15th Parliament · 1st Session
Mr. SPEAKER (Hon. G. J. Bell) took the chair at 3 p.m., and read prayers.
Hon.JOSIAH Francis made and subscribedthe oath of allegiance as member for the electoral division of Moreton, Queensland.
Reports of Conference of Common- wealth and State Ministers and of Committee of Officers. .
– I, lay on the table -
Unemployment Insurance and 40-hour Week - Report of Conference of Commonwealth and State Ministers, held on13th August, 1937.
Unemployment Insurance - Report, dated 9th September, 1037, of the Committee of Officers of Commonwealth and State . Governments.
– I. move-
That the papers be printed.
I ask leave to continue my remarks on a future occasion.
The following papers were pre sented : -
Taxation- -NineteenthReportof the Commissioner, years 1935-36: Land Tax, Income Tax,Estate Duty; l936-37: Sales Tax.
Ordered to be printed.
Norfolk Island Act - Ordinances of 1937-
No. 9 - Conveyancing (No. 2).
No. 10 - Education.
No. 1 1 - Marriage.
Papua Act - Ordinances of 1937 -
No. 4 - Registration ofBirths, Deaths and Marriages.
No.5 - Customs Tariff.
No.6- Bills of Exchange.
No.7 - Seamen (Unemployment Indemnity).
No. 8 - Maintenance Orders (Facilities for Enforcement).
No. 9 -Public Service (Officers Invest ments ) .
No. 10 - Customs (Export) Tariff.
No. 11 -Supplementary Appropriation. 1936-1937.
No. 12 - Appropriation, 1937-38.
No. 13- Quarantine.
– In view of the public concern regarding the alarming accidents to the Hawker Demon defence squadron, another accident having occurred this morning, will the Minister for Defence prepare a comprehensive report setting out whether these are due to the pilots concerned not having gained the necessary experience, to the unsuitability of aerodromes, or to the lack of airworthiness of the aircraft?
– No. 1 bomber squadron, stationed at Laverton, Victoria, left, that aerodrome on Monday, the 29th November, for a training flight to Bourke, Charleville, Brisbane, Richmond,Coota- mundra, and return to Laverton. The squadron consisted of nine Demon aircraft, each with a crow of two persons.
The object of the flight was to give long cross-country and navigational experience to the pilots of the squadron, as this is the only way in which a junior pilot can be trained in cross-country work. The pilots were all qualified to undertake a flight of this nature in charge of experienced squadron and flight commanders.
Unfortunately, a series of mishaps occurred, one of which resulted in the death of Pilot Officer Fallon, and the injury, fortunately not very serious, of L eading . AircraftsmanFitzgerald. 1 am naturally deeply concerned at. these occurrences. The Air Board has appointed a special committee consisting of Group Captain W. H. Anderson, Wing Commander E. C. Wackett, and Wing Commander A. W. Murphy, to make a thorough examination, with a view to arrivingat the causes. The Air Accidents Investigation Committee, which investigates all such accidents, and was specially constituted to protect thepublic interests, will also submit a report after full inquiries have been completed.
– Will the Minister arrange for the special committee when making its inquiry to indicate whether the number of accidents in Australia is in any way out of comparison with the number in other parts of the world, having regard to the mileage flown and the types of machines used, in order to ascertain whether accidents which have occurred in Australia are of the kind normally to be expected in flying training?
– The honorable member’s request will be complied with. J may add that, in addition to the inquiries conducted by the special committee, the Air Board itself and the head of the Royal Australian Air Force also carry out full and comprehensive inquiries into every aspect of accidents that occur.
– Is the Minister for Defence prepared to consider the desirableness of the inquiry to be held into the air accidents in the Royal, Australian Air Force being conducted by persons outside of the personnel of the Air Force itself in order that the fears of parents of pilots and the public generally may be satisfied ? I might add that, in my opinion, the committee of inquiry may very well consider whether pilots are receiving sufficient training, and may even consider the activities of the heads of the Air Force themselves.
– As I have already said, a special committee consisting of Group Captain Anderson, Wing Commander Wackett and Wing Commander Murphy has been appointed by the Air Board to inquire into these occurrences. Wing Commander Murphy is in charge of the workshops at Laverton, and I am sure every one will agree it would he impossible to secure a more highly trained technical officer than WingCommander Wackett. Group Captain Anderson, who is a member of the Air Board, is to be chairman of the special committee. I assure honorable members that nothing will be done to prevent the fullest inquiry being carried out in every direction in the interests, not only of the AirForce, but also of the general safety and efficiency of: the service.
– Will the ‘Minister, until the report is available and we can be assured that the Hawker Demon aircraft is airworthy, direct that all flights with this type of machine be suspended?
– Offhand, I cannot give an assurance to that effect, but the honorable gentleman’s suggestion will be very carefully considered this afternoon.
ALTERATION of Licensing System.
– hy leave - It is the intention of the Government to alter the licensing system introduced on the 22nd May, 1936, and to substitute a system of adequate duties where such action is necessary for the protection of Australian industry.
The import quotas at present applying to motor chassis, however, will be retained. The motor chassis quota will continue on the present basis, which provides for the annual importation of chassis equal to the number imported during the twelve months ended the 30th April, 1.936.
In respect of other goods now subject to restrictions under the licensing system, the action necessary to determine duties adequate to protect industries established under the licensing restrictions, or industries which have either extended manufacturing operations or have laid plans for establishment, will be put in hand forthwith. It will not, however, be possible to determine and apply the duties at once. A change-over from the licensingsystem to duties cannot be made until ‘Parliament meets after the forthcoming recess, and in appropriate casesreference willbe made to the Tariff Board.
In the meantime, the licensing system will be administered on thefollowing basis : -
The Commonwealth Government has arrived at this decision in the light of its experience over the last twelve months, and after carefully considering the factors opera ting for and against the retention of the licensing system, including the improvement of the trade balance since the restrictions were first introduced.
– Were the restrictions on imports from the United States of America lifted after consultations with the representatives of the British Government? Was there any consultation in regard to the matter?
– May honorable members take it that the lifting of licences against certain imported goods is a conciliatory gesture at this stage of the Anglo-American trade discussions?
– That is partly the reason for it.
– Has any method been suggested to direct merchants as to how they are to know what goods are non-competitive, and therefore not subject to licences? In regard to those which will be admitted without licence, can it be relied on that those remissions will he continued until the next meeting of Parliament?
– The Customs Department is making an immediate survey in order to classify which goods are competitive and which are not. Importers will make application for licences in the usual way, and the right will be reserved to refuse them without application to the Tariff Board.
– Will the Department now permit the entry of those items which were previously held up under the general prohibition, subject to a satisfactory bond being given for the payment of the amended duties when they are determined?
– I do not know what specific items the honorable member has in mind, but any applications now with the department will be dealt with on the present resolution. New applications can be made in regard to items refused in the past.
– Will the Minister for the Interior inform me whether the variations in the rates on city leaseholds which, since September last, have affected the payments made fortnightly in respect of privately-owned houses in Canberra, also affect the rentals on governmentowned houses ; or were variations of rates made in respect of only private city leases?
– I shall investigate the subject, and give the honorable membera reply to his question later.
23rd Conference - Reports of Australian Delegates.
– I lay upon the table of the House the following paper: -
International Labour Organization of the League at Nations - Twenty-third Session, held at Geneva, June, 1937. - Reports of the Australian Delegates, together with Draft Conventions andRecommendations adopted. and move -
That the paper be printed.
Debate (on motion by Mr. Curtin) adjourned.
– by leave - I move -
That, in accordance with the provisions of the Commonwealth Public Works Committee Act 1913-30, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for investigation and report - Kingsford-Smith Aerodrome, Mascot, New South Wales - Erection of Terminal Building.
This proposed work was referred to the Public Works Committee by the last Parliament, but as the investigations were not completed before the expiry of the life of that Parliament, it is necessary to resubmit the work to the committee.
Question resolved in the affirmative.
– In view of the publication of many newspaper reports to the effect that the Minister for Commerce is endeavouring to take from the Department of Trade and Customs, the control of our tariff-making and treaty-making power, I ask the Acting Leader of the House to make a statement which will put an end to such fantastic stories.
– I am glad that the honorable member has referred to this subject, for it enables me to give an answer to the mischievous misstatements that have appeared in the press. The personal relations between the Minister for Trade and Customs and myself have always been extremely friendly, and our official relationship has been one of mutual helpfulness. The officers of the two departments have been working most amicably together. There is no truth whatever in the suggestions that have been made in the press.
– Will the ActingLeader of the House inform me whether it is a fact that a meeting of State Ministers has been convened at Canberra to-morrow? -Has the conference been called by the Minister himself? What business is it proposed to submit to the meeting for consideration? Does the business involve consideration of the treaty-making power of the Commonwealth and our overseas trade relations generally?
– A meeting of the Australian Agricultural Council will be held in Canberra to-morrow to consider the best method to deal with overseas marketing in view of the situation caused by the defeat of the referendum on this subject last year. The conference will also consider the general position of our industries.
– Will it have nothing to do with tariffs or overseas treaties ?
– Insofar as it will be necessary to consult with the representatives df various State governments on the position of our industries and to seek advice from this source, it will he done.
– Will the Minister for Commerce table the notices that were issued to the Ministers of State governments inviting them to attend the meeting of the Agricultural Council which is to be held to-morrow? Will he also state any reasons which he advanced to the State Ministers as to why they should be present?
– Members of the Agricultural Council were called together by telephone. No notices were sent, out.
– Were not telegrams despatched?
– I shall find out, but I know that the initial intimation was made by telephone.
– Is the Assistant Minister representing the PostmasterGeneral aware that a widespread belief is held by returned soldier linemen in the Postal Department that the promise made on behalf of the Government that returned men who had qualified for permanent appointment before 1928 would eventually obtain permanent employment in the department has been destroyed by reason of the fact that more than 50 per cent, of the permanent appointments are being given to youths under the designation of linemen in training?
– My attention has been drawn to this subject and I am at present making inquiries from the Postal Department in connexion with it. I shall give the honorable member a reply to his question later.
– As it was stated some time ago that the Government intended to appoint a committee of experts to investigate new sites for the capital of the Mandated Territory of New Guinea, I ask the Minister for External Affairs whether he is in a position to announce the personnel of the proposed committee?
– I am not in a position to announce anything.
– I have received a telegram from Tennant Creek asking that the Commonwealth Government should make payments to miners in respect of the .percentage of residue in sands from the Government battery at Tennant Creek. I am informed that the excuse for not doing so is that no cyanide plant is erected in connexion with the battery. Will the Minister for the Interior look into this subject? The practice in Western Australia is to pay a percentage of the value of the sands after assay.
– The battery erected by the Commonwealth Government at Tennant Creek some time ago has a cyanide plant connected with it and immediately the ore is crushed the sands are treated in the cyanide plant. No delay occurs in paying to the owners of ore the full proceeds from the crushings. I understand, however, that recently the Government took over from the Mammoth Gold Mining Company another crushing plant which had been erected with the assistance of a Government subsidy. The Mammoth Gold Mining Company has failed, and the Government is now operating its battery. There is no cyanide plant connected with that battery. The local mining warden has recommended that it. is advisable to remove the battery from the Mammoth mine and set it up about three-quarters of a mile away. The Government proposes to do so, and. after removal, to equip that battery with a cyanide plant also. In the meantime, requests have been made that the Government should make an advance upon the sands of ore crushed by the battery in its present site. My advice is that it would not be practicable to do t hat, because there are many dumps of sand surrounding the existing battery, and it would be impossible to supervise them in order to prevent removal or to determine their ownership. When the Government undertook crushing at this plant, it made it quite clear that it would not be responsible for the treatment of sands by the cyanide process until a. later date. The cyanide equipment will be made available at an early date, and full returns will then be promptly available to owners of ore.
– Have, requests from the various States for assistance in connexion with the rehousing programme been received? If so, has any decision yet been arrived at in regard to them?
– Speaking from memory, I am not aware that any such requests have been received. I shall, however, investigate the matter and advise the honorable member later.
– I n view of the fact that the Ministers for Agriculture of the several States will be in Canberra tomorrow to attend a conference, will the
Minister for Commerce take the opportunity to bring . under their notice the very serious depredations of grasshoppers throughout Australia and attempt to devise a uniform measure to deal with this serious pest?
– The grasshopper post has already been considered by the Australian Agricultural Council and is at present under concerted investigation by the Council for Scientific and Industrial Research and the various State authorities.
– Is the Minister aware that a large sum of money has already been spent on the foundations of a building to house departmental activities adjacent to this House? Will that work be gone on with in order to relieve the congestion that now exists in the parliamentary building?
– I think the honorable member will appreciate the fact that financial considerations must very largely be the deciding factor with regard to the question he has raised. I have no doubt that that is the aspect from which the Government willmake its decision.
– Has the Minister received the report of the royal commission inquiring into development in the Northern Territory? If it has been received, will he place it before the House before the Christmas recess?
– I presume the honorable member refers to the report of Messrs. Payne and Fletcher regarding development in. the Northern Territory. They were not a royal commission. 1 replied last week to a question in regard to the inquiries conducted, by Messrs. Payne and Fletcher and to-morrow I hope to be able to make a. further statement with regard to the matter.
– Arising out of an article appearing in the Home Journal under the heading “ America’s Immoral Moral Code “ with reference to the Australian motion, picture actress Joy Howarth and her marriage in Mexico to an actor named George Brent, working for Warner Brothers First National Company, who deserted her ten days after the wedding, and against whom she is now fighting her case in the courts,I ask the Minister whether the Government is prepared to suggest to the Censorship Board of Australia that motion pictures in which George Brent appears should he prevented from coming into Australia ?
– The Film Censorship Board has power to ban or censor films that may he indecent, blasphemous or obscene. The board could not very well inquire into the character of all actor* who appear in films, in order to decide on that ground, whether or riot the films should be exhibited in Australia.
– In view of the fact that diesel engines used for the construction of tractors may be imported into Australia free of duty, why is it that a duty of65 per cent, is charged upon diesel engines imported for the reconstruction of partly worn-out tractors?
– If the honorable member were to quote a specific case, I might be able to give the reason. Tractors are manufactured in Australia under the encouragement of a bounty, and it may be that the importation of the engine in the case that the honorable member has in mind cut across that policy, and for that reason duty was charged.
– In view of the comparisons made by the AttorneyGeneral at the. week-end concerning salaries payable to public servants and the Prime Minister, will the acting-Prime Minister supply the House with a statement showing the names of those publicservants receiving more than £l,500 a year from all governmental and semigovernmental sources, and the amounts paid to each?
– I shall go into t he matter, and see whether I can supply the honorable member with the information he desires.
– Can the Minister for Health state whether the Government of’ Tasmania has yet applied for a Commonwealth grant to assist it in combating the infantile paralysis epidemic? If so, has the Commonwealth Government yet given1 the application consideration?
– If an application has been made, it has not yet been brought under my notice.
Presentation to the GovernorGeneral.
Mr. SPEAKER (Hon. G. J. Bell).The Address-in-Reply willbe presented to His Excellency the Governor-General at
Government House at twelve o’clock noon to-morrow. I shall be glad if the mover and seconder . of the Address-in-Reply, together with other honorable members who so desire, will accompany mo when I present it.
– I have to inform the House that I have received from Lady Ryrie a letter thanking the House for its resolution of sympathy on the death of her husband, t;he Honorable Sir Granville Ryrie.
– I have received from the honorable member for Henty (Sir Henry Gullett) an intimation that be desires to move the adjournment of the House for the purpose of discussing a definite matter of urgent public importance, namely, “ The action of the Treasurer in having taken into the general declared surplus for the year 1936-37, and for having taken into general expenditure account for the current financial year (for which the surplus is estimated at £20,000) revenue amounting approximately to £700,000. resulting from a tax of . 7d. per lb. upon imported motor chassis and parts submitted to Parliament and agreed to by Parliament for the specific purpose of accumulating a fund tobeused as a bounty for the encouragement of the manufacture of motor car engines within Australia.”
Five honorable members having risen in support of the motion,
. - I move-
That the House do now adjourn.
Honorable members will, perhaps, recall that on the 22nd May, 1936, the Minister for Trade and Customs (Mr. White), following upon a statement by me, tabled a schedule providing for a duty of . 7d. per lb. on motor chassis and parts for the specific purpose, as I have indicated, of raising a fund to encourage the manufacture of motor car engines within the Commonwealth. In my speech on that occasion; I made it perfectly clear that this tax was of a specific nature in two ways. First, it was imposed specifically, I pointed out, upon the motorists of this country who bought cars the chassis of which were imported after the 22nd May of last year. Therefore, the impost has fallen on a very limited number of persons; say, 100,000 motorists up to the present time. Secondly, the tax was specific in that the proposal was submitted to the House, and agreed to, for the purpose of accumulating a fund to be used exclusively for the encouragement of the manufacture of motor car engines in Australia. My statement in that regard was a very definite one, the outcome of a long series of Cabinet meetings. There was not a detail in my speech in the way of fact that had not been’ agreed to by the Ministry. Moreover, the whole of it had been submitted to the right honorable the Prime Minister (Mr. Lyons). It was in no sense a personal submission to the House. I merely acted on behalf of the Government.
– What amount should now stand to the credit of the fund?
– The sum of £400,000 or more.
Honorable members may recall that although, at the outset, this matter was not referred to the Tariff Board, it was subsequently sent to that body, which action has brought about at least a year’s . delay, for which I must accept my share of the responsibility, inasmuch as I acquiesced in the decision to refer the matter to the board; but I recognize now that that was a grave blunder. I doubt very much, whether anything but a negative result can be obtained from the hoard, which all along, I believe, had no evidence in favour of the proposal, for the simple reason that the only relevant testimony obtainableeither in Australia or overseas was from those interested in the importation of motor chassis into the Commonwealth” or their exportation to this country from overseas.
Soon after the proposal had been tabled in Parliament, I saw four of the larger overseas motor car manufacturers, who, through their agents in Australia, were importing into this country, and 1 discussed every phase of the matter with them. At least two of them were definitely interested, but they asked me for a guarantee regarding the future. As to a political guarantee, I informed them that they would probably find a large majority in the Parliament in favour of the proposal. They thensaid that they required more than a guarantee from a political aspect for their chief executives in the United States of America. After considering the matter, I decided to ask the Cabinet to agree to the funding of the money from a. given, date, and Cabinet acquiesced, but the date on which the funding was to commence was not fixed. Having regard to the rate at which the money from the tax is accumulating, I believe that if it were funded, it would be possible to makea start with the industry at a very early date. Cabinet was quite satisfied as to the funding of the money.
Honorable members will recall that soon afterwards I left the Ministry, but the funding of the money, as agreed to by the Cabinet, was constantly in my mind. In June last, I discussed . it with the Attorney-General (Mr. Menzies), who, then acting for the Treasurer (Mr. Casey), promised to give every consideration to it, but he did not commit himself in any way. I afterwards discussed the matter with the Treasurer, on his return from Great Britain, when I could find no provision in the budget for the funding of this large sum of money. The Treasurer informed me that nothing had been done about it. The position then was that the Treasurer had taken about £370,000 or£380,000 into last year’s general revenue, and had declared it as part of the general surplus of £1,250,000. What was much more surprising to me was that, unfortunately, in the Estimates for the current year, the Treasurer had taken this money again - at least £370,000 - had put it into ordinary revenue, andhad declared an estimated total surplus of £20,-000.
Therefore, it is, I think, clear to the House that there is now no provision whatever on this year’s Estimates for this definitely promised bounty, which was approved in this chamber on the voices, after an amendment by the former member for Indi (Mr. Hutchinson) that the bounty should be paid on an ad valorem basis had been negatived by 43 votes to 7. In face of the Cabinet’s agreement that this, money should be funded, after I had submitted my view - that we could not get the industry established without a proper fund, it has now gone into general revenue. It is true that there was a revenue surplus last year of £1,250,000, but £.1,000,000 of that has already gone to the Post Office, so that for the first two’ years’ collectionno money has been set aside for the specific purpose of paying a bounty on the manufacture of motor car engines. I shall quote from my speech on this matter on the 22nd May to show how resolute the Government was at that time regarding it. I then remarked-
The determination of the Government to give strong, and as we intend, decisive encouragement to the establishment of this industry in. the Commonwealth is in our mind separate from, and independent of, the general scheme of trade diversion which 1 have “outlined.
The idea originated with me personally from the. exploration of the trade diversion plan, and when I placed it before the Government it was regarded as being of so much promise that it was separated from the general trade diversion policy. I was glad to-day, therefore, to learn from the Minister for Trade and Customs (Mr. White) that it was not proposed to terminate the licensing scheme for the importation of motor vehicles. I further said -
In our view the time has arrived - indeed it may be overdue - when this great industry should be established locally as a contribution to our existing protected industries. We have the market; we have the raw material; we have engineering direction and artisans second to none in the world.
There- is no reference there to the Tariff Board. I continued -
To provide the funds needed to encourage the Australian manufacture of engines, steps will be taken forthwith. It is proposed to impose an additional duty of . 7d. per lb. upon all imported motor chassis and parts. Generally speaking, this additional impost will average over the range of imported chassis at approximately £5 each.
Whereas since the establishment, of trade diversion £7 or £8 has been collected from each new motorist, about 100,000 in all - because the £5 is added before the sell ing price is determined - for the specific purpose of encouraging the local manufacture of motor vehicles, that money has not been earmarked for that industry, but has been spent in other directions or- allocated for other purposes. This year it becomes part of the general revenue. Now, as to the amount which was to be collected - because it may be pleaded that we are collecting too much - I said that the Government had decided that we should be onthe safe side. I went on-
Moreover, the question of the exact bounty required will be submitted at an -early date to the Tariff Board.
The definite understanding was that the matter was not to go to the Tariff Board until we had started the new industry with a bounty of £30 on each unit produced and until we had arrived, from experience, at local costs as against overseas costs
Mr. SPEAKER (Hon. G. J. Bell).Order. I wish to say now, lesr the debate will dwell upon the merits of this tax, that it will not be in order to discuss whether this money has been properly levied or whether the Tariff Board should investigate any proposal. The only matter open for discussion is as tohow the money has been used.
– I am pleased to have your ruling, Mr. Speaker, and I shall be careful to respect it. I know that you will make it operate both ways, but I was anticipating what might be said in reply. I submit that the Government by its action, or rather inaction, in having failed to fund this money and to set it aside for the- specific purpose which was intended and for which the House very emphatically asserted it should be used, has not kepi faith with this proposed new industry.
– Or with Parliament !
– No- I shall come -to that later. The Government has not kept faith with those persons who from my own knowledge have made an extraordinarily thorough investigation into the most minute costings both in Australia and quite independently in North America. It is keeping faith neither with them nor with the 100,000 motorists who have bought new cars since the 22nd May. 1935, at an inflated price. As a Government, it has been severe against those.
I raise this matter to-day “with the greatest diffidence. I placed the motion in the hands of the Speaker, and passed it to Cabinet this morning, but I was not certain that I should go on with it until I received final word from the Treasurer in. the House. As I said, it is with the greatest diffidence that I am blaming the Government for not carrying out the will of the Parliament. Further than that there are the motorists for whom I am in the position of trustee in this Parliament. As a member of the Government on behalf of the Government L gave them an assurance. That is the point. Although there was some complaint - relatively little - the motor car purchasers took the proposals, on the whole, remarkably well, playing up to the idea of establishing in Australia what should eventually be the biggest one-piece new industry that the country has known. But I feel that the Government has failed them. I sincerely trust that it will put this matter right. There is still time for it to do so, and I cannot conceive that it will not act. I knew of this matter before the elections, and I said nothing, and I have gone until to-day saying nothing in the hope that the Government would see the grave error made, and’ that it would establish the fund which it definitely undertook to establish at the direction of this Parliament. I do not wish to carry this matter any further, but I would say to this Government, which has done so much for the secondary and primary industries of Australia, that I think that it is very foolish in delivering what must be interpreted as a blow at secondary industries generally- in this country. Ministers are showing a lack of sympathy with the secondary industries, and I say quite frankly that the Government, as at present constituted, is already open to some suspicion.
[8.5S~. - I take it from your ruling, Mr. Speaker, that the discussion is to be confined to the terms of the motion; that is as to the culpability or otherwise of the Government in not having created a trust fund into which to put the proceeds of the .7d. per lb. import duty on motor chassis. I take it that you will not allow me to pursue the path on which the honorable member for Henty (Sir Henry Gullett) began to embark, and refer to the rights or wrongs and the desirability or otherwise of establishing a motor car manufacturing industry in this country. A great deal could be said, I think, on that matter. However, we are confined to a discussion of a trust fund or lack of trust fund. There has been considerable criticism by AuditorsGeneral in the past with regard to trust funds, and I, myself, have come in for a good deal of rather acid criticism at the hands of, what shall I say, the penultimate Auditor-General in this matter. It was directed by him at the creation of trust funds which enabled money to be set aside and allowed to lie fallow beyond the authority of Parliament. At any rate, in my time in the Treasury I have thought *a great deal before permitting any new trust fund to be created.
– There are 60 trust funds in being in Australia to-day.
– There are fewer now than when I first arrived at the Treasury. Just for a moment I must return to this matter of the manufacture of motor cars. The Government’s policy was announced in May, 1936. A good deal of discussion in the Cabinet followed that announcement until the end of that year, and culminated in the reference of the matter to the Tariff Board in the following terms : -
I, Thomas Walter White, in pursuance of the powers vested in nic as Minister for Trade find Customs by the Customs Act 1901-1935, do hereby refer to the Tariff Board for inquiry and report, in accordance with the Tariff Board Act 1921-1934, the following matter: - “The nest means of giving effect to the Government’s policy of establishing in Australia the manufacture of engines and chassis of motor vehicles, with consideration given to the general national and economic aspect.”
That was in December, 1936. It signalized the desire of the Government to have this matter much more fully investigated before final action was taken with respect to it.
– Order ! There cannot be a discussion of that aspect.
– I do not propose to discuss it. The Tariff Board has since been investigating the matter, and its final reporthas not yet been received by the Government.
– The report of the Tariff Board has been in the possession of the Government for some time.
– Order! I must again remind honorable members that, as I. understand the position, the report of the Tariff Board will not decide how and when this money will be used. That is the definite matter which is now under discussion.
Mr.CASEY. - That imposes on me a certain limitation. With great respect, I venture to say that there is a certain relationship between the report -and recommendations of the Tariff Board, when received, and the matter that is now particularly under discussion. However, I shall limit to the smallest compass any reference to that report. The first report of the board was indefinite in certain directions, or at any rate further information was needed, consequently the Minister for Trade and Customs referred back to the board certain specific inquiries, which are now being undertaken.
Mr.CURTIN. - On what date was that action taken?
– I. have not the date, and do not consider that it is relevant to the matter.I believe that the Minister for Trade and Customs will receive. the final report of the board at no very distant date. The recommendations of t he board will, be considered by the Government as shedding a most valuable light on the matter, because the inquiry has occupied about twelve months and has been in very considerable detail.It’ has not been limited to the manufacture of engines, but has taken into account the. manufacture of both the engine and the chassis. Until the Government has received that report, it will not be able to say its final word. Meanwhile, the obligation of the Government is identical to-day with its obligation of May of last year. That is a point which I particularly wish to stress. The creation or non-creation of this trust fund up to the present time does not vary in any way the Government’s obligation to potential claimants for the bounty. So far as they are concerned, the policy of the Government, as enunciated in May, 1936, has not been altered in the slightest degree, and its obligation is no greater and no less than it was then.
– What is that obligation ?
– I repeat that it is no greater and no less now than it was when the policy was originally enunciated.
Mr.FORDE. - Has the Government not used the money?
– That is not the point . The Government is in a. perfectly good position to provide the whole amount.
Mr.Forde. - What is the amount?
– Up to the moment,I believe it to be not much over . -£400,000. The Government is perfectly well able to bring forward and to use the whole of the amount provided by the special duty of 7d. per lb. I should like particularly to make the point that the Government’s obligation is the same to-day as it was when its policy was announced in 1936: it is no greater and no less by reason of the non-creation of this trust fund.
– The Government should have been £700,000 better off.
– Not until twelve months have elapsed. The question that I. was asked was, what would have been the state of the trust fund to-day had it been created in May, 1936, and my reply is, about £400,000.’
-It would be about £600,000 or £700,000 at the end of this financial year?
– Yes. and considerably greater in the following year.
– Where is the money?
– it is safely ensconced in general revenue, instead of bavins lain idle and fallow in a trust account during a period when the Government needed all available funds to finance its defence policy. It is opposed to the policy of the Government to allow relatively large amounts to lie idle and fallow in trust accounts when it is pressed to find the greatest amount it. can obtain n> finance its defence policy.
– The motorist will not think that.
– The. motorist is in no better and no worse position . by reason of the non-creation of this trust account.
– The taxpayers are saving interest.
– Either that, or an increase of taxation. Upon receipt and examination of the final and complete report of the Tariff Board, the Government will no doubt either confirm or vary - if variation be necessary - its earlier pronouncement in respect of the establishment of the motor industry in this country. Until that is clone, no trust fund having any specific designation can be created. One has to be very careful to designate the purpose to which the money shall be applied. I am completely in the dark as to the manner in which this trust fund could be designated. The original point was in respect of the engine of the motor car. I believe that to be incomplete, and that the manufacture of the whole motor car should be taken into account, as it has been in the terms of reference to the Tariff Board.
– What proposal was placed before the House when it authorized the collection of these moneys?
– It was in respect of the motive power. The reference to the Tariff Board covers a wider sphere, in order that the manufacture of chassis should be made the subject of investiga- tion.
– Surely the expressed desire of the Parliament that the investigation should relate to the engine of the car should be final! What authority has;”’ the Government to enlarge the terms of reference ?
– The Government had complete and full authority. The honorable gentleman who moved this motion went so far as to suggest that there was some breaking of faith with potential claimants for the bounty, by reason of the non-creation *of the trust fund. I strenuously combat that suggestion; there has been no breaking of faith with any one, and the obligation of the Government is exactly the same to-day as it was in May, 1936. Unless by reason of the nature of the contents of the report of the Tariff Board the Government is obliged to vary in one way or another an implied contract, it will abide by the undertaking it has already given. I have no knowledge of what the report of the Tariff Board is likely to contain, and I question very seriously the grounds on. which the honorable member for Henty claims to be able to forecast its contents.
Mr.Forde. - But the Government hashad one report from the board.
– The members of the Government have not seen it. It is not possible for the honorable member for Henty to know the lines on which theboard proposes to make its recommendations to the Government.
– But that would not prevent the Government from having a trust fund.
– Certainly it would notBut having a trust fund would not helpthe situation in respect of our finances, the general public, the motoring public,. or potential- claimants for the bounty. When1 the Government receives the report of the Tariff Board, find has had time properly to consider it, if any variation of its policy is found to be necessary that variation will be announced, whether it be in the direction of the expansion or contraction of its programme, or in the maintenance of the existing position. I presume that the Government will then authorize me to make a statement in respect of this trust fund. I remind honorable members that under the Audit Act a trust fund can he created by theTreasurer without reference of the matterto Parliament; but before any moneys are put into that trust fund it is necessary to appropriate them by means of eitherthe budget or a separate financial measure. Thus the House would be made aware of the amount which the Government sought to appropriate, and in most cases, the amount which was to be transferred to the trust fund. I repudiate very strongly any suggestion of lack of good faith towards any of the parties concerned, either by myself or by the gentleman who acted in my absence six months ago. The Government, having announced its policy, does not break faith. Its obligation to all sections of the Australian people isno different now from what it was in May, 1936, and it will remain unaltered until the Government sees fit, on the advice of the Tariff Board, to vary it.
– Therefore, the Government will break faith if it should find that to be necessary?
– Not at all. It may either increase or decrease its obligation, and break faith with no one. No party would be any worse off, but the finances would be very much better off by reason of the money having been allowed to remain in general revenue. I expect that the Government will have full advice From the Tariff Board at no very distant date. It will have an opportunity properly to digest and consider that advice, and if variation be necessary its policy will be made known and the purpose for which the trust fund is being created will be specifically brought before this House.
.- The Treasurer (Mr. Casey) has made a very long explanation, but has failed, I think, to meet the crucial point that was submitted by the honorable member for Henty (Sir Henry Gullett). In telling us that the money would have to be appropriated by Parliament before the Government could establish a trust fund, he spoke truly. But the charge which the honorable member for Henty has made is, that revenue to an amount of approximately £700,000 will have been collected by the Treasurer by the end of the current financial year as the result of the distinct endorsement by this Parliament of a policy which involved the imposition of a special tax, the proceeds of which were to be hypothecated for a specific purpose. That specific purpose can be attained only by Parliament making the requisite provision for a trust fund or by the Treasurer relying upon a buoyant general revenue during the next financial year so that he will be able, without reducing any of his normal expenditure, to restore the £700,000 out of general revenue, to be used for the purpose for which Parliament has authorized it to he collected since May, 1936. That is the gravamen of the charge of the honorable member for Henty, and the Treasurer has not answered it.
As a matter of fact, the Treasurer expects to be in financial difficulties next year. Only the other day he told us that next year £2,000,000 sterling would have to be raised overseas.
– Oh no, that is in this financial year. I did not say anything about financial difficulties. I invited the Leader of the Opposition (Mr. Curtin) to take a slightly broader view of my remarks.
– I shall take a fair view of them. The Treasurer must have known that this tax would yield about £700,000 from the time it was first’ imposed until the close of this financial year ; yet he budgetted for a surplus far short of £700,000. He now says that he will.be able to obtain this money from general revenue. But that is entirely fortuitous. It is not the result of the Estimates which he submitted to Parliament. It is really a kind of gambling. The Treasurer is mis-using the money this year, and is relying upon his luck holding so that he will be able to recoup it next year.
– That is pure abuse.
– It is precisely what is happening.
– I am afraid I am a very poor gambler.
– I do not say that the Treasurer is, personally, a gambler; but undoubtedly he is using the proceeds of this special tax for general purposes this year without making the requisite provision for the money to be available when it is required for the purpose to which Parliament authorized it to be devoted.
-Would the Leader of the Opposition say that he is embezzling it?
– I would not. I saythat Parliament authorized the imposition of a tax on a certain class of commodity. In doing so it made a drastic alteration of existing policy. This departure from, the usual practice was justified by the then Minister (Sir Henry Gullett) he submitted it to the House on the ground that the proceeds -of the tax would be so safeguarded as to be available for the payment of a bounty on the manufacture of motor par engines in Australia when that became practicable. Now the Treasurer says that the whole subject is being investigated by the Tariff . Board. He told us that one report had been made ‘by the board. The Minister for Trade and Customs has seen it, but not the other members of the Government. That Min- ister has referred the report back to the board, and asked it to - make further recommendations. The Treasurer says that these may result in a variation of policy. Variation may mean an enlargement of the policy, or even an abandonment of it.- What will happen in that case? The revenue received from this source, in this financial year, and during a portion of last financial year, amounting to nearly £J50,000, will have ‘been used by the Treasurer for a variety of purposes. I submit that, under existing conditions, the money is being wrongly used.
– The Leader of the Opposition is not flattering to my ingenuity.
– What will happen if the Tariff .Board recommends that the motor car manufacturing industry lie not established? Will it be possible for the Treasurer to make restitution of this money to those who have been improperly taxed to obtain it? Of course not.
– The money will be in the nature of an absolute windfall to the Government.
– That is so.
– How would the creation of a trust fund be held to avoid that position ?
– If the £700,000 had bc.–n paid into a trust fund, Parliament could have determined how it should be med.
– The whole, matter would he governed by the Audit’ Act. The money would have to revert to general revenue.
– Provided that Parliament so decided. The difference between the procedure involved in the creation of a trust fund, and the practice adopted by the Treasurer is just this: Under the Treasurer’s method the expenditure of the £700,000 would be iti his own hands ; bad a trust fund been created Parliament would have decided how it should he used. No trust fund has been created, so if the money is not used for the payment of a bounty on motor ears, the Treasurer will not have to seek advice from Parliament as to how it shall be ultimately expended.
– That is not so.
– There is a vast, difference between the competence of Parliament to deal with revenue in a general way, as submitted , in the Estimates, and to deal with it as from a trust fund. 1 again express my regret that the Treasurer has not given effect to the recommendations of the Public Accounts Committee in connexion with the preparation qf budget papers, and that, therefore, honorable members are still in a great dea of difficulty in dealing with the Estimates. Had the proper course been followed in this case, and a trust fund created, the Treasurer would have been required to approach Parliament if it were ultimately decided that the establishment of the motor car manufacturing industry in Australia, with the help of a bounty, were not practicable, and Parliament would have been able to determine how the money should be spent. We have no guarantee now that that will be done. In fact, it cannot be done, for the money will not be there.
– Of course it can be done.
– The Treasurer Will only be able to deal with the subject now by requesting Parliament to increase taxation next year to the extent of £700,000, or to reduce expenditure by that extent.
– The money could be found to-morrow if it were needed.
– Of course it could: but that is due only to fortuitous circumstances. The gambler’s luck is sticking to the honorable gentleman. The revenue from the Customs Department is about £1,000,000 in excess of the Treasurer’s estimate. The charges of the honorable member for Henty (Sir Henry Gullett) have not been answered. The Treasurer has made no provision to keep faith with the persons who have paid this tax, or with those who expected the motor car manufacturing industry to be established in Australia, or with the Parliament which agreed to the imposition of a specific tax for a specific purpose. No machinery has been- provided to ensure that effect will be given by the Government to the will of Parliament, and the Treasurer is, in fact, using the proceeds of this tax as general revenue.
.- I speak on this subject as one who is not sanguine about the prospects of manufacturing motor car chassis and engines in Australia as a commercial proposition. I waited with great anxiety to hear the
Treasurer (Mr. Casey) give a categorical assurance that this tax would be removed immediately it became plain that the purposes for which it was imposed could not be achieved.
– Surely I was not expected to answer that point, seeing that the situation has not yet arisen!
– I take it for granted that it is beyond question that the Government should have taken care to conserve the proceeds of this special tax, so that it could, be used for the specific purpose for which it was imposed, immediately that purpose could be carried out. I also take it for granted that, as soon as it became apparent that this purpose could not be accomplished,- the tax would be discontinued. There is far too much facility in Australia for taxing transport. Transport is the very life blood of the Commonwealth; yet the development of transport is being handicapped in every way. Everybody must realize that the development of adequate transport facilities would do a great deal to decentralize development and improve the marketing of our products.
– The honorable member will not be in order in discussing that subject on this motion.
– Then I shall approach the subject from another aspect. The honorable member for Henty has brought under notice the fact that the proceeds from a tax imposed for the special purpose of enabling a bounty fund to be established for the purpose of encouraging the manufacture of motor cars in Australia are not being safeguarded so that we may be assured that they will be available for this purpose when required. Transport is, as I have said, of extreme importance, to the Commonwealth. We naturally understood that the proceeds of this tax would he safeguarded so thatprospective. manufacturers of motor vehicles would know that money would be available for the. payment of a bounty immediately they put their capital into the industry. A special tax of this nature could be justified only on the grounds that the proceeds from it would be adequately safeguarded. It is a very serious matter to impose additional financial burdens on transport facilities away from tramways and train lines.
Such a procedure undoubtedly handicaps transport. If the new industry were established ultimately on an economicbasis, it. would eventually be a safeguard to the users of transport, and also provide additional employment. For that reason, the existence of the tax for a limited period could be suffered. Personally, as I have said, I am not” sanguine about the prospects of establishing this new industry. If, after the investigation which is rightly being carried out, the Government decides that the policy should not be persisted in, this burden upon transport should be absolutely removed, and at the first opportunity. Had the money, raised for this purpose been paid into a trust fund, there could be no question about the competence of Parliament to deal with it. I must say that it seemed very specious to me for the Treasurer to suggest that money in trust funds was lying idle and was not being used. 1 take it that it isdesirable and. also the practice for money set aside in trustfunds and ear-marked for specific purposes to be used until the specific purposes for which it is raised can be carried out. If the trust funds established for defence purposes could not be used, except for actual expenditure upon defence, and had to lie idle until that purpose could be carried out, we should have millions of pounds lying idle, earningno interest, and not relieving taxation in any respect. Of course such moneys should be utilized. There is a good deal of non-recurring expenditure provided for in the present budget which is being met in this way. It would not take a very exhaustive investigation of the accounts to show that it is perfectly legitimate to utilize moneys lying to the credit of trust funds for certain items of nonrecurring expenditure. The. adoption of that policy undoubtedly relieves the strain on. the loan market in a given year, and gives the Treasurer something to come and go on. It also permits the adoption of a steady policy of development in respect of, say, postal works. When the trust funds are required for the specific purpose for which they were established, loans must be raised for other purposes. But to suggest that trust funds could not be used at all is specious.
I do no desire to criticize the Treasurer personally. When he gives us an assurance that the money will be available immediately it is needed for the authorized purpose. I am sure he will find it. I have the highest estimate of the Treasurer’s integrity. But. after all, he can speak for only one Treasurer. An assurance- may also be given on behalf of the whole Government. The best governments are, of course, most unreliable.
– But this Government has not kept all its pledges.
– It has kept its pledges better than some other governments. Some honorable gentlemen sitting not far away from the honorable member for West Sydney know that. It is not only because I am afraid of a government of which the honorable member for West Sydney (Mr. Beasley) might be a member that I am not satisfied with the statement of policy of the Government in -this connexion,but it is also because I believe it is in the very interest of the Government itself that this matter should be very much more cut and dried, should be much more definitely safeguarded by the creation of trust funds. At any rate, I hope that the Treasurer can add to his assurances the additional assurance that this further burden on transport will not be continued if the money raised is not required for the purpose for which, the tax was imposed.
.The matter raised by the honorable member for Henty (Sir Henry Gullett) is one more of procedure than of anything else, and the method of procedure adopted by the Government is one which I am afraid I cannot favour. In May of last year this matter was raised of collecting a duty on motor car chassis imported into Australia which was to provide a fund to pay a bounty on motor car engines manufactured in this country. On that occasion I had a good deal to say regarding the raising of the money, and I pointed out at the time that, although the money might he raised, the project might not be gone on with, and, in those circumstances, the duty should not be collected until the issue had been definitely settled after representations had been made to the Tariff Board. An amendment which I moved to that effect was lost, and the tax was imposed. We now find that the revenue derived from that tax has been paid into Consolidated Revenue, which is quite different from what we or the people were led to believe would be the case. I definitely understood, and all the country, and what is more important, the purchasers of motor cars, understood that the money so raised would go into a fund out of which the proposed bounty was to be paid. Such has not been the case. The Treasurer (Mr. Casey) stated clearly this afternoon that the procedure he has followed does not necessarily mean that he or the Government has failed to keep faith.
– Does not “at all “ mean-
– As far as the present Treasurer is concerned, I am of opinion that as long as he occupies his present position he will at fill times endeavour to make sure that money for the payment of the bounty is available if. and when, required, but it rests a. good deal on his ability to keep faith. That, 1 think is very important.
– And it is equally important that he should be kept in the Treasury.
Mr.HUTCHINSON.- Yes. A trust fund, in my view, is one that is set apart for a certain purpose. I am very much afraid that the majority of the people of Australia also look upon trust funds as something set apart for definite purposes. Interference with trust funds is not looked upon very favorably.
– Hear, hear!
– That point is very important, because it brings before the Treasurer and the Government the importance of the step which has now been taken. The position to-day is that the money collected for a specific purpose has not been paid into a specific fund, but is being diverted into general revenue. The time may arrive after the report of the Tariff Board has been received when the manufacture of motor chassis in Australia becomes a possibility, and the Government may have no funds from which to pay the bounty. In other words, the Government may have to raise the money to provide the bounty by additional taxation which would have to be borne in part by the purchasers of motor cars.
– Thus they would be double taxed..
– Yes. Again the money might be found by borrowing on the market or by treasury-bills. I cannot contemplate either course as being acceptable to the people of Australia. Definitely one would not be acceptable to purchasers of motor cars. Therefore, I say that the matter is one of procedure, and I ask the Treasurer, in view of the fact that some honorable members on his own side of the House as well as honorable members opposite, and people outside, look upon trust funds as funds which are established and managed for a specific purpose, to take into consideration the question of paying the money now being raised into’ such a trust fund.
Mr.Casey. - -Why not wait for a couple of months until the Government has the report of the Tariff Board?
– It is only a matter of two or three months. Yet I ask the Treasurer to consider carrying out that procedure now. I feel sure that if he does so the criticism advanced against him will retire.
.- If a private trustee did what the Treasurer (Mr. Casey)- has done in connexion with this money, he would have to face a serious charge. The motion for the adjournment of the House moved by the honorable member for Henty (Sir Henry Gullett) is a well merited rebuke to the Government, and, indeed, I believe that certain statements that were made in the course of his speech will live as long as the title, “ the tragic Treasurer “ applied to a previous Treasurer, and can be applied with equal if not greater effect to the present Treasurer in view of the revelations which have been made by a very distinguished knight who sits behind him. The important point cannot be overlooked that a very definite assurance was given to certain interests that assistance by way of bounty would be given to establish the motor car industry in Australia. I will say that I sat in amazement and listened to the policy when it was originally unfolded by the honorable member for
Henty, though I regarded it as one of the boldest steps forward in the establishment of a great industry in Australia that would provide employment for 30,000 people.
– The honorable member cannot discuss that matter.
– The motor manufacturing interests were told that a bounty would be paid and that as a guarantee of good faith a special tax on imported chassis would be imposed in order to provide the necessary fund. What do we find ? No such fund has been provided by the Treasurer ; on the contrary, he has collected a special duty under false pretences. I use that phrase in no personal sense. The people were told that approximately £7 a motor car would be collected from them for a specific purpose, and that it was to be paid into a special fund to be earmarked for that purpose. This Parliament agreed to the collection of a special duty for that specific purpose, and it was naturally expected that the Treasurer would put the money into a trust fund.
– Did the duty work out at £7 a car?
– It averaged £5 a car for each chassis imported into Australia.
– Then every one who bought a motor car had to pay a duty of £5 on the average?
– Yes, assuming that it was to be used for the specific purpose of encouraging the manufacture of motor cars in Australia. The action of the Treasurer, I believe, will create grave doubts in the minds of those intending to establish the motor industry in this coun- try. Let us examine this aspect of the matter. There are a couple of big organizations in Australia which may be able to tackle this problem- to-morrow, but they have their roots in other countries ; while they are allowed to manufacture in another country are they likely to establish a production unit here? Have they been to the Tariff Board tosay that they can do so? It is to their interest to continue manufacturing in another country for the world market. There is no justification for sidetracking the question by referring it back, to the Tariff Board. The Treasurer said l.o-day that the money could be found tomorrow. Had Lis general revenue not exceeded hi3 estimate, where could he have got the money to-morrow?
– It is perfectly simple.
– We would have to depend on raising a loan or imposing special taxation.
– There would be no question of raising a loan or of imposing additional taxation.
– We would have got it from the same place, as we would have had to get the wheat bounty promised by the Labour Government.
– Is it there suggested i hat the bounty should be provided from loan ?
– At any rate, a substantial sum has to bc paid for this purpose, and if we had .-£600,000 in a trust fund, which could be applied to bounty payments, would that not be to those who have spent a lot of money in investigating this problem some guarantee of the Government’s intention to go on with it? The Minister said i hat the manufacture of motor cars will be in operation in Australia by 1938. He said further that 5,000 cars will be made ii: Australia in that year. It will cost £150.000 for that year for bounty payment’s at the rate of £30 a car. In 1939. or after two years of production, £26 a car will have to be found in respect of 15,000 units. That would cost £390,000.’ !n 1940, he estimated that 30,000 units would be manufactured in Australia, and that with the bounty at £S a unit it would cost £240,000 for that year. In 1941, the fourth year of production, he estimated that 40,000 units would be manufactured, and that the bounty would be £3 15s. a unit; that would cost £150,000. Thus, even on a conservative estimate, in the four years of production a total of £930,000 would be paid out by way of bounty. As I have said, when this tax was first collected we were told it was for a specific purpose. The then Minister said that be had not rushed into this question without conducting certain investigations and without employing the services of the ablest officers of his department to probe the question. Probably inquiries were made from experts in the employ of com panies, which have their roots overseas, who could not give evidence before the Tariff Board, but who, nevertheless, would give their honest opinion to officers of the Department of Trade and Customs. After all of those investigations had been completed the Government brought down its policy, and said that a fund would be created so that there would be no clanger about the money not being made available. Yet we find that the money has been confiscated for general revenue purposes. The Tariff Board some time ago submitted its report te the Government, and we are asked to believe that, although the Minister got (his report on a vitally important question, which agitated the mind of the Government, he did not tell his colleagues in cabinet the nature of the document.
– It is quite true, surprising as it may seem.
– We are told that the report was referred back to the board for further investigation on an aspect of the case that was not sufficiently definite. How did the Cabinet know that it was not definite enough? Undoubtedly Ministers knew its contents. It seems to me that they merely desired to shelve the matter for a further period.
– A very convenient policy.
– Yes, a very convenient policy, indeed. The Minister for Com- meroe (Dr. Earle Page) was one of those who approved of the policy of the honorable member for Henty (Sir Henry Gullett) in regard to the manufacture of motor cnr engines, yet he was a party to the sending back of the report, which resulted merely in useless delay. He now stands condemned for the stand, he has taken in this regard, and shows that he is truly deserving of the description of “ the tragic Treasurer
– The honorable member is transgressing my ruling.
.- This is purely a Treasury matter, and I take part in the discussion only because I think that a great to-do is being made about nothing. The honorable member for Henty (Sir Henry Gullett) said that the Government was under suspicion in regard to this matter. That was a particularly unfortunate statement to emanate from an honorable member, who was, until so recently, a member of the Government, .As I have said, this is purely a Treasury matter, and the Government has not deviated from its policy in any respect regarding the manufacture of motor cars in Australia. It simply means that the money will now be paid out of Consolidated Revenue instead of out of some water-tight fund such as honorable members seem to favour should it be needed. The honorable member for Henty was supported by a majority of the members of the House when he put forward this proposal. At that time he said that the scheme was essential for defence purposes, and would help Australia to become more self-reliant. The honorable member for Parkes (Sir Charles Marr) asked whether the Government proposed to get the Tariff Board to frame its policy, and the honorable member for Henty replied : -
So; but if the Tariff Board can prove that this industry is hopelessly uneconomic, 1 shall drop it.
The honorable member for Dalley (Mr. Rosevear) interjected: “Then drop it; it is only a big bluff”. Apparently members of the Opposition think differently now. The Treasurer has read the reference to the board in connexion with this matter, and it is in very definite terms. The reference states -
The best means of giving effect to the Government’s policy in establishing in Australia t.hu manufacture of engines and chassis of motor vehicles, with consideration given to the general national and economic aspect.
Could anyone want a better reference than that? The board made a lengthy inquiry, and submitted a voluminous report. The Deputy Leader of the Opposition (Mr. Forde) has drawn on his imagination for most of his facte, but, referring to the report of the board, he said, “ It is amazing to think that the report has been seen only by the Minister for Customs”. That is a fact; Cabinet has not. seen it, I referred the report back on my own responsibility for further inquiry. When the report is received, the Government will decide its policy. The Deputy Leader of the Opposition said that the tax should be removed because nothing has been done in regard to the manufacture of cars. The right honorable member for Yarra (Mr. Scullin) said that something in the nature of a loan might be necessary if a demand for the payment of a bounty were made.
– I said that it had been suggested by interjection from the other side.
– It is nonsense whoever said it. The matter could be handled by a mere adjustment of the revenue account. The honorable member for Henty, in outlining his scheme, proposed definite bounties amounting to £30 in the first instance, with reductions to £26, £8 and £3 15s. at intervals. Who knows that those bounties would attract anybody? Can any one say that a firm will come forward and manufacture cars on a proposition of that kind? The Tariff Board is inquiring into the matter now.
– I again remind honorable members that the proposal to provide a bounty to encourage the manufacture of motor car engines cannot be discussed upon the motion moved by the honorable member for Henty.
– That is so, and the matters brought forward by the mover of the motion and those who supported him. should not have been imported into the debate at all. The Government supports the principle of the manufacture of motor cars in Australia, if the means for carrying out the proposal can be “discovered and put into effect. 1 made a statement to that, effect last year at the opening of the McGrath Motor Works, when I said that we would undoubtedly manufacture motor cars in Australia before long.
– Order !
– 1 make that reply to the Deputy Leader of the Opposition, who merely treated us to his threadbare speech on secondary industries.
– The Minister for Trade and Customs (Mr. White) has deliberately ignored the order of the Speaker. I expect honorable members instantly to obey the summons of the Chair. ‘
– I am sorry, Mr. Speaker. I can only repeat that motor cars will be made in Australia eventually, and that, the Government is doing everything possible to hasten that time.
– in reply - I have listened carefully -to all the speeches delivered on this subject to-day,but naturally. I listened with particular care to the speeches of the Treasurer (Mr. Casey) and the Minister for Trade and Customs (Mr. White), and I am compelled to say that I have never before heard such feeble speeches from those two honorable gentlemen. Never before have I known them to be so embarrassed. We have heard a great deal regarding the Government’s willingness, indeed, enthusiastic desire, to pay this bounty money on demand, but I ask them, from what fund will it be paid?
– From general revenue.
– There is no revenue available for it. It has now been taken out of the Estimates altogether.
– I give an undertaking that it can be found.
– This year there is an estimated surplus of only £20,000, and as £370,000 was <paid into general revenue from the proceeds of this tax, where is the money to come from if a demand is made?
– -I give an undertaking that it can be found.
– It is not a question of whether we trust the Treasurer; of course, I trust him. But I ask the Treasurer to put himself in the position of a prospective and keen manufacturer. Would he not be more keen if there were a visible fund of £700,000 for the encouragement of the’ industry, than if there were merely the word of the Treasurer to go upon? The Government has stripped this proposal of all its certainty, and all its attractiveness. It has cast a blight over the whole scheme. I appealed to the Treasurer only to-day to establish a trust fund before the present sittings of Parliament were terminated, but he decided to take another course. I have met many possible manufacturers, some of whom have gone quite a long way in making preparations for the manufacture of cars. I will go so far as to say that there are in existence complete sets of blue-prints for the undertaking.
Mr.Casey. - That is absolute guesswork.
– I put my word against the Treasurer’s.
– Does the honorable member know that complete sets of blue-prints exist?
– Yes. When the manufacturers learn of this debate to-day they will, if I know them, most probably abandon the scheme altogether. That is what the Treasurer and the . Government have done to the industry. I ask members of the Government whether they are sincere in regard to this matter. On their performance, I doubt very much if they are. We know that two additional members have gone into the Cabinet who were definitely and strongly opposed to the scheme. I can only express my very bitter disappointment, and also my disgust. I ask leave now to withdraw the motion.
Leave not granted.
Question put - The House divided. (Mr. Speaker - Hon. G. J. Bell.)
Ma jority . . . .9
Question resolved in the negative.
Revision ov Ottawa Agreement - Projected Anglo- American Trade Agreement.
– by leave - I may say, at the outset, that at the conclusion of my statement I shall take the necessary steps, with the approval of the House, to facilitate a debate on this subject. During the next few months the trading relations of Australia and the dominions generally, the United Kingdom and the United States of America will be under consideration. Important decisions may have to be taken. All over the Englishspeaking world there is a feeling that ihe present opportunities for co-operation, should they be allowed to slip, may not recur for many years. In the best minds of the English-speaking world there is also, I confidently believe, a hope’ that British-American co-operation in matters of trade will not either begin or end as ibo expression of a policy of exclusiveness, but will lead on to that wide world trade co-operation without which much of Europe must, to our infinite material and Spiritual loss, stand outside the arena of trade, and of that friendly understanding which mutual and satisfactory dealings can do so much to promote. In other words, whilst our eyes are to-day on London and Washington, they will not sec clearly unless in the background they discern Berlin, Paris, Rome and Moscow.
Our problem to-day is, therefore, a vast one. Primarily, I propose to say some.thing of the Ottawa agreement, whose
revision cannot be long delayed. But that agreement cannot be effectively discussed without some historical background, and the formulation of at least some general principles affecting empire trade and the trade of the world. Before the Ottawa agreement, Empire preference, though existent, was not widely organized on a reciprocal basis. Indeed, Australia had for many years given preferences as a matter of gift and not of bargain. The adoption by Great Britain in 1931 of a protective tariff system clearly facilitated air Empire reciprocal preferential system. The immediate result was the Ottawa Conference. When it met, the trade of the world had fallen away disastrously, and prices of primary products were at ruinously low levels. The Empire countries came together to see how far they could protect one another against a world depression. After much hard work, the conference succeeded. The most material result immediately, affecting Australia, was the “ United Kingdom and Australia Trade Agreement 1932 to which. I shall refer as the Ottawa agreement. I need not recite the circumstances of its making or the details of its provisions; they are sufficiently well known to honorable members. All that I need do is to remind the House that Australian exports obtained substantial preferences in the British market, in some instances by free entry while foreign supplies paid duty, and in others, as in the case of meat, by a quantitative restriction of foreign supplies. At the same time British exports secured a systematized advantage in the Australian market by means of preferences to be worked- out in accordance with an agreed formula, existing preferences in excess of the formula being maintained, and certain necessary exceptions being, of course, provided for. By the articles of the agreement certain limitations were placed upon Australian tariff autonomy, a result which is, perhaps, the inevitable consequence of every international trade treaty, and must, therefore, not be exaggerated, but the precise nature of which requires to be examined.
Let me first very briefly consider the broad results of the agreement, which commenced on the 20th August, 1932, the primary term of which expired in August, 1937, and which now continues in force subject to six months’ notice of denunciation, and subject to a further provision that the agreement may be varied by consent after consultation between the two governments.
A great experiment like that made at Ottawa, was, and is, bound to excite controversy; and, as in the case of so many controversies, the truth will frequently be found to lie mid-way between the extremes. I believe that the agreement, great as its service to the Australian exporter has been, and great as its contribution undoubtedly has been to the amazing developments of Empire trade, has to some extent $een over-praised, since some enthusiasts have, by applying the maximum post hoc ergo propter hoc, attributed every increase of AngloAustralian trade subsequent to the agreement to the virtues of the agreement itself, and denied all significance to special and varying world and local economic conditions. I also believe that the agreement has been over-criticized by those who find matter for question in the terms of several articles affecting Australian manufacturing industry, since some of these critics have, by concentrating unduly upon the theoretical possibility of injury being inflicted upon Australian industries, rather overlooked the actual event which discloses an almost unprecedented growth of local manufacturing.
The Prime Minister (Mr. Lyons) has publicly stated that a revision, of the agreement will shortly be initiated. The recently announced commencement of Anglo-American trade negotiations, which may well impinge upon and be affected by the British preferential system, renders it inevitable that the revision of Ottawa should, to some extent at least, bc discussed concurrently with those negotiations. In effect, we are shortly to be called upon to clarify our minds on the complex and inter-related problems of our own national development, Empire preferences, and the revival of world trade. We cannot afford, either in our own interests or in those of the world, to be prejudiced, bound unduly to the past or unintelligent. Obviously, no. member of the Government can offer, at this stage, to formulate precise plans or hamper negotiations by too great definition.
But general principles we must have, and I shall endeavour to state some of them, with such excursions into the relevant facts as are necessary for a clear understanding. It will, I think, be admitted that the prime general principle is that our own all-round industrial development is the essential condition,- not only of our growth, but also of our existence. The vital problem of population for Australia cannot be solved within a measurable period of time without immigration. The motive force of migration is, 1 believe, never so much the expulsive power of bad conditions and prospects in the old land as the attractive power of good conditions and prospects in the new. The attraction and absorption of migrants will depend essentially upon the increasing growth of Australian industrial activity. Our protectionist policy, therefore is not a mere proof of either selfishness or self-sufficiency; it is the basic condition of our national safety. As I have repeatedly said, both in England and Australia, we do a great service to Great Britain and to the whole British world by making our country strong, well-balanced*, and self-reliant.
The articles of the Ottawa agreement will require review in the light of this fundamental principle. It is true that the not unfavorable interpretation of the agreement by the Australian Tariff Board, the sturdy Australianism with which that board has ‘invariably conducted its inquiries, and other circumstances, including the exchange position, have. prevented some of the articles from having any untoward results. But disputes on interpretation have occurred, and we must endeavour to avoid them in future. It is, for example, difficult as a matter of literal interpretation to see how you can have “protection” by a tariff which, under Article 10, “ shall not exceed such a level as will give United Kingdom producers full opportunity of reasonable competition “, since the object of a protective tariff, when, applied to an efficiently conducted industry, is to help that industry by excluding the competition of overseas suppliers. Article 12 also has been criticized on the ground that the tariff will of the Commonwealth Parliament may be subordinated to the decision of an administrative tribunal, and that if such were the case the sound general principle of independent and expert tariff investigation would be carried beyond the realm of domestic political policy and into that of international obligation.
The whole of the articles will be reconsidered in the light of experience and with the aid of the valuable comments and suggestions from time to time made by interested and representative bodies.
Apart from the development of our own resources, our policy has been and ‘is one of Empire preference - that is of the essence of Ottawa - -but we must consider the working of our Empire preferential system not only in its relation to Empire countries but also in its relation to the general prosperity of the world. We must be prepared to ask ourselves plain questions, and we must not avoid the answering of them. In the Ottawa year, British Empire trade was 27.5 per cent, of the total world trade. By 1936, it had risen to 31 per cent. In the Ottawa year, intra-Empire trade was 25.7 per cent, of the total trade of British Empire countries. By 1935, it had risen to 30.4 per cent. In other words, the Empire share in the total world trade has increased, and Empire countries have conducted among themselves an increasing share of their total trade. Insofar as this growth is due to the more rapid economic recovery of the Empire during the last few years, and insofar as it demonstrates Empire co-operation and the sense of family partnership, it is a good and satisfying thing. But if it could he shown that intra-Empire trade had grown at the expense of world trade and that we were pursuing exclusive policies calculated to encourage the growth of economic nationalism in Europe, the immediate statistics could not comfort us for very long. Personally, I do not believe that Empire preferences have adversely affected world trade. Indeed, I do not accept the view that tariffs as such are responsible for the sluggish flow of trade. As the experience of the United States of America has shown, the imposition of high tariffs by a creditor nation can sterilize its overseas investments; but, subject to this, the stabilizing of the exchanges, the renewal of international investment, and the abandonment of outworn suspicions and fears are the real hope for the world trade of the future.
I have raised the question of our Empire preferential system because it may be that Ave are reaching a point in economic history when a rigid insistence upon the fullest measure of Empire preference may prevent the British countries from taking their proper part in a great movement for world appeasement through the revival of trade. Honorable members will note that I say “ it may be “. It is impossible to dogmatize; the situation must just be watched and studied, and the Government must be ready to discuss and consider. We do not propose to drop the substance for the shadow. We are too conscious of the value of the Empire and it3 preferential system to make even a modification of that system unless we are driven to it by a real prospect of compensating benefit. The British market has been and is Australia’s best market, and our policies, both before and after Ottawa, have recognized that fact. But it may be that the United Kingdom and the United States of America in the long run cannot come to agreement without some modification of dominion preferences in the United Kingdom or United Kingdom preferences in the dominions; it may be that the United States of America would be. prepared to facilitate such modification by herself, making concessions in its own market to the dominions. In such an eventuality, the Australian Government might not consider that it, any more than the Government of the United Kingdom, should blindly adhere to the complete sanctity of the preferential system as it now stands, hut might bo willing to discuss the matter as a whole with the other British countries and with the United States of America.
Honorable members will recall that during the last ten years Australia’s commodity trade with other Empire countries has shown a passive balance of about £6,000,000 a year, which becomes much larger when the invisible items are considered. Our active balances are largely with foreign countries. These facts are significant, as my friend the honorable member for Henty (Sir Henry Gullett) was frequently reminded during his negotiations for foreign treaties. Indeed, it is not too much to say that if we apply immediate material standards,
Australia is at present a greater contributor to Empire trade than a beneficiary from it. This does not mean that com’plete balance is either necessary or desirable; but it is a factor to be considered when Ottawa is being reviewed and when the future of world trade is being discussed.
I have already made some reference to the necessity for our own all-round industrial development, and have instanced our manufactures. Let me at this stage make some further reference to our primary products. Many millions of pounds ha vo been spent in Australia on water supply, on the means of transport, and on other facilities for greatly expanded production. To take an example not far away, the Murray Valley is at the mere beginnings of its production of fruit and fat lambs. Where are they to be sold outside Australia? Our predominant market has been the United Kingdom, increasingly so since Ottawa and the valuable subsequent meat agreements of the last three years. But it is impossible to believe that Great Britain with all its good will can go on indefinitely absorbing more and more surplus production from Australia. We are guilty of no want of appreciation of the Empire spirit and what it has done for us, or of the supreme value of the British market, when we say that Australia, as a young country on the threshold of our development, must look to the whole world for its markets. That is why we approach the American negotiations with a helpful spirit. Should these negotiations between Great Britain and the United States of America lead on to some effective financial and commercial rapprochement with Germany, so that it became once more a large buyer of the natural products of other countries, lbc effect on Australia and the intensification of our development would be remarkable.-
We, of course, realize that international negotiations must inevitably involve compromises on everything except national security and large principles: and so that our consideration of the details may be wise and well informed, we shall take every opportunity for consultation with representatives of both primary and secondary industry.
In saying all this, the last thing 1 have in my mind is to foreshadow any abandonment of the principle of preference. That principle was succinctly and wisely stated by the honorable member for Henty (Sir Henry Gullett) in 1932 in his Ottawa agreement speech, in a passage which I take leave to quote -
The cose for a comprehensive scheme of preferential trade within the Empire rests upon the belief first that such a scheme is practicable and economically sound and secondly that it will prove a most powerful influence in strengthening all the other bonds which hold the British peoples together. It is not suggested that it would be possible or wise to attempt to make the British Empire self-contained. There are commodities such as wool and wheat and coal and many classes of manufactured goods of which the Empire as a whole has an output far in excess of its requirements, while in other commodities, as for example oil, its supplies cannot meet its consumption, and apart from that consideration it has never been held by those who believe in preferential trade that we should aim to exclude foreign trade from our marketsInternational trading, like inter-community trading, lies at the very roots of a progressive world civilization.
The principle is sound, but the interests of all the British people require that we should make it our servant, and not our master. There will always be room for that kind of preference in trade, which recognizes that we British people are of one family, that our ties are many and various, that we have great instincts and interests in common, aird that the growth and safety of each of us is of moment to the others. But preferences must not be of such rigidity that they constitute an unnecessary challenge to the rest of the world. That does not mean that we are to throw down our walls ; it simply means that we must occasionally be prepared to step over them to do business with the other man.
It is in this spirit that we must approach the delicate negotiations of the next few months, meeting other British countries, not as strangers, but as brothers - “in brotherly love”, as the apostle said, “ preferring one another ‘’. But our mutual preferences, though they continue to be real and substantial, must be sufficiently elastic to permit of a capacity in the British world, during the next few years, to seize every opportunity to encourage the nations of the world to forget old quarrels and suspicions and fears and grievances, and come back into that full commercial life which can in its prosaic and unexciting way do so much to turn men’s thoughts into the paths of peace.
In order to facilitate debate on this matter, because we shall welcome the criticisms and suggestions of honorable members generally, I lay on the table the following paper: -
Australia’s trade relations and the revision of Ottawa agreement - Ministerial statement. and move -
That the paper be printed.
Motion (by Mr. Menzies) agreed to -
That Standing Order No. 119 be suspended to enable the debate to proceed without interruption.
.- 1 have listened with interest to the speech made by the right honorable the AttorneyGeneral (Mr. Menzies) on a question that is of very great interest to the people of Australia, and, I believe, to the people of each of the dominions of the British Commonwealth of Nations. I had previously read in the press that the Government had no intention, during this debate, of making any definite pronouncements concerning its policy.. The speech of generalities made by the right honorable gentleman shows that the press was fairly accurate in its prophecy as to what its nature would be. I am somewhat disappointed at the speech of the right honorable gentleman. While I did not expect him to dot the “ i’s “ and cross the “t’s” or go into details, I believe that he should have given us some more definite indication as to what the considered views of his Government are onmany aspects of the Ottawa agreement, and the proposed trade agreement between Great Britain and the United States of America. I think I may be pardoned for having grave’ doubts as to the extent to which two representatives of the present Government can be trusted at a trade conference overseas, particularly when I have ringing in my ears the following statement : -
I deeply regret that the Government has dealt this staggering blow to secondary industries. This Government, as at present constituted, has loft itself open to suspicion in regard to its attitude towards secondary industries. Two members of “the Parliament have gone into the Ministry definitely opposed to this advancement in secondary industries.
Those words were uttered by no less a political identity than the honorable member for Henty (Sir Henry Gullett), who on more than one occasion, has occupied the position of Minister for Trade and Customs, and who conducted the previous negotiations at Ottawa. Surely, honorable members of the Opposition and the public ouside may be forgiven if they have serious misgivings as to the attitude to be adopted by the representatives of the Government at any proposed confer,ence overseas. I should like to know who is going to lead this delegation. There has been a good deal of “ kite flying “ in regard to the matter. It was said at one stage that the Leader of the Country party (Dr. Earle Page) would lead this debate this afternoon. Then it was said that the Minister for Trade and Customs (Mr. White) would’ do so. I believe that the Government realized that it was necessary to select a professional advocate to put a case of generalities, with many saving clauses, so that there would be bridges built and . ample opportunity for it to escape from criticism at a later date. I consider that I may be pardoned for asking what has happened to the Minister for Trade and Customs, the man who occupies a very important position as the head of the greatest revenue-producing department at the disposal of the Prime Minister. Is he to be a mere cipher in the Cabinet, to be sent overseas behind the petticoats of this political bride of the composite Ministry? If he is not to be reduced to the status of a political nonentity, why is he not to be given the leadership of this delegation overseas? If he is not to be the leader, who is? I think that I have a right to ask that question, particularly after listening to the statement of a former Minister for Trade and Customs “ that this Government, as at present constituted, has left itself open to suspicion in regard to its attitude towards secondary industries”. I wish to make it clear that the Labour party is strongly opposed to the Minister for Commerce leading a delegation to Ottawa or ‘anywhere else to consider the future of Australian industries and of 500,000 workmen in the factories of this country. We believe that the right honorable gentleman is out of touch and out of sympathy with the Australian viewpoint on this matter. An interesting story has yet to be related as to the foundation for the frequent rumours in the lobbies in regard to the meddlesome and mischievous part played by the Minister for Commerce in the negotiations which on a former occasion were conducted between a Canadian Minister and the honorable member for Henty. Those negotiations, I understand, had almost reached a satisfactory conclusion. No acceptable explanation has ever been made to this Parliament as to the cause of the dramatic resignation, or abdication under great provocation, of the honorable member for Henty from the Cabinet before the conclusion of those negotiations to which he had applied himself. He is not one who would throw up the sponge without some sound reason. Was his action due to pressure, or to indignation that had been provoked in him? Was it to appease the Country party? In the absence of an acceptable explanation, the Opposition is led to make, some inquiry, and probably to indulge m some conjecture. I have heard rumours, as have other honorable members, to the effect that if the mischievous influence of the Minister for Commerce had not rendered extremely difficult the work of the honorable member for Henty, an agreement with Canada would probably have been arranged. If the people knew the extent to which the policy that had been endorsed by an overwhelming majority of them was thwarted by the leader of the Country party, I believe they would say that to-day, when the future of Australian industries is at stake, he is not the man to lead a delegation overseas to deal with the subject of tariffs and trade. We must have some guarantee that the man selected will place first the interests of Australia and see that its industries and workmen are given first consideration. Surely the leader of the smallest political party in this House, who, on several occasions, has definitely announced himself as opposed to the present protectionist policy of this country, is not the best man who could be selected. If a secret ballot of members of this House were taken, and all were given absolute freedom to vote as to who should lead the delegation on such an important mission, the Minister for Commerce would not have one chance in fifty of being selected.. The Government will make a blunder of the first magnitude if it sends the Minister for Commerce overseas to negotiate a trade agreement that will subsequently have to be ratified, not only by this House, but also by another chamber, which at that time will have in it sixteen Labour senators pledged to the protection of Australian industries, and a number of the members of the United Australia party who on vital measures of protection may be relied upon to show sufficient independence to refuse to be a party to the betrayal of Australian industries. I should like to recall to the minds of honorable members a policy speech made by the Minister for Commerce in 1934, when he advocated the reduction of the existing tariff to the level of 1921-28. That was the considered statement of the right honorable gentleman, endorsed by the members of his party, upon which he went to the country. Does this Parliament stand for the scaling down of the tariff to the 1921-28 level? What effect would that have upon the secondary industries of this country generally? Would honorable members, by secret ballot, place in the hands of a man who advocates such views the future of Australian secondary industries? No doubt, when the honorable member for Henty said that two honorable members had gone into the Cabinet who were opposed to the great advancement of secondary production, one he had in mind was the honorable member for Barker (Mr. Archie Cameron) who was selected by the Minister for Commerce as his right-hand man in the Department of Commerce, the department which, according to press propaganda, is endeavouring to gather up all the trade treaty negotiations and. conduct them apart from the Department of Trade and Customs. On the 4th November, 1931, the present Assistant Minister for Commerce made the following statement in the Parlia- ment of South Australia: -
As a straight-out freetrader, I believe in buying in the cheapest market. It docs not matter to me -where the article is made, so long as it serves the purpose for what I want it
Was that the honorable gentlemen’s chief qualication for being drawn to the bosom of the Minister for Commerce, and for being made an Assistant Minister in such an important department? Was it the chief qualification for placing his name on the panel of nominees from the Country party for inclusion in this composite Ministry, side by side with you, Mr. Deputy Speaker, whose name, 1 understand, also adorned that panel? You, Mr. Prowse, knocked, but wore not admitted. It cannot be said that that was because of’ your freetrade tendencies, because the choice fell upon the man who said, “ As a straight-out freetrader, I believe in buying in the cheapest market. It does not matter to me where the article is made, so long as it serves the purpose for what I want it.” Nor is the honorable gentleman concerned with the labour conditions under which those articles are manufactured. I ask in all seriousness, dealing with this matter apart from party political considerations, do those honorable gentlemen who administer the Department of Commerce represent the considered opinion of the elected representatives of the people in this House? I submit that they represent the views of a minority. We are told that the honorable member for Barker is to be the driving force in the Department of Commerce, that the Leader of the Country party is a tired man and has a good deal of work to do, and that his colleague is to take over the lion’s share of it in that department. It is only reasonable to assume that probably room will be found for him in the delegation that is to proceed overseas, if it is to he led by his leader.
– The honorable member for Barker is surely no ‘longer a. freetrader !
– I must be guided by his definite utterances. He has worn well, and looks many years younger than lie really is. He made the statement in 1931, when he was considerably over ill years of age. That was his considered opinion after he had served for years as the Leader of the Country party in the Parliament of South Australia. I presume that his views have not varied from that very definite pronouncement of them. The Department of Commerce, like a hen gathering in chickens, is trying to gather in all the proposed trade agreements with other countries. Is it any wonder that the honorable member for Henty says that this Government, as at present constituted, is laying itself open to suspicion in regard to its attitude towards our secondary industries? Have I not a right, in the circumstances, to ask the Government to declare to-day who will be the leader of this delegation? There has been a lot of kite-flying on this subject. Statements have appeared in the press to the effect that the Department of Commerce is seeking to take control of our trade treaty-making power from the Trade and Customs Department. This reminds me that in 1934 the present Minister for Commerce laid it down as one of the conditions of his acceptance of office in the proposed composite ministry that he should be appointed Minister for Trade and Customs. That request had to be seriously considered, because the Country party held the balance of power. Surely there can be no other reason why the right honorable gentleman is able to obtain such favorable consideration of the views of his party! He said, in 1934, that the Country party desired a scaling down of the tariff to the 1921-28 level. Is there not reason to believe that the Government cannot be trusted to pursue a protectionist policy when it takes to its bosom a right honorable gentleman who advocates the scaling down of the tariff to that level, and also the honorable member for Barker who believes in buying in the cheapest possible market? I give the honorable member for Barker credit for his courage. No one can doubt that he is a straight-out freetrader. His candour is to be admired. But it must be remembered that his views are not those of the majority of the people of Australia.
In all the circumstances, the Government should not, on any account, appoint the right honorable member for Cowper as leader of the overseas delegation, nor should it permit the honorable member for Barker to be a member of it. No doubt the press propaganda in connexion with this subject is the work of the publicity officer of the Department of Commerce, an able journalist who was for a number of years the private secretary of the Minister for Commerce. I ask the Attorney-General (Mr. Menzies) to tell us definitely whether there is any truth in these press statements. It is not for me to say who should be sent overseas as members of this delegation - the Government must accept that responsibility - hut the Labour party, as well as the country at large, is entitled to demand a definite assurance that this delegation will not be led by a gentleman who is an avowed freetrader, whose great desire is to scale down the tariff to the 1921-28 level, and who roundly condemned the Ottawa agreement because Australia did not give away substantially more than was given away.
It is my considered opinion that the Australian people were, without their cognisance or desire, committed, at Ottawa, to a trade agreement containing clauses which were nationally humiliating, and which meant nothing if they did not mean that the Australian manufacturers and the British manufacturers were to be given equal rights on the Australian market. Our comparatively small and circumscribed market could be more than supplied with numerous articles of commerce which could be economically and efficiently manufactured in -this country, yet, as the result of the Ottawa agreement, some of our industries are to-day being challenged and rendered vulnerable by such imports from Great Britain.
There was once in this Parliament a gentleman for whom I had, and have, the greatest admiration, although he did not sit with the Labour party. I refer to lbc Right Honorable W. A. “Watt, an exCommonwealth Treasurer, an ex-Premier of Victoria, and, for a period, Acting Prime Minister of Australia. He was a most outspoken man. We could rest n siu red that anything that he studied was given the very closest scrutiny. In that respect he could be likened to the right honorable member for Yarra (Mr. Scullin). Mr. Watt gave very close attention to the iniquitous provisions of the Ottawa agreement. In discussing article. 10 of the agreement he said -
The existing atmosphere of doubt and anxiety arose from the existence of what is popularly known as the Ottawa agreement. Let us take the words of clause 10 of the
Ottawa agreement. By it, the British producer is guaranteed full opportunity of reasonable competition on the basis of the relative cost of economical and efficient production. To my mind, that guarantee constitutes most definitely a challenge to the protectionist system of Australia. The main objective of the protectionists waa to give to the Australian manufacturer a definite advantage in his home ‘market. If you .will read clause 1.2 of the Ottawa agreement, you will observe that ‘ No existing duty shall be increased on United Kingdom goods to an amount in excess of the recommendation of the tariff tribunal ‘. Does this not. give an enormous stretch of authority to the Tariff Board?
– -Was he not speaking as the chairman of directors of a company?
– He was not. When he made those remarks he was addressing the annual meeting of the Australian Industries Protection League. He was certainly not addressing a meeting of the Free Trade Tariff Reform League, as the honorable member for Swan (Mr. Gregory) sometimes does. Honorable members on this side of the House had already made similar remarks about “.he Ottawa agreement in the course of debates in this chamber and we were told that we were political partisans and that our statements were actuated by a desire to indulge in political propaganda. Such intentions could not by any stretch of the imagination be attributed to Mr. Watt, who has never in his life been allied to the Labour party. We believe that Mr. Watt was right when he said that the phraseology of article 12 of the agreement and the practice followed in giving effect to it, were equivalent to handing over the- powers of responsible Ministers to a body which did not represent the people of Australia in any constitutional sense whatsover
Apart from itemized schedules, certain principles were insinuated in the Ottawa agreement which violated Australia’s fiscal freedom and threatened its industrial development. That kind of thing must not be allowed to recur. We desire a definite pronouncement by the Government on this point. The futility and frictional effect of articles 9 to 13 of the Ottawa agreement are being demonstrated almost daily before the Tariff Board. Only last Thursday in Melbourne another interminable argument occurred before the board over the meaning of article 10 of the agreement which stipulates that protective duties shall not exceed such a level as will give the producers of the United Kingdom full opportunity to sell their goods in Australia on a competitive basis with Australian made goods. Surely the Australian manufacturers and the workmen in the factories of this country are entitled to supply the whole Australian market. That is a reasonable request and the Labour party asks that full effect be given to it.
– At any price?
– The honorable member for Henty made a very good speech this afternoon and I know that he will stick to it. I did not say “ at any price.” Internal competition will look after prices in this country. A drop of 30 per cent, in the price of the goods manufactured by a number of major industries in Australia was effected after the Australian manufacturers were assured of the whole Australian market. I know that officers of the Trade and Customs Department can verify that statement. Australian manufacturers have, unfortunately, been forced to assume the defensive in order to safeguard their home market. They have been, as it were, “ put on the spot “. Some of them have been treated almost as criminals, as though they have done something outrageous in establishing new industries in this country. They have been subjected to the very closest cross-examination, and all their activities have been scrutinized with extreme vigilance. Overseas manufacturers have not been subjected to the same humiliation. Articles 9 to 13 must be eliminated from any future agreement entered into by the Government.
Ministers should be able to give us an unequivocal assurance that in the forthcoming negotiations no commitments will be made except such as relate to specific facts and figures. Any new agree- ment should be devoid of general principles which are liable to diverse interpretations according to the views of interested parties. Such provisions undoubtedly impair the effectiveness of the Tariff Board and render difficult the development of Australian industries, for all parties to any negotiations to that end are in the dark as to possible future developments. Ministers should also be able to declare with frankness the attitude they intend to adopt in the light of the now closely inter-related subject of the Anglo-American trade negotiations. The members of this Parliament, an overwhelming majority of whom stand for protection, should not tolerate the sacrificing or even the imperilling of Australia’s industries.
In my opinion, the following provisions should be borne in mind and regarded as the basis for any new agreement with Great Britain: -
Such provisions have caused innumerable disputes before the Tariff Board.
– But not ill-will*
– Frequent complaints have been made within and without Australia about articles 9 to 13 of the Ottawa agreement, and it cannot be denied that they have caused great dissatisfaction.
In respect of the United States of America, I draw attention to the reply given by the Minister for Trade and Customs to the honorable member for Henty on the 30th June, 1937, in which he stated that in twelve new industries additional . capital to the total of £3,032,000 had been invested in Australia, and that in 48 other industries Australian manufacturers have substantially gained as the result of the trade diversion policy. In that connexion, will the Attorney-General give a definite assurance that ample protection against imports from the United States of America will still be maintained so that these industries may be protected, assuming that the statement made as to the capital invested is correct? Even so, had there been no Ottawa, agreement and no trade diversion policy, as a result alone of the foundations laid by the Scullin Government there would have been a substantial increase of capital into this country to establish branch factories of the countries concerned. With regard to America, concessions should be definitely confined to intermediate tariff protection on specific items under the non-protective and revenue items of the customs tariff. I am sick of listening to a lot of platitudinous bunk talked by would-be free traders about the necessity to remove tariff barriers to save the world. It is said that we should cut down the tariff and substantially increase the returns to the primary producers. That, it is claimed, is a panacea for all the economic ills of the primary producers of this country. These and other shibboleths are invented by a so-called Country partycumtariff reform party-cum free trade party, which to-day dominates this Government, because it has the balance of power, although it represents a minority of the people of Australia and could not secure endorsement of its policy at the polls. Is the arch-priest of this policy, the Minister for Commerce, who said that we ought to scale down the tariff to the 1921-28 level, and who, I have no doubt, was assisted in the preparation of his speech by his henchman, the honorable member for Barker, an avowed freetrader,, to become the leader of the delegation to arrange trade agreements and to decide on matters affecting the very livelihood of 500,000 workmen in Australian factories? The proposal is too absurd to be given a moment’s consideration by this Government or by this House, were it not for the fact that we realize how completely under the domination of the Country party is this composite Ministry, which, we fear, may make a foolish decision that will have a damaging effect on Australian secondary industries. ‘[Leave to continue given.] I thank honorable members for their indulgence. The Prime Minister recently made reference to “ discussions which had been opened between the Governments of the United Kingdom and the United States of America with a.view to a conclusion of a trade agreement “. He proceeded to say that his Government would examine the question in consultation with other Empire countries. We have a right to a more definite and candid statement as to the attitude of the Government on this matter than we have had to-day. Probably it will come from the Minister for Trade and Customs. We should be informed to what extent the Government will go and what arc its views in respect of those vulnerable industries which/ we were told, have been’ developed in this country at the expense of the United States of America. Revision of the Ottawa agreement is obviously the basis of any AngloAmerican pact, and the first step is evidently to be the whittling down of Empire preferences and trade reciprocity through a general downward revision of the tariffs of both Great Britain and the dominions.
– There is no evidence of that at all.
– We have evidence that the United States of America objects to the Ottawa formula on the ground that.it has meant a reduction of America’s export trade, particularly the export of primary products. The Secretary of State of the United States of America, Mr. Cordell- Hull, who has already signed sixteen trade agreements, is such an astute gentleman that his present anxiety to sign on the dotted line is a clear indication that he believes the proposed agreement will overcome the Ottawa obstacle. This move will, undoubtedly, put the Prime Minister and his colleagues in the Cabinet on the horns of a dilemma, which makes the selection of the Minister who is to lead the proposed delegation a most important matter. Will the Government commit Australia to an Anglo-American pact that will prejudice the present preferences for Australian primary products on the British market? There is growing anxiety among the primary producers of Victoria and other States. We have the. outspoken utterances of certain Country party members in Victoria representing the canned and dried fruits districts. The Government has said that it is definitely committed to its trade diversion policy. Will not one of the stipulations of the proposed agreement be the abandonment of the suicidal trade diversion scheme, because one of the fundamentals of the reciprocal Cordell-Hull trade agreements is that, once a nation signs a trade agreement with the United States of America, it cannot give preference to any competitor of that country. Mr. R. B. Bennett, the present Leader of the Opposition in Canada, who was Prime Minister of that dominion on the occasion of the signing of the Ottawa agreement, and to whom we listened with the greatest interest when he delivered an inspiring address to us some time ago, now speci fically charges the Canadian Government, led by Mr. Mackenzie King, with secretly agreeing to abolish Empire preference. If Canada has signed on the dotted line, obviously this Government must be in a position to satisfy this Parliament to-day as to what is to be its broad general attitude in relation to the proposed agreement, and whether Australia has to any extent been committed by promises already made.
Sitting suspended from 6.9 to 8 p.m.
.- The Ottawa agreement, which has been under discussion to-day, has been before the House on many previous occasions. It has frequently come up for discussion during the last five years in the course of tariff debates; for trade is never static, and tariff changes have to be made from time to time, while the obligations imposed by the treaty itself have necessitated periodi- , cal revision. To-day, however, the opportunity occurs, now that the agreement has run its course, to appraise its value to Australia, to survey its imperfections, and to endeavour to ascertain how best the agreement can be adjusted and improved. Any constructive suggestions put forward by honorable members in the course of this debate will receive every consideration. We know that many who were hostile to the agreement when it was first mooted have now modified their opinions. Representatives of primary and secondary industries will be afforded an opportunity to put forward their opinions regarding future amendments of the agreement.
In considering the Ottawa agreement, we should endeavour to keep the matter in. its proper historical perspective. This is not a new conception of trade or some creation of recent years; it is an edifice built upon the substantial foundation of preferential trade already skilfully laid by empire builders with foresight and vision, actuated by British sentiment and sound commercial sense. Preferential empire trade goes back to the navigation laws of 1660, which were continued in various forms until 1860, when the United Kingdom, under the influence of the Cobden school, embarked upon a policy of free trade. From 1879 onwards, the colonies endeavoured to revive preferential trade. Alfred Deakin introduced a measure embodying the principle in 1906, whilst at the Imperial Conference of 1907 he endeavoured, unavailingly, to have the system made reciprocal. Though unsuccessful, his advocacy at the conference and elsewhere in England paved the way for reciprocal Empire trade when the United Kingdom became protectionist at the onset of the depression.
– Do not forget Joseph Chamberlain.
– Yes, Chamberlain was he English protagonist of the idea, just as Deakin was the Australian protagonist. Despite the efforts of these men, however, there was little real reciprocity until the signing of the Ottawa agreement. For many years past, Australia had given preference to British goods, but this preference was not generally reciprocated.
There are those who still believe that trade can be left entirely free and untrammelled, and we still hear the shibboleths about free and unrestricted trade, and the advantages of abandoning all forms of protection. This, however, postulates a condition of absolute freedom and equality among the nations. Otherwise, those nations with greater national or physical resources would win out in the trade race, while a young country like Australia would not have a chance of developing its industries. Australia, in order to preserve its standards of living, and to maintain its economic security, must, resort to some measure of tariff protection. Those who oppose that view need only consider the United Kingdom., which, after 80 years of free trade, was forced to become protectionist in order to safeguard its industries against the competition of other nations. Extremes in tariff thought are- like the poles, interesting to explore, perhaps, but not temperate enough for our economy.
Within such an empire economy as we have, where tariffs protect local industry, and give preference to Empire and then foreign goods, there is room for much mutual support. Tariffs, like an economic traffic control, can make trade one-way or two-way, can accelerate, or slow it down, or, if unwisely used, can stop it altogether. Any one who has given the matter thought, must admit that when seven Empire agreements could be made simultaneously by the dominions and the United Kingdom, even though conflicting and competitive interests existed, it represented a notable achievement in cooperation. It was, in fact, unique, because, in the following year, a World Economic Conference was held which was able to achieve nothing. The Ottawa agreement, with all its imperfections, was an important forward step, and now that, it has been in operation for five years, honorable members will, I am sure, admit that it has been mutually beneficial. Certainly the agreement imposes obligations and demands concessions, but these are essential in order to achieve benefits for .each Empire country. Britain gave free entry to Australian butter, wheat, cheese, eggs, condensed and preserved milk, honey, apples, .pears, oranges, grapes, grapefruit, canned fruits and dried fruits, and placed duties on those goods imported from foreign sources. Great Britain also undertook to impose a duty of 10 per cent, on foreign leather, tallow, canned meats, meat extracts, and essences, sausage casings, zinc lead, asbestos, barley, flour, macaroni, poultry, casein, eucalyptus oil, and other minor items, while guarantees for the maintenance of preferential margins were given in respect of wine and sugar, eoncessions which have been of tremendous benefit to South Australia and Queensland respectively.
With regard to meat, it was agreed that the United Kingdom could arrange the regulation of imports from all sources, but the dominions were given an expanding share of the market. The result, generally, has been that the United Kingdom provides a market for 90 per cent., and in some cases more, of our exports of butter, cheese, eggs, beef, mutton and lamb, pork, apples, pears, sugar, wine, pig lead and zinc concentrates, while it is also the largest buyer- of our wool and wheat. There is scarcely a product which does not show a substantial gain, both in quality and in value, over the period preceding the signing of the Ottawa agreement. Taking the average exports for the three years ended the 30th June, 1932. as a base, and comparing them with the quantities exported in 1935-36, we find the following gains in our exports to the United Kingdom: -
Representatives of the leather trade have passed numerous resolutions in appreciation of the Government’s action in regard to the agreement, and have expressed their thanks that, during the depression years, the Government was able, in this way, to come to their rescue. To put the position in another way, the exports to the United Kingdom touched the low level of £40,000,000 in 1930-31, whereas in 1936-37 they increased to .£72,750,000 or about £22,500,000 more than the annual average during the most prosperous three years before 1929. The percentage of exports shipped to the United Kingdom rose, at the same time, from 36 per cent, in 1926-27, to nearly 50 per cent, in 1936-37. An important result of the Ottawa agreement was that it provided a stable market for export commodities which were shut out of many world markets during a period of low prices. We should remember that it was the United Kingdom that saved us during the depression.
Meat export statistics show that mutton and lamb exports increased by 10£ per cent., and beef and veal exports by 33J per cent., as compared with the figures for 1932. Quantities and prices both increased, while surpluses were cleared. These exports were worth millions of pounds to the Australian producers.
Australia now stands third as a supplier to tho United Kingdom, absorbing as it does 7.23 per cent, of Australia’s total imports. Canada takes 8.84 per cent., and the United States of America 11 per cent. No one would suggest that these improvements are entirely due to the Ottawa agreement, but undoubtedly it provided a tremendous stimulus.
Australia also had certain obligations to fulfil, and these, too, have been mutually beneficial, because foreign goods were excluded to the benefit of .Britain. It is in connexion with these, obligations and concessions that considerable criticism and misunderstanding has arisen. Members of the Opposition, particularly, entertained fears that our secondary industries would suffer, but the reverse has been the case. The foreign tariff was raised considerably, and this steered foreign export trade to other markets, leaving considerable room for the expansion of the British export trade to Australia. Margins of preference had to be maintained, and where no margins existed, a formula providing for 15 per cent., 17-J- per cent., or 20 per cent., according to the British rate of duty, was applied. To bring this into effect, about 400 foreign duties were increased. Honorable members will recall that this gave rise to much criticism, it being contended that British duties should have been reduced instead. I remind them, however, that it was the only way in which the agreement could be properly carried out. It must not be forgotten that many tariff items were free, British, and free, foreign. These adjustments of duty rates gave Australian industries greater protection against foreign competition, and these, industries have benefited accordingly. We must remember that a country can import only up to the level of its exports, less the amount which it must pay out under its fixed overseas liabilities, such as interest payments, &c. When tariffs are being adjusted, each item must be considered separately and scientifically. Tariff adjustments cannot be made in a haphazard and crude manner.
The Government also undertook to withdraw the surcharges and prohibitions that had been imposed by the Scullin Government. Certain members of the Opposition said that this was a. betrayal of secondary industries, forgetting that, when the Labour party was in office, the Prime Minister of the day had said that the heavy duties had been imposed merely as a temporary measure to adjust the trade balance. As soon as the trade balance was corrected, these abnormal duties had to be removed. That was-one of the obligations undertaken at Ottawa, and these surcharges and prohibitions were removed. Another undertaking given was that prohibitive duties would be reduced as soon as the finances of the Commonwealth permitted it. Definite reductions of primage were made, and the whole of the protective duties on the British items were cut in half - from 10 per cent, to 5 per cent. It is understandable that that promise should be given, because primage is a revenue duty, and, unless it is required for a definite internal commitment, it should be as low as possible. Prior to the depression it was per cent.
The articles of the agreement setting out certain principles to be followed in relation to the duties imposed for the protection of Australian industries have been the principal bone of contention, both in Parliament and without. Briefly, these articles provide -
Much criticism has arisen with regard to these articles, but Australia could have promised no less for such concessions as I have indicated. The peculiar circumstances at the time should also be taken into account. Australia was in the depth of a depression, prices had slumped, the wool return, which had normally been between £55,000.000 and £60,000,000 annually had fallen to only £27,500,000 for 1930-31, and the total yield from exports had dropped from £136,000,000 to £90,000,000. The Government had already declared on the hustings that it would not interfere with rates of duty, even where they were excessive, without, reference to the Tariff Hoard, so that article 11, undertaking a review, was understandable. That United Kingdom producers should have full right to appear before the Tariff Board, as promised by article 13, was ‘ only fair, and that protection be afforded only to industries reasonably assured of success was merely common sense.
– But were the circumstances investigated in every case?
– The Customs Department has many ways of checking costs. If an importer gives false evidence, he can be prosecuted. -The department sees invoices of all imports into Australia.
– Are similar restrictions contained in the agreement between Great Britain and Canada?
– Yes. Somewhat similar provisions were made in the agreements with other dominions. Canada did not then have a tariff board.
– Were not the preferences specific rather than general in all other agreements?
– In some instances they were, but in others they were not. I know that it is desirable that preferences should be definitely set out in schedules, rather than that we should give undertakings which are capable of differing interpretations, but Australia did both. We had schedules, and we gave undertakings. At that time our tariff was out of joint. The depression had necessitated drastic measures to rectify the trade balance, and therefore a tariff review was essential, notwithstanding the Ottawa agreement.
– We have also made an adjustment of exchange.
– Yes, that was done gratuitously. We put it forward that exchange, like primage, was not intended to be protective, and that it was only fair to make a deduction to compensate for the incidence of exchange. Strong protectionists and protectionist newspapers supported that view. That alteration has worked quite fairly, and has not injured Australian industries. A deduction was made from the f.o.b. value of goods or from the duty in the first instance, and, according to recent reports of the Tariff Board, a specific deduction is made and an automatic factor operates when Australian currency appreciates towards sterling.
Which articles may be deleted, or how they may be altered, will be decided in view of the benefits that may accrue, always remembering that Australia must not surrender its tariff autonomy, with encouragement towards a higher industrialization being retained, and realizing also that there is great good in an agreement of this kind, especially during troublous world times, quite apart from the actual gains. Statistics show that the overhaul and the clarification of the tariff obligated in the agreement has not harmed Australian industries, but, on the contrary, ha3 removed excesses and excrescences from the schedules, and through reasoned and open inquiry by the Tariff Board has thrown a flood of light and instruction upon industries in Australia, which has helped in many ways towards price reduction and higher efficiency. Statistics also show that the highest number of persons employed in manufacturing industries in any predepression year was 452,000 in 1926-27. This number declined to 337,000 in 1932, since when there has been a rapid improvement. In June 1937 the number had increased to 535,000, or 83,000 more than at the highest peak of our previous prosperity. This employment is spread over almost every field.
I have no desire to introduce party politics, but we have heard the Deputy Leader of the Opposition (Mr. Forde) refer to the Ottawa agreement as a ramp. I was glad to hear the honorable gentleman admit to-day that the agreement had a certain amount of good in it. I would agree that it is a ramp because a dictionary definition of “ ramp “ is an “inclined plane between two different levels”. If the Ottawa agreement lifted us out of the depths of the depression to our present high level of prosperity, honorable members opposite may call it a ramp if they choose.
In the metal and machinery industries 14,000 more people were employed than in the peak year of 1926-27, and in the textile trade 15,500 more, while 3,400 more factories have commenced operations.
– Give your predecessors in office some credit.
– I approved of their action to rectify the trade balance. But this agreement has run for five years, and, as the Minister who has had the responsibility of implementing it, I know that each of these items under the tariff has received separate attention, whilst the policy of the Labour administration, which was crude in the extreme, was that of plastering duties ou with a spade, the inevitable result being retaliation by other countries. There was a total disregard of the fact that many imports are essential to manufactures. Of the imports this year, which have increased from £44,042,000 to £90,591,000, about 50 per cent, are raw materials of industry. Yet the Opposition, when in office, increased the duties on raw materials and kept the primage on them high, whereas now, in addition to 50 per cent, of the imports being raw materials, 14£ per cent, of them consist of capital equipment for industry, and 12 per cent, of them are motor vehicle parts and petrol. Only about 23£ per cent, consist of finished consumers’ goods, of which only 15 per cent, are at .all competitive with Australian industries.
I shall specify some of the large industries that have begun operations in the last few years. Time will not permit, me to mention all of those now being developed, hut some of the major ones are -
If the efforts of certain interests to crush the motor body-building industry had succeeded, it would have meant much unemployment in Adelaide, and the steel rolling mills would not have been established in this country. That industry came here because of the tariff and the existence of a certain market in this country. These extensions in existing industries represent a capital investment of £11,000,000. An amount of £3,000,000 has also been invested in new industry and investments to the extent of £10,000,000 are in prospect. As these industries grow steadily, more units will appear, and feeder industries will be associated with them, particularly with those industries that I last mentioned. The new capital invested in secondary industries in the last five years, together with that which is in prospect, amounts to £24,000,000.’ The tariff classification necessitated reductions and increases. I do not baulk at mentioning the number of” reductions of duties - they have been cited frequently and loosely without analysis - but reductions were necessary where in some instances the rates were excessive and encouraged high consumer prices and exploitation. In other cases the reclassifications were definitely helpful to secondary industries by removing from machinery and raw materials duties that hampered expansion. The total reductions were 1,198 British and 679 foreign- Of these onethird occur in non-protective items. Many were made in aid of Australian industries. Of the reductions made in the protective items, 403 under the British preferential tariff represent reduction to offset the protective effect of the exchange, and 395 under the British preferential tariff and 296 under the general tariff were the result of specific recommendations by the Tariff Board. Increases were 32 British and 394 foreign. These results indicate that the Ottawa agreement has been of definite benefit to Australia, whether it he looked at from the viewpoint of the primary producers or that of secondary industry or that of Australian advancement generally, which is the end this Government prides itself it is seeking. The agreement is not free from imperfections, and some changes are desirable: it would be remarkable if it were otherwise.
– Give us an outline of the changes that are to be made.
– How could any country enter upon negotiations with an agreement ready to be signed on the dotted line? That cannot be considered. 1 have tried to show the benefits that we have received and to show that Australian industrial expansion will be allowed to continue. We shall see that the benefits under the new agreement will be really reciprocal. At all times and more particularly in recent years the factors concerned with trade and commercial intercourse are uncertain and undergo great changes. The position in Australia to-day is very different from what it was in 1932. Policies must change with changing conditions in the world economy, and the agreement needs to be brought up to date. Since 1932 we have seen the world emerging from the most severe and widespread economic crisis it has experienced. The policies adopted in different countries to help them through the crisis have left a deep impression on the world’s economy. The almost universal drive towards a. lessened dependence upon external trade, the cessation of external lending by the great creditor nations, the measures adopted in different countries to relieve them from reliance on outside sources for foodstuffs and raw materials are legacies from that period which have left difficulties for every nation.
When the agreement is being reviewed it will be revised in the light of conditions as we find them to-day. The form the new agreement will take can only be a matter of conjecture at this stage, but real reciprocity will be the constant objective of this Government. Final agreement is always a blending of the views and aims of the two negotiating parties. The Commonwealth for its part will seek to maintain freedom to promote all-round development in Australia’s march to greater strength and develop ment.
– These are mere words.
– If the honorable member fails to differentiate between the words and figures for the last five years that I have cited he is without hope.
We shall aim to deal fairly between manufacturing and rural industries helping both in the knowledge that on the prosperity of the one largely depends the prosperity of the other.
Empire trade is all important to us, and must be perpetuated. But where there is opportunity for trade treaties with foreign countries, these opportunities will be and arc being fully explored. Already treaties have been made with Belgium, France and Czechoslovakia ; and it is hoped that negotiations now beginning with the United States of America will enable a satisfactory conclusion to bo made to the present trade difficulty with that country.
To-day honorable members have seen a change that should be helpful. Although the reason for removing the licensing system has only something to do with the present position, it is a system that is better replaced by straight-out tariffs. Rectification of the measure of the trade balance with the United States of America, enabled that adjustment to be made. However small the trade result, a better understanding between that great, democracy, the United States of America, and every part of the British Empire is of immense importance. (Leave bo continue </iven.
I thank honorable members because it . enables me, in conclusion, to make this quotation from that practical idealist, Alfred Deakin, who perhaps did more than any other man to foster Empire trade and the Empire spirit: -
You may speak of commerce as indifferently as von please, hut there is no commerce in the world that is mere commerce, that is commercial only. It carries with it relations and opportunities; it creates agencies which are of enormous value for the growth of national life. It draws yon closer to your own people, if not by the mere transaction itself, by other ties which it concurrently establishes in many directions.
Mr. MAKIN (Hindmarsh) [8.36J.-
Two senior members have addressed this House on .a subject which is one of the most important subjects that could ever engage the attention of a chamber such as this, but their carefully prepared speeches have been singularly free from any concrete suggestion as to what is the policy of the Government on trade _ matters. The Minister for Trade and Customs (Mr. White) dwelt on the history of trade matters from as far back as 1660, and revealed many striking features that have been associated with trade arrangements from that, time up to the present; but although requested to give to the House some definite lead as to the Government’s intentions, he skilfully avoided giving honorable members the slightest indication as to what the policy of the Government may he. His evasion is the more remarkable, because he freely said that the Government would be glad to receive suggestions from honorable members regarding the negotia-tions that are to take -place early next year. Surely we might have expected from the Government that leads public policy in this country something of a definite character in respect of the general lines and principles that it intends to follow in putting forward the claims of Australia at any trade conference that may be convened. We do not expect that it will reveal to us features of its policy which if is necessary, pending the negotiations, to keep to itself, but we have the right to expect some knowledge of the general principles of the policy that will actuate the Government. The Minister “for Trade and Customs failed to give us any knowledge of what is behind the mind of the Government on this matter, but I wonder if the Government has any mind on it. We can be pardoned for wondering, because of the diversity of opinion among members of the Cabinet on this very question. When we remember the almost irreconcilable conditions of mind that are represented in the Ministry, as it is at present constituted, we can realize the need for the skilful evasion practised by the Minister in his dissertation. No less skilful was the Attorney-General (Mr. Menzies) in what might be called his brilliant, essay upon the niceties of trade relations and the new outlook on commercial aspirations that the world should be prepared to adopt. If theright honorable gentleman’s statement is examined closely it will be found to be of little help in determining what is the mind of the Government on this important matter. In fact the right honorable gentleman tip-toed through the tulips very skilfully. The Government hardly does credit to itself in. failing to give the lead required. Another matter that emphasizes the uncertainty of mind possessed by the Ministry is the very fact that the Attorney-General led this debate, when it is remembered that he really has no claim to express an opinion upon trade or commercial matters. That is not his special forte. He is not even second man in this chamber. In the absence of the* Prime Minister (Mr. Lyons) the Minister for Commerce (Dr. Earle Page) is regarded as his deputy. How was it then thai the Minister for Commerce did not initiate this debate, seeing that it has a special relation to the Commerce Department and that it is a matter of public policy to which he. should give attention? Howis it that his views have, up to the present, been concealed ? The reason is that the views that are being forced in the Cabinet room upon the Government would not be popular among the people. We know full well that behind the doors of the Cabinet there, is at the present moment a struggle for supremacy on trade matters. ‘Chose who know something about the way in which members of the Country party are able to exert their overpowering influence on the other party in the Government know what the ultimate result will be when it comes to a declaration of a policy on trade matters. It will amount to a sacrifice of Australian industry and interests. We know that in the mind of the DeputyLeader of the Government (Dr. Earle Page) there is a. feeling that there must be a scaling down of the tariff; there must bea reduction of the protection to be afforded to Australian industries. Aided, as he is, by those aggressive members of the Country party who hold even more extreme views than he himself holds, I have no doubt that he will be able to exert a very real influence on the impending trade negotiations. This House has a. right to demand more information than has so far been given to it. Those Ministers who attended the Imperial Conference this year, were given an intimation concerning probable revisions of the trade agreement in the immediate future. In fact, it has been indicated that the representatives of the dominions were actually informed of the very items upon, which concessions would have to be made. Yet not one word have we heard “from either the Attorney-General or the Minister for Trade and Customs in regard to that very important fact. This Parliament surely has the right to demand that all the facts shall be revealed to it. It has been definitely indicated that one of the Australian industries which is to he sacrificed isa primary industry.I shall want to know why a member of the Government who is supposed to have strong leanings toward country interests is prepared to give his endorsement to a. principle under which the fruit-growing industry of this country would be sacrificed. I understand that the intimation has already been given to members of the Government that preference equal to that enjoyed by Australia in the marketing of fresh, tinned, and dried fruits in the United Kingdom, is to be extended to the United States of America. Many of the men who are associated with fruitgrowing throughout this country, including returned soldiers, are likely to be deliberately sacrificed when a future agreement on trade matters is being negotiated. I want to know what, is the opinion of the Government, on that, concrete proposal? It will be found that the Government has no opinions to express upon it to this House, and I am afraid that it will not have the courage and determination to press for the recognition of the rightful claims of that industry. But it is not only the fruit industry that is seriously threatened. Many secondary industries also will find that they are required to forgo any prospect of advancement or the expansion of their trade. Members of the Opposition have made quite clear where they stand in regard to trade matters. With them there is no equivocation.
We say that Australian industries have an unchallengeable right to a substantial portion of the local market. It must be remembered that with a diminished market in the United Kingdom, the only prospect of ensuring the security of our primary industries lies in the expansion of our secondary industries. That would provide a market which would pay them more handsomely than the export of their surplus production under any system of bounty or subsidy. During my participation in the proceedings of the Empire Parliamentary Association in London. I found members of the British Cabinet very unwilling to encourage an increase of trade from the dominions, particularly in primary products., 1 found that there hud been a decided change in the outlook of British statesmen from what I experienced no more than two years earlier. When in London in 1935 I found that, allied to the unwillingness of British .’Ministers to encourage greater trade on the market of the United Kingdom, -was a very persistent demand that the manufacturers of the United Kingdom should have the right more fully to exploit the possibilities of the markets iu the dominions. While in Great Britain this year, participating in the deliberations to which I have already referred, I found that Imperial statesmen had come to realize the necessity for the dominions to foster their secondary industries to the fullest extent, so that those industries would not only be helpful from the viewpoint of defence, but also provide a profitable market for the absorption of the goods produced by the primary industries. That being so, if the Government feels that when its representatives proceed to London, Ottawa, or wherever the conference is to be held -
– I have no doubt that if my honorable friend were to go to his spiritual home, he might find there quite’ a lot, of encouragement for the view-point that he holds wilh respect to many matters. His views are not very greatly at variance with the communistic idea, although he may not be prepared to admit it. The Government surely is under an obligation to indicate to this House the methods it intends to apply. It should state whether it intends vigorously to make a claim for the expansion of the secondary, as well as the primary industries of this country, and whether there is to be left out of the new agreement that portion of the old agreement which provides that the manufacturers of the United Kingdom shall have an opportunity to be placed on a competitive basis with Australian manufacturers. How can it be said that there is protection of. Australian industries while a provision of that character operates, and while this Parliament is not the master of its own fiscal destiny, hut is required to refer to a subordinate body the determination of such matters? The Government should be reprimanded by the House for having become a party to an agreement which deprives this Parliament of the right to conduct its business in matters relating to trade. We should demand that this shall not be made a feature of any future agreement. 1 hone that, before the conclusion of this debate, we shall have presented to us a statement along the lines that I hav.-s indicated in general principle, so that we may feel that the Government is prepared to recognize more definitely the claim of Australian primary and secondary industries, and should know who is likely .to be the leader of the proposed delegation, and bc able to judge as 1o whether he has the outlook correctly to interpret the desires of the Australian people. Strong objection will certainly be taken if the Minister for Commerce is permitted to lead the delegation. It would be calamitous to the industries of this country if he were permitted to he the chief spokesman for Australia.
– The problem is how can he be prevented?
– The honorable member for Batman (Mr. Brennan) has asked a very pertinent and justifiable question, namely, how is it possible to prevent the Minister for Commerce from playing a very prominent part in the deliberations? Certainly, the department which the right honorable gentleman administers is the one chiefly concerned. Whether he, or the Minister for Trade and Customs, will prevail in the private war which is proceeding in the Cabinet on trade matters, time alone will reveal. It is quite evident that the Government views with some fearful.ness and trepidation the possibility of the Minister for Commerce being entrusted with this responsibility, because to-day it felt it essential to ask the AttorneyGeneral to lead this debate, and thus allay any immediate fears. That does not deceive the members of the Opposition; nor will it deceive the country at large. In view of the nebulous character of the declarations already made on behalf of she Government, we must come to the conclusion that the policy which it proposes to follow will result in the “ selling” of Australian industries and the sacrificing of their future possibilities. If that turns out to be the case it will, of course, be too late for this Parliament to come to the rescue. I hope that honorable members will emphasize that the Government has an undoubted obligation to see that Australian interests are fully secured, and that those who have invested capital in this country and who provide employment for good Australian workmen in the industries established here, have a right to full protection. The industries of Australia should not be sacrificed’ to interests abroad, in order that the Government may placate people overseas who are seeking to negotiate trade agreements for their own benefit find are unwilling to give reasonably satisfactory reciprocal conditions. Every care should be taken to protect the industries already established in’ Australia, and 1 hope that honorable members on both sides of the House will require the Government to indicate much more frankly than has hitherto been done the definite attitude it proposes to adopt. A specific statement should be made by the Ministers who will be called upon to speak on behalf of Australia at the coming conferences on these all-important matters which will affect our trade and commerce.
.- No more important subject could engage the attention of honorable members of this House than that which is being debated to-night, for it involves, as I see it, the economic security of Australia, and of the people in it, and also of Australia as a component part of the British Commonwealth of Nations. I suppose it is inevitable in discussing such a subject that sectional or local interests will obtrude themselves; hut speaking humbly for myself, I believe that when they do obtrude they are apt to submerge the national interests. Speaking from the Olympian heights of an Independent, I think I am able to assess the value of the argumentsthat have been advanced from both sides of the chamber. It appears to me that the Opposition has developed a strangeattitude which is entirely inconsistent with its declared desire to advance the interests of Australian industry. Australian industry is the very bulwark of Australian progress. I believe as firmly as any one can believe, that industry is wrapped up in the destiny and progress of the Commonwealth. Speaking for myself, I would, not be a party, no matter what government was in power, to any measurewhich would reduce the security of Australian industry; but 1 wish to make it clear with respect to both primary and! secondary industries, that I. do not believe either should be given any form of protection if it is not efficient and economic.
The Deputy Leader of the Opposition. (Mr. Forde) expressed the view that certain trade agreements that had been made had threatened, industrial development in. this country. I can see no evidencewhatever of anything of the kind. I do not wish to go back to the sixteenth or the seventeenth century. I am satisfied, to accept the facts that have been made patent to us since the Ottawa agreement was concluded. These establish completely to my satisfaction, as does my own reading, that nothing that has occurred since the ratification of the Ottawa agreement has threatened Australian industry in any way. It. may be urged, of course, that our industries may have progressed more rapidly if the Ottawa agreement had not been made than, in fact, they have. -Such an argument can get us nowhere. In this discussion it is claimed, on the one hand, that all the benefits which have been enjoyed since the making of the Ottawa agreement may be attributed to other factors than the agreement. I concede that it is difficult sometimes to reason backwards, but there has been a good deal of reasoning backwards. I concede, also, that the mere fact that benefits have accrued to Australia since a certain date, that date being the ditto on which the Ottawa agreement -was concluded, does not necessarily imply that the benefits have been the result of the agreement. I am perfectly satisfied, however, from the information which 1 have taken the trouble to collect, that it is a fact that definite advantages have flowed to Australian primary industries from the Ottawa agreement and that as far as I can see nothing whatever which has resulted from the agreement has impeded the progress of our secondary industries.
The mere fact that a gradual scaling down of tariffs is occurring does not, it appears to rae, reveal any indication that our secondary industries will be imperilled. It must be clear to all honor able members of the House that the world-wide tendency during the last twelve months has been to scale down tariffs, because artificial barriers have been created by all countries in the adoption of a suicidal policy of national isolation. As one who believes strongly that the destiny of Australia is indissolubly joined with that of the British Empire, I say that if we can, within the limits of the protection of our secondary industries, advance the cause of reciprocal trade with the United Kingdom” and’ also between the self-governing dominions and colonies of the Empire, we shall do a -tremendous deal to assure prosperity and security for our country. We must realize that our exportable surpluses are almost entirely primary products and that our main market is in Great Britain. We must therefore also concede that to obtain a stable and secure market in tha United Kingdom is something worth paying for, so long as the price does not imperil our national and economic security. I do not believe that that is likely to follow the giving of preferences to Great Britain in respect of certain items. We must develop our secondary industries, however, for we must all realize that, despite the huge sum that has been spent, directly and indirectly, upon the development of primary industries, their power to absorb the unemployed and to add to our population is not at all proportionate to that expenditure, and our secondary industries are the only reliable basis for the absorption and employment of an increased population. It is because of this fact that I regard the preservation of the secondary industries of this country as of paramount importance.
In approaching a discussion of the proposal to revise the Ottawa agreement, it is important to bear in mind that neither primary nor secondary industries should he sacrificed ; nor should one be preferred to the other. Both primary and secondary industries should be dealt with on their merits. Our chief concern should be to insure that our industries, both primary and secondary, are conducted on an economic basis, for only thus can we ensure the welfare of our people.
I do not suppose that any one will envy those upon whose shoulders must fall the responsibility of these negotiations.In the circumstances in which we find ourselves it is idle for us to expect the Ministry to give anything more than a general statement of its policy. This the Attorney-General has already done and, in doing so, has assured us that the Government will do its utmost to protect our secondary industries. Yet we cannot overlook the fact that we have a large exportable surplus of primary goods for which we may find a good market in the United. Kingdom and also in some foreign countries, and to secure these markets we must have something with which to bargain.
The honorable member for Hindmarsh (Mr. Makin) said, without any equivocation, that the policy of the Labour party was the preservation of the secondary industries of Australia at all costs. . 1 consider that, our secondary industries should be preserved if they are efficient and economic. To preserve industries which are not of this nature must do harm to the Commonwealth. It is important to bear in mind that since the making of the Ottawa agreement in 1932, and since the Tariff Board has sought to apply the provisions of article 10 to our industries, they have been conducted on more scientific lines. This has resulted in increased development.
We should be able to discuss this subject dispassionately. Merely to talk in a general way about the need for secondary industries and apparently without any foundation beyond the fact, as stated in this debate, that the Country party forms part of this composite Government, to suggest that the Ministry intends to sacrifice the interests of our secon dary industries, will get us nowhere. Nevertheless, 1 hope that a more positive statement will be made of the Government’s policyin this connexion. I am prepared, personally, to accept the undertaking given by the Attorney-General that the preservation of our secondary industries will be in the forefront of the Government’s policy. With all respect to the honorable member for Henty (Sir Henry Gullett), . 1 hope that the approach to this problem will be on broader lines than* that of the last conference. In introducing the debate on the motion for the ratification of the Ottawa agreement that honorable gentleman said -
The Australian delegation, with the full support of the Commonwealth Government, aimed for something nearer and more tangible than a general benefit cither to Australia or to the United Kingdom. From’ the beginning of the preparation for Ottawa until the conference closed we worked for’ benefits forour primary producers.
I believe that that was a wrong approach. To say, as I understand the honorable gentleman’s remarks on that occasion to mean, that “something nearer and more tangible than a general benefit either to ; A ustralia or to the United Kingdom,” was desired, namely, “ benefits for our primary producers “ was not a satisfactoryapproach. It is my firm conviction that in a matter of this description the approach should be in the interests of the people as a whole, and not in the interests of either primary or secondary producers. It bringsme, in conclusion, to a. consideration of certain articles of the Ottawa, agreement which have been attacked by honorable members of the Opposition. In particular the Deputy leader of the Opposition indicated that, in his opinion,articles 9 to 13 should be completely scrapped. I hope that they will not be completely scrapped. It is true that article 10, in its literal interpretation would, as I read it, result in fierce competition between British interests and Australian interests, but the actual facts are that the Australian Tariff Board has interpreted article 10 to give a. marginal benefit to Australian manufacturers after taking into consideration the added costs of raw material, labour, and overhead charges in Australia. 1 hope that that policy will still be pursued. In the approach of the problem of revision of this treaty which is again inextricably bound up with arriving at a correct, sound, and just agreement with theUnited State of America, I hope that the basis will be a marginal preference for Australian industry in accordance with the terms adopted by the Australian Tariff Board, and then preference to Great Britain or the United States of America in accordance with the joint advice and judgment of the advisers from Great Britain, the dominions and the United States of America.It is charged with respect to articles . 11 and 12 that the Tariff Board has been given too great an arbitrary authority. I have for years indicated, andI indicate again now, that I am against the delegation of plenary powers to any non-parliamentary bodies where such plenary powers cannot be reviewed, by the people or be made subject, to their control. I find with respect to articles 11 and 12 that too great a. power is vested in the Tariff Board, and no doubt in the revision of this agreement consideration will be given to ensure that complete control is given to Parliament in these matters. But there can be no challenging the fact that, having regard to the conditionsunder which Australia was placed when the agreement was made, it was important to ensure . continuity of policy uninfluenced by any change of government. I have no doubt that articles 11 and 12 were introduced for that reason. I hope that . whatever articles are finally drafted more happy language will be employed than was employed in the last agreement. I am almost inclined to believe that articles 11 and 12 were drafted by a lawyer, so full of ambiguities are they. I hope also that in the approach to the revision of the agreement we shall bear in mind that, even although we may be called upon to make some sacrifice, sacrifice, if its leads us finally to prosperity, is essential unless it imperils our economic security. Taking the long view I believe that only in the great democracies of the world - the British Empire is the foremost one - lies the economic solution of the difficulties of the world and of civilization as a whole.
.- I wish to make a few brief remarks in defence of the Ottawa agreement. In the speeches we have heard to-day, we have had sufficient evidence that there is no serious reason why we should depart from the principle of trade relations with other countries through agreements such as the Ottawa agreement. The Attorney-General (Mr. Menzies) in his speech to-day said that the truth is likely to bo found between the two extremes. The Deputy Leader of the Opposition (Mr. Forde) thinks it would be a great mistake for the Minister for Commerce (Dr. Earle Page) to represent this Parliament at. Ottawa. Between the views of the Deputy Leader of the Opposition and the honorable member for Forrest, the truth might be reached, as we may be regarded as expressing the two extremes in this Parliament. I do not like the Attorney-General’s indication that he would whittle away the provisions of articles 9 to 12 of the Ottawa agreement, which I consider contain the basic principles that have tended to make the agreement the great success if. has been during its five years of operation. They were the principles that compelled its application in the form agreed upon.
The Minister for Trade and Customs (Mr. White) has shown very clearly the immense value to Australia of the export primary industries and the wonderful trading development which has resulted from the Ottawa agreement. In view of that, I ask honorable members what harm has the agreement done to our secondary industries? It has conferred a distinct, advantage upon secondary industries both in their establishment and in the employment which they provide. In regard to the prognostications of honorable members opposite and of some honorable members on this side of the House, that it would destroy the protective principle of Australia, I remind them that the Ottawa agreement, during the whole period of its operation, has resulted in great advancement of our secondary industries and that, towards the end of its term, the highest, peak of employment in Australia has been reached. These factors call for a renewal of the agreement. When such distinct and widespread advantages follow the making of such an agreement, it is wise to renew it. When this agreement was first signed, there were 337,000 employed in factories in Australia ; to-day, the number of factory employees lias grown to 535,000. The Minister for Trade and Customs has informed us that the duties on something like 2,000 items in the tariff schedule have been reduced. Those reductions must have been of distinct advantage to industry generally. The AttorneyGeneral seems to think that the populating of this country depends upon the development of our secondary industries. The right honorable gentleman is mistaken in that view, and I think also that the honorable member for Warringah (Mr.( Spender) is mistaken when he believes that the population and development of this country rest entirely on the development of its secondary industries.
– He did not say that.
– I remind both honorable gentlemen that had there been no fall of the prices of our export, commodities, 97 per cent, of which were primary products, there would have been no depression in Australia. The financial and economic development of this country depends upon the extent to which we can. sell our primary exports in the world’s markets. Our secondary industries were in no way able during the period of depression to export their surplus output; their whole energy is expended in manufacturing goods to be used in this country.
– The employees of secondary industries constitute a market for Australian primary products.
– The market is no better.
– It is worth £5,000.000 more for butter and because of the Australian consumption wheat-growers received £14,000,000 which they otherwise would not have got.
– It is interesting to read some of the observations of the Tariff Board contained in its report presented to this House last week. The outlook for Australia is much more hopeful at present than it has been for many years. Why alter it? The Board regards the Ottawa, agreement as having had a beneficial effect. We have undoubtedly regained prosperity. Can we hold what we have gained? Is it worth while dropping the Ottawa agreement and losing markets which we have gained? Why not improve them? Why not even go further? Dealing with this matter the Tariff Board said -
We will not easily forget the disquietude of thoughtful people in the years immediately prior to the depression. Our financial credit which had stood high because of high prices for our export commodities had been strained to the utmost by heavy external borrowing. Interest rates were high and internal costs and prices wore inflated, importations Were heavy and growing despite increase of duty rates. Costs were heavy on export industries and could only be supported while export prices remained high. When these fell our London funds and our credit fell also and only emergency action enabled the Commonwealth to maintain solvency. Many serious warnings were uttered, but although people were disturbed at the outlook, the position was .not remedied.
Only when export commodities rise in price arc we able to say that, we have turned the corner to prosperity. The prosperity which now exists was not brought about by the development of secondary industries, which can only be developed when primary industries are successful.
– We must have both.
– One must follow the other as naturally as night follows day. On page 27 of its report the Tariff Board stated -
There is room for development both in extent and variety of secondary industry, but the structure will be more firmly based if extension into lines imposing heavy excess costs is restrained. A balanced economy does not imply seeking to produce goods which impose heavy excess costs. Reaching out after uneconomic production wilT restrict more natural development and will thus reduce1 the general standard of living.
This is the considered opinion of men who have studied this question. Unemployment is now back to normal. What is wrong with that? I contend that the Ottawa agreement has contributed largely to ‘ the present prosperous state of this country by expanding markets for our primary producers. The Tariff Board went on to say -
Unemployment is now back to normal. It must be realized therefore that if employment is pushed in one direction by costly assistance, be it by tariff or bounty, we only transfer employment from more natural and economic forms of employment to that in which we have a disadvantage.
Another important point is that referring to interference with trade negotiations
Avith good customer countries. Such interference is forcing other countries to produce artificial fibre to be used in place of our wool. In this connexion the Tariff Board said-
The ultimate effect is therefore hard to foretell. There is now a general recognition of the need to take care lest any public action should place further handicap upon the placing of our wool on the world’s market.
In conclusion the Board summed up as follows -
On the other hand it would bc futile to expect that Europe will completely open her doors to the food from the newer lands. They, in common with ourselves, desire a balanced economy. They desire if only for defence reasons to grow much of their own food just us wc desire to manufacture many oE our normal requirements. ‘.No sudden departure from this policy is to bo expected, but it is surely reasonable to expect that Europe will set a limit on the exclusion of these healthgiving foods just as that .we should set a limit to production where excess costs must bc heavy.
The amelioration lies in not pushing the policy of exclusion too far - not attempting to support production when the disadvantages are too heavy.
There are members of this House who would have us manufacture in Australia at any cost, regardless of the ‘handicap that would be thereby; imposed upon the people. There is such a thing as uneconomic production. The Tariff Board, an expert body, is offering its advice to Parliament, and it is meet and proper that Parliament should give due consideration to its utterances. The report continues -
Along this line of “live and let live” lies the hope for the future, not only for Australia, but for the world.
– Would not that criticism apply also to the growing of wheat when the industry has to be supported by the payment of a bounty?
– Many people hold wrong ideas in regard to this matter. The right honorable member for Yarra (Air. Scullin), when he was Prime Minister, did not ask the honorable member for Parramatta to export buses when he sought to re-establish the credit of Australia overseas; but he did have printed across every envelope that went through the post an . appeal to the farmers of Australia to grow more wheat. Why did he do this? He did it because he recognized that wheat was a primary commodity that could be exported and sold overseas in order to pile up credits overseas. He knew that he could establish Australia in a sound financial position if he could export and sell enough wheat. He did not appeal to the people to export more shirts or collars, or boots, or any other manufactured goods; he asked them to export wheat. I remind the honorable member that the wheat-growers of Australia exported £150,000,000 of their capital during the depression years, in order to safeguard the credit of Australia overseas, and they were instrumental in bringing into Australia £21,000,000 annually in new money.
– All that interesting information does not make the Tariff Board’s remarks any less applicable to wheat than to any other uneconomic industry.
– What the Tariff Board has said in its report is on the lines of what Mr. Bruce said in that classic speech which he delivered in 1929. At that time, he said that the depression which was approaching was different from any other depression that Australia had experienced. Other depressions, he pointed out, had been brought about by drought, but the approaching depression was due to other causes. He reminded the people that it was necessary to examine the position very carefully, and to eliminate overlapping services as far as possible. He said that there should be only one Arbitration Court in Australia. The people could please themselves whether it was under State or Federal control, but there should not bo more than one. He also said that experts should be appointed to examine our fiscal policy, and to weed out uneconomic industries. I agree with what the honorable member for Warringah said about the development of efficient industries. It is necessary that industries become efficient so that we may discover how much protection they require. When Mr. Bruce, in his wisdom, told the Australian people what they should do, the Opposition cried out that he proposed to abolish arbitration that the Labour party had fought so hard for. and had almost shed their blood for. In this way, they were able to scare the working people. They then went to the manufacturers, and said that Mr. Bruce was going to do away with protection, so that the. manufacturers poured money into their hands to help them to defeat the Government. The Deputy Leader of the Opposition (Mr Forde) was appointed Minister for Trade and Customs in the incoming Labour Government. He revised the tariff without advice from the Tariff Board. He hedged Australian secondary industries about with such unnecessarily high protection that he lost £2 1,000,000 in revenue to no purpose whatever. . For every four minutes that the Labour Government was in power, a man losthis job. The Labour Government increased the income tax by 30 per cent., and was compelled to impose the pernicious primage duties and sales tax. The present Government, by participating in the Ottawa agreement, and by removing embargoes and reducing duties,has helped to bring about the satisfactory financial positionthat obtains to-day. The percentage of unemployment has been reduced to normal, while secondary industries were never better off than they are now. It is axiomatic that every increase of the tariff is followed by increased unemployment, while every reduction is followed by an increase of employment. The Tariff Board recognizes that truth, and warns us against excessive protection of any industry. My remarks apply to primary industries,as well as to secondary ones. We should concentrate upon the development of our natural industries - whether primary or secondary. In this way only can we achieve permanent prosperity and bring about the effective occupation of this country. Under the policy of high protection we have reached a dead end. It seems impossible to increase the population, and there is a tremendous outcry from the Labour party whenever it is suggested that fresh population should be brought into the country. We should accept the pronouncement of the League of Nations authorities at Geneva, and adopt such measures as will encourage a freer -flow of trade, I hope that whatever delegation goes to Ottawa will take a broad view of the situation, and will recognize that only by the development of our natural economic industries, and by the promotion of a natural flow of trade between countries, can we achieve national prosperity, and the effective occupation of the country.
– I feel under an obligation, as one of the Ministers of the United Australia party Lyons Government which negotiated the Ottawa agreement on behalf of Australia, to make some contribution to this debate. . First, however, 1 should like to congratulate the honorable member for Warringah (Mr. Spender) onhis maiden speech. It is clear that his presence in this House will contribute greatly to our debating strength.
The Attorney-General (Mr. Menzies) this afternoon expressed the opinion that the Ottawa agreement had been subject both to too much praise and. to too much criticism. Well,’ one could probably say that of every child that was ever born. That does not get us very far, but I do lb ink that the Ottawa agreement received, until the last two years, far more criticism than praise. It is only now coming into its own as a servant and aid of all industries in Australia. I say “ all industries “, because I think that the secondary industries, and employment generally, have benefited every bit as much from the Ottawa agreement as have the people on the laud. It is difficult to estimate what the Ottawa agreement has been worth to us. I say its worth is incalculable, in the sense that it cannot be calculated, but it is very great indeed. It is not to bo measured by the increased value of outexports to the United Kingdom. It is rather to be measured by the increased value of our primary production year byyear. I do not need to emphasize our dependence on the United Kingdom as a market for a great part of our pastoral production, and for the heavier part of our agricultural production, including, of course, fruit, wine, honey, poultry and the lesser rural industries. The following table shows the. percentage of the total exports of our main primary products taken by Great Britain in 1933-36: -
I have been careful to omit such commodities as wheat and base metals, because there is a certain amount of doubt as to the benefit they have derived under the agreement. They both enjoy a preferential rate on entering Great Britain, but they must be sold at world parity. In years when the prices of wheat and base metals were low, it was good to have the British market free of duty to the Australian products, while the foreigner was subject to duty.
Since the Ottawa agreement, the total increase of the value of Australian primary products, apart from wool, wheat and base metals, has been slightly over £20,000,000, so that it may bc fairly said that benefit to the extent of £20,000,000 a year has resulted almost entirely from the agreement. I shall go further than that. Heaven knows what the prices of bur primary produce would have been had it not been for the British market and the Ottawa preference. Had there been open entry to Great Britain, and had our produce been on the same level as that of foreign countries, our primary industries would have been choked up with over production. Either we should have had to reduce our production severely or the prices would have been so low as not to cover the cost of production and transport to market. It is extremely difficult to calculate the benefit derived from the Ottawa agreement; but to say that it is vast indeed is not to exaggerate the position. We have about 100,000,000 sheep and 11,000.000 or 12,000,000 cattle in this country. I find that the average price of prime wethers in Australia in August, 1931, was 15s. a head, whilst the average in 1935-37 was 30s. a head. This was due entirely to the reduction by 35 per cent, of free imports of mutton and lamb under the Ottawa agreement. In August, 1931, prime fat lambs averaged 12s. 6d. a head, but, in. 1936 and 1937 they were worth 2fis. Fat bullocks, which averaged £6 13s. 4d. in August, 1932, reached £9 in 1936 and 1937. The gain is not to be measured merely by the increased prices realized; we have also to bear in mind the immense benefits of the greatly improved farming and pastoral position due to improved meat prices alone. All breeding livestock has been greatly enhanced in value. Hundreds of millions of acres of land in Australia are more valuable now than they were prior to the agreement. The clearing of the market created a keen export trade and lifted the homeconsumption prices. The benefit has gone back to the very leaseholds themselves.
Now I come to secondary industries. I have said that the benefit to these has been no Jess than to the primary industries, as it has given immensely increased purchasing power to those engaged in primary production. Owing to desperately low prices in the few years preceding the Ottawa agreement the spending power of primary producers was very low indeed, but the agreement lifted that spending power enormously, and it has been sustained only by the constant demand from London and the clearing of the surplus in Australia sufficiently to provide a good home market. Ottawa has had nothing whatever to do with the recovery in the price of wool, but the greater part of the prosperity we are now enjoying is due to a run of generally good seasons, backed by the sustained reasonable level of prices brought about in the main by this instrument. Therefore, I cannot understand how Ottawa can ever have been regarded as an enemy of secondary industries in this country. Those industries have never been more prosperous or given more employment than today. As the Minister for Trade and Customs (Mr. White) has pointed out, the acceleration of secondary industries is higher to-day than in any previous time in our industrial history.
Perhaps I have as much right as anybody else, if not more, to speak about the articles of the agreement, because I drew the first rough draft of them, and put into them most of the points which they contain They were finished by the Lord Chancellor, after a number of conferences.
– The Lord Chancellor always has the last word.
– Yes ; I know that Lord Hailsham avoided putting these articles into strict legal language. They were framed in the simplest words that would convey their meaning. Despite all that has been said on former occasions in this House, a trade treaty is not a strictly legal document. I shall explain why these articles were indispensable in the making of the treaty. Some time before the Conference at Ottawa, the United Kingdom had granted i»s a temporary measure, a large number of preferences in favour of the imports of. Australia, and other Empire produce. The Australian delegation aimed at the increase of those preferences, and an obvious condition was that they should be continued for the life of any treaty made. In particular, the delegation sought a substantial restriction of mutton and lamb, and frozen beef, imported into the United Kingdom from Argentina.
While they were urging these matters, the British delegates pointed out that it was their intention to pass legislation making all concessions granted effective within a week or two after their return to London. They very naturally asked us if We would be in a position to follow the same course with respect to our concessions to Britain. We were not. As the House knows, the United Australia party, which was responsible for the treaty, gave a definite undertaking, when it went before the people in 1931, that it would not increase duties without, reference to the Tariff Board, and we were obliged to adopt that policy at Ottawa. We told Great Britain definitely that there were no duties which we could arbitrarily reduce and that all we could promise was a series of hearings before the Tariff Board. It is true that we produced before the British delegation a number of recommendations for tariff reductions that had been left behind by the honorable member for Capricornia (Mr. Forde) when he was Minister for Trade and Customs in the Scullin Government. ‘.Chat honorable member carelessly left behind the recommendations for substantial reductions of his own tariff that had been made by the Tariff Board. I think that there were 71 reports by that board that were waiting for attention when the Scullin Government went out of office. The honorable gentleman had these reports made, but, of course, took no notice of them. The Lyons Government, early in 1932, had those reports tabled and presented them at Ottawa as evidence of the downward trend in Australia. We had also asked the Tariff Board to investigate other important industries. Just before arriving at Ottawa, we were acquainted ‘with the text of some of the reports from those inquiries, and at Ottawa, we received the text of further reports. We produced them as further evidence of the fact that duties were coming down in Australia. The British delegation, however, said that the British Parliament was being asked to endorse all existing duties and to give them currency for five years, to increase a number of other duties, and to impose a number of restrictions. . upon Argentine meat, whilst all that Australia was prepared to do was to promise that -by the grace of the Tariff Board British duties might one day be reduced. Honorable members opposite will agree that while from its viewpoint, that was a very proper attitude for Great Britain, to- adopt, from our point of view it was a formidable obstacle around which we could see no way. Great Britain then asked us if we would agree to the drafting of some policy for the guidance of the Tariff Board which would assure British manufacturers of reasonable treatment. It was that and nothing else that led to the drafting of the articles in their existing state.
Mr.Rosevear. - None of the other dominions had to put up with the same set of conditions.
– They did. Article 10 went into the agreement between the United Kingdom and Canada. Ithas been taken out since. A similar article appears in the agreement between the United Kingdom and New Zealand.
– Not exactly the same.
– Not exactly the same in words, but the same in principle and effect.
– - No t at all.
– The honorable member is speaking without knowledge. I shall be pleased if he will allow me to proceed. I can. see that the time has come for considerable amendment of these articles. . They were never intended to be permanent. They were inserted in order to avoid a difficulty of which there appeared to be no other way -of avoidance. They were telegraphed to the Australian. Cabinet and completely endorsed by it. Quite frankly 1 see little, objection to article 9, which reads -
His Majesty’s Government in tin- Commonwealth of Australia undertake that protection by tariff’s shallbe afforded only to those industries which arc reasonably assured of sound opportunities for success.
I challenge any- honorable member to show me a report from the Tariff Board that has ever recommended the establish ment of an industry, and at the same time said that, despite reasonable tariff protection, it did not have opportunity for success. That article has never caused me a moment’s worry. I shall not care whether it is removed from or left in the agreement. Article 10 was necessary for the reasons that I ha ve given. It reads -
His Majesty’s Government in the Commonwealth of Australia undertake that during the currency of this agreement the taritf shall be based on the principle that protective duties shall not exceed such a level as will give United Kingdom producers full opportunity of reasonable competition on the basis of the relative cost ofeconomical and efficient production, provided that in the application of such principle special consideration may be given to the case of industries not fully established.
I admit that it has awakened very hot controversy, but I challenge the House to cite a single industry in Australia that ever suffered under that article. Some time ago the honorable member for Wide Bay (Mr. Bernard Corser) mentioned the deisel engine, and I agreed when he did. so that its case was an exception, but, at the week-end I found that it was not an exception. The Tariff Board signed its report on the deisel engine taking away the duty on highpower engines one day before the agreement was signed. Therefore, the Ottawa agreement was never a consideration in this matter. I assure the honorable gentleman of that.
– That was the reason given by the Minister at that time.
– I was out of the country at that time, but the facts are that article 10 of the agreement had no affect on deisel engines. Article 10 is to be the subject of negotiation, and I trust that delegates will be able to reach a satisfactory modification. ‘I go further and say that since we found the articles necessary we have made a complete revision of the tariff with substantial reductions, and that we can now say to the United Kingdom that we have proved that our tariff as a whole has been substantially decreased. This is due to the fact that the tariff reached a preposterously high level during the tenure of office of the honorable member for Capricornia. I. do not, however, want to engage upon a controversy with that honorable gentle man who has become a convert to the cause of the Ottawa agreement. One article, I th in lt, should be removed - and i hat is article 12, which reads -
His Majesty’s Government the Commonwealth of Australia undertake that no new protective duty shall lie imposed and no existing duty shall lie increased on United Kingdom goods to an amount in excess of the recommendation of the Tariff Tribunal.
I do not think that there will be a difficulty in having that article taken out of the agreement at the forthcoming negotiations.
What I have stated to-night represents my personal views, and .1. do not in any way desire to compromise or prejudice those Ministers who will go abroad next year to conduct negotiations on Australia’s behalf. I felt that as I had a considerable hand in the framing of these articles T was justified in expressing my view as to the prospect of changing them in the future. I think that the Ottawa: agreement has been a great friend, not only to the Australian primary producers, but also to the Australian secondary industries.
.- In approaching the subject of a revision of the Ottawa, agreement, 1 desire to take the broadest outlook possible. J. congratulate the honorable member for Warringah (Mr. Spender) on his having raised the debate to a high plane. We have had delivered to this House statements from the Attorney-General (Mr. Menzies) and the Minister for Trade and Customs (Mr. White) in respect of the Ottawa agreement. Complaint has been made from the Opposition led by the honorable member for Capricornia (Mr. Forde), that Australia might lose something by a revision of the agreement, and by the association of the United Australia party with the Country party in this matter. I think that the honorable member for Hindmarsh (Mr. Makin) tried, if possible, to drive a wedge between the two parties which to-day form the Government. When the Ottawa agreement was framed the United Australia party was in complete control of the treasury bench, and when the agreement was brought back to Australia and debated in this Parliament it was the subject of much consideration and thought.
Doubt was expressed as to whether it would be of benefit, to Australia, out .1 contend that, after the experience of five years, it can ho stated that it has had most satisfactory results. Not only have the primary industries benefited from the preferences that were given to this country by Great Britain, but also the secondary industries, as was pointed out a short while ago by the honorable member for Henty (Sir Henry Gullett), have found that their Australian market has increased substantially as the result of increased purchasing power that has accrued to primary producers as the result, of the agreement. The primary producers have been able to purchase more of the goods imported in exchange for the goods that they send overseas, and more of the goods that are manufactured in Australia.
The conditions that existed throughout the world in .1932 when the agreement w:is signed were deplorable, but since then the wheels of progress have been again set in motion, and in Australia, as was pointed out by the Minister for Trade and Customs, thousands of additional factories are in operation. It is clear. therefore, that secondary industries as well as primary industries have benefited from the agreement rWe should’ take a broad view in considering what might accrue from a revision from the Ottawa agreement, and from trade agreements generally. At the present moment there is in prospect an agreement between the British peoples within the Empire and the English speaking United States of America. In 1932 at Ottawa the Australian delegation, when approached by the delegates from the United Kingdom, was prepared to give, and did give something away in return for the greater preferences which Great Britain gave to Australia. To-day we are not in a position to give as much as v.-e gave in 1932. I contend that we have to be very careful as to what we give to any section of the British Empire in return for preferences. If, as has been stated in this House to-night, there is a possibility of the export of fresh and dried fruits being restricted as the result of the revision of the Ottawa agreement. T shall be entirely opposed to that revision, as I would be to any concessions being given to other countries which would deprive Australia of the market gained by means of the agreement. The United States of America would certainly demand from Great Britain preferences that might clash with Australia’s interests. Therefore, Australia has to view very carefully the revision of the agreement. In Tim Economist of the 9th October. 1937, appears an article on Anglo-American trade discussions. Analysing the matter, the writer lends up to tlie following statement -
Unless Great Britain concedes a substantial i in idi lie;i tion of the Ottawa preferences, prospects fur an Anglo-American trade treaty will lie slender indeed. For it is precisely in the agricultural prod nets covered by the Ottawa preferences, that America is anxious to extend her export trade.
In that respect we are likely to clash with the interests of another agricultural export country. The writer goes on to say -
For Britain, obviously, this modification of Ottawa is a very delicate mutter, for it involves asking sacrifices of third parties, the dominions. The United States of America has made clear - and onn e,in hardly blame her - that any compensation which the dominions may demand for sacrificing their preferential rights under the Ottawa, agreement must b-j provided not by her. but by us. But it is not easy to see what compensation we can oiler, in view of the extraordinary advantages we already confer on the dominions, who. so for (lot us gratefully acknowledge), have shown themselves far from unsympathetic to our claims and needs.
That is an admission by an English writer that the dominions have not been unsympathetic towards Great Britain. .1. recognize that matters bud to be adjusted as hastily as possible so that the preferences to Great Britain outlined by the Minister for Trade and Customs might be given. But there is another side to the position. Al any people in Australia are enamoured of the idea of developing secondary industries. The honorable member for Hindmarsh said to-night that Australian industries have a prior claim to the Australian market: rightly so, if they are prepared to make their prices commensurate with those which our primary product? are able to obtain for their exportable surplus production. Our primary industries were unable to afford the prices charged for secondary commodities when the prices of their commodities readied the lowest level in our history, and the wheat industry was obliged to obtain from this Parliament bounties which should not have been needed. The wheat farmer would have been able to withstand the onslaught ofthe depression, but for the fact that he had to pay the high prices made possible by the erection of a tariff wall which * many foreign exporters could not scale. During the last twelve months, the prices received for wheat and wool have been high. For many years the price received for wool has not been greater than it was last year, while the price of wheat also was higher than it had been since 1928-29. In both cases, however, the price is receding to-day, and if the production of wheat is increased the world over, and there are good seasons, who is to ?ay that we i hall not again be in the throes of a depression that will land the wheat- grower in a worse situation than that in which lie found himself in 1932- 33? T am not a pessimist, but 1 try to look at the matter fairly and squarely. When wo are revising an agreement under which preferences are given, wo must realize that we cannot give too much. At. the same time, however, we must take into consideration the cost of producing those articles which provide the wealth for the purchase of goods manufactured by our secondary industries. I hope that, whoever may bo deputed to represent Australia at the conference overseas will take these matter’s into consideration. .1 feel sure that we can trust any member or members of this Government to do his or their best for Australia. In 1932-33, when the Ottawa agreement had to be ratified, the Government was criticized severely for what it had done. I believe that, the doubts which then existed have been dispelled, and that, to-day, Australia is in a far bettor position because of the operation of that agreement. If the advance that we make, in the five years following the revision of the agreement is as great as that made in the last five years, the Government will have done a good job.
.- A good deal of the argument advanced tonight, is in the nature of propaganda that we have often heard in connexion with the tariff. I should like to know what loss has been caused to secondary industries generally as the result of the operation of the Ottawa agreement, particularly of articles 9, 10, J 1 and 12. All that we can learn proves the contrary. As Ave were able to obtain markets for our primary products, and the value of our exports increased, the expenditure of our people within Australia also increased. The returns show that, the number of people employed in our secondary industries is much larger to-day than it was in 1931. I do not think that there is the slightest need for any alteration. 1 feel very strongly on the subject of the Tariff Board reporting on all questions of duties. We know perfectly well that in 1929-30 duties were increased without any investigation by the Tariff Board, contrary to” the Tariff Board Act. I cannot understand why those who believe that the Government should be unhampered in the introduction of tariff schedules do not amend the law, so that they themselves may comply with the law. In 1929-30 and 1930-31, the most extraordinary increases of duties were made. Although a good deal has been said about subsequent reductions, these have been inconsiderable. There is not the slightest doubt that, although we are receiving much higher prices for our exports at the present time, the great difficulty is still the cost of production. One of Australia’s greatest needs is a larger population. It is absolutely essential for our future welfare- that we shall make every effort to increase our population. If any other nation had possession of Australia, the population of the area from Mount Gambier to Cairns would exceed by many millions what that area carries to-day. There are very large areas which are inferior to that rich country, but. they also must be peopled and developed. The cost of production is- so great, and the value of our exports so low, that the work cannot be carried “on economically and profitably. The honorable member for Capricornia (Mr. Forde) quoted today from a speech made by Mr. Watt. We know that Mr. Watt is a company director, and is particularly interested in rubber goods. Anybody who reads the report of the Brigden committee of econo- mists appointed by the Bruce-Page Government at the end of 1927, to report upon the economic effects of the Australian tariff, will find in one of the appendices a list showing the total amount paid in salaries and wages in different industries, and the value of the duties tinder which they operated. It shows that the salaries and wages paid in the rubber industry at the time amounted to £1,300,000 “while the value of the duties it enjoyed was £2,100,000. Yet that is described as protection. The honorable member for Hindmarsh (Mr. Makin) spoke strongly on this matter, but forgot to mention that the dividend paid by General Motors was 40 per cent, in one year and 60 per cent, in another year.
I direct attention- to the report of the British Economic Mission, and also to reports by Sir Otto Niemeyer and others, which indicate clearly Australia5? great need not only to preserve, but also to increase its export trade. This cannot be done, however, if the cost of production is raised to a point which makes production unprofitable and .markets destroyed by tariff restrictions. We must pay regard to the old axiom that people will not continue to produce if the value of the article produced is less than the cost of producing it. Year after year from about 1929, the Tariff Board, in its annual report, drew attention to the grave increases of customs duties that were occurring. In passing, I may say that it is regrettable that, although the board expressed these sentiments, it recommended frequent increases of duty. In the annual report of the board for the year ended the 30th June, 1937, Ave find the following comments : -
We will not easily forget the disquietude of thoughtful people in the years immediately prior to the depression. Our financial credit which had stood high because of high prices for our export commodities had been strained to the utmost bv heavy external borrowing. Interest rates were high and internal costs and prices were inflated. Importations were heavy and growing despite increase of duty rates. Costs were heavy on export industries and could only be supported while export prices remained high. When these fell our London funds and our credit foll also and only emergency action enabled the Commonwealth to maintain solvency. Many serious warnings were uttered, but although people were disturbed at the outlook, the position was not remedied.
From 1925 onward I was one of the few members of this House who called attention frequently to the effect that must follow our inordinate borrowing overseas, and our rapidly increasing costs of production. After 1929, as we are not likely soon to forget, the value of our exportable goods fell so seriously that the whole country seemed to collapse. I have been pleased to hear the admissions by the Leader of the Opposition (Mr. Curtin) and others that the depression really occurred in consequence of decreased export values. Few people in Australia realize the marvellous value of our export trade. From about 1922 to 1929, this trade was valued, on the average, at £140,000,000 a year. In that period we experienced the highest . prices for our exportable goods that we have known in our history. But subsequently, prices collapsed, and a serious depression overtook the country. The farmers’ equity in their holdings was destroyed, at least, for the time being. This result was contributed to by the extravagant borrowing of more than £400,000,000 at ever increasing rates of interest, that occurred between 1919 and 1929. When the crash came the manufacturers of this country had to dismiss between 113,000 and 11.4,000 operatives. The value of our exportable goods in the years succeeding 1929, was as follows: -
The average, therefore, was .about £95,000,000 as against £140,000,000 in the preceding five years. This fall in export prices affected the purchasing power of our people to an extraordinary degree, and caused the greatest depression that we have ever known. We shall have another depression if our export values fall. It is only by reason of our large exports of wool, wheat and other commodities that we are able to pile up credits overseas. The unemployment, destitution, insolvencies and abandonment of farms should show the fallacy of this policy of the past.
Australia needs a greatly increased population to ensure sound development, and we must consider, in this connexion, whether people should be encouraged to settle in the country or in the cities. It would, of course, be madness for any one to suggest that a wholly free-trade policy should bc practised in Australia. ‘ No one desires to destroy the industries that have already been developed here. At the same time,’ protection must be reduced, as - numerous reports bf the Tariff Board indicate very clearly, and manufacturers must be given to understand that they must be prepared to accept world competition in the near future. If our tariffs are too high production costs increase, and that must seriously affect the progress of the country. It is highly desirable that people should be settled not only in the richer areas of Western Australia, but also in some other parts of that State and of South Australia, where settlement is impossible to-day because production costs are too high. Unless we take steps to increase our population we are asking for trouble. We shall live in a fool’s paradise if we seek to maintain this country on the present basis. All thinking persons must be aware that it is useless to aim at developing great manufacturing industries in Australia until we have the people living here with the purchasing power to huy the goods. This purchasing power can be created only by an export trade. It is possible to live in a kind of way by taking in one another’s washing, but a great nation can never be developed by that policy. We have to face the fact that to-day many nations, such as. Italy, Germany and Japan, have a rapidly increasing population, and no land available for their people. Naturally they want their place in. the sun, and Ave shall find it increasingly difficult to justify retaining for ourselves a huge area such as Australia, which, although as great, as that of the United States of America, carries a population of less than 7,000,000 people, while the United States of America carries a population of 130,000,000 people. In. the past, Ave have been largely dependent for our safety upon the Union Jack and the British Navy. If Ave may continue to depend upon the protection afforded us by Great Britain Ave may be able to hold this country for some longer period with its small population; but the time will come when we shall no longer be able to do so. The longer we hold Australia with its present handful of people the more we shall develop a spirit of enmity in other peoples of the world. it, would he idle for any one to deny that Australia has enjoyed marvellous benefits in consequence of the Ottawa agreement. Our primary industries will suffer severely if anything is done to destroy the effectiveness of the policy decided on at Ottawa. In order to ensure a continuance of that policy, Australia must be prepared to make reasonable tariff concessions to Ureal Britain. The preferences that: we have accorded Great Britain in the past have -been in the nature of an investment by Australia. But in these days there are such things as cartels aud. gentlemen’s agreements. I direct attention to the following duties on various articles specified in our tariff schedules : -
To-day cartels and trade arrangements by British and Australian manufacturers lend to the exploitation of the people, and it is necessary that many of the existing anomalies be rectified without, delay. Honorable members opposite have complained about the effects of the Ottawa agreement, hut they have not been able to direct attention to a single instance in which that agreement has been inimical to the interests of either Great Britain or Australia. I want those who represent Australia to face the fact that world trade and a departure from the curse of economic nationalism arc absolutely essential for world peace.
The Government must, of course, decide who shall represent Australia at the coming conference. It has been abundantly apparent to-night that the purpose of this discussion has been to reveal that tin- manufacturers of Australia intend to do everything possible to ensure that thu delegation shall consist of persons favor- able to their point of view; but the Government will make a sorry mistake if it seeks merely to pacify the manufacturers of this country. It must ensure that justice will bo done to the interest of the pi unary producers. If any other course is adopted, some peculiar things will occur in this chamber when the report of the conference comes to hand. I ask for fair play to all the interests concerned.
.- As tho representative of a. purely primary producing constituency, .1 wish to make a. brief contribution to this debate. I have realized very clearly to-day that the secondary industries of Australia do not lack champions in this House. ri,e,.. are no secondary industries in my electorate so far as I know. 1 have been surprised thai; sonic honorable’ members have not realized the importance of our primary-producing industries to the solvency of Australia. Along t he Murray Valley we have many successful fruitgrowing settlements which :are of immense importance to the country. The fruit-growing industry is highly organized and is thoroughly efficient, but many of the people engaged in it are concerned about the attitude that ibo Government may adopt in connexion wilh the proposed trade treaty between the United States of America and Great Britain. Our fruitgrowing industry has been developed in consequence of the preferences afforded to it under the Ottawa agreement. Because of these, we have been able to do a big and growing trade on the market of the United Kingdom. In the.=e circumstances. I would welcome a frank statement by the Government as to the attitude it proposes to adopt in the forthcoming negotiations, particularly in regard to the fruit-growing industry. The fruit-growers of Australia were given certain specific promises which should be honoured in every respect.
It is also desirable that the interests of the wheat-growing industry should be conserved. It appears to mc that the Government has shown a lack of stability in connexion with both its tariff and its marketing proposals. Last year some strange decisions were made. in connexion with the Government’s trade diversion policy. We were told that this policy was necessary in the interests of Australia and in order to maintain preferences with Great Britain; but in consequence of steps taken at that time, a good deal of the trade which our primary producers had been able to do with certain eastern countries, especially during the years of the depression, was lost to us. This . trade, it should be remembered, was responsible in no small measure for the restoration of prosperity in Australia. Honorable members will remember bow Government spokesmen subsequently on two occasions took advantage of the opportunity to speak over the air through the national network to defend the action which the Government had taken; yet, within a comparatively short period of time, it turned a somersault, and reversed its policy. The blunders made at that time caused much damage to Australian interests in the markets for their primary products, from which it will take a long time to recover. I. hope that the Government will not repeat mistakes of this kind in handling the delicate question of trade treaties in the future.
I do not want to give the impression that I am anything of a freetrader - I believe in protection, but I want to see it evenly extended to all sections of the community. I cannot follow the Deputy Leader of the Opposition (Mr. Fordo) in his bald-headed advocacy of protection at any price. The policy of protection followed in Australia for the last 2.1 years has given a monopoly to Australian manufacturers; but, in my opinion, it has not had the effect of raising the standard of living for the workers of the country. On the contrary, it has had the opposite effect. If the position is analysed, it will be seen that the purchasing power of the money received by the workers to-day does not reflect the prosperity enjoyed by the manufacturers in secondary industries. I am prepared to go a long way to protect secondary industries, but I demand that protection be equally and fairly applied to all sections of the community.
– How would the honorable member do that?
– That is a problem for the Government; it is not for me to make suggestions of that nature. Great industries such as the wheat industry should also receive consideration from this Government. The small benefit of 3d. a bushelmentioned by the honorable member for Henty (Sir Henry Gullett). which the wheat-growers receive under the Ottawa agreement, was, perhaps, helpful to us; but the industry is looking to the Government of this country to extend to it. some share of the protectionist policy of Australia, so that it shall not again experience the throes of depression and have to come cap in hand to the Government for assistance. It is frequently said, “ See what it costs us to maintain the primary industries in Australia; consider the bounties that’ are provided.” We arc conscious of these benefits; but those who make this complaint say nothing about the immense cost of maintaining the secondary industries, which far exceeds that of any assistance granted to primary industries. The Government should consider very carefully how it is to handle this proposed trade agreement. I ask that special consideration be given to the claims of the primary industries, especially those engaged in the dried and canned fruit industries, which are the only Australian industries I know of at the moment that arc able, through organ iza^tion, to give to their workers a reasonably decent, wage. That is the position in which we should like to see every other primary industry, because we are anxious to remove the aspersion so frequently cast on farmers and agriculturists that they do not pay a decent wage to their workers. I stand for a decent wage for everybody, I should like to have a clear statement from the Government that, before entering upon these important negotiations for a trade agreement, it will take into its councils representatives of its primary industries.
– I desire at the outset to remark that so much has been said in this chamber in favour of the Ottawa agreement that it ha? been taken for granted that Australia has received a tremendous benefit at the expense of some one else. Always in the making of an agreement between buyer and seller it is presumed that neither would agree to the transaction unless each thought he was getting at least an equal, if not a greater, advantage out of it than the other. That . is the position with regard to the Ottawa agreement so far as Great Britain is concerned. It is obvious that those whom we delegate to go overseas in connexion with this agreement will find that, in addition to the review of the Ottawa agreement, the possibility of a trade agreement between Great Britain and the United States of America will come under review; the two will be taken together. I remind honorable members that to-day the United States of America has a tremendously favorable balance of trade with Australia. Australia produces a large number of primaryproducts similar to those produced in the United States of America, but owing to the fact that one country is situated in ibo northern, and the other in the southern hemisphere, it should be possible for the two countries to have an exchange of commodities at different seasons during the year. When, for instance, certain fruits are in season in Australia, they arc out of season in the United States of America and vice versa. I remind my colleagues that in these negotiations we are dealing with people whose early President, George Washington, spoken of as “first in peace, first in war, and first in the hearts of his countrymen “, not only a great soldier but also a great statesman, laid down 140 years ago a dictum to his own country which we might well take to heart when our delegation goes to the Old Country. In his farewell address delivered on the 19th September, 1796”, he said : -
Harmony, liberal intercourse with all nations, arc recommended by policy, humanity, and interest. But even our commercial policy should hold an equal and impartial hand; neither seeking nor granting exclusive favours or preferences; consulting the natural course of things; diffusing and diversifying by gentle moans the streams of commerce, but forcing nothing; establishing (with powers so disposed, in order to give trade a stable course, to define the rights of our merchants, and to enable the government to support them) conventional rules of intercourse, the best that present circumstances and mutual opinion will permit, but temporary, and liable to be from time to time abandoned or varied, as experience and circumstance shall dictate . . .
I do not. intend to weary the House by reading a lengthy extract from his speech.
Ifr. .1. Green
That, is an opinion which the United States of America still holds. In my opinion the arrangement made in articles fl to 1 1., which still stands, will not find u. place in the new agreement. Anything that, threatens our independence of action as a nation is something that cannot he tolerated by Australia even from the Mother Country. That is precisely the. attitude that Great Britain takes up with regard to its own legislation. It was laid clown by the Minister controlling agriculture in the Old Country at, the time the agreement was being made at Ottawa, that the first consideration of Great Britain was to be its primary production. Although beef was one of our great hopes in helping our trade with Great Britain, a far greater quantity of English beef is consumed in England than is imported from abroad. The quantity of beef consumed in Great Britain in 1931 - and no great change has taken place since then in spite of the Ottawa agreement - amounted to 1,399,000 tons, of which S00,000 tons, or nearly two-thirds, was of British origin. Chilled beef imported from South America amounted to 464,000 tons; frozen beef from South America to 59,000 tons, from Australia to 57,000 tons and from New Zealand to 19.000 tons. The quantity of chilled beef imported from Australia was so negligible at that . time that it was not worth recording. Despite the fact that we have indulged in a great deal of propaganda in regard to the amount of chilled beef imported to Great Jiri fa in from Australia, ir is negligible as compared with that: imported from Argentina. The quantity of frozen beef, in respect of which we have always been given to understand we had supremacy, exported from South America to Great Britain is nearly as large as that sunt from Australia. Mr. F. P. Kneeshaw, president of the Australian Chamber of Manufactures, writing in the Melbourne Afic, in December last, dealt with what Ottawa has done for Australia. He told a very different story from what we have heard to-day from the ex-Minister who conducted negotiations for trade treaties (Sir Henry Gullett), from the present Minister for Trade and Customs (Mr. White), and from the “yes men” from the other side, who backed up everything they said, with regard to the wonderful benefit Ave are setting from the Otta wa agreement. J list after the Ottawa agreement was signed, we. were told to go slow, lt happened that Argentina, conscious that it would be cut off to some extent, had rushed large supplies of chilled beef to Great Britain. Consequently, when the agreement came into operation there was a glut in the British market. The Prime Minister, on the 8th November, J 932, almost as soon as the agreement was signed, stated in the Mouse of Representatives that there were to be restrictions on shipments of meat from foreign countries to the United Kingdom for November and December. 1932, as compared with the same months of 1931. Foreign imports of mutton and lamb were to be rationed 20 per trent., chilled beef 10 per cent. and bacon 20 per cent. Meanwhile the Commonwealth Government had agreed that immediate Australian shipments of mutton and lamb should not exceed 90 per cent, of the amount exported in 1931. That is to say, although we, had signed an agreement which the meat-producers thought was going (o be of tremendous help to thom, the immediate result was a reduction of the amount of meat that could be exported. It must, bc remembered that, 70 per cent, of the trade of the British Commonwealth of Nations is done with foreign countries, only 30 per cent, being intra-Empire trade, ft is evident, therefore, that there may be something in the statement put forward by Dr. E. R. Walker, and published in the Sydney Morn inn Herald of the 20th .J uly last, that the Ottawa, agreement is a menace to peace. He proceeded to show that while intra-Empire trade had in- ^ creased considerably, the trade of foreign countries had been adversely affected by the agreement, a fact which might, easily give rise to those irritations and disagreements which are the forerunners of war. However, our good friend, the Minister for Trade and Customs (Mr. White), with that innate pugnacity, that is characteristic of him, immediately challenged the figures of Dr. Walker. He is reported as follows: -
He challenged figures quoted by Dr. Walker, showing that since l!>32 Britain had bought £11,000.1)0(1 more of dominion produce and £34,000,000 less of foreign goods. .Since 1032”, said Air. White, ‘ Britain’s increased purchases from the Empirehave amounted to £84,000,000, while purchases from foreign sources huw increased by £(13,000.000. Since 1032 Britain has increased her exports, to Empire countries by £.Y1 ,000,000. and to foreign countries by £24,000. 000.’”
So that, according to the Minister’s own figures, the amount of trade wc have done with foreign countries since this wonderful agreement was made, has increased side by side with our trade with Great Britain. As a matter of fact, Australia and New Zealand in 1931 supplied only 5$ per cent, of the total quantity of meat consumed in the United Kingdom. In 1932 exports of frozen beef from Australia to the United Kingdom amounted to 47,000 tons. In 1933, they increased to 53,000 tons, and in 1934 to 78,000 tons. That was a considerable increase, 1 admit, but during the same period exports of frozen beef from Argentina had. increased from 32,000 tons to S7,000 tons. Moreover, we must remember that the quantity of frozen beef exported to Great Britain from Argentina is very small compared with the quantity of chilled beef which that country exports. For every fi worth of goods that the United Kingdom exports to Argentina - w hi eli does not belong to Great Britain - the United Kingdom accepts £3 worth of goods in return. As a matter of fact, the amount of British capital invested in Argentina is stated to be not less than £600,000,000, and may he as much as £1,000,000,000.
– The people of Argentina must pay their interest in goods.
– I shall show just how much interest they pay. I have been to Argentina, and also to Brazil, and l know something of what goes on there. In Argentina, many of the railways are owned directly by British capitalists, but the federal legislature of Argentina, determines the freight and passenger rates, with the result that for many years past the British stock-owners have received practically no dividends. We, on the other hand, borrowed British money with which to construct our own railways, and despite the great losses which we have sustained in the running of those railways, we have always paid, and will continue to pay, the full interest on the borrowed money, Brazil, which owes £30,000,000 to’ British capitalists, does nui propose to pay une cent in interest year, in Australia it lias been our policy to balance our trade with Great Britain as far as we can. except that vrc must always have a credit in our favour of £27,000,000 with which to service our overseas debt. We know that, at the conference table at which the Ottawa agreement was drafted, there were representatives, not only of the dominions, but of Argentina a* well, and they helped, to mould this essential piece of Empire policy, fu 11)82, Argentina exported to Great Britain 390,000 tons of chilled beef, while in 1934 it. exported 347.000 ions, a very slight reduction indeed in i ho circumstances. The amount of chilled beef sent to Great Britain from Australia in 1934 was 34,000 cwt; in 1935. 22S,000 cwt.; and in 1936, 295,000 cwt. That seems a considerable increase, but is a very small quantity compared with more than 7,000,000 cwt. exported by Argentina.
We cannot expect any great advantage from the Ottawa agreement in respect of wheat, because the British Empire produces an overage surplus of wheat of 100,000.000 bushels. That is a very large quantity, and, as it is sufficient to supply a large proportion of Great Britain’s requirements, we never actually ‘receive the supposed benefit of 3d. a bushel, because our wheat has to compete with that of other countries in entering the British market. With regard to meat, Australia gets a small benefit when it sells its birthright as provided under article 9 which states -
Hia Majesty’s Government in the Commonwealth of .Australia undertake th at protection by tarilta shall lie afforded only to those industries which are reasonably assured of sound opportunities Tor success.
Even the honorable member for Henty, who was in charge of the negotiations for trade treaties, is not now prepared to attempt to justify that article. Members of the Tariff Board of the United States of America declare that it is impossible to give practical effect to it. Article 10 states -
His Majesty’s Government in the Commonwealth of Australia undertake that during the currency of this agreement, the tariff shall be baaed on the principle that protective duties shall not exceed such a level as will give United Kingdom producers full opportunity of reasonable competition on the basis of the relative cost of economical and efficient production . . .
If a member of this House desires an interview with the Comptroller-General of Customs in Canberra, he finds that that official does not occupy the suite of rooms on the ground floor of the Customs Department, but that these rooms ‘accommodate the High Commissioner for the United Kingdom. At, the seat of government and in a building erected for the housing of the department that is expected to consider the requirements of Australian industry, a watchdog of Great Britain occupies the suite of rooms on the ground floor! If that is not literally true, it is a fact that at the meetings of the Tariff Board, when Australian manufacturers submit their claims, a representative of British importing interests is seated at; the table. Whilst I am not an extreme protectionist, I desire to see the manufacturers of Australia producing all they possibly can in this country. My views may not coincide with those of the majority of the primary producers in Western Australia, but I claim to take a broad view of Australia’s best interests, and I contend that the presence of trade representatives, even from the Mother Country, should not be tolerated at; meetings of the Tariff Board at which the claims of Australian manufacturers are being considered. Article 11 of the agreement states -
His Majesty’s Government in the Commonwealth of Australia undertake that a review shall be made as soon as practicable by the Australian Tariff Board of existing protective duties in accordance with the principles laid down in Article 10 hereof, and that after the receipt of the report and recommendation of the Tariff Board the Commonwealth Parliament shall be invited to vary, wherever neces-nary, the tariff on goods of United Kingdom origin in such manner as to give effect to such principles.
That throws the gates wide open to the manufacturers of Great Britain to the detriment of Australian manufacturers, who are, subjected, to the full blast of overseas competition. It may take several years to establish a local industry on a firm basis; but, in view of the skill and versatility of Australian workmen, and the brains that are brought to bear upon manufacturing problems, the possibilities of industrial expansion in this country are almost unlimited. A few years ago it. was considered that, owing to the liability to shrinkage of woollen cloth made in Australia, one could not wear suits made of this cloth and 2-h’eserve one’s self-respect; but to-day the difference in quality between Australian-made and imported woollen cloth is so slight that suits made from Australian woollen materials can now be worn with pride and satisfaction. in Great Britain, important trade bodies conferred with the British subcommittee of the Cabinet for months prior to the Ottawa Conference. A questionnaire was sent out as a preliminary measure, asking manufacturers in the United Kingdom to give a list of the goods exported by them to the dominions, to state the trade -barriers operating against them, and to compare them with foreign tariffs, to state the value of the preferences hey ( enjoyed,, to set out the secondary industries in the dominions which were competing with them, and to indicate a fair competitive basis for their products. For the last 25 years Australia has granted preference to Great Britain. Long before any suggestion was made that Britain should give a preference to Australian goods, we granted preferences to the Mother Country without haggling such a3 occurred at the last Ottawa Conference, and, no doubt, will take place on lbc. next, occasion. A questionnaire similar to that circulated in Great Britain should bc distributed among Australian manufacturers.
From time to time, the Government lias been requested ti) deal, through the Defence Department, with the Japanese ve.-.s.eis which are engaged ‘in poaching pearl shell in Australian waters within riO miles of the Northern Territory. The. Japanese pay no duties in Australia on any of the goods they use. Our people have been fishing for the last 50 or 60 years on the north-west coast of Australia, and, in more recent times, in the waters of the Northern Territory. The pearl beds were discovered by Australian fishermen, who buy their food supplies in this country at Australian prices, and, unlike their competitor.1?, contribute to the income tax. The Japanese use the cheapest of labour, and, notwithstanding the warnings given, openly boast of their intention to fish 6,000 tons of Australian shell this year. They are equipping themselves with large vessels to unable them to work through the monsoonal season. The Australian industry could be assisted by means of the trade arrangements soon to be made with the United States of America. A preference of 20 per cent, should be given on shell produced by Australian citizens of the north. This would enable us to compete against the foreigner in our own wafers.
Mr. ROSEVEAR (Dalley) [11.201. When this debate was commenced, I expected an indication from the Government as to the lines to be pursued in the negotiations with regard to the Ottawa agreement. I am amazed that the Deputy Leader of the Government (Dr. Earle Page), in the absence of the t rime Minister (Mr. Lyons), did not take if upon himself tto speak on behalf nf the Government, but, of course, my amazement is tempered by my knowledge of the fact that the two parties comprising the Government are not at one in their outlook or their fiscal policy, and probably would not be at one in the views he might put forward on behalf of Australia at the meeting at which it is proposed to revise the Ottawa agreement. I am also mindful of the fact that the United Australia party section of the Government could hardly stand up foi the policy that would probably be put forward by the Deputy Leader of the Government, because during the recent election campaign be told the people ‘hat the policy of his party was arbitrarily to get back” to the 1921-28 tariff levels. Apparently he was not concerned with tariff boards, Ottawa agreements, or anything else. His view. I take it, ien ti rely different from that held by the other section qf the Government, but, whilst lie is not prepared to show hi”? baud, and the Government itself is not prepared to show its hand, there, is 1114 the possibility that the Deputy reader of the Government will be representing the Commonwealth Government at the meetings that are to take place for the .negotiating of the new agreement. It is important therefore lo know what his out look is in regard to thi- agreement. II- has not favoured us with his views on the matter. Apparently the Government lias seen to it that he has not had the opportunity to do so. I do not quite agree with the outline which the AttorneyGeneral (Mr. Menzies) gave to-day of the history of the circumstances that led up to the formulation of the agreement. He spoke of economic nationalism, but I do not think that was the cause of the Ottawa agreement, because the policy ot economic nationalism was -being practised by European countries, which used to be very lucrative markets for Australian produce up to a certain stage, long before the Ottawa agreement was ever brought into operation. The reason for this policy of economic nationalism was not a purely economic one. l t was largely governed by thi’ experiences of those continental countries during the Great World War, and wah rather forced upon them by a consideration of the prospects of another world war. It Avas their very laudable desire, after their experience in the last conflict, to be self-contained so far as concerned the production of their own necessary food supplies both in peace and in war time. It was largely because of those considerations that the policy of economic nationalism spread like a bushfire through Europe. Its spread, because it” was first practised in the primary industries of those countries, Avas one of the most prolific reasons why Australia suffered, both through the collapse of the volume of its trade with Europe, and the price of the commodities previously supplied to Europe. In 1932, when the. Ottawa aagreement was” before this chamber, I ventured to express the opinion: that it was an attempt to set up an Empire trading bloc, and that such a policy would Iia ve its repercussions. 1 ventured also to express the view tthat the component parts of the British Empire could not come together in a trading bloc for the purpose of excluding the rest of the world ffrom Empire markets, without inviting retaliation’, and that has been the experience of Australia. We have not only been excluded from other markets, but, owing to the foolish trade diversion policy of this Government last year, added to the effect of ‘ the Ottawa agreement, Ave have most effectually been excluded from some of the best, markets that Australia enjoyed irc all parts of the world. Much has been said to-night about the benefits that Australia has achieved through the Ottawa agreement, but I want to add to what the honorable member for Kalgoorlie (Mr. A. Green) has already said regarding the repudiation of certain aspects of the agreement by Great Britain, almost before the ink was dry upon it. Honorable members will remember that, despite the promises madeto Australia, and the undertakings by the British Government in the agreement itself, that Government, very soon after the document was signed, entered into what were known as the “Black Pacts” with .Denmark and other northern European countries, for the supply of the very products for which it had undertaken to gree Australia an expanding’ marker. Those trade agreements which were entered into were described, not only in Australia, but also in Great Britain, as “Black Pacts”. Great Britain undertook, under them, to give the northern European countries concerned certain preferences which iit had already undertaken tto give to Australia under the Ottawa agreement. We have now anotherrepercussion of British policy, because Britain to-day is entering, or proposing lo enter, into an agreement, Avith the United States of America. Whether this is to suit its own particular interests, or for the purpose of increasing the dimensions of the British Empire trading blocI. am at a loss to know, but I believe that, if the proposals which sso far have been divulged to the public are carried out,, the effect will be detrimental to many sections of Australia’s primary industries,, and, just as the Empire trading bloc under the Ottawa agreement created international trade antagonisms against Australia, so I believe that the extension of the agreement to take in the United States of America will only increase and accentuate the difficulties. The honorable member for Warringah (Mr. Spender) could see very little damaging effect to Australia’s secondary industries in articles 9, 10, 11 and 12 of the agreement. Speaking as he said from the Olympian heights of an independent, he seemed very anxious to agree Avith everything put forward by the spokesmen of the Government as to its intentions. Whether or not he is satisfied Avith the vague statements of the Attorney-Genera I (Mr. Menzies) and the Minister for Trade and Customs (Mr. White), he will learn in due course, as we learned in 1932, that he will know nothing of the policy of the Government, and that thi? Parliament will have no voice in the direction of that policy, until the agreement is placed before it for its endorsement. In .1.932 the Prime Minister (Mr. Lyons) was asked in. this House the very question which is agitating the minds of honorable members to-day, namely, what policy the Government proposed to pursue at Ottawa. The right honorable gentleman then gave the very definite undertaking that before the delegation leftAustralia this -House would have the opportunity to discuss the details of any proposals which the Government intended to put forward at0 Ottawa. ‘No such opportunity was afforded. The delegation proceeded to Ottawa, and returned with the agreement that I now have in my hand. .Not one “i” could be dotted and not one “t” crossed by this Parliament. The delegation assumed the responsibility of speaking on behalf of the Government, and we had to either accept or reject the agreement in toto. That is exactly what will happen on the next occasion. The House, should not bc satisfied with th, vague speeches that; we have heard today from representatives of the Government. Honorable members are entitled to know what policy the Government proposes to follow; for example, whether if proposes to accept an agreement in terms similar to those of the present agreement, whether if proposes to press for an amendment of articles 9, 10, 1.1 and 12, which are so objectionable, and have caused so much controversy in Australia, and whether it is prepared to perpetuate a breach of the powers conferred upon this Parliament bv the Constitution, such as occurs under article 1.2. The honorable member for Warringah (Mr. Spender), not being one of the “dumb driven cattle” supporting the Government, ought to stand up as an independent who is free from party affiliations, and demand to be given some concrete idea of what is proposed. He says that he ran see nothing inimical to secondary industries in articles 9. 10, 11 and 12. Article 9 reads -
His Sin jussty’s Government in thu Commonwealth of Australia undertake that protection by tariffs shall be afforded only to those industries which are reasonably assured of sound opportunities for success.
How does the honorable member think that that matter is to be determined ? Who is to decide whether an industry is reasonably assured of sound opportunities for success? Should that determination be made by the Government, the Tariff Board, or the representatives of overseas manufacturers? Should we allow a tribunal that we hit ve set up to be dictated to by overseas interests in the determination of whether any particular industry in Australia should be allowed to exist? Surely it is reasonable to assume that the people who invest their money in an industry are. best able to determine whether or not it is reasonably assured of success.
Let us look at article 10. It reads -
His Majesty’s Government in the Commonwealth of Australia undertake that during the currency of the -agreement the tariff shall bc based on the principle that protective duties shall not exceed such a level as will give to United Kingdom producers full opportunity of reasonable competition on the basis of the relative costs of enconomical and efficient production.
I point out that in every inquiry so far conducted by the Tariff Board into matters governed by article 10, the only costs inquired into are those that operate in” Australia. The board takes evidence with respect to the wages paid, the conditions of labour, and the profits made by the industry. A similar inquiry is not made in regard to competing industries in Great Britain. Only last year the Government proposed to adopt the recommendation of the Tariff Board in respect of pottery. I was able to point out that the principal firm in Australia which made that particular line of goods had not paid, a dividend for three years, and had paid only 2-£ per cent, in the current year. The Government, on the recommendation of the Tariff Board, proposed to reduce the duties on the lines that this firm was producing. I was .able to show by British trade, journals that the overseas interests which at the inquiry by the Tariff Board demanded a reduction of the protective
His Majesty’s Government in the Commonwealth df Australia1 undertake that uri new protective duty shall lie imposed and no existing duty shall he increased on United Kingdom goods to an amount in excess of the recommendations of the Tariff Tribunal. lt is clear that article 32 of the Australian agl cement makes it absolutely mandatory that the Government shall accept the decision of the Tariff Board. The relevant article in the Canadian agreement is article J 4, which reads -
His Majesty’s Government of the Dominion of Canada, undertake that no existing duty shall be increased on United Kingdom goods except after an inquiry and the receipt of a report from the Tariff Hoard and in accordance with the facts as found by that body.
The wording and meaning of each of these articles differ entirely. The Australian Parliament has to accept the determination of the Tariff Board; there is no such obligation on the Canadian Government. The Canadian agreement certainly provides for an inquiry by the Canadian
On the imposition of uniform duties of Customs, the power of the Parliament to impose duties of customs and of excise, and to grant bounties on the production or export of goods, shall become exclusive.
The Commonwealth Constitution says 1” l.i ft I- Parliament shall have the exclusiveright to determine the fiscal policy of this country, but the Ottawa agreement, in effect, says that the Tariff Board shall determine that pol icy° regardless of what this Government, or this Parliament, may think on the matter. .There is a vast difference between the obligations en te roil into by the Canadian and Austraiian Governments under the Ottawa agreement, particularly in respect of the surrender by Parliament of the right to determine the fiscal policy of the country. “
There seems to be n disposition to disparage any suggestion that Australia has done anything for the betterment of other parts of the British Empire.. [ have just studied some figures which appear in the official Statistical. Abstract of the United Kingdom for the period from 1922 to 1935. This is an official parliamentary paper, and for purposes of comparison I have taken the figures for the year preceding that in which the Ottawa agreement was signed, and 1935, which is the. la.sl year for which figures ure available in this particular journal, in 1931. Australia’s exports to Great Britain were valued at £45,679,000, and in 1935, at £54,285,000, or an increase of approximately ‘ £8,600,000. Canada’s exports to Great Britain in 1.931 wenvalued at £32,340.000, and in 1935, at £56,000,000, or an increase of £21,000,000. Canada, therefore, gained an advantage nearly 250 per cent, greater than Australia under the Ottawa agreement. It might be claimed that that is because Canada has given a greater share of its trade to Great Britain., but the facts prove the opposite to be the case. Australia’s imports from Great Britain iu 1931 were valued at £14,527,000, ami iu 1935, at £29,338,000, or an increase of £15,000,000. Canada’s imports from Great Britain in J 931 were valued at £20,550,000, and in 1935 £21,381,000, or an increase of £830,000. Thus, although Australia’s imports from Great Britain were £15,000,000 greater in value in 1935, than in 1931, its increase in trade to Great Britain was valued at only £8,600,000, whilst, on the other hand, Canada enjoyed an increased benefit of £21.000,000, although the value of its imports from Great Britain increased by only £830,000. Although Canada has fared much better than Australia under the Ottawa agreement, and although Australia’s trade figures show that Great Britain has had flic better of the trading wilh this country to the extent of £7,000,000 during the period for which I have cited figures, Canada has had the advantage .’is against Great Britain to the extent of over £20,000,000. Thus, the effect of the Ottawa agreement in both countries has been entirely different. 1 readily admit that Canada has something to boast about; the Ottawa agreement has been a Godsend to that country, but it has not proved nearly so beneficial to Australia. We may have exported more in volume to Great Britain since the Ottawa agreement was signed, but the prices we have received for our exports have not, shown any great increase. Therefore, to those people who continually disparage the part, which Australia is playing in Empire trade, I say that, generally speaking, Australia lias fared worse under the Ottawa agreement than has any other part of the British Empire. It is the duty of this Government, if it should enter into another trade agreement with other parts of the Empire, and even if this trading bloc is extended to include the United States of America, to see. at least. That Australia gets a much better deal than it did on the last occasion. If it docs not <>-e.t something belter from the point of view of our trade balance, I urge it. at least, not to restrict the rights of this ‘Parliament to any greater degree than statesmen in any other part, of the Empire are prepared to restrict the powers of their parliament. The Government should not sacrifice any rights which this Parliament enjoys under the Constitution by agreeing to delegate, to an outside authority created by the Parliament the power to control the fiscal policy of the country. We are entitled to know whether it is intended to pursue this policy again, or whether a fight will be made by our representatives for the same conditions for Australia as the Canadian statesmen were able to exact “for that dominion. If it does so we may not have a great deal to cavil at, but if it. does not do so trouble is certain to occur. Those who think they can secure the peace of the world by a bloc of British Empire countries, whether in connexion with international trade or international war. arc likely to be disillusioned, lt will be of no use for us- to attempt to exclude other than Empire countries from participation in the trade in raw materials of British dominions. The position will not. be helped very much by forming a bloc of English-speaking peoples as it is apparently proposed to do. Such a policy will merely accentuate the difficulties which the world is facing and which confront all the English-speaking peoples, as well as all others.
.- We have been given to-day by the AttorneyGeneral (Mr. Menzies) and also by the Minister for Trade and Customs (Mr. White) an outline of the policy which the Government intends to adopt in the negotiations for a renewal of the Ottawa agreement, and honorable members have had the opportunity to express their views upon the subject. It is extraordinary that., in the course of this debate, many of the arguments advanced five years ago in opposition to the Ottawa agreement have been repeated, although they have long ago been effectively exploded. The honorable member for Dalley (Mr. Rosevear) used figures relating to 1935 in dealing with certain aspects of our trade in his comparisons with Canada, but they were so out-of-date as to be absolutely useless. The figures for the last two years which are available completely rebut his arguments.
The fairest judgment is based on results and su rely the best way to assess the value of the Ottawa agreement is to consider its effects upon the parties chiefly concerned in it. I shall refer first to British manufacturers. These have undoubtedly enjoyed an increased trade with Australia. Secondly our own manufacturers have been benefited. It was said when the Ottawa agreement was first made that the interests of the Australian manufacturers would be seriously prejudiced, yet our actual experience has been that they have enjoyed more prosperous times in the last few years than ever before. During the currency of this agreement our manufacturing industries have shown marked development, the employment of people in our factories has in five years increased by more than 200,000, and the amount of capital invested in Australian secondary industries has increased by £24.000,000.’ The turnover and profits of our manufactures, as revealed by their balance sheets, have also expanded enormously. The cement industry affords us a striking example of what has occurred. Even twelve months’ ago certain. . Jeremiahs declared that, unless certain action was taken by the Government the Australian cement industry would be destroyed. The fact is that the. output of this industry thi s yearwill be 100,000 tons in excess of the output last year. Our primary producers have also enjoyed big advantages from the Ottawa agreement. Recently the honorable member for Kalgoorlie ; Mr. A. Green) said that the Australian wheat-growing industry had not benefited by reason of the Ottawa agreement, and could not do so because sufficient wheat- was already grown within the British Empire to supply all the needs of the British people. That statement was not correct. During the last five years. Great Britain has imported a very large quantity of wheat from Argentina and Russia, and oil every quarter of wheat sent to England from these countries a duty of 2s. a quarter has been paid. This duty has helped the Australian wheat-growers to the extent of 3d. a bushel. Figures which I obtained from the Commonwealth Statistician provide undeniable evidence of the advantages of the Ottawa agreement to the people of Australia as a whole.
The consumers have been protected against those who would exploit them and producers have been helped out of the financial morass.
Many people fail to recognize the very defi n i te in d i rec t a d va ntage - re presenting millions of pounds - received by the primary producers of Australia through the Ottawa agreement due to the influence upon home prices which have invariably followed, the better export prices that have- resulted from the preferences contained in the Ottawa agreement.
Even the direct results have Contributed in a material degree to the financial rehabilitation of Australia, as shown by the following schedules in which appears the years, the product, the value or quantity exported, the rate of duty on the foreigner, and the extra amount received by Australia through being exempt from the tariff imposts.
FOUR YEARS SUMMARY OF THE DIRECT MONETARY ADVANTAGE TO AUSTRALIANEXPORTINDUSTRIES OF THE OTTAWA AGREEMENT.
Britain’s dutyon foreign 2s. quarter.
If the 3d. advantage has been reflected in the whole Australian crop, the advantage to the growers for the fouryears would be £7,572,000.
Britain’s duty on foreign i.15s. percwt.
It would be much more difficult to maintain our home price if the export “advantage of Ottawa were non-existent.
Britain’s.- duty On foreign15 per cent.
Two-thirds of this production is used in Australia. The Ottawa’ preference helps maintain the home price and adds a further £360,000 to producers’ returns.
Britain’s, duty oil foreign . 10 per cent.
But for this., there would have been a glutted and ruinous . market in Australia. wine.
Britain’s- duty on foreign 2s. per gallon.
Britain’s duty on foreign varies from1s. to 1s.6d.’ for 120 according to size.
Britain’s duty on forrign 7s. cwt.
In addition there is the advantage to the local price by removing stocks from a glutted market.
Britain’s duty on foreign 10 per cent.
This represents 3s. 3d. a pair average preference on approximately 96.000 pairs exported.
Britain’s duty on foreign 10 per cent.
Britain’s duty on foreign 3s. Od. per cwt.
In four years exports 250.002 centals advantage, £39,062.
Britain’s duty on foreign10 per cent.
Britain’s duty on foreign10 per cent.
Britain’s duty, on foreign 10 per cent.
In four years 1933-37 exports were £67,879 and advantage £6,787.
Britain’s duty on foreign1d. perlb.
Exports 1936-37 22,830,900 and advantage for one year £95,128. On this basis for four years advantage £380,512. 1 year only Britain’s preference¾d. lb. on chilled beef. 1 year only Britain’s preference2/3d. lb. on frozen beef.
Britain’spreference to Australia, £315s. per ton.
1,255,901 tonsat £3 15s.per ton equals £4,709,628.
For the four years 1933 to 1937 the preference advantages on these specific items add up as follows:-
These are wonderful results but in all the circumstances the move that Australia is now taking is wise. Undoubtedly our trade with the United States of America, which will come under review at the forthcoming conference, can be substantially increased. We could supply the United States of America with fat lambs, and also with larger quantities of wool if an appropriate reduction of the tariff could be arranged between the two countries. We could also supply the United States of America with certain fruits during their off season there. A triangular agreement affecting Great Britain, Australia, and the United States of America, would undoubtedly be most advantageous and would in my opinion do a great, deal to enhance the prospects of world peace.
Question resolved in the affirmative.
Bill returned from the Senate without requests.
House adjourned at 11.57 p.m.
The following answers to questions were circulated: -
n asked the Prime Minister, upon notice -
Is the. Government investigating (a) the grave difficulties that dairy-farmers are encountering in endeavouring to secure farm labour and the fundamental causes of same, and (b) the grave shortage of domestic workers which is to-day making life a burden for countless women”, particularly in country districts?
– No. These matters are primarily ones for consideration by the governments of the States. The question of granting facilities for the introduction from the United Kingdom of the classes of labour referred to, by way of assisted passages, is at present under consideration.
e asked the Minister representing the Postmaster-General, upon notice -
– The PostmasterGeneral has supplied the following answers to the honorable member’s questions : -
r asked the Minister for External Affairs, upon notice -
– The answers to the honorable member’s questions are as follows : -
Com mon w e alth Fin ances.
T asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follows : -
Supplementing the above replies to the honorable member’s specific questions, it may be said that the method of presentation of the budget summary in the budget-papers was altered last year, in that previously only the net resultof the operations of the General Post Office, Commonwealth Railways and Territories was shown in the summary, whereas now the full expenditure and the full income are shown.
y asked the Minister for
What is the estimated cost of (a) the buildings erected or to be erected at the corner of Victoria and Therry-streets, Melbourne, for military purposes, and (b) the equipment?
y. - The answers to the honorable member’s questions are as follows : -
r asked the Prime Minister, upon notice -
In view of the very considerable insufficiency of accommodation for members and officials in this building and also the desirability of utilizing the opportunity to make provision for the relief of unemployment by necessary public works, will he give serious consideration to the question of the erection’ of a permanent Parliament House, the foundation stone of which was laid many years - age?
– The provision of adequate accommodation for members and officials of Parliament is receiving the fullest consideration of the Government.
Aerodrome at Walgett.
y. - On the 1st December the honorable member for Gwydir (Mr. Scully) asked the following question, without notice : -
Will the Minister for Defence reconsider the decision of his department regarding the application of the Walgett Shire Council for a grant for the construction of an aerodrome in that district?
I have reconsidered this matter but, for the reasons given in reply to a question on this subject by the honorable member on 9th September last, I regret it is not possible to provide funds for establishment of an aerodrome at Walgett.
Australian Broadcasting Commission : Fees for Talks:revenue: New Studios for Adelaide.
s. - On the 2nd December, the honorable member for Boothby inquired what fees were paid in the last financial year by the Australian Broadcasting Commission to university professors and lecturers for talks and other services. Information has now been received from the Australian Broadcasting Commission that the fees paid to university professors and lecturers for talks and other services for the twelve months ended December, 1936, totalled £3,325. The percentage of talks given by university speakers in that year was ten per cent.
On the 3rd December, the honorable member for Grey (Mr. Badman) asked the following question, upon notice: -
I am now in a position to furnish the honorable member with the following answers to his inquiries: -
On the 3rd December, the honorable member for Boothby (Mr. Price) asked the following question, upon notice : -
Will the Postmaster-General make contact with the Australian Broadcasting Commission and ascertain when the proposed new broadcasting studios will bc built and opened in Adelaide?
I am now in a position to inform the honorable member that additional studios arc now in course of construction and it is anticipated they will be available two or three months hence.
Cite as: Australia, House of Representatives, Debates, 7 December 1937, viewed 22 October 2017, <http://historichansard.net/hofreps/1937/19371207_reps_15_155/>.