a representative of this enterprise presented certain information to the Minister in support of a case for a return to the original duty; the Minister deemed it necessary to refer the facts to the Tariff Board which had already investigated ‘ the claims of the industry for adequate protection. The second report of the board has not been published, but I understand that it is not favorable to the request. In my opinion, ibis industry is deserving of special consideration. I realize that the manufacture of any machines which displace manual labour is not to the advantage of workers, but it is inevitable that we should have them. When firms, capable of manufacturing machinery of this type on a commercial basis are established, they should have the support of honorable members in obtaining adequate protection. I do not propose to follow the course of suggesting that this item should be postponed in order that the circumstances may be reviewed, but I feel that the mannfacturers have made out a sufficiently sound case to warrant this matter being delayed long enough for them to demonstrate that, with a measure of protection, they can compete successively with the British manufacturer. As a member of the Australian Labour party, I stand for the adequate protection of industries of this kind. I feel that the Government, regardless of what its view on the tariff might he, is not desirous of putting out of existence an industry which gives employment to artisans and enables machinery of a special type to be manufactured in Australia. The unfortunate position in which this firm is placed is due to the fact that the present rate of tariff was fixed at a time when the building trade was very slack. As the result of improved conditions, for which the Government has claimed all the credit, Australia is now experiencing what may be termed a revival, if not a boom, in this trade in consequence of which all manner of timber work, which these machines would perform, is in demand. If the duties are restored to their previous basis Wolfenden Brothers may again find an increased market for their machines, and from that viewpoint the Minister could well give careful consideration to their request. Theirs is a specialized business; the machines they turn out do not sell by the thousand. When this matter was being considered by the Tariff Board it referred to the fact that the development of patterns and drawings added to the overhead costs. In view of the fact that it gives employment to skilled men in the engineering trade, we should not take any action which may strangle the industry. According to information that I have received, quite a number of men have already been thrown out of work, in consequence of the new duties. If. therefore, it canbe definitely claimed by this firm that it can compete with imported machines, provided it receives adequate protection, I feel that it deserves sympathetic consideration from the Minister.
– Honorable members will agree that machinery for production purposes should be available at the cheapest rates possible, in order to keep down capital costs and allow Australian manufacturers to compete with one another, and also with overseas manufacturers. A general statement that, by taking away some of the field of manufacture from the makers of machinery, unemployment is created, ignores the fact that machinery gives employment in other industries. The Tariff Board carefully eliminated certain types of machinery which the firm mentioned by the honorable member was unable to make economically. On the other lines which it manufactures, the rates of duty are satisfactory. Representatives of the firm interviewed me, and stated that certain evidence tendered before the Tariff Board in regard to imported machinery was incorrect. I undertook to have an investigation made in order to ascertain whether the duties were sufficiently protective. The Tariff Board has given a comprehensive reply which, however, I do not propose to read to the committee, because it concerns only one firm which, I imagine, does not desire the details of its business to be made public. In my opinion, the Tariff Board has supplied a satisfactory answer. It states that the evidence tendered before it has been proved to be correct, that the firm is sufficiently protected in regard to those lines which it can produce economically, and that it would be better for it to discontinue the manufacture of other lines. There is no scarcity of work for engineers in Australia. The firm in question can find employment for its engineers in the making of other classes of machinery. On one occasion it opposed the entry under by-law of certain wood-working machinery, which it stated it was able to make. Later, it found that it could not do so. It is better that these items be clarified and put in the schedule as free of duty, and that the firm should concentrate on the making of machinery which it can produce at reasonable prices.
– They are specialists in the particular class of machinery to which I have referred.
– The Tariff Board investigated 321 types of machinery, and said that undoubtedly the firm in question had undertaken the manufacture of too many types. I shall forward the Tariff Board’s report to the firm. If it had acted wisely the firm would not have undertaken the manufacture of machines which it could not produce on an economical basis.
By adding the following paragraph to subitem (x) : - (9.3) Engines, exceeding 100 horse-power designed for the use of coal or producer-gas, including first set of spare parts imported with and for use with such engines, ad valorem: British, free; intermediate, 15 per cent.; general, 15 per cent.
– I move -
That the item be amended by adding the following to paragraph (93) of sub-item x: - “And on and after 27th March, 1936-
Engines, exceeding 100 horse-power, designed for the use of coal gas or producer -gas, including the first set of spare parts imported with, and for use with, such engines, ad valorem - British, free : intermediate, 15 per cent.; general, 15 per cent.”
Customs Tariff Proposals No. 3 reads “ Engines exceeding 100 ‘ horse-power designed for the use of coal or producergas, &c.” It is necessary to remove the ambiguity associated with the previous draft, the intention being to provide for engines using coal gas, not coal, as a fuel.
Amendment agreed to.
Item, as amended, agreed to.
Item 17 G-
By adding a new sub-itemas follows: - “ (n) Air Com pressors of the reciprocating and rotary types, viz.: -
Of a capacity not exceeding 1,7.% cubic feet of free air delivered per minute -
Portable, in which the prime mover is an internal combustion enginedirect-coupled to the compressor, including the engine when imported therewith,ad valorem: British, 20 per cent.; intermediate, 371/2 per cent. : general, 40) per cent.
And in respect of subparagraph (a) -
For each £1 by which the equivalent in Australian currency of £100 sterling is less than £125 at the date of exportation -an additional duty of, ad valorem : British, . 6 per cent. ; intermediate, . 7 per cent.; general, . 7 per cent.
Other, ad valorem. British. 25 per cent.; intermediate, 421/2 per cent.; general. 533/4 per cent.
And in respect of subparagraph (b) -
For each £1 by which the equivalent in Australian currency of £100 sterling is less than £125 at the date of exportation - an additional duty of. ad valorem, British. . 8 per cent. : intermediate. . 9 per cent.; general,9 per cent.
Of a capacity exceeding 1,750 cubic feci: of free air delivered per minute - the rate of duty shall be the rate under sub-paragraph (b) of paragraph (1) reduced by 1 /500th of the British preferential tariff rate for each cubic foot of free air delivered per minuteby which the capacity exceeds 1.750 cubic feet, with minimum of - ad valorem. British free; intermediate15 per cent.; general, 15 per cent.”
– I move -
That the item be amended by adding the following to sub-item (n): - “And on and after 27th March.1936 -
Air compressors (including air blowers) of the reciprocating and rotary types, viz. : -
Portable, in which the prime mover is an internal combustion engine direct-coupled to the compressor, including the engine when imported therewith - ad valorem, British, 20 per cent.; intermediate, 37£ per cent. : general, 40) per cent.
And in respect of sub-paragraph (re) -
For each £1 by which the equivalent in Australian currency of £100 sterling is. less than £125 at the date of exportation -
An additional duty of - ad valorem, British, 6 per cent.: intermediate. 7 per cent.: general, . 7 per cent. (b) Other - ad valorem. British 25 per cent. : intermediate. 421/2 per cent.; general, 533/4 per cent.
And in respect of sub-paragraph (b) - For each £1 by which the equivalent in Australian currency of £100 sterling is less than £125 at the date of exportation -
An additional duty of - ad valorem. British, . 8 per cent.; intermediate, 9 per cent.; general, 9 per cent. (2) Of a capacity exceeding 1,750 cubic feet of free air delivered per minute - the rate of duty shall be the rate under sub-paragraph (b) of paragraph (1 ) reduced by l/500th of the British preferential tariff rate for each cubic foot of free air delivered per minute by which the capacity exceeds 1,750 cubic feet, with minimum of - ad valorem. British, free; intermediate. 15 per cent.; general. 15 per cent.”.
The effect of the amendment is to make it clear that the sub-item embraces air blowers of the reciprocating and rotary types as well as air compressors of those types. As the wording of the proposed sub-item now stands, doubt exists as to whether the sub-item may properly be taken to include air blowers. The amendment removes any possible doubt on the point. As far as I am able to ascertain, there is little or no mechanical difference between air compressors and air blowers of the types under review. The only difference between the two machines appears to be in the pressure at which they deliver the air, the blower delivering at a low pressure, while the compressor delivers air at a higher pressure.
The advice of the Tariff Board has been sought as to the interpretation to be placed upon the sub-item, and the board has replied intimating that it did not intend that there should be any difference in the tariff treatment of blowers and compressors of the types covered by item 176 n. The amendment is, therefore, in accordance with the recommendations of the Tariff Board.
.- I ask the Minister to be good enough to refer this sub-item back to the Tariff Board for further investigation and report.
Before the present tariff schedule was introduced, air compressors were classified under item 176 f 1 machines and machinery, n.e.i. at 33^ per cent. British preferential tariff, and 65 per cent, general tariff. Under the new classification they are admitted according to free air capacity, viz. 1,750 cubic feet of free air a minute being dutiable at - portable, British preferential tariff, 20 per cent.; general tariff, 46i per cent.; other, British preferential tariff, 25 per cent.; general tariff, 53 j per cent. Over 1,750 cubic feet a minute the duty recedes, until at 2,250 feet, the British preferential tariff rate is free and the general tariff rate is 15 per cent. Import figures are included with “ air and gas compressors and exhausters under which heading the official returns show values for the past two years to be £9.131 in 1933-34, and £37,518 in 1934-35. The fixed dutiable limit is strongly objected to, as is also the separation of portable from stationary machines. If a limit should bo imposed, which manufacturers definitely do not admit, it should not be fixed within the proved productive capacity of the trade. Air compressors have been manufactured in Australia for many years, and types of compressors ranging in capacity from 20 to 2,500 cubic feet of free air delivered each minute have been supplied. It is, therefore, strongly urged that the limit of 1,750 cubic feet should be increased to at least 2,250 cubic feet. This whittling away of protective duties to the vanishing point is viewed gravely by Australian manufacturers and it is feared must prove a serious blow to the industry.
.- The Tariff Board has already undertaken an inquiry, and has reported that the types of air compressors made in Australia are of the lower range. The larger machines can be made in Australia, but not economically. Such machines are used chiefly in the mining industry, and I do not think that the Deputy Leader of the Opposition (Mr. Forde) wishes to impose further restrictions on mining. I cannot undertake to refer the sub-item back to the Tariff Board, but if the Australian manufacturers of these articles have any further representations to make, I shall be glad to give them full consideration.
Amendment agreed to.
Item, as amended, agreed to.
Item 177 (Tractors and tractor parts).
.- Tractors and tractor parts are admitted free under by-law. Sub-item (n) (2) deals with cylinder sleeves, and I notice that the British preferential duty is now 20 per cent., and foreign 51J per cent., whereas, previously, cylinder sleeves imported from Britain were admitted free. If the sub-item provided for “ cylinder sleeves n.e.i.” it would be clear that it did not apply to tractor sleeves. As it stands, the sub-item appears to deal with cylinder sleeves for tractors, and I should like to know why the duties of 20 per cent, and 5l£ per cent, are now imposed.
– Cylinder sleeves which are imported with tractors enter free of duty, but are dutiable if brought in to replace worn-out parts, as they are made in Australia. Larger sizes may still come in at rates equivalent to by-law rates.
Item agreed to.
Item 178 agreed to.
Item 179 (Electrical heating and cooking appliances, &c).
.- The Tariff Board inquired into this item in November, 1933, and since that inquiry wages have, in many instances, been increased in Australia and hours have been reduced. The capital invested in this industry is estimated at £300,000, the wages and salaries distributed directly being estimated at £83,000 per annum. The value of purchases of raw material, &c, by the industry is as follows: 48 per cent. Australian origin, £69,120; 44 per cent. United Kingdom origin, £63,360; and8 per cent, foreign origin, £11,520. The industry, which was established between 1900 and 1905, forms a necessary adjunct to the success of the many electricity schemes throughout the country in which scores of millions of public money are invested. The quality and range of locally-made appliances are undisputed. The industry works closely with the supply companies and has developed many electrical appliances to suit the needs of the Australian people, one striking example of which is the electric jug, a quick and cheap electric water-boiling utility which is not made in the United Kingdom. The sale of jugs in Australia is estimated at from 40,000 to 50,000 per annum. Again, the electric “ Night Load “ hotwater service is made by the industry, and the needs of Australia are fully catered for. By reason of their bulk, such heaters could not be imported economically. The industry also renders an essential service by the provision of servicing depots throughout Australia, where service in the nature of repairs and replacement parts is readily available, not only to their present and past products, but also in cases where overseas manufacturers have withdrawn their products from the market or, for other reasons, fail to provide adequate service facilities for the goods they have sold in Australia. Service is provided by the industry by the manufacture of special heating and cooking equipment for the commercial preparation of foodstuffs, specialized plant for other industries, electrical equipment for hospitals, scientific research, &c. Such service could not be effectively or economically rendered by overseas manufacturers, as it is in most cases special and intimate to specific needs. The evidence submitted to the Tariff Board indicated that the difference in wages between Australia and the United Kingdom in the trades affected was then 47 per cent., and the difference in the cost of basic materials from 75 to 80 per cent. The industry is well-established and well-managed, and is equipped with highly modern plant. As local competition has regularly and consistently reduced the prices of Australianmade appliances, and the extent and nature of the manufacturing activities of the industry are substantial, it can claim to be economically practicable. The tariff does not preclude overseas manufacturers from tendering for the Australian market requirements with a reasonable chance of success. The present tariff protection - 30 per cent, ad valorem British - is moderate and represents only the difference between labour and material costs in Australia and those overseas. This is another industry which would be placed in jeopardy if any further reduction of duty were made, or if any trade treaty bearing on it were made with any foreign country, particularly with an Eastern country, where labour costs are lower and hours of labour longer thanin Australia. It affords excellent opportunities for Australian boys to learn an interesting trade.
Item agreed to.
Sitting suspended from 6.15 to 8 p.m.
.- The Scullin Government incurred a lot of criticism because it imposed prohibitive duties, and even total prohibition in some cases, upon the importation of wireless receivers and accessories. Those prohibitive duties were imposed, however, because the Government believed that this industry could be developed satisfactorily in Australia, and, indeed, supply the total local requirements. The growth of the number of persons employed in the industry within recent years demonstrates the effectiveness of the protection afforded. At the end of December, 1930, the average number of persons employed numbered 275, while the number engaged at the present time is 6,000. Those employed in the manufacture of raw materials associated with the industry number 20,000. Quite an important industry has grown up in the manufacture of wireless cabinets from Australian woods. For the year 193-1-35, the wages paid in the industry, at an average of £150 per annum for each employee, totalled £3,900.000. The number of receivers manufactured for the same period was approximately 170,000. and the average sale price was £30 each. Before the importation of wireless sets was prohibited, a six-valve set of good quality sold in Australia at £50. To-day a good quality, six-valve receiver is priced at £20. 1 stress that fact, because the opinion is freely expressed by low-tariffists that, as soon as protection is afforded to any Australian industry, the price of the commodity concerned must inevitably rise. The wireless receiver manufacturing industry affords a striking example of how the encouragement of local production may lead to a substantial reduction of prices. I remind the Minister that the manufacturers of wireless sets in Australia are apprehensive lest the projected negotiation of a trade treaty with Japan should result in the reduction of the import duty on foreign receivers to the detriment of the Australian industry. I should be pleased to learn from the Minister whether there is any likelihood of that occurring. Any downward revision of the foreign tariff would strike a serious blow at the Australian industry, in which so many persons are employed.
– I have always been a consistent supporter of Australian industries; but recently I had a bitter experience of the operation of the Australian tariff. While I was in England I purchased a wireless set for £3 17s. 6d., upon which I was asked to pay, when. I reached Australia, duty totalling £8 10s. I remonstrated with the authorities, and the best bargain I was able to strike was to have the duty reduced to £6. Unfortunately, during the voyage out. the set fell off a shelf in a rough sea, and was broken, so when I learned that I should have to pay £6 on it, I told the officials they could take the set away and play with it. In my opinion, the duty levied upon that set was altogether excessive. On the other side of the world one can buy wireless sets for one- third of the price asked for them here. I favour reasonable protection, but I believe that the poorer members of the community should be able to purchase wireless seats at a moderate price, especially as these are no longer luxuries, but are practically necessaries. It is ridiculous that we should be required to pay £12 in Australia for what can be bought in England for £4. We might reasonably be required to pay twice as much here as in England, but no one can convince me that it is justifiable to charge three times as much.
. -I think the speech of the honorable member for Eden-Monaro (Mr. Perkins) has effectively answered the Deputy Leader of the Opposition (Mr. Forde). This is a thriving industry, the importance of which the Government fully recognizes. Generally speaking, those engaged in the industry are satisfied with the present duties. There is a divergence of opinion between the manufacturers of Melbourne and those of Sydney, but the Melbourne manufacturers, at any rate, are quite content. The present duties have been carefully considered by the Tariff Board, and some of them represent reductions, as compared with those previously in operation. The honorable member for EdenMonaro has informed us that he bought a wireless set abroad for £3 17s. 6d. No doubt he used it for some months, but, had he used it for twelve months or more, it would have been admitted to this country free of duty. When comparing Australian prices with those overseas, the honorable member must take the exchange rate into consideration. The honorable member must realize that if, when he is abroad, he buys goods which are subject to protection in Australia, he must be prepared to pay duty on them.
.- From 1929, until the end of 1935, duties on sparking plugs were, British preferential,1s. 6d. each or 45 per cent.; foreign. 1s. 9d. each, or 65 per cent.
The proposed reduction is in two instalments -
Since the higher duties were imposed in 1929, importations of sparking plugs have steadily increased as follows: -
It must be assumed that the effect of the reduction of duties will be a still more rapid increase of importations of sparking plugs. Information furnished by the Commonwealth Bureau of Census and Statistics, shows that imports of sparking plugs during the six months ended the 31st December, 1935, numbered 63,733 dozen, or 764,796 plugs - over four times as many as we imported for the year ended June, 1932. The lower duties did not commence until the29th November, 1935, and the figures I have quoted indicate what increased importation may be ex- pected in the next twelve months. The local factories are able to supply the total Australian requirements, both as regards quantities and range, and at short notice. They have been declared by leading local and foreign competent judges to be amongst the first three of the most efficient Australian factories of high precision work, and to rank equal, except for size, with any similar factories outside Australia. The largest, keenest, and most critical purchasers of sparking plugs, - General Motors and the Ford Motor Company of Australia Proprietary Limited - have been, for a number of years, using Australian sparking plugs exclusively as original equipment for all General Motors and Ford cars and commercial vehicles marketed in Australia, their purchases numbering over 300,000 plugs per annum. These firms are more competent to judge the quality of a plug than are the general public ; they not only have greater facilities, knowledge, and experience in the testing of plugs, but they are also required to submit Australian equipment to their home factories for stringent test and approval. Those firms are under a very great responsibility when selecting a sparking plug as original equipment for the approximately 40,000 motor vehicles sold in Australia per annum. They could not and would not jeopardize the performance of their cars and trucks for the sake of saving a few pence on each plug. Their choice of an Australian sparking plug is the highest possible testimony to the industry.
The Australian manufacturers have been able to build up a growing export toNew Zealand. They have even exported plugs to South Africa, and have received the highest prices for the finished article. The industry can make the unusual claim that the retail price of the Australian plug in the Commonwealth is considerably below the retail price at which English plugs of similar quality are sold to the English public. There are some people so steeped in prejudice against the local article, however, that, unless the duties on the imported plugs are sufficient to keep them out of this country, they will continue to ask for them. Yet the same people will ask for £4,000,000 a year as a bounty for the wheat-growers, or some other primary producers. Australian plugs sell here at 4s. 6d. Australian currency. Similar English plugs sell in England at 5s., which is equal to 6s. 3d. Australian currency, It will thus be seen that the establishment of the local industry has brought about a saving of thousands of pounds annually to the Australian motorist. It has provided employment to Australian workmen under ideal conditions, and indirect employment has been given by the use of Australian raw material such as steel, brass, mica, washers, cartons, &c. I think it is also important from a defence point of view that Australia should be self-contained with regard to sparking plugs for motor cars, trucks and aeroplanes. A capital of £75,000 is invested in the industry, and there are 140 employees. About 2,000,000 sparking plugs per annum are required for the Australian market, and the local industry, provided the margin of preference were sufficiently high, could supply the trade without any difficulty. Five
Australian firms are engaged in the manufacture of sparking plugs. The Tariff Board’s summary of the evidence given in its report of the 20th March, 1935, is as follows: -
Australian manufacturers have not in the past availed themselves of the full margin of protection available, and the public can now purchase locally-made plugs for replacement purposes at prices which are much lower than were ever previously quoted for good quality plugs.
The existing rates of duty, which have had the effect of diverting the bulk of the equipment business to local manufacturers,are considerably in excess of what is required to protect the replacement business, and arc slightly higher than is necessary for the adequate protection of the equipment trade.
The weight of evidence supports in general the Australian manufacturers’ claim as to quality.
No doubt as to the quality of the Australian article can remain after a perusal of the Tariff Board’s report. The motorist is able also to buy his plugs at cheaper prices than would obtain if the local industry were not in existence. A similar statement could be made with respect to very many other Australian secondary products.
– The Deputy Leader of the Opposition (Mr. Forde) said that it was most necessary that we should make sparking plugs in Australia, and he pleaded for a still higher duty, but he showed also that the Australian industry is so efficient that it has developed an export industry to New Zealand and South Africa. Furthermore, the honorable member stated that the Australian plug sells at a lower price than the English plug. If the facts are as stated - the honorable member went to very great trouble in reading them so that he would not make a mistake - there is no need, I should say, for protection to be given to an industry which not only is able to supply the local market at prices lower than those at which manufacturers in other countries are able to supply their home markets, but is also able to compete with those countries under the freetrade conditions which obtain in Now Zealand, and under conditions with which I am not acquainted, in South Africa.
-What about wheat?
– We have to grow wheat in competition with black, white or brindle nations and sell it on the markets of the world. If it were not for the excessive height of the protective tariff of Australia there would be no need for some of the wheat bounty measures that have been introduced in the last few years.
– Wewould have to raise the money somehow.
– The honorable member for Capricornia (Mr. Forde) made out too tough a case for the higher duties and imposts on production and transport, and has succeeded in getting his party into a position in which it imposes a prohibitive tariff on moderation and an effective embargo on commonsense.
Item agreed to.
Item 181 agreed to.
By omitting the whole item and inserting in itsstead the following item- “ 182. Bolts, nuts, rivets, and metal washers, n.e.i. : screws with nuts or for use with nuts ; engineers’ set screws - ad valorem, British 35 per cent, (less 3s.6d. per cwt. ) ; intermediate, 35 per cent, (plus1s.6d. per cwt.) ; general, 35 per cent, (plus1s.6d. per cwt. ); or as an alternative to the above composite rates - ad valorem, British 10 per cent.; intermediate, 55 per cent.; general 55 per cent; whichever rate returns the higher duty.
And for each £1 by which the equivalent in Australian currency of £100 sterling is loss than £125 at the date of exportation -
An additional duty of - ad valorem, British, 1per cent.; intermediate, 1 per cent.; general, 1 per cent.”
– I desire to bring under the notice of the Minister for Trade and Customs (Mr. White) the position with respect to heavy black iron washers. The actual effective duty is l1s. a cwt. British tariff and 16s. intermediate and general. The firm of C. Ebeling and Sons Proprietary Limited, in my electorate is, 1 believe, the only firm in this country that is engaged in the manufacture of black iron washers and it set up special machinery for this express purpose. Before extending this section of its business, however, the management was afraid that a tariff change might jeopardize the success of the enterprise. Therefore, in 1932 a letter was sent to the Minister for Trade and Customs seeking information as to the Government’s intention in regard to the duty and stating that in the event of the duty being removed the firm would not be able to continue the manufacture of these washers. On the 23rd September, 1932, the company was notified by the department that no application had been made for a reduction of the duties on iron washers and that a reduction was not being considered. Accordingly the plant was improved and the industry grew in size until about 30 persons, many of whom live in my electorate, were employed. Subsequently the company found that although a reduction of the duty on iron washers had not actually been sought, the Tariff Board had given consideration to it. I emphasize that the type of washer produced by Ebeling and Sons Proprietary Limited is not of the ordinary type, but is a special article. The company said that it would not be able to compete in the manufacture of ordinary washers, but the fact that the black iron washers were of special sizes warranted special protection. When the duty was reduced the company realized that it would find difficulty in carrying on in face of strong overseas competition and appealed to the Minister; I understand that some consideration is being given to its desires. From a perusal of the Tariff Board’s report I find that the representative of the British Association of Manufacturers did not ask for a reduction of the duties on iron washers, but asked for a reduction of the duties on certain other lines, which are included in the same tariff item. Nevertheless, the duty on washers was reduced and the company has been almost driven out of production. The Ottawa agreement was not intended to prevent an Australian manufacturer from carrying on, but merely to enable the British manufacturer to compete on even terms. Article 10 of the United Kingdom and Australia Trade Agreement Act 1932 reads -
His Majesty’s Government in the Commonwealth of Australia undertake that during the currency of this agreement the tariff shall be based on the principle that protective duties shall not exceed such a level as will give the United Kingdom producers full opportunity of reasonable competition on the basis of the relative cost of economical and efficient production, provided that in the application of such principal special consideration may be given to the case of industries not fully established.
The manufacturer of black iron washers falls within the category of “ industries not fully established “. In October, 1933, the Tariff Board refused to differentiate between the different products of the nut and bolt industry, and taking the item as a whole recommended that the duty be reduced. The duty operating in 1933, before the Government adopted the recommendation of the board was - British lis., less onefourth of the duty or one-eighth of the value for duty, whichever is the less per cwt., or 33$ per cent, net ad ‘valorem, whichever rate returns the higher duty; and general, 16s. a cwt. or 65 per cent. At the sitting of October, 1933, the Tariff Board refused to differentiate between the different products of the nut and bolt industry, and, taking the item as a whole, reduced the duty to ad valorem 35 per cent., less 3s. 6d. a cwt., or ad valorem 10 per cent, (whichever returns the higher duty). This finding may have been satisfactory to manufacturers of nuts and bolts, hut it is contended that it is unfair to the manufacturers of washers and heavy iron washers quoted at Ils. f.o.b. London. By adding 35 per cent, duty- 3s. 10d., less 3s. 6d. a cwt - it. is equal to a protection of 4d. per cwt. ; or by adding 10 per cent., a protection of ls. Id. a cwt., plus exchange, primage and freight, bringing the landed cost to about 19s. a cwt., against the Australian price of 28s. lOd. a cwt. The Tariff Board, in its comments, explained that for examination it divided the components of the selling prices of bolts and nuts manufactured in the United Kingdom or in Australia into three principal groups - (1) costs of steel; (2) costs of manufacturing and packing and ‘manufacturers’ profits; (3) costs of delivery e.i.f. and e. at main Australian ports. In respect of group 1 the board found that the Australian manufacturer had an advantage of ls. 6d. a cwt. over the imported material, and, taking this into consideration and summarizing the three groups, recommended the duty I have mentioned. In the production of washers, the Australian manufacturers found it impossible to procure sufficient scrap plate for local requirements, and installed a mill which rolls plate to any gauge required. This mill can produce plate ready for punching at the cost of 5s. 101/2d. per cwt., which, it is claimed, is very reasonable. They are emphatic that it is impossible to manufacture enough washers for local demands without this mill, and the board, when compiling the costs of steel, group 1, did not take into consideration the washer manufacturers. To manufacture 1 cwt. of washers, 3 cwt. of plate is used, and 2 cwt. is waste. The details are -
Cost of plate for1 cwt. washers (ordinary plate if available) -
Difference of coat if milled plate and scrap plate, if procurable, 5s.71/2d. per cwt.
It is claimed that in the washer industry in Australia, the production of washer plate by a rolling mill is essential, and further, that the extra cost of producing that plate should have been taken into consideration by the board. With an added protection of 5s. 71/2d. per cwt.. Australian manufacturing costs will be still above the landed costs of the British product, but the manufacturers feel it is possible to do business with some merchants who would prefer to buy assorted sixes ex their stock with 30 days’ credit, in lieu of having to import, say, 10-ton parcels and pay cash against documents.
From inquiries made overseas, the firm is satisfied that its workmen, their methods and the washers manufactured, compare favorably with those of British manufacturers. The following details of cost of manufacturing 1 cwt. of washers have been supplied by Messrs. Ebeling and Son, Yarraville, Melbourne : -
Cost of 1 ewt. of imported washers, prior to sitting of Tariff Board -
Cost of washers, since sitting of Tarriff Board -
This firm was employing about thirty hands on the making of washers and if the industry had been allowed to develop it would to-day be giving employment to 90 men. In 1930-31 it employed one adult and two juniors, the value of the machinery was £150, and the sales were £457, representing the manufacture of 16 tons at an average price of £29 10s. a ton. In that year the firm incurred a loss of £51 17s. 5d. In 1931-32 it increased its staff to two adults and eight juniors. The value of the plant was £530, and sales amounted to £1,51711s. 10d., representing the value of 52 tons at an average price of £29 10s. a ton. The loss incurred was £7 15s. 4d. I suggest to the Minister that a mistake has been made by including washers in this item with bolts and nuts. If this had not been done, this Australian firm would have been able to carry on. In confirmation of my earlier statement the Tariff Board’s report indicates that Mr. Ferguson, the representative of the Australian Association of British Manufacturers in Melbourne, did not ask for a reduction of the duty on nuts and bolts, and in its only reference to metal washers in five pages of comment on the evidence, the board stated that there were no special features connected with the production of these goods in Australia to warrant the imposition of duties different from the rates suggested for bolts and nuts. In its opinion, they should be similarly treated. The board appears to have completely overlooked the fact that a reduction of the duty on washers would put these people out of business. The representations of the firm deserve the earnest consideration of the Minister, because, as I have shown, had it received reasonable encouragement, it would to-day be giving employment to 90 men, who would be in receipt of good wages, and the firm wouldbe able to supply the Australian market. In a letter to me on the 17th March, 1936, Messrs. Ebeling and Sons stated-
Even during the depression when the industry was protected, we had sixteen machines withan operator to each, also sorters, packers and two foremen - the machines were worked at top speed and Ave often found it necessary to work two shifts.
Our rolling mill, which manufactured the plate to feed the machines, employed nine men and one foreman on each shift and the mill had to work often two shifts to keep up the supply.
At the present time the mill is closed down and only two machines are in operation.
This state of affairs is ridiculous, and when the Tariff Board reduced the duty on washers from11s. per cwt. to1s.1d. per cwt. it was a violation of the United Kingdom and Australia Trade Agreement Act 1932, article 10.
If the duty were reduced to, say, 50 per cent, instead of 10 per cent., we feel sure that we could carry on, as, although the British manufacturer could stillland washers in Australia under our price, the Australian merchants, we believe, would purchase our product which compares favorably with the British article and buy against our stocks with 30 days’ credit, as against buying large parcels from abroad “ cash against documents “.
With business now offering, we should be employing three times as many hands as in the depressed times instead of now being in the inglorious position of employing about one-tenth.
While item . 182 caters for bolts, nuts, rivets, metal washers n.e.i. screws for nuts or for use with nuts and engineers set screws, it is remarkable that Mr. Ferguson, the British representative, opposed duty on all lines in this item except washers, yet the Tariff Board used bolts and nuts as the basis of their report and found the duty for the item asa whole. Our contentionis that from our evidence, washers should have received consideration and been treated as a different item.
I hope that the Minister will heed my representations. All I am asking is that consideration be given to this Australian industry which, with proper tariff protection, could be made self-supporting. I know the policy of the Minister’s party, and I am aware that he has sufficient supporters in this committee to give effect to it. I am afraid, however, that as he appears, at the moment, to be otherwise engaged, he has not given attention to much of what I have been saying on this question.
-I have been conferring with the Opposition whip, but I am well a ware of the case presented by the honorable member. He has stated it on other occasions, and all thathe has said to-night could have been told in a few minutes.
– I think I am entitled to have the attention of the Minister while stating my case to the committee. My one purpose is to place the facts before the committee, and if possible persuade the Minister to give this industry adequate protection.
.- This industry was the subject of inquiry when the Tariff Board investigated the manufacture of bolts and nuts, and the duty applied to them was applied to washers. The firm mentioned by the honorable member has represented that it cannot carry on with the existing duties, but other firms manufacturing this class of goods can do so. In its report the Tariff Board stated that the industry being carried on by this firm was unecenomic. Through using scrap iron its costs for the raw material were £19 2s. a ton, as compared with its competitors landed costs, duty free, of £16 17s. 6d. a ton. This firm, it should be explained, has been making its washers from scrap which it obtains from various sources. It rolls this material, and stamps out the washers from it. Notwithstanding the known facts, the honorable member for Maribyrnong (Mr. Drakeford) has not been satisfied and has asked that there should be a separate inquiry into the manufacture of washers, which, as honorable members well understand, is a comparatively small industry. Although other and larger industries have been pressing for inquiries, I have sent this request on to the Tariff Board, and the honorable member knows it, so there was no occasion for his long story to-night and his petulent behaviour.
Item agreed to.
Items 186, 187, 190, 192, 193, and 197 agreed to.
Item 206 (Lamps n.e.i., lanterns n.e.i.).
.- I ask the Minister to refer this item back to the board for further investigation and report, because drastic reductions have been made of the British preferential rates on sub-items a and b, although there is provision for an increase of the duty as exchange returns to par. In determining the present rates of duty, there has been the assumption that exchange is equivalent to a tariff of 20 per cent. This assumption is not borne out by actual experience. Bartering by Germany, the depreciated currency of Japan, and special allowances made by other countries frequently reduce the landed cost of goods in Australian currency below the level when exchange was at par, thus exposing this industry to competition that is detrimental to the best interests of Australia. If the assumed protective value of exchange were halved, being placed at 10 per cent, instead of 20 per cent., and the rates of duty were increased accordingly, the position would not be so unsatisfactory as it is at present. The subsequent increase as exchange moved towards parity could then be . 4 per cent, instead of . 8 per cent, for every advance of £1, so that the same rate of duty would eventually be reached as under the 1935 proposal, and the Australian industry would be safeguarded in the process of the return to normal financial conditions. Under item 250 (a) free admission is now given to bottles, flasks, &c, from the United Kingdom, while only the nominal duty of 5 per cent, operates on lamps under item 206 (a), glassware n.e.i., under 250 (c), and glass dishes under 250 (f). Such drastic cuts into the duties are not counter-balanced by the protective value of exchange, and each line should be given some additional protection, instead of the protection being left to exchange, as is the case at present. This would not involve any increase of the final duty upon the return of exchange to parity. The Government’s tariff policy - the reduction of duties - has given a good deal of concern to this industry. The attitude of the principal company and its associated companies towards that policy was stated before the Tariff Board at its inquiry in June, 1935. The representative of the company then pointed out that in twenty years it had grown from a comparatively small industry to one employing 4,000 workers and paying £700,000 a year in wages. It was also pointed out that because of the uncertainty of tariff policy and the frequent fluctuations of the rates of duty the company did not know where it stood for any length of time ahead. It asked for reconsideration of the protection given. I know that the Minister has committed himself to the policy of referring all such matters to the Tariff Board for investigation and report, and will not accept the responsibility of increasing the duty to-night. I ask him to be good enough, therefore, to refer this matter back to the Tariff Board, and to promise early consideration of the report when received, followed by parliamentary action in accordance with the board’s recommendations.
– This item has had full consideration. The board’s recommendations are based on present conditions, and are not worked out from the angle of exchange parity. If the contention in regard to the allowance for exchange is correct, then the board’s rates for par exchange should be reduced, not the present rates increased. In the circumstances, as an inquiry has already been held, the Government is unable to agree to the suggestion that the matter should be further investigated.
Item agreed to.
Items 208 and 215 agreed to.
By adding a new sub-item (d) as follows: - “ (d) Shovels - ad valorem. British, 20 per cent.; intermediate, 371/2 per cent.; general,483/4 per cent.
And in respect of sub-item (d) -
For each £1 by which the equivalent in Australian currency of £100 sterling is lessthan £125 at the date of exportation -
An additional duty of ad valorem, British . 8 per cent.; intermediate, 0 per cent.; general, . 0 per cent.
Amendment (by Mr. Archdale Parkhil l) agreed to -
That the item be amended by adding the following sub-item (d) : - “ And on and after 27th March, 1936 -
Shovels n.e.i. - ad valorem, British, 20 per cent.; intermediate, 371/2 per cent; general, 483/4 per cent.
And in respect of sub-item (d) -
For each £1 by which the equivalent in Australian currency of £100 sterling is less than £125 at the date of exportation -
An additional duty of ad valorem, British, . 8 per cent.; intermediate, 9 per cent.; general, . 9 per cent.
Item, as amended, agreed to.
Item 221 agreed to.
Division 7. - Oils, Paints and Varnishes
By adding a. new sub-item (j) as follows: - “ (J) Medicinal cod liver oil, not compounded, per gallon - British, free; intermediate, 7d. ; general, 7d.”.
– I move -
That the item be amendedby adding the following to sub-item (j) : - “ And on and after 27th March, 1936 -
Refined cod liver oil, not compounded, per gallon: British, free; intermediate, 7d. ; general, 7d.”
The question arose as to whether the British Pharmacopoeia standard was to be adopted for medicinal cod liver oil. Under the amendment it nerd not necessarily apply in order to obtain the benefit of the present duty.
Amendment agreed to.
Item, as amended, agreed to.
Items 231, 232 and 233 agreed to.
By omitting the whole of sub-item (a) and inserting in its stead the following sub-item: - “ (a) Portland cement - per cwt., British, free; intermediate,1s.; general, 1s. 41/2d.
And in respect of sub-item (a) -
For each £1 by which the equivalent in Australian currency of £100 sterling is less than £125 at the date of exportation -
An additional duty of - per cwt., British, . 36d. ; intermediate, . 36d.; general, . 36d.”.
.- Formerly cement from Great Britain was subject to a duty of1s. per cwt.; it is now free. That cannot be justified. The Tariff Board has submitted two voluminous reports on the subject, one of which was made available only yesterday. The Opposition as a party is not prepared to see a great labour-employing industry of this kind wrecked by any drastic reduction of duty.
Removal, of the protection altogether will have a more damaging effect. Labour does not stand for profiteering on the part of any Australian manufacturers who enjoy protection, particularly if they have a monopoly of the trade. I believe that when a reasonable profit has been made on capital invested, after the payment of decent rates of wages, and the observance of reasonable conditions of employment, prices to the consumer should be reduced. This party stands for the new protectionistpolicy which has been in our platform for 30 years. It believes that profiteering should be dealt with in another way. Why burn the house down to roast a pig?
We do not condone profiteering in any way; it is reprehensible. Companies that enjoy protection should benefit the consumers by reducing prices after a reasonable dividend has been paid out of profits. The Government’s action in this case has been very drastic, in that it has completely removed protection from the industry. It could have lowered the duties gradually over a period, and thus have allowed the industry to re-adjust itself to the altered conditions. I believe that, by arrangement, the industry would have been prepared to effect some reduction of price, so long as it was not made vulnerable to the competition of imports. I do not believe in cutting off one’s nose to spite one’s face. I am mindful of the large number of employees in the industry. If the competition of imports from cheap labour countries has to be met, the innocent workmen, who have nothing to do with profits, and certainly receive no dividends, will find their employment in jeopardy. I am astonished at the statement of the Tariff Board in its supplementary report, that it is not concerned with dumping.
– Because the Government deals with that under legislation which has already been enforced.
– Surely it has to take cognizance of the possibility of cement being dumped in Australia ! I understand that it was informed that that occurred.
– It is for the Government to take action.
– I hope that the Minister will keep an eyeon that danger. One cannot condone profiteering that is practised behind the tariff wall. On the other hand, one must have some concern for the workers in the industry. Under the heading “ Cost of production the supplementary report of the Tariff Board states -
The board is not primarily concerned with the difference between export and domestic prices in the United Kingdom, because it is satisfied that the local manufacturers are able, without the assistance of any duty, to meet competition based on current export prices, whether or not they be what might be regarded as dumping prices.
That is to say, irrespective of the dumping prices at which cement might be landed in Australia, protection is not justified. That is an extreme doctrine, lt is not the policy on which secondary industries have been established. If cement is being dumped in the absence of tariff protection, the local industry is vulnerable, and the consequences to the employees in it may be very serious. Should it be shown that the industry is in jeopardy as the result of the wiping out of the duty, the Minister may consider some compromise. Apparently, in his opinion, the British preferential rate of ls. per cwt. is too high. If some honorable member who has made a careful study of the matter will move for the insertion of a lower rate, say, 6d. per cwt., the Opposition will support the move. What will happen to the 3,000 workers in the industry if there is absolute freedom of entry and there are large importations of cement while this Parliament is in recess?
– Dumping legislation can bc applied.
– It is quite possible that a year will elapse before it can be proved (hat dumping is taking place. The Tariff Board states that a gross profit of 10 per cent, is sufficient, hut I am informed that out of that profit, taxation, which represents at least 2 per cent., has (o be paid, and from the remaining 8 per cent, provision has to be made for amortization and reserves. Messrs. Smith and Johnson, accountants, of Sydney, have submitted a. report, to the Tariff Board to the effect that such a percentage is totally inadequate for the cement manufacturing industry. The Minister may have some information to the contrary, but the Tariff Board’s reports have been submitted in such numbers and with such rapidity, that it is exceedingly difficult for honorable members to study them.
About two-thirds of the cement produced in. Australia is manufactured in New South Wales. I have already shown that even under normal conditions the Australian cement companies could not make a gross profit of 10 per cent. The Tariff Board has stated that the manufacture of cement ought to be rationalized, and if that means that one or more of the works should be closed down, the effect upon employment throughout Australia would be serious. lt has been proved to me that, under the suggested rationalization, there would be no reduction of the cost of manufacture. The Tariff Board has also reported that the largest works do not necessarily produce cement at the lowest cost. The board bases its recommendation on the landing of British cement in Australia at 54s. a ton c.i.f., but evidence was given that it could be landed at 7s. a ton under that figure. Moreover, since the Tariff Board submitted its report, British cement has been landed in all ports of the Commonwealth at 5s. to 6s. a ton cheaper than the figures on which the Tariff Board based its recommendations, thus leaving very little profit for the Australian manufacturers. The Tariff Board further states that the capacity of cement works in Australia should be 900,000 tons, and, allowing for stoppages this would give an effective production of 720,000 tons. The Australian cement manufacturing companies stated that they had a capacity of 1,300,000 tons or, when allowance was made for stoppages, 1,000,000 tons. Seeing that at one period prior to the depression these companies sold about 750,000 tons, they were justified in providing for expansion. The increased consumption in New South Wales during one year was 100,000 tons, and for several years it was equivalent to an increase of 20 per cent. Prior to the depression there was nothing to indicate that the steady development of this industry would not be maintained. In reply to the board’s arbitrary statement that it could not allow for depreciation on what it regarded as the excess plant, I may state that the modern kilns produce upwards of 50,000 tons a year, and with the number of companies operating, there should he a substantial reserve of plant capacity. There is every indication that, prior to the depression, the excess plant would have been utilized to meet the increasing demand. If the demand were for 10,000 tons annually and there were prospects of selling another 10,000 tons, kilns could not be installed to produce nearly the additional quantity for which a market could be found. Provision in building has to be made for future expansion, and to-day kilns are not erected with a capacity of less than 50,000 tons. A kiln was recently erected in Victoria with a capacity for 80,000 tons. It would be extremely difficult to mention any old-established industry that is not overcapitalized. During the depression the building, baking, hosiery, clothing, wheat-growing and textile industries were overcapitalized. In Great Britain soft chalk and marl are used, and the works from which cement is exported are situated on the Thames or on the seaboard, where loading can be made direct into ships. In Great Britain, chalk, which is the principal ingredient, can be puddled and fed direct to the kilns, thus eliminating nearly 50 per cent, of the plant required by Australian cement-making firms. Moreover, British producers are able to purchase their power at cheap rates, and Australian manufacturers cannot possibly expect to produce cement at a price approaching that of their British competitors. The latter are selling cement in Australia at a little more than one-half of the price at which they dispose of it in Britain - a clear case of dumping - while supplies sent to other countries in which cement is not manufactured, are sold at prices much higher than those ruling in Australia. The British Board of Trade returns and information available to the Tariff Board support that statement. The freight on which the Tariff Board based its report, is probably 27s. a ton which, I understand, is the rate charged by the associated shipping lines; but as coal was recently shipped to Australia at 13s. a ton, it would be an easy matter for ship pers to obtain a substantial reduction of freight on consignments of cement. Since the Tariff Board submitted its report shipments have arrived in all ports of Australia, principally in 100 and 200 ton lots ; importers are awaiting a decision of Parliament in this matter before ordering larger consignments. Buyers are also hesitating before committing themselves until the duty has been definitely fixed by Parliament. Unless adequate protection be restored, there is every prospect of large quantities of British cement flooding the Australian market and seriously affecting the industrial position. I have heard that Australian steel manufacturers are closely associated with similar manufacturers in Great Britain, but I have yet to learn that the Australian cement companies are in any way connected with the British cement-making companies. If large quantities of British cement are landed in Australia, the production of the local factories will diminish substantially, overhead costs will increase, and large numbers of men will be thrown out of work. I should like the Government to take steps to ensure that the whole of this market will be available to Australian manufacturers. If the Minister conferred with the representatives of the companies, some arrangement could be reached under which the price of cement could be reduced without causing unemployment. I understand that some time ago there were consultations with the manufacturers in connexion with the price of galvanized iron, and that the present Minister in charge of negotiations for trade treaties (Sir Henry Gullett) was able to force a reduction of the price which was of great benefit to the Australian public. It should be possible to take similar action in connexion with cement, without jeopardizing the industry.
– If the manufacturers reduced prices voluntarily undue overseas competition would be prevented.
– The Australian cementmaking industry was established under a protectionist policy, and investors arc justified in asking that their interests shall be safeguarded and thus enable them to maintain the Australian standards of wages and conditions of employment.
Taking the Tariff Board’s cost of producing cement and allowing an average wage of £175 per annum to each man, possibly 12,000 men are directly and indirectly dependent on the industry. Even allowing part of the cost as transport charges and interest, at least 10,000 persons are dependent on the industry. The cement manufacturers claim that unreasonable profits have not been made, and that the profits made have been used largely in developing the industry.
– That is dealt with in the Tariff Board’s report.
– The board is not infallible. I am not condoning profiteering, but the industry should not be made vulnerable to imports from other countries. If these companies are profiteering, the Government has a remedy at its disposal. If the cement producers can reduce prices without increasing hours or reducing wages, they should do so, but I am sure that they can not hold the market on the present freetrade basis. The largest cement-making company in New South Wales has not paid more than 10 per cent, on its capital, and during the depression the dividend was reduced to 21/2 per cent., a portion of which was provided from reserves. I understand that a company conducting its operationsin Adelaide has been charged with profiteering, but the company has more than half its capital invested in other undertakings from which it is drawing profits.
– All the companies are linked up.
– I am not aware of that. The United States of America found it necessary to increase the preference on cement used on government work to 50 per cent, in order to protect its cement industries. The fact that British cement was actually selling in America necessitated a substantial preference being provided in order to keep it off the American market. At the same time the Lyons Government deals the Australian industry a staggering blow. The members of the Opposition are particularly concerned in providing employment for Australians and in ensuring that only a reasonable price is charged. I should like the Minister to give an assurance that he will take definite steps to prevent the importation of cement from other countries, and thus increase local employment. We believe that the reduction from1s. per cwt. to free is too drastic, and that a graduated reduction would enable the Australian manufacturers to become accustomed to the new conditions. The whole of the Australian market should be available to our manufacturers but we have been assured that under the changed conditions this will not be so. This Parliament, after a short sitting following the Easter recess, will probably be closed down for some months. I ask honorable members to consider the position of those 2,000 workmen who are directly employed in the industry. If they lose their jobs sympathy will be of no use to them. What they want is employment ; a chance to earn a decent livelihood for themselves and their families. I ask the Minister to reconsider this matter carefully. The Government has the numbers, and has a responsibility to see that nothing is done that will jeopardize employment in this industry.
.- The cement industry is obviously one of great national importance. I have read very carefully the report of the Tariff Board concerning it. After most careful examination, I can come to no other conclusion than that the report is extravagant and extreme; it is illogical, inconsistent, and based in several instances on the flimsiest data. In fact many of the passages in the report completely destroy its value. Let us consider, for instance, the first page of the report in which the board, after paying tribute to the spirit of fairness of the cement companies, admits that its report was intended to have a drastic effect on the industry. One might almost infer from the manner in which the board has arranged the figures, so as to aggregate profits over five years, and make them seem unduly large, that it has intentionally misled the Parliament and the public. Should the board’s recommendation be given effect, an Australian industry established in every State will be seriously affected, if not completely destroyed. Already there are large importations of cement. In Brisbane alone, during the last few weeks, importations have been coming in at ‘ the rate of about 6,000 tons per annum. These increased importations will adversely affect employment in the cement and allied industries, and will have an adverse effect on the trade balance. At the present time, Australian funds in England are barely sufficient to pay for current imports and interest on external loans. The importation of cement will obviously reduce the Australian company’s output, and tend to increase local production costs. The cement industry gives direct employment to 2,000 men, and to many thousands of others engaged in associated industries. In the manufacture of cement 200,000 tons of coal and 10,000,000 paper bags are used. Any reduction of the present output must increase unemployment, and Australian workmen will suffer for the benefit of workers in other countries. It is amazing to find the suggestion that this industry should be placed on a free-trade basis, though many thousands of men may be thrown out of work as a result. There is a possibility, which I hope will be ultimately realized, that in future it will not be possible to continue the present rate of imports. The ink on the Tariff Board’s report is hardly dry, yet large quantities of cement are already pouring into the country. The cement manufacturers purchase large quantities of electricity in bulk, and any decrease of their output will result in a reduced consumption of power, which in turn will have a detrimental effect upon the coal industry. This will involve a reduction of interstate steamer earnings, and result in considerable loss of employment to waterside workers. All other industries will suffer* as the result of loss of purchasing power by all those workers in the cement industry and allied industries affected by this drastic decision. Reduced output by the cement companies will mean also a curtailment of purchases of manufacturing supplies; the railways of the various States will lose freights derived from the carriage of coal and materials. Taxes, both Federal and State, to the amount of about £1,000,000 peT annum will be lost.
This industry is a natural one, as all the raw materials required for the production of cement are obtained in Australia, and, as its product is essential for defence purposes, it is a national industry and a national necessity. Therefore, having regard to the disturbed world conditions to-day, it is unthinkable that we should jeopardize its success in Australia. One dominant fact disclosed by the Tariff Board report is that the British manufacturers did not avail themselves of the opportunity provided by article 13 of the United KingdomAustralia trade agreement to give evidence before the board. The only request received from British manufacturers was for the free entry into Australia of special coloured cement, which was produced principally in Great Britain. The price of Australian cement has been gradually reduced, and I hope will continue to be. A reduction of 10s. a ton has been made by the Queensland company in the last twelve months, which has resulted in a voluntary loss of income to the company of £22,000. In 1934 and 1935, that company, after deducting taxation, made profits of only 6.2 per cent, and 8.9 per cent, respectively. In comparing the prices of cement in the various countries, the board conveniently omitted to draw a comparison between the prices charged in Australia and New Zealand. In that dominion, cement is quoted at approximately the same price as in Australia. After an inquiry under the Ottawa agreement, a duty of 8d. per cwt. was imposed by the Government of New Zealand. During the debate on agricultural implements in the committee this afternoon, the statement was made that New Zealand is a freetrade country. Yet the Dominion Government saw fit to impose a duty of 8d. per cwt. on the importation of cement into New Zealand, in order to protect its own manufacturers. The board stated that the cement industry is overcapitalized. Having regard to the fact that until 1929 the industry was hard pressed to meet the demand, who could have foreseen the unfortunate depression and the sudden slump which overtook us in the following year. The statement has been made by the board that rationing of output has hindered free local competition. Actually, in New South Wales, rationing of output, which was referred to in the board’s report as an evil, was carried out with the full concurrence of the State Government, in order that the manufacture of cement might be spread throughout the State. The board has also contended that one company has made unduly high profits. None of the cement companies has paid a dividend of more than 10 per cent, in any one year, and the largest company in New South Wales, the Commonwealth Portland Cement Company, which has been operating in Sydney for over seven years, has not paid a single penny in dividends. So far as I can ascertain, the company to which the board referred has a comparatively small output - in fact, less than 5 per cent, of the Australian total - and has a large amount of its capital invested outside the cement industry. In dealing with the alleged unreasonably high prices, the board, in its supplementary report, aggregated the profits of the Australian companies. These profits are for five years, and are based on a capital of £5,000,000, as certified by Smith, Johnson and Company, a leading firm of accountants in Sydney. Let us analyse the board’s figures. In its original report the board said that the total production for the five-year period was 2,363,115 tons. It said that there had been an enormous profit of £2,250,000. Taxation on that income would amount to £450,000. A further deduction, on the board’s own allowance, of 6s. a ton for depreciation would amount to £708,000, making a total deduction of £1,158,000. That would leave a balance of £1,100,000 for five years, or an average annual net profit of £220,000, which on a- capital of £5,000,000 represents approximately only 4 per cent.
– ‘Would the honorable member refer to page 4 of the supplementary report?
– I am dealing with both reports. This does not take into consideration any deduction for reserves and contingencies, which would be made by a prudent company. The board pointed out that the five years in which £2,200,000 profit was made covered the depression period, but it failed to state that it also embraced two peak years. Is that fair?
– The Queensland company made profits all through the depression.
– I shall deal with the position of that company. Some members of this committee do not wish Australian companies to make any profits. Will any honorable member suggest that 4 per cent, is an excessive profit for an industry of national importance such as the cement industry? On page 4 of its report, the board admitted that its original report was so badly worded that it was difficult for the industry to understand what was intended, and equally difficult for it to reply to the charges made against it. The board still maintained that an allowance of 20s. a ton to cover all overhead costs, including selling, was sufficient, but made no allowance whatever for the technical organizations supported by the industry for the purpose of supplying free technical service and advice to all users of cement in the Commonwealth. If the importation of cement continues at the present rate, British firms will get all the plums, and the Australian factories will be left with only the inland business which is most costly to carry on because of the long transportation. The board stated that the industry could carry on commercially with a profit of only 4 per cent., because that is the interest rate on Commonwealth bonds.
– Is it within the rights of the board to judge what the profit of the industry should be?
– In my opinion it should merely determine ‘ the duties properly applicable to the industry. It is unfair to compare the cement industry with many others. It is subject to seasonal demands and to frequent interruptions through the failure of machinery, strikes, and trouble in the transport of its commodity. If Australia is to be developed it must have new industries, and the cement industry is one that should receive every encouragement. Those who are prepared to help in its development, and are prepared to invest their money, are entitled to the prospect of a reasonable return ; but the confidence of the investing public would be shattered by the acceptance of the proposed reduction of duty.
The subject of over-capitalization was dealt with by the board on page 4 of its report. It stated that the present plant has a capacity of 1,313,000 tons a year, but that is the rated capacity. The productive capacity is actually 1,000,000 tons, after allowing for usual and unusual stoppages. The board considered that any capacity over 900,000 tons was excessive. Assuming this to be correct, and seeing that a modern unit has a capacity of from 60,000 to 85,000 tons a year, the excess amounts to only about one unit throughout the Commonwealth. In 1924-25 Australia produced 578,000 tons of cement, and in the next three years the output was incrceased by 30 per cent, to 753,000 tons a year. Had that increase been steadily maintained for a further three years, the production would “have reached 977,000 tons, which is more than the actual tonnage that the board said ought to be produced in this country. Therefore, on the hoard’s own figures, the industry is not over-capitalized. The commercial supplement of the Japan Weekly Chronicle of the 13th February last remarked -
It is necessary to have a 20 to 30 per cent, leeway in production capacity in order to ensure harmony between demand and consumption.
If there is to be continuity of supplies, and the industry is to be in a position to meet emergencies, it should have this capacity for expansion.
On page 5 of its report, the board made special reference to local freights. I challenge the statement that the freight paid by local manufacturers would, if averaged over the whole industry, be lower than that charged in the metropolitan market. The freight from Darra to Brisbane is 5s. 8d. a ton, whilst the average freight paid by the Queensland company in 1935 was 16s. 5d. at ton. The board said that the industry is most exposed to overseas competition in its principal markets; but, if these markets were handed over, wholly or in part, , to manufacturers in the United Kingdom, the Australian factories would be expected to supply the inland markets, and that would result in increased prices to purchasers in the back country. The Minister may say that it costs 19s. a ton in Queensland to get raw material from the quarries to the factory at Darra, but I point out that, when the company was established in 1914, the rail freights were only half those ruling to-day.
Referring to shipments from Queensland to northern ports, the board, in its supplementary report, stated -
It is worth mentioning in this connexion that other locally-manufactured products, such as pig iron, steel, fencing wire, kraft paper, meet overseas competition in North Queensland when sold at prices which include portion or the whole of the extra freight costs.
It is apparently expected by the board that this industry should be able to compete on equal terms in the northern parts of Queensland, because pig iron, steel, fencing wire and kraft paper are sold at competitive prices there; but all other charges involved in sending goods to North Queensland will be regulated by freetrade conditions. The board omitted to mention that the duties on the respective items to which it alluded are as follows : -
The cement industry returns a considerable amount of revenue to both Federal and State governments, and particularly to the railways. Its contribution to the revenue in a normal year is over £1,000,000. Railway revenue benefits to the amount of about £600,000, and £450,000 is contributed in taxes. In its supplementary report, the board pointed out that it is satisfied that efficientlyconducted factories in New South “Wales could meet the competition of free importation from the United Kingdom. Vet the board, when conducting its investigation of the position of the industry, did not inspect any cement factory in Australia. As I consider that the board’s recommendations are of too drastic a nature, I intend to submit an amendment. The board stated that the object of its recommendation was not to prohibit the importation of cement from overseas, but to force a reduction of local prices. I contend that that result could be obtained in many ways other than that adopted by the Minister. A reduction of prices has already taken place. In Queensland it amounts to £22,000.
– After the report was presented.
– No. The first reduction occurred in March of last year ; the schedule was tabled in November. Other reductions were made this year. Instead of the drastic action recommended by the board, it would be safer, in the interests of Australian industry, to take the middle course. Cement and galvanized iron are the only items used in the building trade whose prices have been reduced in the last twenty years. The prices of most other items, except sand, have been substantially increased. Because of the practical certainty of wholesale unemployment resulting from the Government’s proposals, I move -
That the item be postponed, to indicate “ that, in the opinion of this committee, the following rates should be substituted : - British, 6d. per cwt. ; intermediate,1s. 3d. per cwt.; general,1s. 6d. per cwt.; subject to existing exchange adjustments being maintained.”
I do not support profiteering. This industry may not have done what everybody desires; but I think that I have shown that the report of the Tariff Board is too academic and extreme. This reducdution of duty will bring about untold employment, and I, therefore, urge every honorable member to take the safe and middle course by supporting my amendment.
.- This is the first occasion on which I have spoken duringthe debate on this tariff schedule. I had decided to remain silent throughout the discussion of the various items; but the reduction of the duty on cement is likely to have such a disastrous effect upon an important industry of this country that I feel I must support the effort being made to secure a reconsideration of it. The cement industry of Australia has developed steadily in many centres throughout the Commonwealth over a long period of years, but if the reduced duty continues in operation. I am afraid that its days of progress are passed. I do not look at the subject parochially. Although some cement works are operating in my electorate very much more extensive works are to be found in other electorates. The industry provides direct employment for 12,000 persons throughout the Commonwealth, and an additional 6,000 are employed in subsidiary enterprises, which depend, to some extent at least, upon the cement industry. Roughly about 80,000 men, women and children depend, directly and indirectly, on this industry, and if the men actually manufacturing cement are dismissed from their employment the dole bill of the States will be increased enormously. British ships arriving at the main ports of Australia to-day are landing cement at a price based on approximately £1 3s. a ton, f.o.b., against the British homeconsumption price of £1 18s. a ton, and it is suggested that even this dumping price may be still further reduced! Approximately 80 per cent, of the cost of manufacturing cement is represented by wages. Very little imported material is used in producing the Australian cement. Operating costs in Australia are higher than in Great Britain and some other countries where chalk and marl are available, which can be crushed for considerably less than the material used in Australia. The total annual output of Australian cement is 700,000 tons and the annual wages bill is about £2,000,000. Towns like Kandos, with a population of about 2,500; Portland, with a population of 3,000; Berrima, Cockle Creek and Geeling depend largely on cement manufacturing. I have had some experience of towns practically dying through the depression of the main industry on which they depend. I took the Prime Minister (Mr. Lyons) through some such towns in my electorate, which had suffered through the depressionof the coal-mining industry. I call to mind Goldsmith’s couplet -
III fares the land, to hastening ills a prey, Where wealth accumulates, and men decay.
That sentiment has particular application to many coal-mining towns, and I do not wish to see other towns, which rely to a large extent on cement manufacture, suffer as the coal-mining towns have suffered. The apathy and indifference of the Government in investigating new methods of dealing with coal with the object of rehabilitating the industry are largely responsible for what has happened. Do honorable members propose to allow a similar policy to be adopted in respect of the cement manufacturing industry simply because the Imperial authorities are claiming, under the terms of the Ottawa agreement, the right to export large quantities of cement to Australia? Merely because the Government wishes to honour an agreement that it should never have entered into, and which is unfair to many Australian industries, overseas manufacturers have been encouraged to send representatives to Australia to dictate to the Tariff Board what they consider to be fair and reasonable conditions of competition. But to determine such a matter the board should compare the wages paid overseas with those paid in Australia. Japan is seeking to send cement to Australia. The wages in Japan are approximately 1s. 6d. a day. The average wage paid in the United Kingdom is about 50 per cent, below the average Australian wage, and the Tariff Board should regard this as a paramount consideration when making any recommendation. Honorable members of all parties in this Parliament claim to take pride in our Australian standards of living. Honorable members opposite certainly have a great deal to say on this subject on the hustings, but it is a different matter when the protection of Australian industries is at stake in this chamber. If the reduced duties now applicable to cement are allowed to remain in force for very long, this industry will undoubtedly suffer serious injury. In considering such a matter as this I remember all the time that I am an Australian. I love Australia and intend to do all in my power to protect its industries. I am not concerned with what the Imperial authorities desire, for they do not care a continental about us except when a war is on and they want our citizens to help them fight their battles. We ought to protect our Australian industries right up to the hilt. This country should work out its own destiny, manufacture from its own raw materials, and do its best to become self-contained. Our people should not be made “ wood and water joeys “ for the manufacturers of Great Britain.
We should work up our own products and sen tthe manufactured articles on the markets of the world. We ought no longer to be content to be simply a primary-producing nation.
– I have been more than ordinarily surprised at the opposition expressed to the new duties on cement, and particularly at the action of the honorable member for Moreton (Mr. Francis) in moving this amendment, the object of which is to increase the duties. I remind the committee that the reduced rates are those recommended by the Tariff Board. The report of the board, on which the Government acted in this instance, is one of the clearest and most convincing ever submitted to Parliament. I suggest to honorable members who may feel tempted to support the amendment that no Australian industry has suffered in consequence of any reduced duties brought into operation on the recommendation of the Tariff Board. In fact, I challenge any honorable member to name a single industry that has suffered in consequence of any reduced rate of duty introduced since the present Government has been in office. Hundreds of tariff items have been affected by these reductions, but no industry has suffered through them.
– The Diesel engine industry has gone right out of existence.
– That is not so. The industry has expanded in the output of engines of the smaller types.
– The Minister is indulging in vague generalities.
– Surely by this time such facts must have given to the Tariff Board considerable prestige in the mind of every honorable member.
– But are they facts?
– I invite the honorable member to name any that are not. After listening to the speech of the honorable member for Moreton, one would have thought that the Tariff Board was something suspect; that it habitually makes mistakes. I will not venture so far as to say that the board never makes mistakes, but I maintain that it has an extraordinary record with respect to recommending reductions of the tariff since the beginning of 1922.
– When the Minister sat in Opposition, he never had a kind word to say for the board.
– I have always had the profoundest respect for the Tariff Board, and have always spoken of it in the most eulogistic terms. In view of the record of the board, I venture to assert that the odds are one thousand to one that its report on this matter is correct. The board has a record in recent years of expanding industry, of creating employment, at a rate and to a measure that, I think, none of us anticipated two or three years ago.
– If the Tariff Board is always right in its recommendations, why has not the Government always acted on them?
– In any of its recommendations for reductions of the tariff that have been accepted by the Government, the board has been right. That is my claim. Of course, the Government has the power to set aside a recommendation if it has good reason for so doing; other governments besides this have done so, and I have no doubt that they will continue to do so in the future. So much for the general merit of a reduction recommended by the Tariff Board.
I come now to the matter of the reduction of the duty on cement, which is under consideration by the committee. The board has stated in plain language, that the manufacturers of this article are making excessive profits. That is the case ; and I marvel that honorable members of the Opposition, in view of the tenor of their speeches last night, should speak in support of an industry which the Tariff Board has charged with profiteering and with the abuse of a monopoly. I do not speak harshly of the cement manufacturers; I speak of them through the report of the Tariff Board, and I am merely repeating to the committee what is conveyed by that report, which states that the manufacturers arn making excessive profits. At the expense of whom ? The Deputy Leader of the Opposition (Mr. Forde) has stated that this industry directly employs 2,000 hands, and then by one of his marvellous piece of multiplication, he makes the figure 10,000 men. I ask the committee to pause to consider who are the victims of these excessive charges. Surely they are the occupiers of homes throughout Australia!
Honorable Members. - Hear, hear !
– I venture to assert that every occupier of a home in this country is a user of cement. There is not a cottage so small or so mean in the industrial areas that it does not use cement, and has not suffered from these excessive charges; there is not a farm in the electorate of Moreton which will not be affected if this amendment is carried. Round about any homestead in Australia one cannot put together two or three bricks, lay a few square feet of concrete, floor a dairy, build a silo, or carry out any of the thousand and one operations so necessary about a farm without making use of cement. The Tariff Board does not threaten to strangle or in any way do harm to this industry; mrt it makes the direct charge that the industry is, at the expense of every household, making excessive profits. I point out for the information of honorable members, that this report is more than an original one. The duty was referred back to the board for further consideration, and this is actually a second supplementary report which confirms its predecessor and sets out that the board, having again carefully considered the situation, is as decisive in its opinion as it was in its first statement of the case. I do not desire to delay the committee; I wish, merely, to bring under the notice of honorable members the simple facts. The first is that this industry has been found guilty of making excessive charges which affect, as I say, every home on the continent. In those circumstances, what alternative has the committee but to agree to the proposed duty? Ifa.il to understand how honorable members, particularly those represeting the smaller householders of this country, can vote against this proposed reduction. I realize that the honorable member for Moreton is being loyal to the industry in his electorate, but he is being anything but loyal to the overwhelming majority of the people of Queensland who pay for this cement and will continue to pay excessively for it if the amendment is carried. A vote against this reduction is conclusively a vote against the peopleof Australia as a whole.
Honorable Members. - No!
– Yes, it would he a vote in favour of a few profiteering companies. Honorable members of the Opposition may protest, but I remind them of their remarks last night about monopolies and profiteering companies. Will they repeat those sentiments, or will they tell us an entirely different story in the face of this report of the Tariff Board ?
– The manufacturers of cement do not work their employees for twelve hours a day.
– After the speeches they delivered last night, honorable members cannot get away from this report. The Deputy Leader of the Opposition engaged again in those mar.vellous and fascinating-
– I ask the Minister to confine his remarks to the item and avoid personal references.
– I put it this way: I congratulate the Deputy Leader of the Opposition for having entertained the committee by giving another of those marvellous feats of multiplication for which he has become famous. When, as Minister for Customs, he submitted tariff schedules, he always prophesied that immense increases of employment would follow; and always he was wrong. His luck was invariably against him. In reference to the item now under consideration by the committee he once more prophesies that if the rate of protection be reduced, the Government will create unemployment. To my knowledge the honorable member has been making similar prophecies for three and a half years.
The TEMPORARY CHAIRMAN.I again ask the Minister to confine his remarks to the item.
– I appeal to the committee to read the report and take into consideration the record of the Tariff Board in recommending reductions; to remember that it has prejudiced the existence of no industry and done nothing but. bring prosperity to industry and create more and still more employment; and, finally, to remember that the persons who use cement are the householders throughout Australia.
.- I wish to discuss this item fairly and dispassionately. I am somewhat astonished that the Minister directing negotiations for trade treaties (Sir Henry Gullett) should have referred to the item in the schedule before us as a reduction when,, as a matter of fact, it is a complete abolition. There is a vast and distinct difference between reducing duties because of increased competitive ability on the part of an Australian industry, and-, as in this instance, leaving an industry without any customs protection whatever against Great Britain. Having regard to the nature of the tariff, Great Britain is probably the only place from which the Australian cement industry need fear competition, because the duties against foreign competitors would probably keep out their product. If the duties in the schedule are agreed to, the Australian cement industry will experience decisive competition from Great Britain, because the duties proposed to be abolished are substantial - ls. per cwt. or £1 a ton. That reduction is a larger item than the Tariff Board’s estimate for the raw material in a ton of cement, and larger also than the cost of the coal or the value of the labour required to produce a ton of cement.
– But not nearly so large as the profit.
– It must be clear, therefore, that an alteration of tariff duties which is greater in its margin than the cost of the raw material to the factory, or of the power that the factory must use, or of the labour required, not only strips the industry of the protection that it has had in a monetary sense, but also exposes it to conditions which I am sure the Australian public does not countenance. We have some conception of industrial standards in Australia ; it is said that the standard of wages which Australian manufacturers have to observe is higher than in Great Britain. Therefore some degree of protection ought to be assured to all Australian industries which have to withstand competition from the United Kingdom, if for that reason aLone. We have also to consider that this industry uses exclusively raw materials of Australian origin, and that therefore it is, in many respects, an essential secondary industry, in that it makes the best possible use of Australia’s raw materials and natural resources. It is in a different category altogether from those manufacturing industries which are more or less dependent on overseas supplies. Customs duties on the raw materials which must be imported must result in higher cost of production. But in regard to cement, there is no question of customs duties on raw materials adding to the cost of production, because they are entirely of Australian origin. Furthermore - and I venture to submit that this should be a consideration in Australia at the present time - the power which the industry uses, whether generated from coal and transmitted to the works as electric current, or used directly as coal for roasting, and for other purposes, is a matter of some importance to another valuable Australian industry. The honorable member for Hunter (Mr. James) has told us how the coal-mining industry has suffered grievously during the last five years. Large numbers of men have been out of work and huge sums of capital have lain idle, and (therefore it would he unwise to set up conditions in the cement-making industry, which would diminish the demand for Australian coal. However, the demand for Australian raw materials directly, and for other Australian raw materials indirectly, and for Australian labour specifically, is more or less threatened by the fact that this item invites us to accept definitely, in respect of this industry, the principle, not of protection in some degree, hut of free trade, absolutely naked and unashamed. I put it to the committee that the argument of the Minister directing negotiations for trade treaties in reference to the attitude of the Opposition, as stated in the committee at an earlier stage, is not relevant at all. What we did urge was that, where protection is being abused, there should be some limit to the protection afforded.
– What has the Tariff Board reported?
– The Tariff Board has said that there is a good deal of profiteering in the cement-making industry. But is the remedy to expose it absolutely to freetrade? Should not the remedy be a reduction of the duty?
– Does the honorable member say that the exchange is not protective?
– An exchange rate of 25 per cent., which has been stable for mora than three years, ceases to yield 25 per cent, protection. No economist of any reputation at all would suggest for a moment that an exchange rate of 25 per cent., which has been stable over a period of three years, is not reflected definitely in internal price levels. I shall quote from page 84 of Professor Brigden’s work the Purchasing Power and the Australian Pound. I hope that the Minister will take cognizance of the following statement by Professor Brigden: -
If and when prices rise in Australia through inflation, and if the exchange does not move, or is not allowed to move, with them, imports may be expected to revive.
– The professor said “If and when “.
– Prices have risen in the Australian internal economy.
– Not on these ingredients.
– If the Australian manufacturers were exporting, they would get the benefit of the 25 per cent, exchange ; but instead of being exporters they are buyers of labour and raw materials. To the extent that Australia’s price levels have been raised as the result of the exchange rate, to that extent manufacturers have to pay increased prices of the things they buy, or the goods they use, or the labour they employ, because those things have to conform to Australian internal price levels. The Minister should know that. Professor Giblin’s thesis, which was discussed in this chamber in connexion with the sales tax on flour, set out that the price of flour would be advanced, as a result of that tax, and showed that., whilst the tax would he of benefit to the exporters of wheat, because of enhanced prices, a very substantial portion of the tax would ultimately fall upon the wheatgrowers themselves, because their costs would be inflated. The machinery that they would buy would be more costly, because it would be made by workers who consumed the flour that was the subject of the tax. Because their cost of living would increase, their wages would increase also. It is an asinine argument to advance that the devaluation of the currency does not inflate price levels. If that is not true, everything that we have learned, from the beginning of our study of political economy until now, has taught us nothing. The Minister is like the Bourbons; he forgets nothing, and ho learns nothing. On the same page, Professor Brigden says-
While progressive inflation is taking effect the exporters benefit. Their costs do not rise as rapidly as the rate of exchange they receive, but when the process stops the benefits virtually disappear.
The argument that the Australian cement industry gets the benefit of a 25 per cent, exchange rate is wholly untenable. I agree that it gets the benefit of a portion of that rate, and under legislation passed by this Parliament the theory is accepted that only a portion of the exchange rate should be taken into account in the assessment of the appropriate automatic adjustment for customs purposes.
Mr.White. - Only a quarter.
– That provision could not have been made without some reason.
– It was to cover imported material; these are all local materials.
– But they add to the price of the Australian article. The Minister’s argument that the exchange rate affords sufficient protection to the Australian cement industry against imports from the United Kingdom is not valid.
– The honorable member is ignoring the fact that the Tariff Board assessed all these items of costs in the industry.
– I regret to say that I am of the opinion that the Tariff Board has erred very grievously in its assessment of costs in respect of this industry, and also in relation to quite a number of other factors which should be taken into account. The board has had to investigate a veritable network of complicated and exceedingly difficult industries, and I doubt very much whether it has been able to do the volume of work it has accomplished in respect of all the reports it has submitted to this Parliament in the last year without committing some errors or mistakes, even though these may not have been very serious. When the cement industry was established in Western Australia the price of cement to the Western Australian user was 25s. a cask, or £7 10s. a ton. Its establishment, which was accomplished under great difficulties and with initial loss, has resulted in very substantial reductions in the price of cement to the Western Australian public. Thus, whilst it may be true that a monopoly over manufactures in Australia can exploit the public, it is equally true that the absence of internal competition, enabling a monopoly to command import distribution, can also result in the ruthless and gross exploitation of the Australian public.
– The honorable member prefers the former?
– I submit that a monopoly in itself is not an inherent quality of either freetrade or protection. For instance, if all cement had to be imported into Australia as from tomorrow could an ordinary builder place an order in the United Kingdom? He could not. The chief manufacturers in the United Kingdom would establish half a dozen agencies in Australia, and the only source of supply to the Australian user would be through the medium of those agencies with the result that there would be just as much monopolistic control over the distribution of cement, having regard to the workings of the economic system, as could conceivably be the case in connexion with the manufacture of cement in Australia. As I have already said, when there was no local supply of cement in Western Australia, the price in that State was 25s. a cask or £7 10s. a ton. The Western Australian company, simply because it existed, forced those then supplying the Western Australian market to reduce their prices immediately. Thus the loss which the pioneering company in cement manufacture in Western Australia suffered is not the only thing to be taken into account. The benefit to the public resulting from the reduction of the price through the establishment of the company also has to be considered.
This was definitely the immediate outcome of the development of competition in Western Australian production which freed users of cement from their dependence on supplies from elsewhere. The Western Australian company states that, whereas the Tariff Board’s average estimate of costs a ton included 7s. 6d. for raw material, and 8s. Id. for coal and power, its actual cost for raw material was 12s.
– Why did not the company give those estimates to the Tariff Board?
– If the Minister had read the supplementary report of the board he would know that it did so.
– Not at the first inquiry; it did on the second occasion.
– In justice to manufacturing companies operating in Western Australia, I point out that they are far removed from the eastern States, and that the Tariff Board visits that State infrequently. Furthermore, the Western Australian cement company, for instance, is not associated with the cement manufacturers of Australia; it is a separate, independent and exclusive company. It is not even a member of the Australian Cement Manufacturers’ Association. In this case it really believed that the communication addressed to it was one that would be dealt with adequately by the manufacturers in the eastern States. If the Minister will make allowances for the company on these grounds, he will admit that when the Western Australian company, by reason of its detachment from the eastern States, receives a communication of this nature, it does not regard it as seriously as it probably should. In this ease it probably did not do so, because it relied upon the facts, that the duty of £1 a ton had been in operation for years, and that the industry had been established by the Parliament which had given it protection. It thought no great damage could be done by adopting that attitude. It made that mistake, but when the second inquiry was made by the Tariff Board, it furnished all the evidence it could. It now makes the challenge that, the Tariff Board took as the standard for cement costs, not the actual costs incurred in the industry at all, but those applying to the treatment works at Mount Lyell, in Tasmania. The board apparently thought that cement works were analogous to those works at Mount Lyell, whereas the conditions under which cement is produced vary as between State and State, and as between establishment and establishment. The majority of cement works in Australia are situated in country districts, whilst the majority of the users of cement are situated in the capital cities, and it costs almost as much to haul cement by rail from the centres of production to the cities as it does to ship it from the Thames to Melbourne or Sydney. Thus the fact should be taken into account that cement users in Australia pay substantial amounts by way of rail haulage to Australian governments, whereas cement imported from British manufacturers can be brought here in ships not under an Australian register, and under advantages for which the Tariff Board has not made allowance. The board quotes £3 19s. 6d. a ton as the cost of imported cement at Fremantle, excluding duty, but my information is that at least one order has been placed at, Fremantle at the following rate :- net cost c.i.f., £2 13s. 6d., exchange 13s. 8d., landing charges 8s. 3d., and primage (estimated) ls. 7d., making a total of £3 17s. a ton. This shows that the Tariff Board’s estimate of the cost of imported cement, landed free of duty at Fremantle at £3 19s. 6d. a ton is considerably in excess of the price which is now being quoted.
– If it is being dumped we can take action.
– I have said that I was informed that a recent order had been placed, and that these were the figures. I am not in a position to say whether the figures are accurate. I am somewhat fearful that the - board has made a mistake, and has not been furnished with adequate data. I was led to that belief, as I pointed out before, by the fact that the board used as a starting point, the figures furnished by the Mount Lyell works in Tasmania. The Swan Portland Cement Company is a reputable firm, and the chairman of directors is not a man who would append his name to an irresponsible document. As a political opponent of that gentleman I give him credit for more probity and honour.
– The honorable member will receive his support at the next election.
– I do not think so, and I do not ask for it. This industry, which has been developed under the shelter of substantial tariff protection, is now to be bereft of protection of any kind. That is too drastic. If protection is to be reduced, it should be ‘tapered off gradually, so as to give the industry an opportunity to adapt itself to competitive conditions. To cease protection too suddenly, is likely to endanger employment, and to make it probable that the amount of cement produced in Australia will fall short of our requirements. There will he a tendency for oversea suppliers to flood the Australian market to such an extent that the Australian industry will be swamped. It is always difficult, and sometimes dangerous, suddenly to reverse a fiscal policy once it has been initiated. I think it would be unwise of the committee, even if it accepts the report of the Tariff Board, to abolish this duty. The Minister directing negotiations for trade treaties said that the board had recommended a reduction of duty. We might be prepared to accept that recommendation, but we cannot accept the abolition of all protection. I support the amendment of the honorable member for Moreton, and if that amendment is defeated, I shall vote against the item.
.- I support the amendment. The Minister directing negotiations for trade treaties (Sir Henry Gullett), blew hot and cold in regard to this item, and treated us to a dissertation upon the merits and demerits of the Tariff Board. It is my belief that the board has, from time to time, furnished some admirable reports to this House, but I do not agree that we should swallow holus bolus every recommendation the board places before ns. After all, Parliament is supreme. We are always glad ito receive the report, of the Tariff Board on any item, but, on this occasion, I think the board has made a mistake. On many previous occasions, Parliament has declined to be guided by the recommendations of the board, so that if we decline on this occasion we shall be doing nothing new. Some of the evidence placed before the board cannot, upon analysis, be accepted. For instance, Mr. Green, in giving evidence, made the following statement: -
The disparity between British or Canadian f.o.b. prices and Australian manufacturers’ selling prices is greater than any disparity between the general level of costs in the three countries.
With that I disagree. The British manufacturers refused to supply the board with any information as to costs, and no doubt the witness would be ignorant of Australian costs. In making a comparison, it should be remembered that Australian costs, selling prices, &c, are given in an inflated currency. Mr. Green goes on to say -
Cement is manufactured in every State of the Commonwealth, and interstate freight would not offset any appreciable proportion of the natural protection of ocean freight.
That assertion will not stand close examination. Nominally, steamer freight on cement from Great Britain to Australian main ports is 27s. 6d. a ton, but there are reasons for believing that this rate is subject to rebate for consistent shipping by conference steamship companies’ vessels, and there may be other grounds for making concessions.
– What is the honorable member’s authority for that statement?
– My information is from people who understand the cement industry in all its phases. It is well known that a few years ago sailing ships were anxious to get cement as stiffening, thus saving the cost of purchasing and disposing of sand or shingle ballast. Consequently such cement was carried at very low freight rates, in some cases for the mere cost of stowing and discharging from the ship. At the present time the freight on cement from Melbourne to Port Adelaide is fi a ton; from Tasmania to Port Adelaide, £1 ls. a ton; from Sydney to Port Adelaide, £1 5s. a ton; and from Port Adelaide to Fremantle, £1 7s. 6d. a ton. These figures indicate that, except for the shortest distances between Australian ports, freights on the Australian coast are, perhaps, higher than freights from Great Britain to Australian ports.
– The honorable member is presenting a good case against the Navigation Act.
– I am endeavouring to state the case for the Australian cement industry. Freight charges, I submit, are an important factor in the successful carrying on of this business, particularly in view of the hint given by the Tariff Board concerning the probable ultimate rationalization of the industry as between the States. Under this system, States in which cement is manufactured would reap all the benefit, and those States to which the cement is shipped would be in a worse position, relatively, than they are now, owing to the added freight and other charges. Mr. Caldwell, in his evidence before the board, mentioned that prices of cement to the Government had remained fairly constant during the last five years, notwithstanding falling costs over that period. He was referring to the position in New South Wales. Some years ago the Government of that State made a long period contract to encourage the establishment of a new cement works.
– That did not happen.
– ‘One company was sponsored by the Government. This was considered necessary, because the demand for cement was not being adequately met by the existing companies, and as a result, a large number of developmental works in different parts of Australia could not be carried out.
As regards South Australia, the price of cement to the Government during the period 1929-34 was reduced from £5 6s. 6d. to £4 13s. a ton, a reduction of 13s. 6d., equal to 12.67 per cent. In 1935 and 1936, there were further reductions, the price receding to £4 ls. 6d. a ton, a reduction of 25s., or 23.47 per cent, as compared with prices in 1929.
For several years immediately following 1915, British cement could be purchased in Australia at competitive prices, and there is now the fear that, owing to the substantial reduction of the duties, the Australian industry is in danger.
This industry is of national importance, and I am prepared to vote against tariff reductions that threaten its existence. From a defence point of view it is an essential industry. The lowering of the duties to permit of the importation of British and Japanese cement is not in the best interests of
Australia. We should do all that lies in our power to encourage its expansion.
– The honorable member should deal in facts, not suppositions.
– One of the facts which the Acting Leader of the House (Mr. Parkhill) cannot deny is that, as the result of the lower duties, there will be much keener competition by overseas manufacturers in the Australian market.
– The price of cement may be more reasonable.
– Ultimately, the price might not be more reasonable. The dumping into Australia of cement from overseas may give users a temporary advantage, but once the local industry is put out of business the price of imported cement will rise, probably above the present level. Large buyers will take advantage of the removal of the duty to place orders abroad. The increase of importations will adversely affect the Australian trade balance. Surely that must cause concern to the Government ! At the present time Australian funds in England are barely sufficient to pay for current imports and interest on external loans. Importations of cement will obviously reduce the output of the Australian companies. Such a reduction will tend to increase the costs of production. There are certain fixed charges which do not vary with production, and the most advantageous terms for the purchase of many materials depend on the quantity ordered. Any reduction of the present output must mean an increase of unemployment. Australian workmen will suffer for the benefit of employees in other countries. I feel very strongly on this aspect of the matter. Our first duty is to the workers of this country. If we allow cement, from Japan and other countries to be dumped in Australia, more and more of our men will lose their employment. It has been said that there are too many cement-making plants in Australia. I do not hold that view. The cement companies are large users of coal. Any decrease of their output will curtail coal consumption, and thus detrimentally affect the coal-mining industry. Many other industries also must be adversely affected. A reduced output of cement will mean a curtailment of the purchases of manufacturing supplies, lubricants, repair materials, gypsum, coke, firewood, &c. There will also be a restriction of purchases from other manufacturers, engineering companies, ironf ounders, bagmakers, &c. The paper bags which are used for the transport of local cement are made in New South Wales. Decreased purchases of hags will injure the paper-making industry. The largest proportion of the machinery used in cement works is made in Australia, the balance being imported from Great Britain. The railways of the various States will lose the freights that are derived from the carriage of coal and other materials and very heavy losses will be experienced because of the reduction of the quantity of cement carried from the manufacturer’s works to capital cities or shipping ports. Other reductions of government revenue will include wharfage on materials and fuel royalties on minerals, charges for water consumed, and Federal and State income tax covering companies and individuals. I hope that the Government will agree to the postponement of the item.
– Parliament has adopted as a general principle the giving of preference to industries that are economical and are assured of reasonable opportunities for success. I believe that the Tariff Board has been desirous of extending preference in such cases. Many honorable members also use that as a basis in deciding whether to give or withhold their support of industries. Here we have a great industry which, because of the success it has achieved, is opposed by the Tariff Board and by certain honorable members. The Tariff Board has gone so far as to draw attention to the excessive profits made by the industry, in a report which the Minister in charge of negotiations for trade treaties (Sir Henry Gullett) has described as the clearest and most convincing report yet presented to this Parliament. It appears to me that the board has endeavoured by every means in its power to show that the industry should not be protected, and that the British cement manufacturers should have free access to the Australian market. But no evidence has been furnished in regard to the profits made by British manufacturers, nor have the Australian manufacturers any means of ascertaining what those profits are.
– The Tariff Board has considered those who use this product.
– I do not think that the board has given the slightest consideration to the Australian public; it has made its recommendation merely because it contends that excessive profits are being made by some cement manufacturers - an aspect it ignored when dealing with the tobacco combine. Perhaps unknowingly, it has misrepresented the position in stating that some manufacturers are making a profit of 10 per cent. ; but I do not think that they have received, over the years, more than 4 per cent, on the capital they have invested. In supporting the recommendation of the Tariff Board, the Minister in charge of trade treaties (Sir Henry Gullett) challenged honorable members to cite one case in which an Australian industry had been closed down in consequence of the adoption of a recommendation of that board. I direct the Minister’s attention to the fact that, when Minister for Trade and Customs, he definitely informed Walkers Limited, of Maryborough, that, if they established a factory for the construction of large diesel engines, the necessary tariff protection would be afforded. In view of that promise, the firm sent artisans to be trained in Great Britain, and after they had completed their training, patterns were obtained, and arrangements completed to enable construction to commence in Queensland. A short time later, the Ottawa agreement was reached in which the Government’s decision was reversed - because that agreement provided that tariffs against Britain should not be higher than those recommended by the Tariff Board - and as production could not be conducted profitably in Australia without protection, the whole project had to be abandoned.
– The smaller sizes were produced ; I have seen them in operation.
– I am referring to the larger deisel engines; I know that the smaller type are still being manufactured in Victoria. I understand that £5,000,000 has already been expended in the cement-making industry, and, had the amount been smaller, we would have been told that the industry was not sufficiently well estalished to merit protection.
– The policy of the honorable member is that Australia should not trade with any other country.
– The policy of the honorable member for Swan is that we should trade only with overseas manufacturers. Stress has been laid upon the statement contained in the Tariff Board report that this industry has been making excessive profits; but no mention has been made of the profits made in other secondary industries. Wages represent fully 80 per cent, of the expenditure incurred in cementmaking, and in view of the Government’s policy to reduce unemployment, this factor should receive the fullest consideration. Moreover, the wages paid in Australia are 100 per cent, higher than those paid in Great Britain, and as the conditions of labour generally in this country are infinitely better, the Australian manufacturers should receive some protection. British manufacturers also have the advantage of obtaining the commodities required for the manufacture of cement at a lower cost than is possible in Australia, and of controlling extensive manufacturing plants on the Thames, from which point shipments can bc made direct to Australia. As this industry is established firmly, not only in the eastern States, but also in Western Australia, it is of benefit to the whole community. From a defence view-point local manufacture is of vital importance to Australia. In the event of war, shipping might be interfered with; we should not have to depend upon supplies from Great Britain. Cement is used extensively by almost every section of the community, and it is difficult to understand why the Tariff Board should recommend that it be admitted to Australia free of duty. The Tariff Board had apparently not correctly viewed the situation, and taken into consideration all the facts when it said that the profit made by the cement manu facturers was as high as 10 per cent. That statement is not only criticized by those engaged in the industry, but is also so ridiculous and unfair that honorable members should ascertain the facts for themselves before they condemn the industry on, what the Minister directing negotions for trade treaties would term, a charge of profiteering. In addition to imposing limits on the industry’s capacity, it is suggested that gross profits should be limited to 10s. a ton. On last year’s production of 481,148 tons, this would yield £240,574, which, after deducting income tax amounting to £48,115, would be reduced to £192,459. On a capital of £5,000,000 - the companies’ valuation of the industry’s assets after making adequate allowance for depreciation - a return of £192,459 would represent 3.8 per cent. Even on the board’s valuation of £3,600,000 arrived at to suit the board’s own purposes, that return would represent only 5.34 per cent. If the trade recovered to the predepression peak year production of 776,186 tons, a gross return of 10s. a ton after deducting income tax would yield 6.21 per cent, on a valuation of £5,000,000 and 8.62 per cent, on the lower estimate of £3,600,000. This is before taking into account selling and administrative costs and contingencies. The aggregate expenses of administration, head offices, research and advertising average 5s. a ton. The industry has already expended £6,000 on research. The suggested limit of 10s. a ton gross profit has been declared after a careful accountancy analysis to he commercially impossible. The Darra Cement Company in Queensland, following a decision of the State Coal Board, has now to pay 9d. a ton more for its coal purchases and has had to pay increased wages due to recent arbitration court awards. The Darra Cement Company estimates that wages account for 80 per cent of the total cost of production. The board in its original findings of the Queensland factory costs of production did not include the amount of 19s., representing railway freight on limestone from the quarries at Gore to the Darra works.
– It has been proved that cement can now be manufactured from
– Investigations have been undertaken by the industry which will enable the manufacturer to take advantage of all the aids that science can offer. The industry is an efficient one, and deserves every encouragement at the hands of the Government and the Tariff Board. As in the case of other companies, administration and overhead costs were omitted from the board’s calculations when arriving at the costs of production at the Darra works. Big concessions to governments and municipalities have been granted in the prices charged by the Darra company to help them in the construction of Government utilities, roads, dams and weirs. I sincerely hope that no undue concern will be exhibited for the British manufacturers to the detriment of the Australian industry, because the British manufacturers did not approach the Tariff Board for a reduction of the duties. No case has been made out by .the hoard against the Australian industry, except that it is over-efficient. The industry is capably conducted and economically sound, and supplies a good article against which no complaint can be made. In the interests of country and city users, honorable members will appreciate the value of the industry to Australia, and what its successful establishment means in the building up of this young nation by the provision of employment for our workers at Australian wages under Australian conditions.
.- No honorable member on either side of the chamber wishes to see an Australian industry such as the cement industry shut down by foreign importations, but we do want to ensure that this big Australia- wide decentralized industry does not take excessive toll of the employing capacity of other industries in the Commonwealth. The Minister directing negotiations for trade treaties has pointed out that it is on the home builder that any excessive costs of building material falls. This is also true of the home occupier, because rents are governed largely by the cost of building. The question before the committee is not whether imports shall be permitted to come into Australia, but whether the industry is giving the home-building public a fair go. Although the Leader of the Opposition (Mr. Curtin) and the honorable members for Wide Bay (Mr. Corser).
Boothby (Mr. Price), and Moreton (Mr. Francis) quoted voluminous figures concerning the costs of handling the raw materials, all ignored the figures concerning profits and allowance for depreciation for the year following that upon which the first report of the Tariff Board was presented, which have since been submitted to it. The allowance made by the companies on 543,000 tons of cement amounted to £1 10s. lid. a ton; or a total of £814,000 in an industry employing 2,000 workers. Thus, for every worker employed in the industry, £8 a week is absorbed in overhead costs, depreciation charges and profit. The Tariff Board considered that a fair allowance for depreciation was 6s. a ton. If that is deducted from the £1 10s. lid., it leaves the figures for profit, only at £1 4s. lid., or £678,000. This means that the industry is obtaining about £6 10s. a week for every workman employed in it.
– How does the honorable member arrive at that figure?
– The profit and allowance for depreciation amount to £1 10s. lid. a ton on 543,000 tons of cement sold and the number of workers employed in the industry is 2,000. The allowance for depreciation which the board considers is beyond reason, is about 14s. lid. a ton, or just about the amount of duty which the board recommends should be removed. I do not say that all the profit is going into the pockets of the shareholders. The industry is over capitalized. The general manager of the Portland Cement Company stated in evidence -
I contend that half the works ought to be shut down.
There are too many of them for economic production.
It is quite plain, from a dispassionate study of the figures given, that this industry is too good a thing. For every £1 that the workers get, 30s. or more goes into either over-capitalized equipment and plant, or a very high profit indeed. It is with great regret that I say that I cannot support the continuation of such a happy state of affairs for the shareholders, among whom are excellent supporters of the United Australia party, and even prominent Country party supporters. But we have a duty to discharge to the workers of Australia. This investigation has been duplicated. Assurance has been made doubly sure with regard to the figures. The companies have had a second opportunity to correct any mistakes in evidence given at the first inquiry, and still the figures are more emphatic than before. The extra balance-sheets for the year that has been completed since the first report was made further emphasize the enormous proportion of the cost of cement, which is going to maintain very high profits on a small turnover. I hope that the Government will not be shaken from its decision, that it will have the support of the committee. We can trust it to see that the industry is not overwhelmed by the dumping of cement from Japan or any other country. If there were such a danger, I am sure that many honorable members, including Ministers, would revise their opinion. I cannot understand honorable members who profess to speak on behalf of those who occupy small homes supporting a state of affairs which means that for every worker employed in the industry the companies are receiving a profit on the average, of over £6 10s. a week. That is not my idea of a fair division of the fruits of protected labour. I am usually considered fairly conservative, but this is a little more than I can tolerate, even from people who are close personal friends of mine.
House adjourned at 11.30 p.m.
The following answers to questions were circulated : -
s asked the Minister for Defence, upon notice -
– The answers to the honorable member’s questions are as follows : - 1 and 2. Air route night lighting facilities are already provided on portion of the Aus tralian section of the overseas air mail route. In addition to complete night lighting requirements at Darwin, Cloncurry, Longreach and Cootamundra aerodromes, airway route beacons, spaced approximately 70 miles apart, are installed between Cloncurry and Longreach. These night lighting facilities cater for the present winter time-table operated by the air services concerned.
Proposals for the installation of further route night lighting facilities are in hand, but are held in abeyance at the present juncture pending finality upon the Empire air mail proposals.
y. - On the 20th March, the honorable member for Richmond (Mr. R, Green) asked, without notice, whether an ordinance had been promulgated in the Mandated Territory of New Guinea, the object of which is to merge into one organization the whole of the aviation services of the Territory, and if such an ordinance had not been promulgated, whether instructions have been issued that no further flying permits shall be granted to any companies other than those which are already operating.
I am now in a position to advise the honorable member that no instructions of the nature indicated have been issued.
n asked the Treasurer, upon notice -
What is the total cost in sterling to date of converting our overseas loans?
– Since October, 1932, loans aggregating £181,961,873 have been converted, resulting in annual savings for interest and exchange of £3,398,972 (Australian), equal to £2,711,044 (sterling). The expenses of conversion of these loans, including underwriting commission, were £2,477,250 (sterling).
d asked the Prime Minister, upon notice -
– The information is being obtained and a reply will be furnished to the honorable member as soon as possible.
Oil: Search in Gippsland.
y asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follows : - :
y asked the Minister for Trade and Customs, upon notice -
In view of the large amount of money collected in duty upon imported cigarette papers in excess of the amount estimated by the Minister, will he consider the question of reducing the duty upon imported papers and thus, by reducing the price of same, encourage the use of our Australian fine-cut tobacco, which is used by smokers who make their own cigarettes ?
-No. The amount of duty collected on imported cigarette papers is not large. A reduction of the duty on imported cigarette papers would reduce the margin of1/4d. per 60 papers between the import and excise duties, which margin the Tariff Board considered necessary for the protection of the local cigarette paper-making industry.
asked the Minis ter for Repatriation, upon notice -
In view of the fact that where the invalid or old-age pension is paid to a service pensioner and/or his wife, certain deductions are made by either the Pensions Department or the Repatriation Department, will the Minister indicate what action he proposes to take to remove the anomalies thus created?
– This matter has been engaging the attention of myself and the Repatriation Commission. The position is that service pensioners come within three classes, viz. : -
Approval has now been given for the Repatriation Commission and the Commissioner of Pensions to prepare a joint memorandum for submission to Cabinet in order that returned men may receive the full benefit of the amending legislation passed last session.
s asked the Minister for the Interior, upon notice -
Has the ordinance to prevent and penalize usury in the Federal Capital Territory yet been framed: if so, will be place it on the table of the House?
– An ordinance relating to the business of money lending has been drafted, and it is expected that it will become law very shortly. A copy of the ordinance will be laid upon the table of the House, in accordance with the prescribed practice, after it has been made.
r asked the Minister for the Interior, upon notice -
– The answers to the honorable member’s questions are as follows : - 1.15th April, 1936.
Postal Department: Temporary Messengers.
l. - On the 20th March, the honorable member for Dalley (Mr. Rosevear) asked, without notice, a question pertaining to the employment of youths as temporary messengers in the Postal Department. Inquiries I have since made elicit that a number of lads are employed in that capacity. Permanent appointments to positions of telegraph messenger are, however, already being made in all States to the fullest extent consistent with the need for regulating such appointments so that each lad admitted will be absorbed on adult work when he reaches manhood.
New Guinea : Moratorium for Planters.
y. - On the 17th March, the honorable member for Richmond (Mr. R. Green) asked, without notice, whether the moratorium granted by the Commonwealth Government to purchasers of expropriated plantations in the Territory of New Guinea had been further extended, and, if not, what is the position in regard to those who were granted the moratorium. I then advised the honorable member that a plan was in course of preparation for the resumption of payments by purchasers of expropriated plantations in New Guinea on a basis which will be connected with the copra price. I am now in a position to advise the honorable member that an announcement of the Government’s decision in this matter has been deferred pending negotiations that are in train with certain firms that have assisted the planters financially in regard to their plantations. It is felt that action by the Commonwealth Government alone will not be fully effective in placing the planters on a satisfactory footing, and it is hoped that the firms that have assisted to finance the planters will be able substantially to reduce the payments required to be made to them.
Norfolk Island Newspaper.
y. - On the 20th March, the honorable member for Dalley (Mr. Rosevear) asked, without notice, whether as a result of an ordinance known as the Newspaper Ordinance, promulgated in regard to Norfolk Island, and the restrictions consequent upon its enforcement, the only newspaper of Norfolk Island had ceased publication, whether the Advisory Council of Norfolk Island had unanimously recommended the withdrawal of the ordinance, and, if so, why the Government did not accept the advice of the council in connexion with the matter. I am now in a position to advise the honorable member that -
Cite as: Australia, House of Representatives, Debates, 26 March 1936, viewed 22 October 2017, <http://historichansard.net/hofreps/1936/19360326_reps_14_149/>.