24th Parliament · 1st Session
Mr. SPEAKER (Hon. Sir John McLeay) took the chair at 2.30 p.m., and read prayers.
– I wish to ask the Minister for Immigration a question concerning the incidence of typhoid fever among white Russian migrants who have recently arrived in Australia from Hong Kong. In view of the serious alarm created by this unfortunate situation, I ask: Will the Minister consider the establishment in Hong Kong of a temporary settlement where migrants from countries infected with typhoid, cholera and smallpox may be accommodated during the incubation period of these diseases as a means of preventing Australia from being threatened with these scourges?
– The Department of Immigration, in conjunction with the Department of Health, is certainly very well aware of the dangers to which my honorable friend has referred. At the same time, I think the House will agree with me that it would be a mistake to exaggerate these really quite few outbreaks of which we have already been notified. After all, the House approved some time ago the Government’s decision, made with a real humanitarian motive, to make Australia available to at least 1,000 white Russian refugees from China. I think that it would be a great pity for this move- - ment to be vitiated in any way merely because of these two or three cases of typhoid that have occurred. As it is, the Department of Health, I am informed, has instructed that all future white Russian migrants be inoculated before departure from Hong Kong for Australia. That department, in conjunction with my own officers, is taking all possible precautions to prevent any spread of this disease attributable to those who have already arrived here.
– My question is directed to the Minister for Primary Industry. Is it a fact that the conference which will be the body responsible for electing the proposed Australian Wool Board has already been instituted by the Australian Woolgrowers and Graziers Council and the Australian Wool and Meat Producers Federation? Does the constitution of this alleged conference provide for the tater admission of other organizations provided that each is “ a federal organization of wool-growers with affiliations in at least four States “? If this is a fact, why does the newspaper “ Stock and Land “ have this information which has not yet been made available to honorable members? Would it not be better to start the conferences as a body truly representative of woolgrowers by including now all federal groups conforming to the criterion mentioned?
– I have received advice from the two organizations mentioned by the honorable member that at their annual conferences which were held recently at approximately the same time they had formed the body which he has mentioned. This body does not include other than the two organizations. I hope to be able to announce within the next few days the Government’s decision on the other matters relating to the wool industry and to state the Government’s policy.
– When the Prime Minister announced on 17th October, 1962, the setting up of an economic inquiry he stated -
Naturally the Government will wish the report of the inquiry to be available to it as early as possible.
Does he still regard an early report as desirable? When does he intend that the committee shall be appointed?
– I certainly regard the obtaining of the ultimate report as early as possible as most desirable. I also regard the announcement of the membership of the committee as soon as possible as most desirable but, as the honorable member will appreciate, these things are not to be achieved suddenly. AS present we are directing our attention to the matter in a very concrete way.
– I direct my question to the Minister for Shipping and Transport. Does the Government consider it desirable that wherever practicable shipowners should place orders for new ships with Australian shipyards? Is the Minister aware that the recent action of the Australian Seamen’s Union aimed at preventing the new tanker “ P. J. Adams”, built at Whyalla, from being manned otherwise than at exorbitant cost by members of that union - an action supported in this House by members of the Labour Party - will deter shipowners in future from having ships for overseas trade built in Australia? Can the Minister take any steps to reassure shipowners who are patriotic enough to have their overseas ships built in Australia that they will be protected, and thus reassure all those who work in shipyards that these Communist inspired efforts to wreck promising shipbuilding prospects stand no chance of success?
– Australian shipbuilding yards want to obtain orders wherever they can, and from time to time they have tendered for overseas contracts. Shipbuilding throughout the world has been at a low ebb and it is to the credit of this Government that ships built for use on the Australian coast have been subsidized to the extent that several shipbuilding yards have been kept in operation. But this is not easy to do. Therefore, a regrettable incident such as occurred with the “ P. J. Adams “ obviously will not benefit the Australian shipbuilding industry. Undoubtedly it will shake the confidence of people who perhaps have ideas of having ships built in our yards, particularly when it is allied with the incident in a Queensland shipyard when the launching of the “Troubridge” was held up for over a day on a flimsy pretext. As to overseas shipowners who might build in Australia, let me say that the Government will endeavour to point out that ships built here and registered overseas can have their own manning arrangements under the laws of the country where they are registered.
– Cheap labour!
– Order! The honorable member will not interject.
– This will give them confidence to come here and will offset as much as possible the very bad effect of the Communist-inspired industrial disturbance.
– Following the debate in the United Kingdom Parliament last weekend on the British Government’s application to join the European Economic Community is there any additional information that the Minister for Trade can convey to this Parliament? Is he satisfied that the United Kingdom Government will honour its assurances that it will safeguard the vital interests of the Commonwealth countries in the event of Great Britain’s joining the European Economic Community?
– I am not in possession of any new information of significance. Day by day information comes in, but nothing new of significance. I have not the slightest doubt that the British Government will, as a government and through its chief negotiator in relation to the Common Market, pursue the line of endeavouring to secure the best arrangements that can be arrived at to protect Australian trade. I do not think that the British Government can actually secure all those arrangements for, after all, Great Britain is an applicant, and the decision rests with other countries.
– In directing a question to the Treasurer I refer to Treasury Information Bulletin No. 28, at page IS, which contains figures concerning the outstanding loans of major trading banks and alludes to business advances in the rural sector. The figures show an increase of £14,000,000, or of 6 per cent., between July, 1961, and July, 1962. As there are still many complaints from farmers of inability to obtain or to increase bank overdrafts, do those figures refer to loans to individuals or to loans to organizations such as wool firms? If the figures refer to both classes of borrowers can the Treasurer have the figures dissected?
– I have told this House on many occasions that the Government has consistently made it clear that it expects some priority in bank lending to be given to rural borrowers, particularly those engaged in the production of farm produce for export. Such inquiry as I have been able to make suggests that this expression of desire on the part of the Government has been given effect to by the trading banks. I cannot answer off-hand the specific question put by the honorable gentleman but I shall get the information for him. I may say, by way of addition, that I am not myself conscious of having received direct representation to any degree about this matter in recent times. Therefore, I have formed an impression that, taking into account the relatively liquid position of the trading banks, it was safe to assume that the needs of rural borrowers were being well catered for at present.
– In the absence the Attorney-General, Mr. Speaker, my question is directed to the Prime Minister or, if he would think it more appropriate, to the Minister for the Interior. In explanation of the question I point out that the other day, in submitting to the House a proposal for discussion on a matter of urgent public importance, namely, the actions of some companies operating under the Australian Capital Territory Hire Purchase Ordinance, I asked whether an official inquiry would be granted into the allegations voiced against one company, and offered to produce documents and witnesses. I was not sure, by the replies made to my request, whether an official inquiry was to be granted. I now ask whether the official inquiry which is sought by both the company and by myself will be granted. I will be glad to receive a definite answer as soon as possible so that otherwise the way can be cleared for adopting some other means of finalizing this matter.
– The Minister for the Interior will answer the question.
- Mr. Speaker, the honorable member for Eden-Monaro has started a private quarrel with a company. It was made very clear in this House the other day that he had produced no evidence of any activities by the company for which a remedy was not provided in the law already in force in the Australian Capital Territory. So far as I am concerned I do not think it is likely that the Government is going to extricate him from his particular difficulty.
– My question is Erected to the Postmaster-General. It refers to a letter which he sent to all honorable members and senators, concerning the charges for telephone rentals. On page 2 of that letter the Minister stated -
No reference to any matter of an occupation nature, including designation of officials or employees of organizations, may appear in either the main directory listing for the service concerned, or in the “ After Hours “ or “ Residence “ entry relating to the service.
Will this apply in future to those honorable members who advertise their calling by the insertion of the letters M.H.R. after their names in telephone directories?
– The immediate reply to the question asked by the honorable member for Perth is, “ No “. May I point out, however, that this matter has been under investigation for quite a long time? A week or so ago a certain newspaper in my own area published an erroneous statement to the effect that the word’s referred to by the honorable member meant that there would be an increase of £3 5s. per annum in all telephone rentals, and that item caused a considerable stir. The report was erroneous. The position is that telephone rentals are determined on a residence or business basis. If some one wants to use his telephone in his home for business purposes he pays the present business rate, but if the telephone is purely for use for private purposes he pays the residence rate. In metropolitan areas the difference between the business rate and the residence rate is £3 5s. per annum. In areas other than metropolitan areas the amount of difference is £1. Honorable members will be interested to know that as a result of this general check-up a considerable number of subscribers who have been paying a business rental until now because of some fault in their application forms will be listed as residential subscribers and have their rentals reduced.
– I address a question to the Minister for Labour and National Service. I preface it by stating that it concerns the Norwegian motor vessel “ Gudvin “, which commenced unloading a cargo of paper pulp at Port Kembla on Friday, 2nd November, as a consequence of which some 47 waterside workers lost about 330
Questions. man-hours’ pay, spread over several shifts, due to component parts of the working gear not conforming with the relevant safety regulations. I request the Minister to investigate this case and also to initiate action against the shipowners for their disregard of the law affecting stevedoring operations, which forced waterside workers unjustifiably to lose substantial wages. Is it a fact that action to effect necessary repairs eventuated only after the ship’s officers had failed to take any action on complaints made early in the operations by the union’s delegates? Did this failure result in a responsible departmental official being called in by the union and did he order a number of alterations to the working gear affecting four hatches? Finally, is it the responsibility of the Waterside Workers Federation to see that the safety measures applying to its industry are adhered to? If not, I ask that action be taken to have a departmental officer inspect the cargo gear on all vessels to ensure that it conforms to the regulations.
– A Norwegian vessel did pull into Port Kembla, I think on the 2nd November and at least on that date it was worked by, I understand, four gangs and no complaint was made about the ship’s gear or the splices. On the next two days - if my recollection holds good - the ship was not worked, but on the fourth day there was a complaint by the Waterside Workers Federation that Liverpool splices were being used and that they did not comply with the safety requirements of our navigation and safety laws. It is true, as the honorable gentleman said, that the fact that they were Liverpool splices was pointed out by representatives of the federation. The most I can say about the matter is that after inspection by the navigation surveyor - I think that is the term used - the splices were replaced and the ship was then satisfactorily worked. So, the first thing I can say as a generalization is that the defective or unsatisfactory gear was replaced, and quickly replaced. I think it is unfortunate that the men lost their employment in this way. I point out that it is the responsibility of the shipowners, the Australian Stevedoring Industry Authority and the navigation surveyor to see that the equipment is in the condition prescribed by the act. I will direct the attention of the authority to this particular case and ask that it take whatever action we think is necessary. I may state that, as the honorable gentleman probably knows, this ship had not been in Australian waters for three years and that its last port of call was, I think, Vancouver.
– I ask the Minister for Trade whether every effort is being made to increase our trade with India with a view to helping the development of that country and the morale of its people who, unlike those who are attacking them from red China, are our friends.
– Every facility is given to the increasing of Indian exports to Australia. The greatest facility, of course, is the provision of completely nondiscriminatory access to Australia for the products of Indian farms, factories and commerce. Australia itself has a beneficial export trade to India and, for reasons of self interest and for the much broader reasons that the honorable member obviously has in mind, we want to provide a basis for India to gain more export income. Shortage of exchange is one of India’s big problems. Australia, of course, is a very big buyer of jute, and always has been. It is also a big buyer of tea from India and other countries. We give every encouragement and afford completely nondiscriminatory tariff treatment to exports from India to Australia.
– My question is addressed to the Acting Minister for Territories, ls it a fact that a government undertaking to build a cold store at Darwin to cater for the export meat trade has been shelved? If this is a fact, does it not mean that proposals put forward by private interests for the construction of export meat works at Katherine and Darwin will now be scrapped, thus keeping the pastoral industry in the northern end of the Territory in its present unsatisfactory state whilst at the same time preventing the establishment of a valuable industry in that part of Australia? If it is not proposed to shelve the scheme, what progress is being made and has any alteration been made to the original proposal?
– I have no information that the proposal to establish the works has been scrapped. However, I will treat the question as being on notice and will let the honorable gentleman have a letter about it.
– My question is directed to the Minister for Labour and National Service. I refer to an industrial dispute at the Amagraze meat works at Cairns, north Queensland, which I raised with the Minister some time ago and which was subject to an appeal to the High Court. Has the Minister any information regarding this appeal?
– The honorable member has taken a very deep interest in the efficient working of the Amagraze meat works at Queerah, and rightly so. The Queerah meat works are run by an Australian company which works all the year round, as distinct from those which work only periodically, and is getting into the export trade in a very large way. We want this company to be successful, particularly in competing with international companies in the world’s markets. The honorable member will know that a decision was given by one of the conciliation commissioners which was not satisfactory to the company, and which was the subject of an appeal to the High Court. The High Court has ruled that the commissioner exceeded his constitutional powers in making his decision, as this was an intrastate dispute and not one that extended over several States. I think the position is now satisfactory from the point of view of the company, and I have great hopes that the closest co-operation can now be established between the trade unions and the management, for the very good reason that we all want this company to be successful.
– Has the Minister for Shipping and Transport read a book, recently published, which gives the history of the Ampol organization, and in which details of Ampol’s part in the defeat of the Chifley Labour Government, in 1949, are related with considerable relish and pride? Is he aware that this book records the fact that up to £75,000 was contributed by the company towards the expenses incurred in challenging recently for the America’s Cup? Do these activities represent some of the reasons why the Minister protects this Australian company, which is employing a cheap-labour Chinese crew in preference to our own Australian seamen?
– I have not read the book, and matters of the kind referred to by the honorable member would make no difference to the outlook of this Government to these questions, as the honorable member knows very well. Reverting to 1949, I say that it was a great source of pleasure then to find anybody helping to remove the government of the day and to substitute for it a government which would introduce a sound system of legislation. As for the overseas efforts of the Ampol company, I think everybody in Australia has been very proud of what it did with “ Gretel “, and would not discount those achievements in any way by considerations affecting the oil tanker to which the honorable member obviously refers. If one gives due consideration to the matter of the construction of this tanker, one finds that the company has done a very Australian deed, because it spent £700,000 more in having the vessel built here than it would have spent if it had arranged for construction overseas. It saved the Whyalla shipyards at the time. It gave unionists employment. It is a very cheap gesture for the honorable member to try to discount what was a splendid action on the part of the company by bringing in these irrelevant statements.
– My question is directed to the Minister for Primary Industry. In view of the marked deterioration in the fishing available to amateur anglers in the Eucumbene River and Lake Eucumbene, will the Minister ask the appropriate State governments to investigate the matter, to see whether this deterioration has been caused by semi-professional fishermen using every possible unfair and illegal device to catch hundreds of trout for subsequent sale in Melbourne and Sydney? Will the Minister ask the State governments whether existing laws are being policed, and, if necessary, request that the laws be strengthened so as to protect what has been Australia’s greatest trout fishing water, and which should become a great attraction for overseas tourists and anglers?
– Fishing in New South Wales rivers and other waters, including the Eucumbene River and Lake Eucumbene, is a matter for the State Minister in charge of fishing, who is the Chief Secretary. Each State has a Minister to take care of matters affecting fishing, and each Minister has powers covering licensing, closed seasons, bag limits and minimum sizes, as well as the power to prohibit the sale of trout and other fish. I think this is a matter that I could refer to Mr. Kelly, the Chief Secretary in New South Wales, and ask him to supply information. I am assured that there are plenty of fish at Eucumbene, and that the waters have by no means been fished out. Of course, it is necessary that the young fish have room to grow. Another fishing inspector has recently been appointed in the district, so there are now two inspectors to supervise fishing in the Eucumbene area. I will refer the matter to the New South Wales Minister and get any further information that I can.
– My question is addressed to the Minister for Labour and National Service. I refer to the very satisfactory decline over the past few months of the overall number of registered unemployed. I ask the Minister whether the component of unskilled workers included in the number registered has dropped in the same proportion as the overall number. If the answer is in the negative, will the Minister indicate what special measures might be taken to achieve a bigger drop in registered unskilled workers?
– -A Dorothy Dix-er?
– No, it is not; it is quite the contrary. The honorable member for Bruce is correct when he suggests that there has been a greater reduction in the number of skilled people registered for employment than of unskilled registrants. In other words, Sir, the real problem we face in employment, as I have said before, is not the problem of the general level of employment but rather of particular groups within that level. The people we are most concerned with to-day are the unskilled workers. This is not only a Federal problem; it is also a State problem. To show what the Government is doing about this problem I would like to be able to distribute a document to the House dealing with, or to say something about, apprenticeship and skilled trades. One way in which we think a larger contribution can be made to the solution of the problem is by training more skilled people, first, because those additional skilled people could quickly obtain employment and secondly, because this would overcome the existing bottlenecks which prevent unskilled people from going into jobs. We have been working on this problem for some months and I have reasonable hopes that within a short period I will be able to announce what I think will be an improvement in the training of people for skilled work. I am glad that the honorable gentleman has asked the question, because I think that it will not be long before I will be able to satisfy him that what the Commonwealth Government is doing is along the right lines and is making a significant contribution to helping unskilled people obtain jobs.
– I address my question to the Prime Minister and I will turn his mind in the required direction by a little prefatory remark. Last Thursday the right honorable gentleman told the honorable member for New England that he would refer to the Ministers concerned a question respecting the reasons for the Commonwealth’s delay in delivering its defence in the High Court case initiated by Airlines of New South Wales Proprietary Limited. The right honorable gentleman will recall that the case concerns the rationalization of air routes within New South Wales. In view of the Attorney-General’s absence from this House this week, and bearing in mind that
Parliament will rise on Thursday until next Tuesday week, I ask: Is it a fact that the hearing has been considerably delayed because of the Commonwealth’s tardiness in filing its grounds in this matter? If that is so, is the Commonwealth’s conduct deliberately designed to delay the re-allocation of air routes to East-West Airlines Limited and thus favour Ansett-A.N.A.? Finally, is it the policy of the right honorable gentleman’s Government to support decentralization and oppose monopolies?
– If this information has not yet been made available - and I agree that it apparently has not - I will take steps to see that it is available by the time the House meets to-morrow. The honorable member, of course, knows as well as I do, that there are all sort of complications in the course of pleadings, but the matter was at once referred. It is true that the AttorneyGeneral is not here, but this is so only because he is attending the Colombo Plan conference on important matters. I shall certainly do my best to provide the honorable member with a reply in detail to-morrow morning.
– I ask the Minister for Labour and National Service whether the senior fellow in economics at the Australian National University previously questioned the reliability of unemployment statistics. I ask whether the same gentleman, in an article in the “ Australian Financial Review” of 8th November, 1962, after comparing the census of 1961 with the census of 1954, said -
Differences in definition and coverage make an exact comparison virtually impossible; but when allowance is made for these differences the unemployment statistics appear to be reasonably reliable.
Is the Minister equally satisfied that the unemployment statistics are as reasonably accurate as is possible with the facts available?
– I read an article recently by Dr. Hall, whom I previously regarded as a critic of the registrant for employment figures and who I had always thought was not fully informed before making up his mind as to the reliability of the figures. I am glad to be able to say that in his most recent review he has stated that, as a result of the latest information in his possession, he now thinks that the Commonwealth employment statistics are reasonably reliable. I think that is the phrase that he used. I agree with what he has said.
As to the second part of the honorable gentleman’s question, which I take it is the more important part, I have consistently stated in this House that the employment statistics are statements of fact and, being statements of fact, they must be accurate. I know of no better way of judging the trend and general level of employment than by a review of the figures published monthly by my department. So I join with Dr. Hall in saying that I think the figures are reliable. I omit the adjective “ reasonably “ that was used by him. I know of no better way of getting an estimate of the trend and the actual level of employment than by means of these figures.
– My question to tha Treasurer is prompted by a letter which 1 think he has received from the North Queensland Local Government Association. If he has not received it, he will receive it very shortly. The North Queensland Local Government Association is formed of representatives of local governments in North Queensland and its finance comes from the ratepayers of the areas under the control of its members. The association’s objective is to publicize the north in order to help people it. To assist in this endeavour the association has employed a journalist as a news officer. In order to assist him to get around, the association has purchased a station wagon for his use. The association does not come under the Commonwealth legislative provision granting exemption from sales tax. Will the Treasurer give favorable consideration to the request of the association to be exempt from the payment of sales tax in order to assist it in its work of decentralizing the people of the north?
– I question whether I have any discretion in a matter of this kind. However, I shall examine it and give the honorable gentleman a reply.
– My question, which is addressed to the Minister for Trade, relates to the Tariff Board’s report on textiles of man-made fibres. Has the Government considered the recommendation in this report that some action be taken to ensure that any protection given to Australian industry will not be nullified or impaired by the procedure known as close-out sales? Has the Minister’s attention been directed to the fact that legislation for the purpose of protecting Canadian industry against such practices exists in Canada?
– I am, of course, familiar with the comment that the Tariff Board has made on the problem confronting certain Australian industries arising out of so-called close-out sales. A country such as Australia situated in a hemisphere different from that in which other great industrial countries are situated, is likely to be vulnerable - particularly in respect of fashion goods and the like, and also other items - to the commercial process of clearing the shelves at the end of the season. The Tariff Board has directed attention to this matter. It is one that would normally be dealt with, not by tariff action, but by my colleague, the Minister for Customs and Excise, under some variant of the anti-dumping treatment, which is within his jurisdiction. I am able to say that the Minister for Customs and Excise is studying this matter and, in due course, will ask the Cabinet to consider whatever his conclusions may be. The matter is, in fact, already in the course of being fully considered by the Government.
– I ask the Minister for Shipping and Transport a question without notice concerning the manning of tankers in the coasting trade. The honorable gentleman will remember telling me, on 23rd October, that he had given eleven tankers continuing permits in the previous twelve months and 134 tankers single-voyage permits in 1961 to operate in the coasting trade free from the conditions imposed by the Navigation Act, which requires that the crews of vessels operating in the coasting trade be paid Australian award rates. I ask the Minister whether he will take steps to ensure that in the near future all tankers in the Australian coasting trade, wherever built, operate under the conditions laid down in the Navigation Act. Will he, after a certain date, grant no more continuing permits or single-voyage permits exempting tankers from these Australian award conditions?
– I will not give an undertaking such as that for which the honorable member has asked. The Navigation Act allows the granting of permits to overseas vessels when there are no suitable Australian vessels available to be used in the coastal trade, and vessels to which permits are given may operate in the coastal trade under their own relevant conditions. This is allowed by the Navigation Act. I repeat that I will not give the undertaking sought, nor will I take the other action that the honorable member has asked me to take after a certain date.
– My question is directed to the Treasurer. Is the right honorable gentleman aware that several members of this Parliament have received this morning from the Lord Mayor of Melbourne lengthy telegrams requesting their support in pressing for an immediate decision to construct a jet airport for Melbourne at Tullamarine? I ask whether the Treasurer knows that the Lord Mayor, in his telegram, stated, among other things -
I am certain that only the strongest Treasury objections could have persuaded Cabinet not to commence the Tullamarine project long before this.
Can the right honorable gentleman remove the Lord Mayor’s fears on this point and once again give an assurance that a decision, when it is taken, will be made by the Government and certainly not by civil servants in the Treasury?
– I, too, received a lengthy telegram, no doubt in terms the same as those to which the honorable gentleman has referred. The telegram was signed by the Lord Mayor of Melbourne in his capacity as chairman of the Victoria Promotion Committee. Having read the telegram, I give him high marks for zeal and low marks for accuracy. The Lord Mayor is to be commended for the zeal which he reveals in his capacity as chairman of the Victoria Promotion Committee, but the Prime Minister, the Deputy Prime Minister and the present ministerial head of the federal Treasury had been promoting the welfare of Victoria for many years before the present Lord Mayor began to show an active interest in the public affairs of this country. We are not flagging in our zeal to promote the welfare of Victoria or, for that matter, of any other State.
The Lord Mayor of Melbourne is concerning himself directly with one airport - a very important airport, too. We, on the other hand, have to concern ourselves with literally hundreds of airports throughout this Commonwealth. We recognize the importance of establishing an international jet airport at Tullamarine, and this Government has provided substantial sums for the purpose. The acquisition of land has proceeded and the Cabinet has considered this project in conjunction with the works programme at appropriate times.
It is rather nattering, perhaps, for the Lord Mayor to suggest that the Treasury is sufficiently powerful to be able to convince the Cabinet that it should do something which the Cabinet otherwise might not wish to do. I want to make it clear that the decisions made by this Government are taken by all members of the Government, and are based on advice, not by one department alone, but by all the relevant departments of state. The honorable member may rest assured that, in considering the advancement of this project and its place in the general development of Victoria and the Commonwealth, we shall be guided by the best advice which we can obtain and the best judgment which we can bring to bear on the issue.
- Mr. Speaker, I wish to give the answers to questions which I was asked about two matters raised at and immediately after question time yesterday. I have mentioned them to the Deputy Leader of the Opposition (Mr. Whitlam). I do not wish to go through the formal procedure of making a statement. I want merely to bring this information to the attention of the House.
Yesterday, when I presented the fortyfirst report of the Commissioner of Taxation, the Deputy Leader of the Opposition asked me why it was that the report, since it had been dated for signature by the commissioner on 1st June, was not presented until yesterday. I told the honorable member at the time that I had not received the report from the Commissioner until yesterday morning. I put the question directly to the Commissioner of Taxation, and he has supplied this information -
The practice of dating the Reports 1st June is one of long-standing, that date being the first convenient date after the main body of the statistics to be included in the Report becomes available. For example, the statistics included in my Forty-first Report generally cover the year 1960- 61 but the tabulation of those statistics was not completed until May, 1962. The task of preparing the schedules and tables for the Report is considerable and this, together with the work involved in printing the Report, takes several months. The date shown on the Report, namely, 1st June, 1962, is the date on which its preparation was commenced and the date on which the basic material was available. Thus the time lag between that date and the date on which the Report was furnished to you for presentation to the Parliament was due entirely to the time required for its compilation and printing. Although, as a matter of formality, the Forty-first Report could have been dated, say, 1st October, 1962, it would not have been possible to have included any more up-to-date information than that already shown and, at the same time, to have had the Report available for presentation to you yesterday.
The second matter relates to a question without notice asked yesterday by the honorable member for Balaclava (Mr. Whittorn) about the proportion of profit on United States and United Kingdom investments retained in Australia and not distributed overseas by way of profits. I said at the time, drawing on recollection which, I added, was subject to check, that it had been my impression that a rather higher proportion of profits on United Kingdom investments was retained in Australia than was the case with United States investments. I have since checked the facts and while I cannot segregate United States from Canadian investment I have the figures for the two sources of investment. The undistributed income retained in Australia from United States and Canadian sources over the period 1947-48 to 1960-61 was 63 per cent. This is a considerably higher percentage than the proportion of profits from United Kingdom investment over the same period which was 40 per cent. For 1960-61, the last year for which I have information, the proportion from the United States and Canada was 63 per cent, and from the United Kingdom 42 per cent.
As a matter of interest to honorable members, I point out that in 1960-61 the total income payable overseas on United Kingdom investment in Australia for the year 1960-61 was £56,300,000, of which £23,800,000 was retained as undistributed income. The total payable for the same year on United States and Canadian investment was £51,900,000, of which £32,900,000 was retained.
– Will you seek leave to have the document incorporated in “ Hansard “?
– With the concurrence of honorable members I incorporate the table showing this information.
- Mr. Speaker, I wish to make a personal explanation. I have been misrepresented - very seriously, I think - by the Minister for the Interior (Mr. Freeth) in three statements which he has made. Replying to my question this afternoon he said that last week I had used the forms of the House to pursue a private quarrel with an outside company. That would be very serious misconduct. The House agreed that the matter which I proposed for discussion was one of urgent and public importance, otherwise I could not have raised it. I acted in accord with my duty as a public man, as I saw it, to expose a weakness in the law which in my opinion could inflict and was inflicting great hurt on people.
Secondly, the Minister stated that in asking my question I already knew perfectly well that the existing law in the Australian Capital Territory provided a remedy for all the matters that I had raised. I resent that imputation. It is untrue. The Minister’s colleague, the Attorney-General (Sir Garfield Barwick), agreed when I raised the matter that the law did require amendment and he stated specifically that he proposed to amend it to give protection against one of the chief malpractices to which I had referred.
Finally, the Minister stated that I was now seeking governmental intervention to extricate myself from my own private and present difficulties. That also is entirely untrue. In my question I specifically asked that if the Government did not intend to hold an investigation it should say so straight away so that the way would be clear for a public investigation of all the allegations I had made - an investigation which I am doing everything possible to bring about. I trust that some day at least it will be said of me that I have not evaded or dodged any issues that I have raised.
– I also desire to make a personal explanation, Mr. Speaker. I refer to yesterday afternoon’s debate on the Loan (Housing) Bill (No. 2) 1962. The honorable member for Bonython (Mr. Makin) referred to the amount available to State housing authorities. I interjected and the interjection is recorded in “ Hansard “ in this way -
That does not allow for the 30 per cent. to be allocated to building societies.
I knew then and I know now that it does include that allocation. What I did say was -
That does not allow for the fact that last year there was a special grant of £7,500,000.
The honorable member for Bonython then made a further statement and, according to “ Hansard “, I interjected again, this time in these terms -
That is a special grant.
What I did say was -
You are not making allowance for last year’s special grant.
Confirmation of what I have just said will be found on page 2327 of “Hansard” because I followed the honorable member for Bonython in the debate and during my remarks I made special reference to the interjections I have mentioned.
Motion (by Mr. Harold Holt) agreed to -
That leave of absence for one month be given to the honorable member for Maribyrnong (Mr. Stokes) on the ground of parliamentary business overseas.
Motion (by Mr. Calwell) agreed to -
That leave of absence for one month be given to the honorable member for Lilley (Mr. Don Cameron) on the ground of ill health.
– I move -
That, in accordance with the provisions of the Public Works Committee Act 1913-1960, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for investigation and report: - Alice Springs Water Supply- Provision of Additional Wells, Reticulation and Tank.
The proposal provides for the sinking and equipping of three wells approximately 1,000 feet deep in the area to the west of the Alice Springs aerodrome and the provision of a pumping station and 15-in. rising main to a 1,000,000 gallon reservoir to be constructed on Heavitree Range, and connexion to existing reticulation. The estimated cost of the work at present is £231,000 but this could increase should the water prove to be aggressive to asbestos cement pipes.
Question resolved in the affirmative.
Debate resumed from 13th November (vide page 2361), on motion by Mr. McEwen -
That the bill be now read a second time.
.- In 1960 I asked the Minister for Trade (Mr. McEwen) whether he was contemplating re-introducing import restrictions in December of that year or early in 1961. His answer was a curt, brief, abrupt and unequivocal “ No “. During the early part of 1962 the Government found it necessary to eat its own words, but to save face it appointed a Special Advisory Authority, Sir Frank Meere, and gave him the power to impose what is described as quantitative restrictions on imports. No matter what adjective you use to prefix the word “restrictions” you still get import restrictions, but with this difference, that every one is left guessing whether they will be applied. If they are applied, then under the Tariff Board Bill before us every one will be left guessing whether the Tariff Board will extend them or remove them gradually. So there is no certainty in any one’s mind on what will happen when a case which has been presented first to the Special Advisory Authority later goes to the Tariff Board.
Hopes of finding a solid foundation upon which to build and expand Australian industry are slender indeed, even though this bill seeks to arouse those hopes. It will be a courageous and valiant manufacturer who accepts this bill at its face value and assumes that the only opposition to his business will come from his competition inside Australia. While import restrictions were in existence at least everybody knew where they were and could proceed with some certainty as to the future. Nearly every manufacturer knows with some certainty what are the costs of production in his own business and in that of his competitors in this country. He can never be sure of what are the costs in an overseas plant. Neither can the Tariff Board, and yet it makes findings upon a great deal of guesswork in regard to overseas manufacturers.
A recent case can be regarded as typical. The rayon weavers of Australia - that is the name by which they are known in the Australian textile industry - had been in very serious difficulties prior to August, 1961. Their difficulties arose from the import of fabrics from cheap-labour, lowcost countries. Not that the women of Australia derived much advantage in lower prices from these imported fabrics. They did not. The importer and the big retail stores reaped a harvest in high profits, buying at a low price and selling at a price just far enough below the price of the Australian fabric to make things tough for the Australian manufacturer. As an almost immediate consequence, every Australian rayon weaving mill commenced to lay off staff and placed the remainder on a fourday week.
In August, 1961, the Special Advisory Authority inquired into the troubles of the rayon weavers and found their case proven. He found that the industry was “ economic and efficient”. These are the two words upon which so much stress is laid in this bill. He recommended to the Minister for Trade (Mr. McEwen) that an emergency 25 per cent, ad valorem duty be imposed, and so it came to pass that the industry returned to a reasonably prosperous condition. But not immediately. Stocks of cheap imported fabrics had to be disposed of, and great harm had been wrought upon the industry. It says much for the strength and resiliency of this industry that it recovered fairly rapidly. It says much for the honesty and the integrity of this industry that, having recovered full production, those engaged in it set themselves to achieve price reduction. Burlington Mills (Australia) Proprietary Limited, in particular, reduced prices on 50 per cent, of its production, thereby passing on to the public the benefits it gained from reasonably adequate protection.
This side of the textile industry, if we include furnishing fabrics, has endured a terrible battering without very much help from the Tariff Board. In the last thirteen years those engaged in it have been obliged to face up to twelve Tariff Board inquiries. Nearly one to each year! The cotton industry has faced even more. I do not suppose that there is an industry that has more small shareholders than the cotton industry in Australia, yet look at the picture. The two largest firms in the industry are Bradford Cotton Mills Limited and Davies Coop (New South Wales) Proprietary Limited. Bradford Cotton still stands strong and erect in a far from easy situation, but the Davies Coop organization at the opening of whose latest and most modern mill the Prime Minister (Mr. Menzies) was present to bestow his blessing, is in such a condition that its 5s. shares, which once were worth 16s., are now available at ls. lid.
I shall endeavour to show, Mr. Speaker, as fairly as possible, the things that can flow from decisions made by a tariff board. Once the board’s decisions are made and the Government endorses them there is no court of appeal. There is no way of arresting the consequences until the damage has been done. Surely when it can be shown that an error of judgment has been made - and tariff boards, after all, are only human instruments - it should be possible to get a restraint on the Tariff Board taken out. But the bill makes no provision for a restraint upon the Tariff Board. I care not whether, in the words of the honorable member for Wakefield (Mr. Kelly), such power to restrain might sap the morale of the Tariff Board. He has asked in this House whether special advisory authorities are sapping the morale of the Tariff Board. It would appear, from the resignation of Sir Leslie Melville that something or some one is upsetting the Tariff Board. But whether or not the morale of the Tariff Board is sapped in this way there should be some means by which industry can appeal before the damage is done and not after. We have machinery to rectify damage after it has been done, but not before. The Minister said in his speech that it was the Government’s intention “ that protection shall be effective “. These are bold words and the unequivocal imperative “ shall “ is used. He said -
It is the Government’s policy that so long as an industry remains economic and efficient it has an assurance that where necessary it will receive protection.
I say equally unequivocally that the textile industry of Australia is economic and efficient, but that in the last thirteen years, as a general statement of fact, it has received almost anything but effective protection.
In what a curious politico-economic world we now live! For some strange and interesting reason the leader of the freetrade Australian Country Party has become quite a protectionist, and a cave of freetraders has appeared in the Liberal Party. Three times now has the Country Party Minister for Trade sternly and publicly rebuked the leader of the Liberal Party cave of free-traders - the honorable member for Wakefield - and not a word of protest or a word in defence of that honorable member has come from his party or from his leader. Let me say, however, that if any one wants to examine and criticize any report of the Special Advisory Authority or the Tariff Board in a thorough and painstaking manner, as the honorable member for Wakefield has done, I will raise no objection - and no objection should be raised. Surely it is the right and the function of this Parliament to speak freely without intimidation. The fact that I might disagree with the honorable member for Wakefield - and most times I do - does not prevent me from admiring him for his careful scrutiny of the many reports that come before this House. He did not merit the blasts he has received, and I notice with pleasure that his head remains unbowed. He has principles and will not abandon them merely for the sake of expediency. A parliament needs men of principle wherever they come from.
In his speech the Minister has said that the legislation is to authorize the Tariff Board to recommend quantitative restrictions as a last resort. I take the liberty of telling the Minister that to the textile industry of Australia, thanks to cunning as well as unfair competition, the last resort should be the first. Only a little ingenuity is required to vary the construction of fabrics in such a way as to change both the cost and the weight so as to bring them outside the range of protective duties. Sometimes the use of certain colours, sometimes the use of easily removable colours, sometimes the printing of a regular pattern of scarcely visible spots or a few marks on the back of a fabric are sufficient to defeat the tariff. Year after year goes by with the Tariff Board playing about with duties, sometimes according to weight, sometimes according to percentages of mixed fibres in a fabric, sometimes with both weight and method of construction, but always with the same result. In August, 1961, the Special Advisory Authority did tackle one problem with realism when he recommended the imposition of a 25 per cent, ad valorem duty on textiles of man-made fibres. In this case, with this method, although there were some anomalies a reasonably satisfactory result was achieved. But, lo and behold, the Tariff Board in its wisdom - or lack of it - has seen fit to alter this completely. When its turn came to review the textiles of man-made fibres industry it altered the method of imposing duty according to value and arrived at a duty according to a basis of area. Why? Heaven alone knows! The Australian mills had geared themselves to produce the kind of fabric, economically and efficiently, which the consumers in Australia wanted. The 25 per cent, ad valorem duty imposed by the Special Advisory Authority was working pretty well. Is the Tariff Board expressing its discontent with the Special Advisory Authority at the expense of this section of the textile industry? Is it asserting its greater wisdom and longer-lasting authority at the expense of this section of the industry? Is this indicative of the Tariff Board’s jealousy of the Special Authority, again at the expense of this section of the industry?
This is an example of the need for a place of appeal against the papal infallibility of the Tariff Board. Is the idea too new or too revolutionary? I think not. The Tariff Board conducts its hearings in the same manner as a court of law. Evidence is given before it on oath and under this bill statements in writing are to be acceptable, but they are still to be made on oath. A common criminal in a court of law has the right of appeal, but a manufacturer is denied the privilege of the common criminal. He has no right of appeal against a decision of the Tariff Board. He takes his punishment and serves his sentence and only if his economic health is gravely impaired can he hope to get a retrial.
As we see things to-day, the resignation of Sir Leslie Melville is a gesture. We will probably never know whether it arose out of his dissatisfaction with Government policy or from governmental dissatisfaction with his policy. But of one thing I feel sure: It is that, despite denials to the contrary, governments like tariff boards which are compliant to their will and, wherever it is possible, they shape them accordingly. The Tariff Board can be a powerful instrument in making or destroying employment and, with the disappearance of import restrictions at the beginning of 1960, followed by the credit restrictions of 1961, large-scale unemployment was the result. In desperation, and not because the leopard has changed his spots, the Government wants a Tariff Board that will help it to reduce unemployment at least for the time being. This is the kind of thing that saps the morale of the Tariff Board more than does any Special Advisory Authority.
We cannot, in conscience, oppose the bill, because it takes a few more faltering steps towards adequate protection, but it does not go far. It would have been a far better thing if, in these days of vastly accelerated movement and change, the Minister had said in his speech that adequate protection should move with equal speed. Under the existing and proposed machinery it will still take months to close the stable door against the escaping horse. The Minister admitted in his speech that the world’s most highly industrialized countries find it necessary to restrict imports in certain circumstances. He added that this device has been continuously practised, for example, by the United States of America, France, West Germany and Italy. Japan and the Soviet bloc continuously employ protective devices other than tariffs.
If it is necessary for the world’s industrial giants to use import restrictions and devices other than tariffs, how much more necessary is it for young Australia to protect herself by means other than an addition to the tariff? Yet the Minister proclaims that quantitative restrictions are to be the last resort. In other words, he tells the Tariff Board here and now that it must exhaust every other means before it shall give the only effective protection. Despite this bill, heaven help the Australian manufacturer who needs rapid protection against the rapid movement of goods from one part of the world to another!
I want now to spend a few moments in dealing with profit margins. The difference between a duty which enables an Australian industry to operate satisfactorily and one which is just sufficient to allow imported goods to come into Australia has only a small effect on selling prices. Most Australian plants are quite satisfied if, when in full operation, they can make a profit of 5 per cent, on turnover. The difference between not being able to operate at all and being able to operate satisfactorily is covered by this margin, so there is very little to work upon. Compare this with what happens to goods after they are made. The first handler will add 33i per cent, to the price, and it must be remembered that many goods go direct from factory to shop and in that case a mark up of 50 per cent, or even 55 per cent, is immediately added to the price. Why does not the Department of Trade do some research in this field in order to get costs down, instead of allowing the Tariff Board to take it out of the hides of our manufacturers?
Why is it that the terms of reference for the Tariff Board, when drawn up by the Ministry of Trade and signed by the Minister, almost invariably specify “ whether assistance should be accorded production in Australia of . . . &c, &c?” Why does not the Minister decree the use of words like “ what assistance should be accorded the production in Australia of . . &c, &c? “ The Minister did just this when he wanted to help the Americanowned aluminium producing industry in Australia. Why are these employees of the Government permitted to become dictators against whose decisions there can be no appeal?
Let me return for a moment to the question of fair and ethical trading, and inform the House that at the last Chinese Trade
Fair in Peking, Dickies Australian towels were on display. Were they displayed in order that the Chinese might be induced to buy them? Not at all! These were the best jacquard towels. They were displayed by the Chinese so that they could be copied faithfully. The Coles organization sold the copied towels for 10s. each, while the price of the Australian-made article is 21s. At least Coles made no attempt to make an extortionate profit, as it could have had it so desired. There is a special emergency duty on these towels, but that does not keep them out of Australia. China is buying millions of pounds worth of Australian wheat. Any duty which would protect the weavers of towels in Australia against the preposterous working conditions stemming from personal patriotic self-sacrifice in China would be and would look absurd. So the Tariff Board, because by ministerial direction it can only use the weapon of quantitative restrictions as a last resort, can and will do nothing until it is too late. We must also remember that in a country like China, where the government is its own tariff board, the authorities might stop buying our wheat. The result is that there is no adequate protection for another economic and efficient Australian industry.
What kind of thinking actuates our Tariff Board, which makes findings on accurate information that it demands from Australians and inaccurate and incomplete information on overseas costs? Is it critical of some textile manufacturers because in desperation they spend largely on sales promotion to display their wares to the best advantage? Verily I say that if the wool promotion authorities placed their displays in the hearts of our big cities, instead of in drab and dreary places near the auction rooms, where are to be found those already converted to the use of wool, they would render a greater service to wool.
I sincerly trust that when Australian manufacturers, who are hard-headed realistic businessmen, take the trouble and spend the necessary money to display their products to the world’s buyers, they do not attract a jaundiced look from any member of the Tariff Board. The biggest buyers in this world, wherever they come from - when all things are equal or nearly equal - will buy those goods which are best displayed.
I sum up: This bill takes two or three more infantile steps towards a fair deal for the manufacturers, but only because it has now become Government policy to use those measures in reducing the volume of unemployment. It contains no guarantee of assistance upon which Australian industry can proceed with confidence to expand. The time lag between an application for assistance and a decision by the Tariff Board is to be reduced, but only slightly. Quantitative restrictions - the only effective deterrent to unfair competition from abroad - are to be prescribed only as a last resort. The Minister has not even mentioned the palest hope that the terms of reference of the Tariff Board will be altered, although he followed that course when he wanted to assist the American-owned aluminium industry. The Government told the Tariff Board - through the Minister’s speech - that in effectively carrying out its advisory duties it must keep within its sights the objectives of Government policy. I welcome this remark because it offers a hope, faint though it may be, that the dictatorial powers of the board are to be whittled down and Parliament restored to its rightful position as ruler over its own servants.
.- If the honorable member for St. George (Mr. Clay) looks at the notice-paper, he will see that to-night or to-morrow we are to debate the question of man-made fibres. I hope that he has not used all his ammunition because I can assure him he will need more than he has used so far in this debate.
The main function of the bill has been said to be the giving of power to the Tariff Board to introduce quantitative restrictions if it finds this necessary. I will devote the first part of my speech to this subject. Quantitative restrictions have never been used as a method of protection in our fiscal history. Even Mr. Forde, the Minister for Customs in a Labour government in the 1930’s, and perhaps the most rabid protectionist Minister for Customs in our history, did not use this method. It is not that he did not know about it. It has been used in other countries for many centuries. Charles II. used to sell to his favorites the right to import goods and so make profits on them. I will set out briefly the reasons why quantitative restrictions have not been generally used.
The first reason is that they always add as much to the cost of protection as does a tariff. Usually they add more, but always they add as much. I know that some people do not believe that this is so. Probably the honorable member for St. George honestly does not believe it, but this is the effect of quantitative restrictions. People say that because imported goods do not come in over a high tariff wall their cost is not increased, but in fact the cost of goods imported under quantitative restrictions always rises to the cost of locally produced goods. There is no incentive for the importer to bring his prices down. He knows he cannot sell any more goods by so doing. He can sell only his quota, so what is the sense in cutting prices? That is the reason why Mr. Frank Forde did not use this protective device.
The second reason is that quantitative restrictions must be constantly revised if they are to be effective. The market and local production can, with difficulty, be measured. The quota of imports is then fixed. Then things start to change. Local production either goes up or down. People either come into or go out of the industry. The demand changes. People may be producing weedicides. Farmers start to use different kinds of weedicides; they must do so to keep up with their competitors. The only certainty in any such exercise is that supply and demand will be somewhat different six months after quantitative restrictions are introduced and they will be radically different in twelve months’ time. So the quota must be altered. This continual alteration of the quota would bring great problems to the Tariff Board. If the Tariff Board is not to do this, then the Department of Trade must do it and we will end up with the department and not the board determining what shall be the level of protection. This is a very dangerous thing to do, as I think we would all agree.
The third reason why quantitative restrictions have always been avoided is that some one must give a quota to another person. When all the eloquence dies down, some one has to give a quota to some one else. Who is to get the quota - the man who has brought in a lot of goods in the base year?
The big man gets the biggest quota. There is little available for a man who wants to enter the business or happened to import a small quantity in the base year. This system of quantitative restrictions and the allocation of quotas leaves the way open to special pleading and undue influence, to which no civil servant, however dedicated he may be, should be exposed.
There is a fourth reason. If goods come in over a tariff wall, at least a duty is paid and so money goes into the Treasury. If quantitative restrictions are used, the cost of the goods rises just the same, but the importers and not the Treasury get the profits.
These are the four reasons why quantitative restrictions have not before been used as a protective device. They are now being introduced for the first time, and we should realize what we are doing. Fortunately, the Government seems to be aware of the dangers involved and has guarded against them. The Government has not directed that the Tariff Board should use quantitative restrictions but only that the board should use them when it is satisfied a tariff is not appropriate. If the Government had instructed the board to use quantitative restrictions and not a tariff, I would have voted against the bill whatever the consequences. But I am prepared to leave this matter to the judgment of the board, and I am certain that it will very seldom use this clumsy and inefficient method of protection. The Minister for Trade (Mr. McEwen) admits the inherent weakness of the system of quantitative restrictions. In his second-reading speech he said -
The Government therefore envisages that the Tariff Board should recommend the use of such restrictions only under conditions in which the board is satisfied that consumers would be adequately safeguarded.
With these safeguards embodied in the bill to some extent and in the Minister’s speech, I must rest content. It is only the fact that I know that no independent tariff board would recommend quantitative restrictions other than in exceptional circumstances that makes me so tractable.
This reference to the independence of the Tariff Board brings me to the most important part of what I have to say to-day. As we all know, the chairman of the board, Sir
Leslie Melville, has resigned and many of us think we know what caused him to resign. I believe that he thought that the independence of the board was in jeopardy. So I think we should examine this question of the independence of the board with some care. In my view, the independence of the board could be threatened from five quarters. The first threat could come from the Minister; but the Minister has assured us on many occasions that he has been careful to respect the independence of the board, and I accept this assurance.
The second quarter whence a pressure could come is the Department of Trade itself. We know that the staff of the Tariff Board is part of the establishment of the Department of Trade. We know that the staffing position of the board is causing concern and that this was specifically referred to in the annual report of the board. The Minister has admitted that this is one reason that Sir Leslie Melville has given.
– I did not say I admitted it. I volunteered it.
– Yes. I think that it is important that the board not only be independent but also that it should appear to be so. For that reason, I would urge the Government again to reconsider its decision not to separate the two establishments. As the Minister knows, I have other reasons for thinking that the staff of the department has often been unduly critical of the board. These reasons may not be conclusive in themselves; however, I cannot but have a great uneasiness that the staff of the department is not doing all it can to support the board loyally.
The third quarter whence pressure can come is the pressure groups. Only a week or two ago, the Tariff Board recommended reduced duties on man-made fibre piece goods. The honorable member for St. George referred to this specifically. This was greeted with a howl of rage by the manufacturers and a bitter and vindictive attack was made on the chairman and the board. The members of the board are taken from ordinary walks of life. I know how deeply hurt some of them have been in the past, and, I would think, still are, when subjected to such bitter attacks. Certainly the Minister has not been quick to spring to the board’s defence when these attacks have been made. The defence, when it is made, is often both tardy and tame, and I refer particularly to the Acting Minister for Trade early in the year when a similar outcry took place. In this last bitter attack, there was no defence at all.
In the nature of things, the pressure of pressure group disapproval will always be present. But I think the Minister should go out of his way to alleviate this pressure when he can. Even more important, I think the pressure groups themselves should learn to speak with more moderation.
This is particularly directed to the Chambers of Manufactures, because they have more at stake than anybody else and they have most to gain from a wise protective system. If the reputation of the board is challenged in the way in which it has recently been challenged, then I feel that the reputation and the authority of the board must suffer.
The fourth pressure can come from the system. My opinion of the Special Advisory Authority system is, I think, well known, and I shall not elaborate on it here. But whether we agree with the system or not, and whether we agree with the recommendations of the Special Advisory Authority or not, we must admit that the continual shuffling of references from the board to the Special Advisory Authority, and back again, does not make for a happy family. This is particularly obvious when we realize that the special adviser often gives temporary protection which the Tariff Board later feels obliged to remove.
I am not at this stage complaining about the system. I am simply emphasizing that the system puts a strain on the morale of the board - or, at least, I should imagine that it would. Put yourself in the place of the board, Mr. Deputy Speaker. It works on an inquiry for many months and the Minister accepts its recommendations. Perhaps six months later the matter is referred to the Special Advisory Authority and increased temporary duties are imposed. Then the matter comes back to the board again and all the work has to be done a second time, with another inquiry having to be undertaken. It is this inevitable weakening of the board’s morale that I have often warned about in customs tariff debates, and it is these warnings, I believe, which drew down on my head the wrath of the Minister last week. However, I make no apologies.
These four pressures that I have mentioned, though considerable, are not nearly so strong as the fifth, which is pressure by the Government itself. I shall quote a passage from the Minister’s speech which has been quoted before -
Obviously, the Tariff Board in effectively carrying out its advisory duties must keep within its sights the objectives of Government policy- the objectives I have outlined in my remarks to-day and as given in Government statements from time to time.
This may sound innocuous. Let us look at it in greater detail. The Tariff Board’s main task is to decide whether an industry is economic and efficient, and, if it is, to decide what assistance in the form of duties or bounty is necessary to enable the industry to compete with imports. This is not an easy decision, because comparisons of costs with those in overseas countries are always difficult. The board must always remember that high duties have to be paid, in the end, by the export industries, so it must obviously keep the effect of excess cost well in mind.
With those considerations in mind, we can ask ourselves what is the effect of the Minister’s statement. This is how it appears to me: The Government has a policy of full employment. Obviously the Minister expects the board to keep the Government’s announced policy of full employment in mind when it is deciding whether an industry is economic and efficient. It all sounds so humane, so logical. But let us look at it clear-eyed.
This time last year we were troubled by unemployment. Does the Minister expect that the duties recommended by the board this year should be lower than they were last year, because unemployment is now less serious? If so, what happens to the soundness of the main judgment, that is whether the industry is economic and efficient? Does an industry become more economic and efficient, and so more worthy of protection, simply because there is more unemployment at the particular time? And if duties are to be fixed on the basis of the proportion of unemployed persons to the total work force, are the duties to be automatically reduced as the proportion of unemployed decreases?
I believe it is very proper for the Government to have a policy of full employment, but I think it is very dangerous to expect the Tariff Board to implement that policy. If it tries to do so, if it clutters up its main inquiry - whether an industry is economic and efficient - by trying to cure transient unemployment, then the answer to the main question will not be clear, and a clear answer to the main question we must have. Put it another way. Let us suppose that the Government announced a clear policy on decentralization. Would the Tariff Board be expected to take this policy into account when trying to decide whether an industry was economic and efficient? If so, what kind of an answer would you get to the main question?
Again, I do not say that the Government should not have a policy on decentralization. What I do say is that the Government should not expect the Tariff Board to take such a policy into account when deciding whether an industry is economic and efficient. If the Government feels that industry should be decentralized, then it should appoint a decentralization commission charged with the task of working out ways of achieving decentralization. If you give the job to the Tariff Board, you cannot hope to get a clear answer to the main question, and, I repeat, a clear answer to the main question we must have for the sake of our whole protective system.
I am fairly certain that this paragraph in the Minister’s speech springs, in part at least, from his disappointment at the Tariff Board’s report on man-made fibre piece goods. This report had the effect of reducing the temporary duties imposed by the Deputy Chairman - not by the Special Advisory Authority. This would be disappointing to the Minister for many reasons. First, it would be disappointing for personal reasons, because no one likes to see people unemployed. It would be disappointing for political reasons, because the Government believes in a policy of full employment, and obviously the Government becomes less popular as more people are unemployed. So, obviously, the Minister is not pleased. Yet what should the Tariff Board have recommended?
I have studied this case with great care, and I have no doubt whatever that the Tariff Board was right in removing the temporary duties. I shall not argue the case now, but will do so later in the day or to-morrow. All I want to say is that the Tariff Board embarked on this inquiry to decide whether the industry all over Australia should continue to receive this emergency protection. Should the board be expected to keep within its sights the particular needs of Wangaratta? If so, what is to stop industries springing up in country towns, which could then claim consideration similar to that given to Wangaratta? Where would that kind of thing end? I suggest it would end in the Tariff Board making a completely incompetent assessment whether the industry as a whole was economic and efficient. It would end in the board having to make political decisions rather than economic decisions.
But there is another danger to be found in this paragraph in the Minister’s statement. If the Government’s reference to the board were definite we would know where we stood. If the Government were to ask the board whether assistance should be accorded to such and such an industry, bearing in mind the Government’s announced policies on full employment and decentralization, that would be bad enough, for reasons I have stated. But at least the board would know where it stood. It would know what it was supposed to try to measure. It would have to balance the “ economic and efficient “ question against the need for more employment in certain areas. This would make its decision difficult, or almost impossible, but, as I say, the board would know what it was trying to do, and that would be something.
But if the board embarks on its examination with the general directive of the Minister - as I understand it; perhaps the Minister will give me clarification - ringing in its ears, that it must keep within its sights the objectives of government policy as announced from time to time, without the Government specifying which policies it wants the board to keep in mind, where would we finish up? What objectives is the board to have in mind at each inquiry? All of them, or only some? Should it consider government policy on trade with Communist China, the Government’s view on whether trade is more important than aid, the policy on decentralization of industry, or on the balance of payments? The
Government has ideas on all these matters, and rightly so. But if the board sets out on an inquiry with its sights set on all of these matters, then I doubt if it will ever reach port. And if it is to have its sights set on only one objective, which one?
I suggest, Mr. Speaker, that we should keep the Tariff Board to its main task, that of deciding whether an industry is economic and efficient, and, if so, what assistance that industry should have. If the Government has other policies, say on decentralization of industry, that clash with the board’s recommendations, then it should say so and not implement the board’s decisions, as, of course, it has a perfect right not to do.
What happens if there is a change of government? I presume that the objectives of government policy would change. Is the board then to be expected to change its recommendations to suit the new government’s policies? If this directive from the Minister does not mean that, then I do not know what it does mean. The honorable member for Lalor (Mr. Pollard) made no bones about it when he said in this debate yesterday that the moment Labour comes into office it will have this precedent set for it. He said -
If we see fit, when we are in government, we can say: “The Tariff Board must keep within its sights Labour’s traditional policy in regard to protection of Australian industry “. Do not worry. We will do it. If it is good for you, it is good for us.
So there is no doubt about the interpretation that the honorable member for Lalor places on the directive. If the board’s policy is to change with a change of government, what will happen to the independence of the board, which I was always told stood apart from government and was not subject to pressure by governments? I know that it must be frustrating to the Minister to get a recommendation from the board which runs contrary to his wishes, say, on decentralization. I am not being sarcastic in saying that; I know that it must be disappointing. But we may be very glad of this independence if the board, under a Labour government, refuses to give way to government pressure to protect each and every industry by imposing prohibitive duties or import licensing again, no matter if by so doing it would break the back of export industries.
So, in regard to this fifth pressurepressure from the Government - I urge the Government to say more specifically what it means. The board itself has never been subjected to this pressure in past years. When discussing this problem with my father, who as some honorable members may know was a member of the Tariff Board under a Labour government in the early 1930’s, I asked him what the chairman of his board would have done if he had received a directive similar to that contained in the Minister’s speech. This discussion, of course, was before there was any talk of Sir Leslie Melville’s retirement. My father’s immediate reply was, “ He would have resigned “. This is a new development in the Government’s thinking. At least I believe it to be so, unless I am reassured by the Minister, and so, evidently, did Sir Leslie Melville.
I have dealt briefly with the five pressures which the board faces. I do not regard the Tariff Board as a sacred cow to be worshipped from afar and whose recommendations are to be regarded as divine revelations. But unless the board is truly independent, in fact as well as in theory, and what is just as important, unless it appears to be independent, then our whole protective system is in jeopardy.
Because in the past I have often criticized tariffs that appeared to me to be unduly high, I know that I am branded as a free trader. I have denied this often, and do so again. I believe in a wise protective policy and it is because I feel that our wise protective system, built up over the years, is threatened by this new development that I feel so concerned to-day. Because I have been critical of what appeared to me to be unduly high tariffs, I have been branded as a little Australian; as one who does not believe in the development at Australia. This charge is even sillier and hurts even more than the first. I think I can say that I know more at first hand of the problems of development of the rural sector and that I have seen far more factories than most members of Parliament. I know that it takes as much courage, initiative, capital and brains to start an industry and to run it well as it takes to start and run a new farm.
I think we all admit, in our hearts, that primary, secondary and tertiary industries have to advance in step with one another if development is to be sound. That is the way it has always been done in the past and, indeed, we have no reason to be ashamed of our past performance. But there is a tendency now for the three sectors to get out of step, and I am afraid that this will be encouraged by this new kind of thinking. Some people imagine that only secondary industry can employ our people. I have pointed out before that we have a greater percentage of our work-force employed in factories than has the United States of America. Even now, our secondary industry employs only about 30 per cent, of our work-force, compared with about 58 per cent, in the service industries.
It is obvious that if we are to develop our country as we should, and as we have done in the past and can do again, we have to keep the various sectors in step. An important part of the fiscal machinery for keeping them in step is a capable and independent Tariff Board. So I do hope that the Minister will clarify the directive to the Tariff Board that he mentioned in his second-reading speech and put beyond all doubt that the Government is not doing the things that I fear it is doing.
I hope that when the new chairman is appointed he will be a man of undoubted reputation and ability. Sir Leslie Melville has resigned and that chapter is closed. I hope the new man will be as good, and that he will have every opportunity to do the job as fearlessly and soundly as it must be done if our fiscal system is to keep in step so that we can do this job of developing Australia.
Last week the Minister for Trade was very critical of me. I have no hard feelings about this matter; I led with my chin and I copped it good and hard. Perhaps this will teach me sense. But I can assure the Minister and the House that my forebodings on this question are in no way related to that incident. There are greater issues at stake than the small matter of the reputation of the member for Wakefield. I feel that we are drifting away from the straight and narrow path of fiscal rectitude. I do not pretend that treading that path is ever easy, and I have a great deal of sympathy with the Minister in this, but if we wander off the path of fiscal rectitude in the search of easy popularity, then we will certainly jeopardize our present successful system, which has played an important part in the development of Australia.
.- Mr. Deputy Speaker, the decision of the Government to abolish import controls in 1960 had a devastating effect on Australian secondary industries and, incidentally, a devastating effect upon the Government’s majority. In 1960, in the face of opposition from the trade unions and all sections of industry, the Government persisted in its attitude. What occurred subsequently is history. Unemployment rose, bankruptcies increased, industries closed, imports flooded the country, our overseas balances fell, and, generally speaking, our economy suffered a tragic setback. Since that time several changes of policy have occurred. Protection has been applied, reluctantly and in a half-baked manner. First we had the reimposition of certain import controls; then the Special Advisory Authority was created. There were more Tariff Board inquiries and differing policies were brought forth on various issues, with the inevitable conflict between the Special Advisory Authority, the Tariff Board and other interested parties.
To-day we face another stage in this story of the Government’s manipulation of tariff policy. The bill now under discussion gives us the opportunity to bring under public scrutiny at this time the question whether the Government has a tariff policy. In his second-reading speech the Minister for Trade (Mr. McEwen) stated that this bill is one that will impose quantitative restrictions and make certain other provisions. He said it will assist in reducing delays in the board’s operations and will introduce greater flexibility in the board’s administration. He said, also, that it is the Government’s policy that so long as an industry remains economic and efficient it has an assurance that, where necessary, it will receive protection, and he said that this bill includes measures to give that protection. He went on to say, further that, under the proposals, urgent temporary protection would be given as the circumstances demanded it.
To summarize the position in support of what my colleagues have said, the amend ments proposed in the bill are designed to assist in reducing delays in the board’s operation and to introduce a greater flexibility into the board’s administration. In other words, this is meant to be an overhaul of the Government’s approach at a very late stage to a tragic failure in regard to the protection of Australian industry, which not only has brought Australian industries to their knees, but to a major extent, has caused unemployment for which the Government evidently has no solution.
Before dealing with the Labour Party’s attitude to this matter and the attitude of the honorable member for Wakefield (Mr. Kelly) I want to refer to the contribution made by the honorable member for Lalor (Mr. Pollard) last evening. He brought in a pertinent way to the attention of the nation the shortcomings of this Government on the question of tariffs. He put a spotlight on various aspects of policy enunciated by the Minister for Trade (Mr. McEwen) with particular reference to the Government’s policy of tariff revision and the resignation of the head of the Tariff Board. He also dealt with the Government’s directing the board along the lines that it should follow. I endorse the sentiments expressed by the honorable member for Lalor when he said that the Tariff Board must be independent. It must have the right to make its own approach to a problem. Although the honorable member for Wakefield did not mention it, the honorable member for Lalor read what the Minister for Trade had said and stated that Labour might well follow that. As the honorable member for Lalor said, the board should act in the light of Government policy. But the Government has not the right to direct the board. Its right is to review the decisions of the board, not to dictate to it. The honorable member for Lalor criticized the Minister in this respect. I congratulate the honorable member on having given a first-class exposition of Labour’s attitude on this matter.
The honorable member for St. George (Mr. Clay), with an intimate knowledge of the textile industry, not only brought a constructive approach to this great problem, but made suggestions which could well be followed by the Government. In particular, he said that there should be a right of appeal against arbitrary decisions which, on occasions, have gone against industry and of which there can be no review at this time. The honorable member for Wakefield, to give him credit, does make a great study of these problems. I think he will become known as the yo-yo member of this Parliament if he takes to bobbing up on the other side of the House and getting knocked over so often and bobbing up again. To give him further credit, he is persistent. I would imagine that he is almost punch drunk or out on his feet. One day he makes a speech completely opposed to the policy of the Government and gets knocked over by the Minister. He makes another speech the next day and there is a continual repetition of exchanges as it were, between the Minister and the member for Wakefield. Yet he persistently goes on.
As the honorable member for Lalor mentioned last night, the Minister is cranky and irritable about the resignation of the chairman of the Tariff Board. He is up in arms whenever the subject is mentioned. The honorable member for Wakefield probably hit the nail on the head to-day when he said that the chairman refused to be dictated to by the Government and by the Minister. That is probably the reason why the Minister will not reveal to this Parliament the real reasons for the resignation of the chairman. With due respect to the honorable member for Wakefield, he has argued consistently in this Parliament against tariff protection for Australian industry. He may excuse himself as he will, but he started off to-day by saying that tariffs increase prices to Australian consumers. What he did not say was that even if you do get increased prices - and I question that - under this Government’s policy cheap goods are available but 100,000 people are out of work and cannot buy them. What is the answer to this problem? Protected Australian industries with men and women working in them, manufacturing Australian goods and becoming consumers on a market with money in their pockets is undoubtedly the answer. That is the policy which the Opposition supports and which the honorable member for Wakefield argues against consistently.
I cannot see how any member who gives lip service to the policy of the Government on the one hand and condemns it on the other hand every time he speaks on a tariff measure, can hold his place in this Parliament. What would Government supporters say if a member of the Labour Party were to do this? They would demand that he resign. There would be newspaper headlines. The honorable member for Wakefield, who pretends to be a rebel on this issue, has been publicly rebuked by a Country Party Minister who is a free-trade Minister. Again and again, we have this difference of opinion on tariff reform on the other side of the House. To-day, the honorable member for Wakefield was listened to in an interested way by a number of Government supporters who share bis opinion and do not really believe in protection for Australian industries.
I want to examine the question of what protection really means in this country. Although the Tariff Board was established in 1921, I believe that Labour’s policy on tariff protection was epitomized by the late J. H. Scullin, a former Labour Prime Minister, in a policy speech delivered in 1928 which he subsequently gave effect to in this Parliament. This is what he said about protection for Australian industries -
If Australia is to become the great wealthproducing nation that we hope, we must resolve to do our own work in our own country as much as possible, instead of sending it across the seas to be done for us by others. Manufactured goods are flooding this country from abroad, our industries are languishing, and thousands of our people are out of employment. The breaches in our tariff wall should be repaired at once. Labour stands for the fullest possible protection for all industries, primary and secondary. Where we can by agreements or undertakings safeguard consumers as to price, quality, and the ability of the industry to supply requirements, complete protection will be given in guaranteeing the Australian market to Australian industries.
That is as true to-day as it was then and it typifies the continuing policy of Labour in this matter. I think it was endorsed not long ago by Mr. C. E. Gaudry, chief tariff officer of the Chamber of Manufactures in New South Wales, when he said -
The term “protection”, in the tariff sense, means the erection of a barrier against foreign competition on the domestic market. Broadly, the aims of a protective tariff are development of the economy, full employment, and the maintenance of an improving standard of living.
These two statements alone disprove the statement made by the honorable member for Wakefield that the Tariff Board has no responsibility to play its part in the maintenance of a policy of full employment. Following on what the Labour leader, Mr. Scullin, said, the tariff is not effective if, after its operation, goods flow into this country from abroad. A policy of supposed protection that does not protect Australian industries is a delusion and a fraud on the people. If protective tariffs are effective we should have flourishing industries with full employment and all that goes to make a prosperous economy. There are people who argue against a policy of protection, saying that Australia is a high tariff country. I understand that Australia has a lower tariff scale over the whole range of industry than other countries have. The average rate of tariff in Australia is 12 per cent. In Japan the average is 19 per cent., in the United States of America 11 per cent., in Canada and Italy 16 per cent., in France 15 per cent, and in the United Kingdom 17 per cent. We should raise our tariff barriers high enough to maintain full employment. To-day, we have a lower tariff barrier than many of the countries I have mentioned.
At this stage, I think that we should look at the question of whether or not the Government is protecting Australian industry. What has it done? What will this measure do? What are the future prospects for the protection of Australian industries under this Government? Time does not permit me to say a great deal on this matter, but it permits me to make a few comparisons regarding factories and manufacturing industries, particularly textile industries. I shall make a comparison to show why I believe that this Government is falling down on these issues and why it should protect these industries in the manner advocated by Labour prime ministers and governments. The latest figures available show that 1,129,000 persons are engaged in Australian factories and manufacturing industries. Of this number, 70,000, or between 5 and 6 per cent., are employed in the textile industry. Of those employed in the textile industry, fifteen out of every 100 are women.
Capital investment in Australian manufacturing industries totals £2,000,000,000, of which £100,000,000 is in the textile in dustry. The value of output from all manufacturing industries is £5,000,000,000 per annum. About £250,000,000, or some 5 per cent., comes from the textile industry. Seventy-two per cent, of the woven fabrics sold in this country is imported. This shows the potential of the textile industry if it is properly protected by the Government. It is estimated that one man could be employed and a family of four could be supported for every 10,000 yards of woven fabrics imported. Imports of this item are running at the rate of 300,000,000,000 yards per annum. On this basis, 30,000 Australians are being denied employment because of imports of this product which could be manufactured in Australian factories. Taking that argument a step further and applying it to manufacturing industries generally, on the basis that for every person employed in the textile industry three could be employed in allied industries, we can see that the solution of our unemployment problem and the maintenance of full employment would not be difficult if a sound policy of tariff protection were maintained.
After the lifting of import controls in February, 1960, Mr. Deputy Speaker, retail organizations thoughout Australia sent their buyers overseas by the hundred, particularly to cheap-labour countries. I am reliably informed that one large Sydney firm, which was very anxious to obtain goods from cheap-labour countries, gave instructions that not more than ten of its buyers were to travel on any one aircraft. It was six months before the flood of imports began to arrive. They came from Japan, Hong Kong, the United States of America, Italy and other countries. Rapidly, our stores filled with goods imported from overseas while Australian factories went to the wall. This is indicated by the fact that, within a few months, employment in the textile industry alone fell from 71,000 to 60,000 operatives. It is worth mentioning, also, that, at this stage of Australia’s history, we are Japan’s best customer, on a value basis, for felt and textiles. This is what is happening under the policy of a government which claims to protect Australian industries.
The drain on Australia’s overseas balances as a result of this policy and the Government’s failure to protect our industries is exemplified by the comparison between exports and imports. In 1959-60, we had an overseas trading deficit of £106,000,000 and in 1960-61 a deficit of £256,000,000. In 1961-62, we had a surplus of £194,000,000. This surplus was due entirely to the fact that depressed conditions existed in Australia, unemployment had reached record levels and purchasing power had been reduced, with the result that imports declined. The Government’s policy is increasing the flood of imports into Australia, with consequent detrimental effects on the economy and on manufacturing industries generally.
For the benefit of honorable members, I should like to point out the nature of these imports. I have taken the trouble to obtain the figures. I find that, in the three months ended with September, 1962, compared with the three months ended with September, 1961, imports increased by more than £64,000,000, and exports declined by about £20,000,000. Thus, the overall quarterly trade deficit increased by about £45,500,000 under this Government’s policy. If we study the “ Monthly Bulletin on Oversea Trade Statistics”, published by the Commonwealth Bureau of Census and Statistics, we find listed large imports of various goods which could be manufactured in this country if we had a government which really believed in an effective tariff policy. Imports of footwear alone increased from £372,000 to £534,000 a quarter between the September quarter of 1961 and the September quarter of 1962 - an increase of £162,000. These increased imports of footwear put thousands of pounds in the pockets of overseas exporters at the expense of Australian workers. This bulletin shows the large volume of imports coming from Italy, Japan, Hong Kong and other countries. I do not intend to clutter my speech with any more figures. All the relevant figures are available in this bulletin for everybody to see. They establish the failure of this Government’s tariff policy and its failure to protect Australian industries.
I wish now to deal with a matter that is a contentious one for the Government and the Ministry - Sir Leslie Melville’s resignation from the Tariff Board. He evidently has resigned for reasons which the Minister for Trade will not reveal to the Parliament. Beyond doubt, Sir Leslie has resigned because he considered that the various authorities constituted by this Government were such as to cause a conflict of opinion. Evidently, he could not follow their reasoning and in his view it was impossible for the Tariff Board to continue to function on a proper basis. The Government merits criticism on this issue, Mr. Deputy Speaker, because it has refused to face up to the questions that have been asked. The Minister for Trade has behaved in a cranky way. As the honorable member for Lalor has said, the Minister is so cranky on this issue as to make the whole of the Government’s approach seem a bit fishy. I hesitate to use a word which is not altogether parliamentary, but, to say the least of it, the resignation of Sir Leslie Melville-
– Does the honorable member think it smells?
– In the words of my colleague from Lang, it smells. I think that those words aptly describe the situation. All kinds of things are happening in relation to the Tariff Board. These happenings are not confined only to the Special Advisory Authority. Sir Frank Meere, the Special Advisory Authority, has submitted a number of reports to the board, but, so far as I know, up to this stage none has related to textiles. The Tariff Board has even rejected submissions made by its own deputy chairmen. A recommendation by one of the deputy chairmen proposed a duty on woollen yarn, but the rate of duty proposed by him was reduced by the board. In other words, the board rejected the recommendation made by the deputy chairman after an emergency inquiry. A report on woollen piece goods from Italy was made by Mr. Clark, the senior deputy chairman. He appears to have a sound knowledge of the textile industry and an understanding of the requirements of tariff protection, and I understand that he made a satisfactory report. However, the measure of protection recommended by him has been reduced by the board. So where do we go from there? Even the deputy chairmen of the Tariff Board are not exempted from the kind of treatment meted out to Sir Frank Meere and others by the board.
I think that the Tariff Board and Sir Leslie Melville have been in a tailspin over the policies being followed by this Government. I do not say, however, that the board and its members should be supreme. The reports made are subject to criticism and review by this Parliament, as they should be. They ought to be subject to review. Nevertheless, I can well understand the trouble that has been caused by the conflicting policies of this Government over the appointment of special authorities, the re-imposition of quantitative restrictions on imports, and so on. The Government has thrown overboard various policies in favour of others which it previously condemned. One would have to be wiser than was Solomon to understand the policies and administrative acts of this Government. I suppose that Sir Leslie Melville took the easiest way out and accepted a job with an organization where he will at least have somebody sensible above him. No doubt, he will now know where he is going, even though he may not hold the top job.
It is interesting to note that, on 3rd August, 1962. Mr. R. W. C. Anderson, director of the Associated Chambers of Manufactures of Australia, said that, in the previous twelve months, of a total of 38 industry cases, 21 resulted in the reduction of protective tariffs and seventeen in increased duties. He added that Australian industry, under the administration of the present Government and the present Tariff Board, had less than a 40 per cent, chance of successfully approaching the board for increased protection. When you look at it, you realize that that is a tragic state of affairs. According to what we have heard, the Government believes in the policy of tariff protection for Australian industry, but it refuses to adopt policies that will provide the necessary protection. As honorable members on this side of the House have pointed out, even this measure will not give effect to proposals under which Australian industry will consistently be fully protected. I should like to know just what the Government intends to do if it does not intend to follow a consistent policy of providing tariff protection for Australian industries, Mr. Deputy Speaker.
The honorable member for St. George and I, as well as other speakers on this side of the chamber, have cited figures which show that more than 70,000 people are registered officially as unemployed at present. Countless thousands of others are not counted by the Government in its unemployment statistics. However, with a stimulated economy, as a result of full protection for Australian industries and the restriction of imports from cheap-labour countries, the slack in employment could be taken up.
The Government should consider these matters if for no other purpose than to put people back to work. The Government is doing nothing to overcome the delays which are occurring before the Tariff Board; it is doing nothing to protect the small man; it is doing nothing to reduce the long delays, even in emergency cases, in hearing applications. I have here a commentary from the “Sydney Morning Herald” of 27th March, 1962, which relates to the Tariff Board. It states -
Since the emergency duty relief was first applied eighteen months ago, 39 applications for temporary duties have been referred to deputy chairmen of the Tariff Board. Twenty-seven of these 39 cases resulted in special duties being granted, and the whole 27 automatically went to the Tariff Board for full inquiry and report to the Minister. Of all these, the Tariff Board has only completed five and made a report to the Minister, the duty being confirmed in each case.
This is another point to which the honorable member for Lalor referred last night. He mentioned the Government’s policy, the lack of staff and the inability of the Tariff Board to do certain things because of the Government’s policy of recruiting staff, when the necessity to do so arose, outside the staff available. The “ Sydney Morning Herald “ commentary continues -
Twenty-two cases are still before the board, which is also snowed under with approximately another 40 normal inquiries before it. Even more have been withheld from reference by the Department of Trade because of this very reason.
Sir Frank Meere is already facing more than 60 applications for relief from all sections of industry, and all his decisions will have to be reviewed fully by the Tariff Board, already up to a year behind in much of its work.
Naturally, the smaller man cannot face these costs and is being frightened away from going to the board for protection. In many cases his business is failing for this reason.
What will this measure do to speed up the procedure? Will it give relief to the people I have mentioned? Will it speed up the process so that justice will be given to those concerned? Will it make adequate provision for some appeal against decisions which can put men out business or factories out of operation because of the competition against which they seek some protection?
I endorse what has been said by the honorable member for Lalor. We support the proposals which have been submitted to the Parliament, belated though they may be. We believe that they should have been incorporated in the previous legislation. Knowing the way in which this Government operates, we are not at all hopeful that the provisions of the bill will be implemented in their entirety. Neither the Opposition nor the manufacturers can have any confidence in a Government which clearly displays in this Parliament differing points of view on matters relating to tariff which completely destroyed, as the honorable member for Wakefield has mentioned, the Minister’s attitude on these matters.
The Government has no consistent policy on this subject. Industry would not be so badly off if it knew that the Government’s policy would be consistent, even if wrong. Are we shortly to face up to another change of Government policy? When import restrictions were lifted the Government said that competition would bring down the price of Australian commodities. It certainly did that. You could not buy an Australian commodity in any retail store in the great capital cities, particularly Sydney and Melbourne. While Australian workers were unemployed, people in Japan and Hong Kong, who apparently have this Government’s blessing, were receiving countless orders at our expense.
Does the Government expect the Tariff Board to be merely a rubber stamp? Will it dictate to the board to such an extent that an industry which the Government favours will receive protection and others will not? If that is to happen some industries will receive favored treatment while others will go to the wall. These are important matters. Until such time as the Minister makes a frank and open statement to this Parliament of the reason why Sir Leslie Melville resigned from the Tariff Board there can be no confidence in the Government. As the honorable member for Lalor has said, the whole business is very fishy. Apparently the Government has some information which it will not make available to the Parliament.
The Liberal-Country Party Government is made up of a mixture of free-traders and protectionists. Naturally the free-traders are very vocal. I have in mind the honorable member for Wakefield. In days gone by the honorable member for Macarthur (Mr. Jeff Bate) has gone on record as saying that he was a free-trader. The policy enunciated by the honorable member for Wakefield was such that he received a stern rebuke from the Deputy Prime Minister and Minister for Trade. A close survey of the policies of governments of the political ilk of the one now in office indicates that for generations they have endeavoured continually to bring about a substantial reduction in tariffs irrespective of its effect on the economy.
Much as I hope for the best from this Government I am afraid that I shall not get it. Australian manufacturers cannot hope for the protection envisaged in the past by great Labour leaders like Scullin, Curtin and Chifley. Until men of their calibre again occupy the treasury benchthe only people of that kind in the Parliament are now on this side of the chamber - confidence will not be restored to Australian industry.
I close on that note. I hope that the proposals will be successful. I ask the Government to tell us why Sir Leslie Melville resigned. What does the Government intend to do with those critics in its ranks who whilst professing to believe in tariff protection speak in this place as freetraders? I support the measure and hope that it will bring some reward to those people who need it urgently - our manufacturing industries which have suffered for too long as a result of this Government’s policies.
.- I believe that the House owes a great debt of gratitude to the honorable member for Wakefield (Mr. Kelly) for his close study of tariff problems and indeed for his fearlessness in expressing his views. Particularly we owe him a debt for his remarks this afternoon because he highlighted the central problem of tariff-making to-day, that is to say, the proper place and the functions of the Tariff Board in this process. I propose to return shortly to this central matter because I believe that such it is. However, I point out now that this bill deals principally with the giving of power to the Tariff Board to recommend quantitative restrictions and with certain other matters connected with the board’s administration. I shall refrain from dealing with this aspect, not because it is unimportant - quite the contrary - but because it was debated up hill and down dale during the autumn session of the Parliament. This afternoon the honorable member for Wakefield summarized his own views on the problem.
The whole question of tariff-making has become so important at this time because of a conjunction of circumstances. These are, first, the elimination of import restrictions; then the credit squeeze and other policies which brought about a reduction in the markets available to Australian manufacturers; unemployment highlighted the problem; perhaps the inflation which over a period had made the products of Australian industry less competitive with imports, and finally, the matters which were referred to in the last report of the Tariff Board and to which reference has been made by the Minister for Trade (Mr. McEwen) and others, that is, the practice of overseas manufacturers through close-out sales and end-of-run prices to bring about unfair competition with Australian manufacturers. All these things have culminated in the present problem which confronts the Government.
This is the big issue: What is the place of manufacturing industry in regard to such matters as the balance of trade and employment? An attempt has been made in the past to correct the chronic imbalance of trade by means of import restrictions - which have been abandoned - and then by general deflation which, I believe, is never likely again to be imposed with the same severity as in the past. But this chronic imbalance has continued. The two remedies have been attempted, and perhaps they are remedies neither of which the Government would wish to impose again. So we are left with this problem.
What is this chronic imbalance of trade? It has been estimated by reliable people that by 1970 Australia must increase its exports by about £400,000,000 from the present annual figure of £950,000,000. But the terms of trade have turned against us over the years in regard to the export of rural products, and there seems to be no sign of this trend ending, because the institution of the European Common Market may close the doors of our traditional export markets, thus making the position even worse. So the future for commodities like wheat and dairy products is not good. The future for wool is uncertain. Possibly there are great prospects for things like minerals and meat; and of course it may well be that over the next few years we shall be able, through the production of oil in Australia, to cut down the tremendous item in our import bill represented by the purchase of oil overseas. Nevertheless, I do not think that anybody who has studied this problem will deny that one important element in bringing about some balance is to exploit as far as we can the possibilities of import replacement.
Dealing with the problem of the chronic imbalance of trade will be a tremendous job in the years to come, and although anybody may speculate about the future, and we may or may not be fortunate, whether or not the problem will be solved, surely as an insurance premium at least we should consider what can be done about import replacements as one of the various things that can be done. Because perhaps temperamentally I am cautious and of a pessimistic character, I like to see an insurance premium against eventualities, and therefore I think that the question of import replacement is important. This may be merely temperamental on my part but I think any prudent person would have that view.
There is a second problem, that of finding employment for our increasing work force, including the immigrants whom we hope will continue to come to our shores. I do not propose to enlarge on this point. I think that anybody who heard, as I did, or chooses to read, the paper delivered by Dr. Vernon and, indeed, the paper delivered by Mr. Chislett at the summer school of the Australian Institute of Political Science last January will be convinced that employment must come preponderantly from the secondary and tertiary industries and not from primary industry.
I am glad that the honorable member for Wakefield (Mr. Kelly) has come into the chamber. I have already expressed my appreciation and, I think, the appreciation of the House for the way he has highlighted the place and the function of the Tariff Board in this process. Having regard to all those circumstances to which I have just directed attention, how does one reconcile the Government’s responsibility for tariff policy with the Tariff Board’s independence in particular cases? This is the nub of the whole matter, as I see it, and it is tremendously important. I think that over the years - over 40 years, as the honorable member for Lalor (Mr. Pollard) mentioned last night - Cabinet Ministers on both sides of politics have been very grateful to have the Tariff Board as a buffer so that they did not have to make decisions for themselves but had the advice of the board. Nothing must be done that will put a Minister in the position where, in particular, the responsibility falls upon him without advice from an independent body. We have this problem how to reconcile the Government’s responsibility for policy with the independence of the Tariff Board and, in particular cases, with the Tariff Board’s responsibility to protect the Minister. Here I should like to quote from a statement made by the Prime Minister (Mr. Menzies) in this House and reported at page 1599 of “Hansard” of 17th October, 1962. The right honorable gentleman, in a ministerial statement on the Australian economy, said -
The Government . . . has the firmest intention of preserving the full independence of the Tariff Board … It is not a policy-making body - although its recommendations necessarily have a considerable influence on policy. . . . Its principal . . . function is to consider . . applications for protection . . . But tariff policy … is the responsibility of the Government and of the Parliament. . . . Our own policy-
That is, the Government’s policy - is clear; we are for effective protection for efficient Australian industry.
So you get the position as stated in that speech by the Prime Minister that on the one hand the Government is responsible for policy while on the other hand the independence of the Tariff Board must be protected. How is this to be done? You might think that the Tariff Board Actwhich is the charter under which the Tariff
Board operates - would give the board some clue, some general guide lines to follow, but in fact it does not.
– It is negative in that respect.
– Yes, it gives no guidance at all. The relevant section of the act is section 15, which provides as follows: - (1.) The Minister shall refer to the Board for inquiry . . .
British Preferential Tariff or the Intermediate Tariff . . .
The Minister may also refer certain general questions to the Board. My point is simply that the charter of the Tariff Board gives no guidance whatsoever in the direction I have mentioned.
Should there be a specific charter? Should the Parliament write into the act an amendment giving a specific charter? This, I believe, is not possible or desirable for two reasons. First, because it would tend to be too vague. What would be the use of the Parliament saying that the Tariff Board should take into account “ employment “ ? That is too vague. Again, if we tried to be more precise we would provoke all kinds of legalistic arguments before the board. Although I have a great deal of consideration for lawyers, I think that this would be undesirable for the economy and businessmen.
I should like to say in passing before I continue that one important power that is given to the Tariff Board is that of dealing with overcharging by manufacturers who take advantage of the tariff.
– The board has the power only to make the recommendation in that respect.
– Well, it can make a recommendation if the Minister refers the matter. This point was raised by the honorable member for Mackellar (Mr. Wentworth) yesterday, and I hope and believe that the legislation to deal with restrictive trade practices that the AttorneyGeneral (Sir Garfield Barwick) proposes to introduce will look after that matter, because all of us must have some concern for the protection of the consumers when we have a highly protective economy.
Should tariff problems be resolved by compromise within the Tariff Board? Should we say: “ The Tariff Board consists of the representatives of manufacturing industry and rural industry. These great questions should be composed within the board.”? I do not believe that these are purely matters for manufacturing and rural interests. I believe that the public at large is interested. One should not simply say, therefore, that it is up to the board, because it represents these conflicting interests, to come to a compromise. This is because I prefer that things should be done in the light of day and according to clear principles known and expressed. Things should be dealt with in that way rather than settled hugger-mugger by people who have conflicting interests. Again, the board has evolved principles of its own, and has done this with great competence. There are three of them. The first is that before an industry can get protection recommended by the board it must be already in existence.
The Tariff Board will not consider a hypothetical application such as, “If I establish such and such an industry, will you give protection and, if so, how much? “ I think the Government well might reconsider whether this principle of the Tariff Board is a sound one. The fact is that over the years our industrial structure has been built up, in a sense, by accident. It has been built through the accidents - if you care to call them such - of World War I. and World War II. and the long period of import restrictions which we have had since World War II. It was during these periods that industries became established and on each occasion Australia was left with this legacy of the accidental structure of industry.
The Tariff Board was confronted with something which existed and which it could not well destroy. So the whole structure of our industry has not been the result of conscious choosing of industries that are economic and those that are not. It has been the legacy of accident. I think that from now on, barring other accidents of this kind, the Tariff Board might well give consideration to hypothetical cases such as, “If we establish this industry, what pro tection will you give? “, although this should be subject to review based on experience after a few years.
The second principle that the Tariff Board has established - this is a kind of case law - is that an industry must be efficient, and this is something fairly precise. An industry must be technically and managerially efficient, and these factors can be measured by comparison with similar industries in similar countries. Again, the industry must be economic, and this concept is not quite so simple. Supposing the industry required protection of 100 per cent., prima facie we would say it was not economic, and this might be for a variety of reasons. It might be a labour intensive industry and the Tariff Board might take the view that, if it was a question of cheap labour, there were plenty of other countries with plenty of cheap labour that could do the work better than we could. Again, it might be a matter of geographical or physical resources. It would be cheaper to import petroleum, for instance, than to distil it from shale oil, or something of that kind. Then there is the question of the size of the Australian market, and I should like to pause here for a moment.
It might be that the size of the Australian market at this time would not make some particular industry economic, although within two or three years it might become economic. Then, having regard to other considerations such as employment and import replacements, it could be worth while to establish that industry - although it would not be economic at the moment - and desirable to give it protection. But the principles under which the Tariff Board acts would not permit it to give protection to that industry now. Good as these principles may have been in the past, and adequate as they may have been to meet the past situation, I say they are not adequate to-day because they do not really pay regard to a new situation. They do not pay regard, for instance, to the problems of balance of trade and import replacements, or the employment factor or the requirements of our trade position, vis-a-vis our trading partners.
Let us suppose that it is necessary for us as time goes on to trade more with Japan and, in order to sell her our products, to accept some products from her.
The matter of the goods that we can permit the Japanese to send us rather than produce them ourselves comes up for consideration. Here we have various considerations which do not now come within the present ambit of the Tariff Board. The honorable member for Wakefield suggested that the Tariff Board should simply report on whether an industry is efficient and economic and that it is then the Government’s business to say that the industry should be given protection notwithstanding. He used, for example, the requirements of decentralization, to illustrate the point. I could use as examples employment-giving capacity in an industry or something related to our trade with other countries. He argues that it is for the Government to say whether, despite a report from the Tariff Board that an industry is uneconomic, the Government should take the responsibility of saying that the industry nevertheless ought to be established. That throws a great burden on the Government.
The honorable member for Wakefield mentioned pressures. I suggest that there would be great pressures on the Government and the Minister if the Tariff Board concerned itself only with efficiency and the question of whether an industry, though uneconomic, ought, on other grounds, to be established. I suggest that the Tariff Board should have a wider charter and should report, first, on the efficiency and economic viability of an industry and, secondly, it should report its opinion in regard to other matters which could be laid down, such as employmentgiving capacity, the resultant value and extent of import replacements, how the industry would fit in with our trade pattern, and so forth. I am not seeking to elaborate these things, but this is the kind of principle which I think is involved.
The Minister said - this passage has been quoted before - that the Tariff Board must keep within its sights the objectives of government policy. He referred to “the objectives I have outlined in my remarks to-day and as given in Government statements from time to time “. I disagree with the Minister on this. Although the Government must be responsible for policy, I believe that policy must not be expressed in some off-the-cuff speech or a hand-out given to the press from time to time which might - coming at some particular point of time - influence the Tariff Board in relation to a particular application pending or shortly to come before it. I believe such directives should be much more deliberate than that. I think the economic inquiry that the Prime Minister (Mr. Menzies) promised should begin with this tariff question in order to give some guide lines to the Tariff Board. The Prime Minister, in his statement on 17th October, 1962, on the proposed economic inquiry, gave the terms of reference for that inquiry, and is quoted at page 1598 of “Hansard” as saying that they included -
This is the very matter to which I refer -
The objectives were a high rate of economic and population growth, with full employment; a rising standard of living, external viability and the stability of costs and prices. I suggest that the Government, being responsible for policy, should hasten this inquiry and ensure that this part of it is dealt with first in order to give a guide line on the Government’s policy to the Tariff Board in hearing applications before it. Thereafter, when the Government’s policy is indicated to the board, that should be done in a deliberate fashion and not in a speech made this week or next, or in some hand-out to the press. It should be done in deliberate fashion, and this could be the kind of method whereby the Government laid down its policy.
The honorable member for Wakefield has emphasized that the Tariff Board must be independent in regard to particular cases. I find myself in agreement with him there. I consider that the Tariff Board should have the degree of independence it seeks in the matter of staff and that pressures should not be applied to it. Indeed, the board must follow government policy as laid down in the deliberate fashion that I have suggested, but apart from that it should have the utmost independence, because the reputation it has built up over 40 years is precious and should not be destroyed by the belief that because of a speech made to-day, to-morrow or next week, the board has to bend to the will of the Government. These things should be matters for great deliberation.
I think I have covered most of the questions about which I rose to speak. I am not versed in these matters as the honorable member for Wakefield and other honorable members are, but I have put these thoughts before the House and, I hope, before the Government - if indeed it reads them - in the hope that they may be found not less worthy than some other thoughts that have been put before the House in the course of this debate.
.- This bill is the seventh bill amending the Tariff Board Act during the term of office of the Government. Two were introduced in this year, 1962, and one in 1958, one in 1953, one in 1952 and one in 1950. I do not know whether this makes the Tariff Board Act the most amended of all the Commonwealth acts during the Government’s term of office, but it must come close to doing so. This record of amendments to this very important legislation shows that the Government throughout its term of office has been taking a very short-term view of what is necessary in the making of Australian tariffs and in other ways to protect Australian industry. The Government’s policy has been one of expediency - one essentially of taking shortterm views - and it looks to me as though this amendment is not much better than and not much different from those that preceded it.
What does this bill do? First, in clause 7, it gives the Tariff Board authority to recommend quantitative restrictions. In clauses 4, 5 and 6, some administrative changes are made and no doubt these changes will make the Tariff Board more flexible and more effective in the job it is trying to do. But it is in relation to the quantitative restrictions in clause 7 that we really find the essence of this amending bill. The Minister for Trade (Mr. McEwen) in his secondreading speech said -
Using that means-
That is, quantitative restrictions - of protecting a local industry is not something remarkably new or novel. Some of the most industrialized countries find it necessary to restrict imports in certain circumstances; this device has been continuously practised, for example, by the United States of America, by the major European Common Market countries - France, West Germany and Italy. Japan and the Communist countries continuously employ protective devices other than tariff.
He went on to say that some countries use a variety of instruments to protect their industries - the tariff, tariff quotas, multiple exchange rate, quantitative restrictions, prior deposits, import monopolies and so on. The adoption of this view by the Government has been long delayed. We had the experience throughout the greater part of the 1950’s of the Government using quantitative restrictions that were not recommended or suggested by the Tariff Board or any special advisory authority but were imposed as a result of arbitrary decisions inside the Department of Trade. During the time this was happening, every one could see that the system was ineffective, that inadequate resources and machinery had been provided for the determination and application of the quotas on which the quantitative restrictions were based. For years, it seemed clear that the Government really did not think quantitative restrictions were essential and that at any minute it would discard the system of import licensing, which was the basis of quantitative restrictions. The Government did not at any time seriously regard this method as an essential instrument of Government policy.
Opposition members are pleased to find the Government at this late stage recognizing that most of the great countries of the world use quantitative restrictions and other most intricate systems to control their international trade. At the beginning of the year, when we found that the power to impose quantitative restrictions was being given to special advisory authorities, we were struck by the fact that this was temporary, as though the Government again was unwilling to adopt quantitative restrictions and was doing so only in the knowledge that it would not be long before it would be able to discontinue them. But what now? We find an issue which apparently is at the root of the disagreement between the Government and the chairman of the Tariff
Board, Sir Leslie Melville. The Minister said -
However, I would expect that the need to use quantitative restrictions would arise on very few occasions.
Even now, the Minister is not prepared to face up to the fact that quantitative restrictions are essential in Australia’s trading relations with the rest of the world.
At this late stage, after twelve years of experience of the enormous pressures that are upon Australian industry and the Australian economy, we have a tardy recognition of the importance of quantitative restrictions; but at the same time we read that the Minister believes that only on very few occasions would the need to use this method arise. If this is at the root of the dispute between the Government and the chairman of the Tariff Board, one is led to think that perhaps there is no more in this dispute, which has led to the resignation of the chairman of the board, than there was in the dispute between the Government and its former Minister for Air, the honorable member for Wentworth (Mr. Bury). Perhaps the real difference between the Government and the chairman of the board is not any greater than the difference there was between the Government and the honorable member for Wentworth. Perhaps there is no greater justification for the resignation of Sir Leslie Melville than there was for the resignation of the honorable member for Wentworth from the position of Minister for Air. We know now that after the resignation of the honorable member for Wentworth the Government substantially came round to agree with what he said and the stand he took. The Government eventually came round to accept Great Britain’s entry into the European Common Market. I think that underlying this dispute with Sir Leslie Melville, there is no more substance than there was in the dispute with the honorable member for Wentworth. However, I will not pursue this point for the time being.
The Minister in his speech related the work of the Tariff Board to the whole national economy. He said -
At the very roots of our national objectives is steady population increase. Hand in hand with that must go solid economic growth at a rate sufficient to provide work for the growing population. I have said before, and I repeat, that we must look to manufacturing industry as a principal source of increased employment.
There can be no difference of opinion anywhere in the House, or I should think anywhere in the country, if people are informed on this proposition. It is fundamental to the future progress and development of Australia’s economy. But then the Minister went on to say -
During the last two and a half years the tariff has stood alone as protective medium, almost for the first time in over twenty years without the bolstering of the incidental effect of import licensing.
This is an important point. In the last two and a half years we have had the tariff almost alone and presumably that is what Sir Leslie Melville stands for. One wonders just was behind the decision to abolish import licensing a few years ago, because this decision was behind the great downward turn of the Australian economy. Of course, if that is the issue between the chairman of the Tariff Board and the Government, the Government is completely right and the chairman is wrong. The Minister continued -
Generally speaking it has proved to be effective . . .
This method of relying on the tariff for two and a half years according to the Minister, has generally proved to be effective. Let us look at the proposition. He is quite satisfied with what has happened in the Australian economy over the last two and a half years. But what has happened? I do not expect the Minister for Trade to be very worried about the level of unemployment. It does not affect him very much. I should imagine that very few people in his electorate are unemployed. He does not happen to have an electorate like my own. But let us put aside the question of unemployment for a little while. The Government almost lost the 1961 election because of the economic conditions which were associated with nothing but a tariff policy. I should have thought that would have made the Minister realize that his policy has not proved altogether effective.
Let us look at the economy as a whole, turning our eyes away from unemployment for the moment and looking at other factors. Some independent judgments on our economy have been expressed. The honorable member for Melbourne Ports (Mr. Crean) and I have previously referred to an article in the “ Economic Record “ of
March, 1962, written by Professor H. F. Lydall of the University of Western Australia. He made an analysis of the Australian economy in the last two and a half years, and it is on this kind of analysis that we can test the Minister’s proposition that generally speaking the tariff method has proved to be effective. Professor Lydall begins by telling us that Australia has just passed through its first independent slump. For the first time in history we have had a slump caused by Australians. Who were those Australians? They were the gentlemen who sit on the other side of the chamber, known commonly as the Menzies Government. They were the gentlemen who caused this first independent slump in Australia, and if those who are with them in the tendering of advice, and those who give them their support in this House, are not very much concerned about unemployment, as I think many of them are not, then I suggest they should see what Professor Lydall says are the other aspects of the Australian economy that have been very much affected. As appears at page 5 of the “ Economic Record “ he considers a number of indexes, short-term economic indicators. He shows that industrial production fell from 154 in the second quarter of 1960 to 138 in the third quarter of 1961, that retail sales fell from 958 in the second quarter of I960 to 910 in the third quarter of 1961, that the number of new houses and flats commenced fell from 24,900 in the second quarter of 1960 to 19,400 in the fourth quarter of 1961. Summing it up, as appears at page 7, Professor Lydall says -
Broadly, it appears that in the slump of 1961 Australian gross national product fell by about 5 per cent, industrial production by 11 per cent, retail sales by 5 per cent, new vehicle registrations by 30 per cent, houses and flats commenced by 20 per cent, and gross private fixed investment in plant and equipment by 15 per cent.
Let us translate those proportions into money. The loss of gross national product in this Commonwealth of Australia in 1961, as a result of the tariff policy alone of this Government, was no less than £360,000,000. That is what this Government and its advisers in the Tariff Board, in the Department of Trade and in the Treasury, did to this country in 1961. If Government members and their supporters are not concerned about the 133,000 persons who were completely out of work, let them think in terms of the loss of £360,000,000. Even the honorable member for Mcpherson (Mr. Barnes), who is trying to interject, has lost something as a result of the Government’s policies. Perhaps there are not quite so many Mercedes Benzes in use, perhaps there has been a little less money available for the training of racehorses, as well as a good deal less food for the ordinary people and fewer decent houses for them to live in. Every one in Australia, including the honorable member for Mcpherson, has lost as a result of the Government’s policies. These are the short-term indicators that Professor Lydall has used.
– Come up to date!
– You are evidently quite satisfied. The Government strikes a severe blow at the economy, knocking it to its knees. Then, eighteen months later, the economy gets up again, looking pretty shaky and depressed, and having lost a great deal of weight, and Government supporters tell us to forget about what has happened, to forget about the eighteen months in which we lost £360,000,000 as a result of tariff policy alone.
– They have saved primary industry.
– Primary industry has lost most of all, as you would agree if you would look at the situation clearly. Let me now consider the position to-day, as the honorable member for Mallee (Mr. Turnbull) suggested I should. I refer again to Professor Lydall’s article.
– Oh! Haven’t you a thought of your own?
– I know you do not take any notice of any one who knows something about his subject. You could not bring yourself to do that. It would be asking far too much of you. You like to take notice of people who have never given any attention at all to the subject under discussion. One needs only to listen to you to realize how much you have been influenced by such people. Professor Lydall has given answers to several pertinent questions. He says, as appears at page 16 -
What likelihood is there that the measures already taken will be sufficient to produce “full employment” by the end of 1962?
That is the question, and Professor Lydall proceeds to give the answer -
We have already seen that there is scope for an increase of £700 million in gross national product.
There is scope to produce £700,000,000 worth more of goods and services in Australia, of houses and flats, and of schools. We would not have to cut expenditure on education if the right economic policy were applied by the Government.
Finally, let us consider the question of unemployment. Having got the numbers of unemployed down from 133,000 to 83,000 in ten or twelve months - and expecting that it will immediately start rising again - you consider that you have made a satisfactory performance. But do not forget that, underlying all these considerations of unemployment there is a fall in the aggregate number of people in employment to be taken into consideration. The monthly bulletin of statistics published by the Commonwealth Statistician gives a pretty clear indication of this. In every year that this Government was in office, until 1960, despite all the difficulties that the economy faced and all the problems of inflation, it managed to keep the number of people in work rising by from 50,000 to 100,000, producing more goods and services throughout the economy. But last year the number of people in employment fell from 3,047,000 to 3,020,000. If the rate of increase in the labour force over the eight or nine years period - about 3.6 per cent, annually - had been maintained, as it should have been with a sensible economic policy, the number of people in the work force would now be 3,271,000. The actual number is 3,088,000. We are employing 183,000 fewer people than we could have been if a sensible economic policy had been maintained. These 183,000 people could have been producing far more goods and providing far more services than are lost in strikes or other industrial friction, or in leisure time taken by management or workers. But the Government does not consider the matter from this angle.
The situation that has developed, in which we have lost £600,000,000 or £700,000,000 in gross national product in almost two years, is spoken of by the Minister for Trade as a proof of the effec tiveness of the Government’s trade policy. On the contrary, of course, it is proof that the trade policy of the Government, and, indeed, all of the Government’s policies, have been completely ineffective.
The Minister said in his speech that when dealing with the task of protecting industry we must always consider the question whether in any circumstances a tariff could be set sufficiently high to be effective. That is, can a tariff be effective on its own? It appears to me, as I have suggested before, that this is the root of the dispute between the Government and the chairman of the Tariff Board. Speaking for myself, if this is so, then I am on the side of the Minister for Trade and I am not on the side of the chairman of the Tariff Board.
I was not surprised to find that the chairman tendered his resignation. What surprised me was that Professor Melville was appointed to the position in the first place. He has been a neo-classical laisserfaire economist for the greatest part of his life, relying on sound money policies and never wanting to move beyond tariff protection. He has never wanted to moye into the field of direct controls. Nothing like that for Professor Melville; that would be far too socialistic for him. As I say, I was surprised that he was appointed to the Tariff Board in the first place, and I was not surprised at his resignation. I think he was appointed during the period of the Prime Minister’s honeymoon with the academics - and I think many academics in recent times have had second thoughts about that development.
However, putting that aside for the moment, it seems to me that the Minister for Trade is having a very difficult time in trying to explain the resignation of Sir Leslie Melville. I cannot see any difficulty about it. If Sir Leslie Melville disagrees with what the Government wants the Tariff Board to do, is it not a fair thing for him to go somewhere else? If there has been nothing wrong in what the Minister for Trade has done in connexion with this resignation, surely there must be something wrong in what he has done in some other direction during the last fortnight, because if ever I saw a guilty man I have seen one in the last couple of days in the form of the Minister for Trade. If he has not done something wrong in relation to Sir
Leslie Melville, what has he done wrong, because he certainly has behaved in this House in the last couple of days as though he has been guilty of some misdemeanour? If it is not about Sir Leslie Melville, then I think an investigation should be set afoot to discover what it is about.
The Minister for Trade has told us that it is necessary, for several reasons, to use something other than tariff protection, and with that I agree. He suggests, first of all, that there are circumstances in which tariff protection can be undermined to an extent which can make it an inadequate medium for protection. We do not need to go into that in detail; that is a well-demonstrated fact of economic history. Secondly, he says that some modem industrial developments have created industries which must be assured of a volume of output to maintain productive efficiency and a reasonable cost. These are his two reasons. But the right honorable gentleman says nothing about two other very important reasons for using some measures other than tariff protection. The first of these other important reasons is the need to preserve our overseas reserves, and the second is the need to use those reserves to the best purpose - to make sure that they are not squandered on unessential imports. But let us look at the first reason, namely, the necessity to preserve our overseas preserves.
It was because we used only tariffs and were not prepared to use import controls from the beginning of 1960 that our overseas reserves dropped so significantly in that year. This led the Government to use neo-classical methods at the end of the year to deal with the situation. It curtailed Australian output and demand in this country. Rather than stop us buying from overseas by the definite method of using import controls, it stopped us from buying by reducing the whole capacity of the economy everywhere to buy, including the capacity to buy overseas. The result was, as I have said, an increase in unemployment and, according to Professor Lydall, a loss of gross national product of £360,000,000 in the one year.
The question of using controls for this purpose is one that the Minister continues to ignore. But he cannot continue to ignore it because reference to our balance-of- payments figures shows that in the September quarter of this year we had a deficit off! £96,000,000. That is likely to increase* ! This deficit, as I think the honorable member for Mackellar (Mr. Wentworth) pointed 1 out, is almost as big as - I think he said bigger than - any other deficit in any other quarter during the course of the difficult circumstances which led to the credit squeeze. The honorable member for Mackellar wants to warn the Government ; of the difficulties that face it. I remember listening to him in 1960 when he was concerned about the Government’s economic policies. He was very concerned about what was going to happen. There was one stage, I think, when he almost thought his own seat was in danger. He did not ever give up warning the Government, sometimes in public but always in private, that something had to be done, otherwise seats would be lost in the 1961 election. The honorable member for Mackellar proved right; the Government lost sixteen seats. So he is prepared to say to-day that this matter is vital to the holding of seats by Government supporters and he thinks this amending bill to give the Tariff Board power to impose quantitative restrictions may be enough for that purpose. But, Mr. Speaker, I doubt whether it is.
I think this matter has to be taken further sooner or later, and if it is not taken further by this Government it will eventually be taken further by its successor. The position of the Tariff Board is a most interesting and important one. The Government is relying on the Tariff Board now as its main instrument of trade policy. The board has all the powers to recommend tariffs and to recommend quantitative restrictions, and so its significance and role come into issue. The Tariff Board is, as I have said, in a very interesting position. It is supposed to be independent, but there is not one word in the act anywhere which suggests or implies that it is in any significant way independent, nor is there one word in the act anywhere which suggests that the Tariff Board should, as the Minister for Trade suggests it should, keep within its sights the objectives of government policy. Here I agree with one point made by the honorable member for Bradfield (Mr. Turner): If the Tariff Board is expected to keep within its sights government policy, then the Government has been extraordinarily inefficient in not telling the Tariff Board what the Government’s policy is.
I think the Tariff Board is a government department which has to be independent in the sense that it is required to go out and collect facts and make an accurate report of those facts, but its relation to the Government when it makes a recommendation is interesting. This is ill-defined at the present time. The policy relation between the Government and the board is vague and indefinite, and, when the Tariff Board defines a recommendation, in a sense it is defining policy. The question arises whether this advice is what the Government wants, or whether it is inconsistent with what the Government wants. Of course, if the Tariff Board continues to make recommendations inconsistent with what the Government wants, then the board has to be changed, and any government in office will change the Tariff Board as it would change any other department of state. That, I think, is the underlying factual position.
Of course the Tariff Board should be completely independent in its scope to go out and collect the facts and to analyse and sum up those facts; but it is not independent in the sense that it has any greater authority, standing, status or repute than the Government. Far from it. In any democracy it is the government and the government’s policy that have to prevail. I think the position has not gone nearly far enough. The Tariff Board is probably a very satisfactory department for doing the job that has to be done in this field, but, in addition simply to making inquiries about the state of industry and making recommendations to the Government, the time has to come when the board will have to estimate demand for industry and estimate output. It will have to be concerned with prices and profits, and not merely say in its reports that there are restrictive practices and monopoly pricing and policies. It will have to be able to deal much more effectively with these things. It will have to say what quantity of imports should be admitted into Australia in a given time. It will have to say what means must be adopted to determine or limit the quantity of imports at a particular time. It will also have to decide what should be done on the production side, because it will not be any good going on indefinitely giving an industry protection if that industry is taking advantage of the opportunity to become more and more monopolistic and to charge any kind of price or make any kind of profit that it likes. The Tariff Board must become a much stronger instrument in this respect than it has ever been in the past. If by increasing the independence of the board the Minister means increasing its strength in this respect, then I think that undoubtedly what is needed is increased independence and increased strength on the part of this department of state that we call the Tariff Board.
Some of the trappings and fictions about the independence and significance of the Tariff Board are about as outdated as the days of Queen Victoria when this kind of thing had real meaning - if it ever did have any meaning. The board must be an efficient instrument for the determination of what is necessary for the development of Australian industry. I believe that the bill we are considering goes a little towards that direction, but it does not go nearly far enough. This is another example of the short-term expedient action that is taken by this Government, which is essentially not a government of public regulation, direction and leadership of the economy, but one which leaves everything to the other fellow. This is an example of its shortterm expedient methods of dealing with important public and national questions - methods which have not succeeded in the past and which I do not expect will succeed much more in this case.
.- The honorable member for Yarra (Mr. Cairns) spoke of the enormous pressures which beset Australian industries. He recommended that these pressures should be alleviated by adopting high protection for Australian industry. I do not disagree for a moment with the opinion that Australian industry is facing considerable pressure, but when one contemplates the way in which the terms of trade have moved against Australia in recent years, one realizes that we have had considerable difficulties to contend with in this country. The terms of trade have moved against Australia from an index figure of 100 in 1953 to 70 during this year. Our achievement during the past year, as a result of the measures to which the honorable member referred, has been to place Australian industry in a better competitive position in relation to overseas industries, as remarked upon by the Tariff Board in its last report and as remarked upon by the Reserve Bank of Australia in its report this year. Through these measures, we have achieved some degree of price stability in Australia and our competitive position has been improved in relation to overseas countries. I support the measure before the House because it appears to me to be a logical extension of the present machinery to deal with tariffs.
During the course of this debate, which has ranged very widely indeed, the terms “ free trade “ and “ protection “ have been bandied about quite frequently. This party in the corner of the House and our leader have been accused of being free traders. Insofar as those words have any meaning at all in the existing complex trading situation, I believe that they should be examined. The accusation that we, in this corner, are free traders is very far from the truth, whatever interpretation be given to the term “ free trader “. We appreciate more than most people, perhaps, the value of the tariff to the Australian economy. Without the tariff there would be a tremendous dislocation of industries throughout the length and breadth of Australia. I am referring now, not to secondary industries, but to primary industries.
The abolition of all tariffs would cause havoc in large areas in every State of the Commonwealth. The dairy industry is the staple industry of the coastal regions in New South Wales and in other States it is a major industry. It depends upon tariff protection. So does the sugar industry, which provides employment and wealth and decentralized industry in the tropical north. It depends ultimately on tariff protection. The oil seed industry, the cotton, tobacco, dried fruits and a host of other rural industries depend upon the protection of the Australian tariff, either directly or indirectly applied. So, we from the country, representing the producers of primary products and those who are directly dependent on the producers of primary products, know full well the value of the tariff to the Australian country. We are very far from being free traders. On the other hand, we do not subscribe to high and unlimited protection as, evidently, the Labour Party does.
Many speakers from the Opposition in this debate and in previous debates have advocated high, unqualified, unlimited protection for Australian industry. We in the country know that protection for Australian industry must be adequate, but it must never be more than adequate. A full price must be paid for the protection that is granted. That price is paid by the export industries. If we were to raise our levels of protection we would find it harder than ever to sell our great commodities, especially our wool, in overseas markets. We were running into a very difficult position in 1960 with costs of production mounting rapidly and with prices stable or falling. Fortunately, the Government took action at that time and we were able to stabilize costs of production. Any further advance in protection must be measured against that degree of stability which we have been able to achieve over the last year or two. We believe in protection, certainly. We believe in adequate protection, but, above all, we believe in balanced protection. Those honorable members of the Opposition who have advocated higher protection than we have at the present time have advocated something that would be suicidal for Australia.
First, if we were to have unchecked, unqualified protection for Australian industry we would have to ignore completely our trading position with countries such as Japan. Japan is our largest customer. Yet we buy from Japan only 5.6 per cent, of the quantity of goods that we import from every source. Japan, naturally, hopes to obtain a larger share of the Australian market. A higher wall of protection would deny Japan that opportunity and we would run a grave risk of losing the Japanese trade entirely as we lost it in years gone by when the Japanese turned away from Australia and bought from other sources, as did the French traders. We cannot afford to lose our best customers by denying them an opportunity to trade fairly in the Australian market.
Secondly, if we were to give more tariff protection to Australian industry we would be running counter to the world trend as evidenced by action taken by great industrial nations in recent times. This trend has been towards a relaxation of tariffs and a greater degree of competition between trading countries, especially in manufactured goods. If Australia were to hide behind a high wall of protection at this time it would be removing itself from the society of nations. It would be absurd for us to move against the current - against the policies being adopted by our friends in the Western world.
The third reason why the Opposition policy of higher protection is wrong in the context of world trade at the present time is that it is unqualified and unselective. The Opposition advocates simple higher protection to all comers with no justification whatsoever.
– That statement is wrong.
– That statement has been made by speakers from the Opposition benches. I believe that it stands condemned because it ignores the facts. Certain industries in Australia have a strategic value. In certain industries, we have an advantage over producers in other countries. Certain of our industries also supply peculiarly local needs. All those industries merit protection. They deserve to be put on one side and given a higher priority than is given to industries which merely supply import replacements, very often of a quality inferior to that of the imported article, and at a higher price. I do not envy the Tariff Board the task of making a selection between those industries which warrant higher protection and those industries which do not. But the task must be shouldered by some one in Australia if we are to have a sensible, coherent and balanced system of tariff protection. Adoption of the unlimited policy advocated by Opposition speakers would be not only extremely dangerous but suicidal, because it would raise the general level of costs in Australia and make it impossible for us to sell our goods on overseas markets.
– The policy that we advocate is not an unlimited one. That statement is quite wrong.
– I have been chided because I have criticized the Opposition and for giving a false impression of its policy. I should dearly like to hear a leading spokesman of the Opposition put its policy in clearer terms than those in which I have heard it put up to the present time. Unfortunately, during this debate, which has now lasted for many hours, and which relates to the most important subject with which Australia is concerned at present - the Australian tariff - Opposition speakers have devoted their remarks to piffling matters such as the resignation of the chairman of the Tariff Board and to abstract discussions about the general state of the economy, with references to what Professor So-and-so said and what somebody else did not say. Opposition speakers think so little of this important matter that, unfortunately, they are not prepared to state their own attitude whout equivocation. I trust that the honorable member on the Opposition side of the House who follows me in this debate will be able to make good this deficiency and let us know once and for all where the Opposition stands on the question of the tariff.
Am I correct in supposing that the Opposition stands for a completely unqualified, unlimited higher measure of protection for Australian industry, or does it want a selective tariff such as I have described? I hope that the Opposition has a clear mind on this subject, because the tariff is of vital consequence to us in Australia, especially at this time when the countries of Europe are banding together, when the costs of industrial goods are expected to fall, when we face intense competition in the markets which we are now trying to enter and when we face intense competition by imported goods on our own Australian market. If Opposition members have not made up their minds about the tariff, it is about time they did. We have now been thinking about the European Common Market for a couple of years. Let us hear the Opposition’s ideas on this subject. What effect does the Opposition think the Common Market will have on Australian trade, both internally and overseas? Surely this is a matter to which the Opposition caucus has given some attention at its meetings over the last couple of years. If it has, why cannot Opposition speakers let us have, in this debate, a clear-cut statement of their attitude? In the absence of such a statement,
I can only assume that the Opposition has no clear-cut policy on this matter.
I must assume, from the stray statements that have been made, that my assumption is correct and that the Opposition, if it has a policy, adopts a free-for-all policy. I can only assume that the Opposition’s attitude is: Any one can have protection if he wants it, whether he is inefficient, completely wasteful and extravagant, or whether or not he boosts Australian costs to unreasonably high levels. I should like to be fair on this issue. I do not want to spread this sort of news about the Opposition in the country in which the people are concerned about the tariff. I should like to be able to state the Australian Labour Party’s attitude as laid down by an authoritative spokesman for the party. But, unfortunately, I am not able to do so. I can only rely on what has been said in this debate by Opposition speakers. I can only say: “ So-and-so wanted a higher tariff. I do not know whether or not he was speaking for the Labour Party. Other Labour speakers have denied that he was. Another Opposition speaker also advocated a higher tariff. I do not know whether he w3s speaking for the Labour Party, either, because Opposition members speak with so many voices.”
I leave the subject of the Opposition’s attitude there, Mr. Speaker. I repeat that I hope that the Opposition speaker who follows me in this debate will satisfactorily answer the questions that I have asked. If not, perhaps there will be an opportunity, when we resume the sitting after the next week’s recess, for an Opposition member to state the Opposition’s views on the question whether we should have a coherent, sensible and balanced tariff system such as we have at present - a system which this Government is determined shall continue - or whether we should adopt some other widespread system which protects every industry, whether economic or uneconomic, or whether efficient or inefficient. I look forward to hearing the Opposition’s answers to the questions that I have asked.
Sitting suspended from 5.57 to 8 p.m.
.- The measure before the House proposes certain amendments to the powers of the Tariff
Board. When Introducing this measure the Minister for Trade (Mr. McEwen) stated -
This bill will extend to the Tariff Board the authority to recommend quantitative restrictions.
It will be recalled that in April of this year the Tariff Board structure was altered by the setting up of a Special Advisory Authority who, upon representations being made by interested parties, can recommend, as a matter of urgency, quantitative restrictions on the importation into this country of certain goods. On that occasion we of the Opposition criticized the measure not because we opposed the principle of quantitative restrictions but because we believed that the move was a subterfuge. We stated then that we believed that the measure would restore import controls on a very limited but not a very logical basis.
We believe that in the bill now before us, what was regarded in the previous legislation as being a temporary measure is being written permanently into the Tariff Board Act. In addition to the methods of giving protection which were at the board’s disposal previously, it will now be able in certain circumstances to recommend what are called quantitative restrictions. It is easy enough to hark back to February, 1960, when the system of import licensing and quantitative restrictions which had operated for nearly ten years was suddenly abandoned. That system was not designed to protect Australian industry although it did so indirectly. It was aimed rather at preserving Australia’s balance of payments. My colleague, the honorable member for Yarra (Mr. Cairns), this afternoon directed attention to that fact. He said that there was an obligation on a government to protect the country’s balance of payments. It should use its overseas reserves in a sensible manner, and not squander them.
Despite what Country Party members suggest about the Australian economy, broadly the majority of Australians depend for their existence upon their employment by others on farms - a relatively less available form of employment now than it was years ago - in factories, in tertiary or service industries, or by government. The majority of people are not directly concerned in primary production as such. In fact, one of the measures of the extent of industrial growth is how few people proportionately depend directly on agriculture or primary production and how many are engaged in other forms of employment. Even the Minister for Trade, when speaking on this measure, stated -
I have said before, and I repeat, that we must look to manufacturing industry as a principal source of increased employment.
I agree with the statement made this afternoon that that virtually is an unchallenged assumption except that to-day there are some who say future absorption of labour must take place. As the Minister for Labour and National Service (Mr. McMahon) well knows, we must find every year at least 100,000 or 120,000 new jobs. How many persons seeking employment are absorbed directly in manufacturing industry, how many are absorbed in tertiary and service industries, how many are absorbed in government employment, and how few are absorbed in agricultural employment is something we in this country do not know as much about as we should.
The first term of reference of the economic committee of inquiry which was announced by the Prime Minister (Mr. Menzies) on 17th October relates to the trends in population as a whole and in the work-force component. Apparently the Prime Minister realizes that no one in Australia really knows where the people who will come on to the labour force in the next five or ten years will find employment. Because of that circumstance at least there is some division of opinion between the Government side of the House and the Opposition side of the House as to the role of tariffs, on the one hand, and the role of what were described by the honorable member for Wakefield (Mr. Kelly) as quantitative restrictions, on the other hand.
This afternoon the honorable member for Gwydir (Mr. Ian Allan) wanted to know in an unequivocal sense the Labour Party’s attitude to protection. Of course, he put up his own Aunt Sally which he proceeded cheerfully and rather recklessly to knock down. He stated that the Labour Party believes in unqualified and unlimited tariff protection. If I had been rude and had interjected I might have asked, “ What do you mean by unqualified and unlimited “? Whether the policy of protection which has operated in this country since 1949 operates adversely to the farming section of the economy as compared with the manufacturing section is a matter of argument. At least the tariff structure has been entirely in the hands of the Government which the honorable member supports. Whenever certain aspects of the Government’s policy are under discussion it is a popular exercise in this Parliament by members of the Country Party either to dissociate themselves from it or to suggest that the position which applies is due to the actions of the Labour Party. No member of the Labour Party has at any time said that any industry should get in all circumstances the protection that it itself desires.
We believe that industry as a whole ought to be protected in the sense in which we use the term “ protected “. After all, except when one is dealing with people like the honorable member for Gwydir (Mr. Ian Allan), such terms do have a normal and logical meaning. When you talk about protection, as it operates in Australia, you know that it means duties either in terms of specific amounts on particular products or in terms of particular percentages. Nobody contends, for instance, that the tariff on such and such an item should be levied so as to bring the price of that item to twice the price charged in England or some other country of manufacture, or that the tariff should be 100 or 1,000 per cent, of the landed cost; yet, this afternoon, the honorable gentleman from Gwydir said that the policy of the Labour Party is unqualified and unlimited tariff protection. Either he is very dull - and honorable members who listened to his speech may make their own decision on that - or he is endeavouring to be deliberately misleading about the matter. He says that he wants to go back and talk to his electors. I do not know how he talks to, or communicates with, his electors but, at least, if he wants to go back and talk to them he ought to tell them the facts of life during the last ten or twelve years. And the facts of life in that time are that since late 1949 we have had in office a coalition government of the Liberal and Australian Country Parties and that in the life of that Government prices in Australia have doubled. I would suggest that that doubling of prices is more significant as a deterrent to the sales of primary products than the levying of a duty at 5 per cent., 6 per cent, or 7 per cent.
The honorable member for Gwydir challenged us this afternoon to say what was the Labour Party’s attitude to the tariff. The Labour Party’s attitude to the tariff is certainly not what the honorable gentleman said it was - unqualified and unlimited tariff protection. We believe in reasonable tariff protection to encourage economic and efficient industries in Australia - basic industry, if you like. I believe, however, that in 1962 the tariff machinery in Australia is operating on somewhat the same concept as was considered appropriate in 1922 or, even later, in 1942. I suggest that this concept is no longer adequate to the circumstances of the Australian economy.
During this debate there has been a lot of talk about the independence of the Tariff Board. I am not quite sure what is meant by the phrase “ independence of the Tariff Board”. I think that virtually what is meant is not the independence of the Tariff Board but the integrity of the Tariff Board, and that is the proper term to use. That covers the atmosphere of the arena in which the Tariff Board is supposed to operate.
I shall quote the description of the role of the Tariff Board which was contained in the ministerial statement on the Australian economy made by the Prime Minister (Mr. Menzies) in this House on 17th October last. Incidentally, nearly a month ago it was, apparently, a matter of urgency to appoint a committee to examine the economy of the nation, yet, so far, the names of the people to comprise that committee have not been announced. However, the right honorable gentleman had this to say about the Tariff Board -
The Tariff Board is, to repeat, an advisory body. It is not a policy-making body - although its recommendations necessarily have a considerable influence on policy - and it is not an executive body. Its principal and best-known function is to consider, on reference from the Government, applications for protection by way of tariffs or bounties or, alternatively, proposals for the reduction of such protection. It also has power on its own initiative to review existing duties, to conduct inquiries on certain matters and to report to Parliament. But tariff policy as such is the responsibility of the Government and the Parliament. Only Parliament can enact tariffs; only the Government proposes tariff legislation to Parliament. The tariff - and other forms of protection such as bounties and subsidies- are means to provide a degree of shelter for local industries against the competition of imports from other countries and so to sustain and promote the growth of these local industries.
I would say that that is a statement by the Government as to what the Tariff Board is supposed to do, and I doubt whether there would be much divergence on this side of the House from the proposition that that is what the role of the Tariff Board has been traditionally. But I think that the point on which issue should be joined is: Is that machinery any longer adequate in the circumstances of 1962 to bring about, in the present condition of the Australian economy, the other things that the Government claims to believe in?
The Government claims to believe in full employment. It claims to believe in economic growth. It claims to believe in what it calls a “ viable economy “ in respect of both internal activity and external activity. We think that the point that has been lost sight of in all this argument is that the weak link in the Australian system is the fact that what we are able to import is dependent upon what we export. What we export consists mainly of primary products, the prices for which are not set in Australia but are set by world forces. Is it any longer possible to allow, in the name of free trade or laisser-faire or any other term, into this country anything at all, irrespective of its importance, that any importer thinks he can sell?
I suggest that that is the broad difference between this side of the House and the other side. We think in terms of the basic development of Australia. We believe that a major part of Australia’s imports should be pre-empted for what might be called essential capital goods. We are limited in that field, in the first place, by the amount that we earn overseas and, secondly, by the fact that a large part of other imports are tied up with, for instance, the motor car industry. The Government, of course, would not want to resurrect that as an example of what has happened in Australia over recent years. Allied to the motor car industry are such matters as the import of petrol and the great question - not very seriously examined by this Government - of invisible imports. The honorable member for Mackellar (Mr. Wentworth) last night pointed to the fact that over the last five years, or even ten years perhaps, but at least over the last five years, there has been an annual deficiency in what, we have sold as against what we have bought, and that deficiency has amounted on an average to £100,000,000 in each of the five years. He pointed out that that deficiency has been bridged only by the flow into this country of capital from overseas. Again we suggest that that sort of thing cannot go on forever. One of the reasons that the flow of imports has taken place is that commodities are being imported which we either do not need or which, if we sensibly ordered our economy, we could produce for ourselves. That is the kind of thing for which the present structure of the Tariff Board does not cater. It will not be within the functions of the Tariff Board unless they are specifically enlarged. In my view the Tariff Board should not have to bear those pressures. Although I do not agree with the views expressed by the honorable member for Wakefield (Mr. Kelly), I admire the courage he displays in presenting them. His remarks exemplify the fact that industry in Australia has been adversely affected by the flood of imports and has relied on temporary duties to save itself. The straw which it has clutched is the straw at which a drowning man might clutch in desperation, but the straw which the honorable member for Wakefield sees is the straw which breaks the camel’s back. He is concerned about the integrity of the Tariff Board. These are two entirely different questions.
I do not think the independence of the Tariff Board enters into the matter. Unless we give a very special meaning to the word *’ independence “ I fail to see how, in the definition of the role of the Tariff Board which the Prime Minister (Mr. Menzies) outlined on 17th October, the board can be regarded as independent. It can only be independent in the sense defined by the honorable member for Yarra (Mr. Cairns) in this chamber this afternoon, namely, that you give the Tariff Board a technical job to do and expect it to perform that duty untrammelled by political pressures or anything else. The Government is not bound to accept the findings of the Tariff Board when they are given. It is bound - as the Tariff Board is not - to take into account other matters upon which the board might not be competent to adjudicate. In view of the structure of Australian industry to-day and its likely grouping in the next ten years, I doubt whether the Tariff Board, with its existing staff or anybody else at the moment, is competent to examine the kind of problems that must be examined.
If we inquire into the chemical industry, the paper industry or the motor car industry, we are dealing with industries that provide employment for many thousands of people and we cannot merely consider whether they are economic and efficient in 1962. We have to look at the likely growth of those industries by 1970, in the terms of employment opportunity. I doubt whether the Tariff Board under its present charter would necessarily adjudicate on those problems. I believe there is an obligation on the Government in 1962, faced with the revolution of automation on one hand and the revolution of the atom on the other hand, to shoulder its responsibilities. After all, it ought to be the measure of any civilization that manpower is displaced by the machine and it ought to be the measure of the humanity of society that it does something about the people who are displaced by machines. It is wrong to assume that the Tariff Board, with its present structure, is not equipped to handle the problems of Australian industry in the next ten years. It might be a matter of argument whether the functions of the Tariff Board ought to be enlarged and that would mean the laying down of a policy.
As the honorable member for Lalor (Mr. Pollard) pointed out, the Minister for Trade said the Tariff Board ought to have its sights set on the policy laid down by the Government. But, as everybody knows, the policy of this Government is of a zig-zag nature rather than of a kind which the board could take in its sights, and it would have difficulty in doing its job if it tried to follow an instruction of that kind. I believe the announcement by the Prime Minister on 17th October regarding the proposed economic inquiry was, to a large extent, triggered off by the fact that there had been a lot of talk in this House about the inadequacy of the Tariff Board at the present time to do the job people think it should do. I think the Prime Minister has belatedly or reluctantly accepted the fact that it is necessary to go deeper than the holding of a mere inquiry around the Tariff Board. For that reason he indicated, when giving the terms of reference of the proposed economic inquiry, a number of points relevant to the question of tariffs. Two of them are as follows: -
That, directly or indirectly, has nothing to do with tariffs -
If we are to have a tariff board it should be concerned about its own integrity. I use the word “ integrity “ rather than “ independence “, because I do not think the Tariff Board can any longer be independent in the sense of being beholden to nobody but itself. It has to work within the structure of industry as it exists in Australia and that structure cannot continue to be static, because the concept of industry ought to be dynamic. Our concept of industry ought to be that of Australia, with a European civilization and a population of 10,000,000, situated in the Asian sphere with nearly 1,500,000,000 people. Our attitude, in view of our limited economy and above all in the name of humanity, ought to be to ask whether there is not an obligation on Australia to adapt its economy so that it may improve its own standard of living and indirectly help to lift the appalling standards of something like two-thirds of the world’s population to-day. Those are the kinds of things which this Government sometimes forgets, but which the Labour Party feels in duty bound to point out to the House. I do not want to enter into argument as to whether Professor Sir Leslie Melville resigned for this reason or that.
– Why did he resign?
– I do not think any man is unexpendable in the framework of our economy.
– Was he forced to resign?
– I regret that until the Minister says more than he has already said or Professor Sir Leslie Melville comes out of the silence into which he has preferred to enter, that is in the field of speculation. But whether it were Sir Leslie Melville at the present time or somebody else in the future, I think it is time we realized that the role of the Tariff Board may well be more limited than some people have thought and that the role of the Department of Trade and the responsibility of the Government are greater in relation to the economic destiny of this country than this Government ever dreamed.
– in reply - I do not propose to speak at length on this matter. Having listened to the debate - a good deal of it in the House and some of it on the radio in my room - I have a feeling that there is really not much that was not covered in my introductory second-reading speech. There are some misapprehensions, valid or not valid. I will touch on some of those, but the general principles at issue, I think, are quite clearly understood.
I think it is quite clearly understood by the Parliament that the responsibilities of the Tariff Board, in its function of advising the Government on matters affecting Australian industry and commerce, embrace activity that covers almost the whole field of investment and the whole field of employment - primary industry, mining industry, manufacturing industry and, indirectly, the tertiary industries. This is the life of Australia; this is the Australian nation. There can be only one government of the nation and that is the government the people elect and expect to assume its responsibilities. There cannot be a completely separate government that ignores what the people have asked for in making their choice, that ignores the changing scene of the Australian industrial, financial and employment situation, and that ignores the total Australian environment. So, this Government has always recognized the Tariff Board as an instrumentality long since established - I am sure very much admired internationally for its independence, objectivity and the quality of its work - which is to give advice to the Government and by which the Government is to be guided.
There are those who believe, out of some theoretical concept, that the Tariff Board can operate as if it were on another planet and offer advice which the Government is free to ignore. Theoretically that is correct, but, in real life, what would be the purpose of having an advisory body if the Government were to ignore its advice consistently? Could that not result only in the Government falling into disrepute because it was ignoring the advice, or the Tariff Board falling into disrepute because it was offering advice on which the Government was not acting?
– What does that matter?
– It does matter, because neither should the Government be completely under charge that it is ignoring skilled advice, nor should so high a body as the Tariff Board be in disrepute because its advice is not being accepted. I have said inside the House on earlier occasions and outside on a number of occasions that this Government has as its high desire a situation in which it will, except in rare circumstances, accept, the advice of the Tariff Board. That does not mean that we want to twist the Tariff Board to our will. We want a Tariff Board that understands the Australian environment and that gives advice of a nature which it believes the Government will be able to accept and which, in the totality of its advice covering the whole sphere of commerce and industry, will foster the general good of the nation. Quite frankly, we have seen nothing in our thirteen years of office to lead us to want to change one single thing in the structure of the Tariff Board in general. This very bill adds a detail, but there is nothing that we want to change in general principle in the structure of the Tariff Board, in the general criteria that it uses or in its organizational independence.
I say once again - perhaps for the fiftieth time - that nothing has been done to impair the independence of the Tariff Board. The Tariff Board still operates to the same criterion that it has used for years - the reasonable protection of economic and efficient Australian industry. But circumstances that are, I think, well understood and by many thought to be desirable, have always resulted in the reports of the Tariff Board on matters referred to it taking quite a while to come through. It is comparatively rare - I hope I am not wrong in saying this - for a report to come through under about a year. It is not uncommon, and never has been uncommon, for a report to take a year or eighteen months. Two years is not highly exceptional and there are instances in which a report has taken three years to come through.
There have been complaints about this delay and we have endeavoured to equip the Tariff Board with more board members, with two deputy chairmen instead of one and with additions to the staff, to enable it to expedite the preparation of its reports. So to-day, the board sits not as one board but as two and I think sometimes as three boards. This is a process to facilitate expedition, but it is not a process to turn the Tariff Board into a sausage machine than can turn out reports by the week. That would not be good. So the concept of a substantial period elapsing between the reference of a matter and the report by the board upon it is accepted by the Government. Although industry complains about undue delay, industry has never put to me that there should be such expedition that a report from the board can be obtained in a few weeks. After all, these are great industries with millions of pounds invested in them, and those who have money invested and those whose employment is at stake would want to avoid a hasty decision. They are willing for a report to take some time.
But circumstances have arisen in which Australian industry has become more exposed to international competition in the last few years than ever before. Some one may say, “ That is because the Government removed import licensing “. True, that is part of the explanation, but it is far from the complete explanation and perhaps, except in the short-term sense, it is not even a principal explanation. Australia, industrially, has been maturing for only about 30 years. There was not a broad base of industry before the 1930’s. Since then, there has been a succession of circumstances which have offered some protection to Australian industry.
In the 1930’s, there were policies of reviewing some of the extraordinarily high tariffs that had been imposed during the depression for reasons I will not argue now, and so industry was protected - in many instances, perhaps overprotected. The tariff as a protective device was noi under strain then. The Government in the 1930’s engaged in an international trade diversion policy which turned out to accord some additional protection to Australian industry. Then came the war when tariff protection was not needed. After the war, we had shortages. Industry and people engaged in all economic activity were short of materials. There is no question that materials were shorter overseas- than in Australia, so no one was busy churning out goods overseas to sell to Australia. Overseas industries were churning out goods to re-equip their own wardrobes, factories, homes, transport and so on. We were not subjected, in the early post-war years, to intense competition. Then, from about the beginning of the 1950’s, this country ran into a situation in which there was a shortage of overseas exchange. So, we introduced import licensing, not to protect Australian industry but to protect our overseas currency, although it had, incidentally, the inevitable, although not intended, effect of protecting Australian industry.
With that hasty description I cover the period from about 1930 or 1931 until a couple of years ago, and I can say that there was at every stage some circumstance that was resulting in fortuitous protection for Australian industry. Our tariff system was never really under test during that period. It was when these circumstances disappeared - no shortages at home, no shortages overseas, no shortages of foreign currency and import licensing abolished - that Australian industry, for the first time since this country became substantially industrialized, found itself exposed to competition from overseas with only the protection afforded by the normal tariff system. It turned out that many industries were unable to stand up to the competition.
At any earlier stage I suppose the Minister in office could have said to the representatives of a particular industry: “Apply to the Tariff Board if you are in trouble. The board will make a report in eighteen months which the Government may or may not accept.” What comfort would that be to those who invested in an industry or those depending for their employment on an industry? This Government, I believe with the entire concurrence of the Parliament, introduced, therefore, a system of temporary tariff making, not to replace the other system, not to duplicate it, not to have anything to do with the normal tariff system, but merely to deal with circum stances quickly, so that until the Tariff Board could get around to its normal examination, employing the normal criteria, an industry would not be destroyed. A functionary was established who, within 30 days when required, was to give a report as to whether an industry was in danger of serious damage, and if it was in such danger, in his opinion, he was to say how much and what protection it should be given to hold the line, as a kind of first-aid measure.
– Is this what Sir Leslie did not agree with?
– I do not know, but I do not intend to allow myself to be distracted. I am describing the situation that existed. The entire Parliament approved of this. Is there any one in this Parliament who will say that it is his policy to allow an Australian industry to bleed to death while the Tariff Board takes eighteen months - I use that period as a typical period - to get around to a hearing? Is there one member of the Parliament who would allow an Australian industry to bleed to death in those circumstances?
– Yes, the honorable member for Mallee.
– Nothing of the kind. The attitude of the honorable member for Mallee is well known, and it is in accord with my own. I took to the Cabinet, and subsequently to the Parliament, a proposal that a system should be established under which the two deputy chairmen of the Tariff Board should be authorized to hear, upon a reference by the Minister, applications for temporary protection. But it was written into the statute, on my suggestion to the Government and on the Government’s suggestion to the Parliament, that if the Government granted temporary protection, the Minister for Trade must refer the matter, that very day, to the Tariff Board for a normal hearing. There was no change in the criteria that the Tariff Board was to apply. They were the normal ones, which had existed for 40 years under the law that honorable members approved of, and which we all really believe is sound.
There has never been any intention, as reference to my speeches on earlier occasions will show, that what the authority dealing with temporary duties does should ; in any sense be regarded as binding or guiding or inhibiting the Tariff Board.
Sir Leslie Melville wrote me a letter last February, from which it appeared to me that he did not have as clear a comprehension of the situation as I would wish. I wrote him a letter in reply. Presently I will place on the table of the House the two letters. However, I did not want the matter to be dealt with merely in an exchange of letters, so I decided that in a speech that I was to make in this House on a Tariff Board bill within a couple of weeks of our exchange of letters I would make a statement to make the position clear for the benefit of the Parliament. As it happened, I was overseas when the debate on that bill was held, and my colleague, the Minister for Repatriation (Mr. Swartz), made the speech that I had drafted. In March the Minister for Repatriataion, speaking in my place, said this -
When temporary protection is accorded an industry it is in the nature of emergency first-aid. It is essentially a holding action pending a full inquiry by the Tariff Board. It must not, in any circumstances, be accepted as indicating the longterm possibilities for protection of the particular industry. That will come out of the board’s full inquiry, when the normal criteria that an industry should be economic and efficient are taken fully into account.
This makes quite clear once again that there is no pressure on the Tariff Board. On the contrary, it is quite clear that the Tariff Board is kept free and untrammelled to apply its ordinary criteria.
If some one says to me, “ But if the temporary protection gives a satisfactory duty to an industry to assure its preservation, the Tariff Board would feel under pressure not to take it away “, I will simply reply, “ Well, too bad. I feel under pressure at times in regard to many different matters. It is my job in life to withstand pressures if I think they should be withstood.” All of us who enter public life have to do this. It is quite unconvincing, to my mind, for any one to say that we should not put the poor Tariff Board under pressure, by placing it in the position of having before it a duty that is satisfactory to an industry. The members of the board are grown-up men. They are responsible people. They know the will of the Parliament, which had approved this proposal. They know the general intentions of those who speak with authority, and they are completely free to exercise their own judgment. When, having exercised that judgment, they have refrained from continuing a temporary duty that had been granted by a deputy chairman, we have approved of their action, except in one special case in which the board said that it made its decision without hearing certain evidence. I hope I have made it clear that there are not two conflicting standards. There is not a pressure arising from the existence of the provision for a temporary duty.
I have said in this House voluntarily, and not as a result of anything said by Sir Leslie or any one else, that a complaint has been that the Tariff Board has not had as much staff as the chairman thinks it should have. I refer to staff of a particular category, not typists and clerks but what are called project officers, specialist officers dealing with particular tariff inquiries. I tabled yesterday or the previous sitting day figures showing staffing in the Tariff Board. Before the present chairman came to office there had never been more than ten project officers, but approval had been given a few months before for the number to be increased to fifteen. Approval has now been given, as a result of pressing requests by the chairman, to expand the establishment of project officers increasingly to a final total, which was approved some time ago, of 29. That is near enough to three times the number previously employed.
– Was it physically possible for the Department of Trade to supply that number?
– No, it was not.
– Then why was not resort made-
– Do not interrupt me; I have not thatmuch time. Not only are men brought in from other departments, but it is their right under the Public Service Act to apply for appointment. At this moment there are 24 project officers in positions; three more have been appointed but have not yet taken up their positions, and two more are to be selected. That will make a total of 29, which is nearly three times as many as there ever were before the present regime, and the volume of references is not very different.
– Are all the officers from the Department of Trade?
– No, they come in from wherever they can be found. But all officers of the Tariff Board are officers of the Department of Trade. For 40 years all officers of the Tariff Board have been from either the Department of Trade and Customs, when it was the responsible department, or, since then, the Department of Trade. They have been legally officers of those departments. We are told that the Tariff Board was a magnificent institution until recently; but its staff has always been attached to the responsible department. The Tariff Board Act is quite mandatory once officers are posted to the Tariff Board, they fall under the authority of the chairman of the Tariff Board. I make that clear.
We did have, as I explained a few minutes ago, a situation in which two deputy chairmen of the Tariff Board were dealing with temporary duty references. In one of these discussions on the problems of staff Sir Leslie Melville put it to me that the fact of our referring temporary duties to his deputy chairmen abstracted them from the ordinary work of the Tariff Board. That was one of the main reasons - not the only reason - that impelled me very shortly afterwards to tell the Government I thought we should appoint a special advisory authority. That was done and Sir Frank Meere was given the position. By doing this we were able to give back to the Tariff Board, full-time, the two deputy chairmen.
– Sir Frank Meere took officers from the Tariff Board for his purposes?
– He is staffed from the Tariff Board, but it is not a subtraction from the figures I mentioned. I have read in the newspaper some suggestion that as all temporary tariffs must eventually go before the Tariff Board the activities of the Special Advisory Authority would provide a new stream of work to the board that would tend to engulf it. Of course that is utter nonsense. The right of industry to approach the Tariff Board is written into the act. If industries had not recourse to the Special Advisory Authority, they would, in the normal course, resort to the Tariff Board for a hearing. The fact that there is a temporary duty provision adds nothing to the ultimate volume of business that goes to the Tariff Board to be dealt with.
I think what I have said deals with many of the things that have been raised in this debate. The honorable member for Wakefield (Mr. Kelly) has attached considerable importance to some words that I used in my second-reading speech. I shall not quote from that speech, as honorable members are in possession of it, but I concluded by saying that the Tariff Board should keep in its sights the general policy of the Government. Those may not be the precise words, but honorable members have them. I explained those words earlier in my speech to-night, but I want it to be quite clear, as there seems to be some doubt in some minds, that when I spoke of the board keeping in its sights the general policy of the Government and the general policy of the nation - a government exists only if its policies have the support of the majority of the people of the nation - I was not referring to the day-to-day changes in policies that come in a dynamic economy such as the Australian economy. I was referring only to the longer-term policy objectives of the nation as enunciated on a limited number of occasions by leading spokesmen for the Government. I think it must be borne in mind quite clearly in this regard that the Tariff Board is an advisory body. It is not a policy maker. It must, of course, have recognizable criteria to follow in pursuing its inquiries, and it has already the overall criterion that an industry shall be economic and efficient. That criterion has stood the test of time. But, Mr. Speaker, the board’s advisory function must be related to an objective, and this objective, obviously, must be the overall government policy - not day-to-day policy, but the overall economic policy. Thus when I said that the board must keep within its sights Government policy, I referred, of course, to overall policy. I refered to the solid foundation of policy on which this Government has built, and will continue to build, solid growth; not short-term changes or daytoday adjustments, but the basic policy as enunciated in general statements from time to time by the principal spokesmen of the Government, such as, for example, the Prime Minister (Mr. Menzies) or, may be, the Minister for Trade. What nonsense it would be if an authority established by the Parliament to advise the Government were to purport to act without any consciousness of the broad policies of the Government to which its advice is directed!
I repeat, Mr. Speaker, that no pressure has been applied to the Tariff Board by the Minister; there has been no pressure from the Government or from any source. I should think that if this body of reputable, responsible and experienced people felt that it has been improperly pressured, not only would it be free to say so but,let me say, it would be its duty to say so. It has not said so. The Tariff Board is to-day as independent as ever it has been, and I hope nothing will he said to impair its reputation, national or international. I repeat what I said earlier, that our Tariff Board and tariffmaking system are the envy of many other countries, where too often tariff-making is the outcome of approaches to a political head of a department. In Australia we have erected this protection for industry and for the people against day-to-day political intervention or day-to-day political decisions. This is the situation and I hope, Mr. Speaker, that the second reading of this bill will now be carried.
Question resolved in the affirmative.
Bill read a second time, and committed pro forma; progress reported.
Debate resumed from 8th November (vide page 2299) on motion by Mr. Fairhall-
That the bill be now read a second time.
.- Mr. Speaker, this proposal of the Government is based on a Tariff Board recommendation that a bounty equivalent to £45 per ton be paid to producers of copper strip or brass strip not exceeding 15 inches in width and not exceeding twelve-thousandths of an inch in thickness, produced in Australia and sold for use in Australia. An annual limitation of £190,000 is specified.
The bounty will operate for two years from 1st October, 1962. A provision of the measure is that a profit limitation of 10 per cent. per annum, which is common to most other bounty legislation, will apply.
Three companies are at present engaged in the production of brass strip and copper strip, including strips of thicker gauge than that covered by the proposed bounty. There is a total investment of approximately £5,000,000 in the industry and a total employment of 800 persons. The Tariff Board has reported in favour of the payment of the bounty. Bounty at the flat rate of £45 per ton on all strip of the dimensions specified, according to the Minister for Supply (Mr. Fairhall), should provide producers with the opportunity to adjust their selling prices to meet competitive market conditions. I assume, Mr. Speaker, that the reference to “ competitive market conditions “ was a reference to competition from sources exterior to the Commonwealth of Australia. I might add that it is said that the principal uses of copper and brass strip are in heating and cooling systems, internal combustion engine radiators, and electrical equipment. Before the expiration of the bounty, the Tariff Board will examine the question of whether further assistance to the manufacturers is necessary. This information was supplied by the Minister for Supply, who introduced this proposal to the Parliament on 8th November.
The Opposition recognizes that, after an examination of the facts, the Tariff Board has reported in favour of the payment of this bounty. Brass strip, in particular, and, in many cases, copper strip are used in the construction of radiators. These materials are incorporated in the cars used by one in every three of Australia’s adult population. Within the last ten years, Australia has built up a magnificent radiatormanufacturing industry. That industry produces radiators which go into the cars which are driven, as I have said, by one in every three of Australia’s adult population. Under no circumstances would any responsible Australian parliament allow a situation to develop in which that industry could be destroyed by virtue of intensive competition by cheaper radiators from other countries. There are other considerations. Australia produces at Mount Morgan, Mount Isa, Mount Lyell and at other places all the copper and other minerals used in the manufacture of brass strip.
Under those circumstances, the Australian Labour Party, which is composed of the stalwart supporters of the encouragement of Australian industry, is prepared to support the payment of a bounty of £45 per ton to ensure, beyond any shadow of doubt, that this Australian manufacturing industry will be able to survive against what is, in most cases, unfair external competition. But let me add this word of warning to Australian industry. I have read, Mr. Speaker, the report of the Tariff Board on this subject. Reference has been made to the fact that the finish and the exactitude of the dimensions of Australian strip brass and strip copper are not exactly comparable with the finish and the exactitude of the dimensions of importations which would be available if it were not for the protection given to the Australian local industry. In respect of most recommendations for tariff increases and bounty proposals which have come before this Parliament, I have invariably stressed the need for a more thorough finish to the Australian product. I yield to nobody in my admiration for the capacity of Australian manufacturers, Australian workmen and Australian executives to produce goods in Australia which are equivalent to and even better than goods produced in any other country in the world. But unfortunately, Mr. Speaker, from time to time instances crop up of the finish of an Australian product being slovenly. This is not due to a lack of capacity of Australian workers and manufacturers to provide the finish or the quality which is essential. It is due simply to a search for profit and to carelessness which has to be eradicated if we are to produce goods of a quality equal to those of any other country in the world. There is no shadow of doubt that goods of such quality can be produced by Australian workers if they are given sufficient encouragement by business executives and those who conduct manufacturing establishments. The Opposition will support this measure, as it has supported other measures which have assisted the continued existence in this country of invaluable industries which are of service to the Commonwealth of Australia.
.- Mr. Speaker, this bill is designed essentially to preserve an Australian industry which produces metal strip of the dimensions stated in the bill. This kind of metal strip cannot be produced in Australia unless the Australian industry is protected. I think the House will agree that the protection given in this instance will affect not only the secondary industry to which the bounty is paid but also the companies that produce the raw material. In central Queensland, we have at Mount Morgan an enterprise which produces-
– No. It produces the raw material from which the metal strip is made. Without the raw material, no strip will be manufactured. In this instance, we must consider not only the protection of the secondary industry concerned, but also the wider ramifications of the protection being given. With improvements in processing methods to-day, we have to face the undoubted fact that the number of workers employed is reduced. At the 1954 census, Mount Morgan had a population of 4,100 people. Earlier, its population had been as high as 12,000 or 13,000. Production may not have varied as much as the population of the town has done. Any variation in production may have been due to improved production methods. If we are to encourage our industries, by the payment of bounty or otherwise, we cannot entirely overlook the displacement of workers by the introduction of modern methods.
I think we could agree that it may be necessary to give assistance of this kind to other enterprises engaged in similar industries. The Mount Morgan company, for instance, can produce fertilizer and sulphur, but it does not do so for the same reason as that for which the manufacturers cannot produce metal strip without assistance at a price at which the local product can compete with strip manufactured overseas where labour may bo cheaper and standards of production are lower. There is no question about the quality of the Australian product. We must not lose sight of the fact that if we produce commodities, either with or without the assistance of bounty, by processes in which the number of workers is continually being reduced, we limit what is in the final analysis our main market - the Australian population with the means to buy the product. We on this side of the House have already stated that we fully support the principle of developing the Australian market for our own products.
The entire idea of bounties is very good. I may point out at this stage, appropriately, that Labour, when in office, did much better by other industries in the payment of bounty. The dairy industry received £4,000,000 a year more from the Labour Government than it receives from the present Government - £17,500,000 a year compared with the present £13,500,000. I remind the House that that was at a time when money was worth much more than it is worth to-day.
The assistance of a bounty keeps an industry, whether secondary or primary, producing in all circumstances and the employment provided in the industry helps to maintain high purchasing power. Even more important, Mr. Speaker, by maintaining stability in the industry that produces metal strip, we bolster our defence ability. If we allowed the industry to languish and vanish, we could find ourselves, at a time of national emergency, lacking an industry capable of producing a product without which our armed forces perhaps could not fight effectively. There can be not the slightest shadow of doubt that the production of metal strip such as this is absolutely essential to defence. I should think that, under the defence heading, we ought to examine every means by which we can economically pay a bounty such as this in various other industries.
It is noted, of course, that the bounty is not intended entirely for the production of metal strip for home consumption, for the bill uses the words “metal strip for use in Australia and also for other purposes “. It might be possible, however, for Australian industry, in the present circumstances, to obtain a market overseas for this product. The extent to which this can be done, of course, depends on the price that can be obtained. It is presumed that the Tariff Board, in its investigations, has gone thoroughly into this aspect of the industry in relation to the payment of bounty.
It is good to note that, in this instance, the Government has protected the economy against the payment of the bounty in circumstances in which it might unduly increase the profit being made by the manufacturing companies concerned. The bounty will be reduced where the rate of profit exceeds 10 per cent, per annum on the capital invested. I think that that is a very good provision. We are endeavouring to support the industry and to enable it to continue, but we do not want unduly to expand profits.
I believe that we can with every confidence support not only this bill but the principle embodied in it - a principle which could be applied to other industries in similar circumstances and especially to those which produce the raw material involved. In this way, we would not only protect secondary industry but also do much to promote primary industry in the field of mining, with considerable beneficial effects not only on the 800 workers associated with the secondary industry but also on thousands of others involved in mining of various kinds. As I have pointed out, there are important effects also on the development of the home market for our products if, by the payment of bounties such as this, we help to put money in the pockets not only of the producing companies but also of the workers employed by them. For, in the final analysis, Mr. Speaker, our home market becomes increasingly important to our primary producers in these days in which we live in the shadow of the European Common Market. I point out that we ourselves control our home market and we do not have to speculate on it so much as we do on overseas markets which are1 beyond our control. Conditions in the home market are known to us, and the home market is the most stable market in which we can sell. Our own people provide the best market for our products, both primary and secondary.
For these reasons, Mr. Speaker, we on this side of the chamber are very pleased to support this bill, and we commend it. We would be prepared also to commend similar measures relating to other industries.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 to 3 - by leave - taken together, and agreed to.
Clause 4 agreed to.
Clause 5 (Specification of bounty).
.- Mr. Chairman, this clause specifies details of the products on which the bounty will be payable, and reads -
The bounty is payable in respect of metal strip produced -
in the case of copper strip - at premises registered under this Act as premises for the production of copper strip; or
in the case of brass strip - at premises registered under this Act as premises for the production of brass strip, being metal strip sold, in a period to which this Act applies, for use in Australia.
The committee will recall that, a few minutes ago, I indicated the quality of many of the products of Australian manufacturers. I want to support the remarks that I made earlier by a quotation from the Tariff Board’s report on copper and brass in sheets or strips. At page 7, in paragraph (f), which is headed “ Quality “, the report states -
The quality of Australian produced copper and brass sheet appears to be acceptable to users. Braemar Industries, the only large user of sheet appearing at the inquiry, stated that it had experienced no serious difficulties in using Australian made sheet.
I ask honorable members to note the qualification “ no serious difficulties “. Naturally, the company does not want to fall out with the suppliers of its basic materials. Paragraph (ii) relates to strip and is in these terms -
Problems of quality in strip production arise as gauges become thinner and tolerances more exacting. National Radiators and Hoelle claimed that strip supplied by Australian mills had greater variations in thickness and width than imported strip, and that Australian-strip contained other variations from specification that made it difficult to process.
Naturally, great care is required as gauges become thinner and tolerances more exacting. If the allegation contained in the statement which I have just read is true, it is inexcusable. If there is a continuation of such variations this industry will have no justification for protection by bounty against imported goods which comply with specifications and are up to the required standards of quality. The report continues -
Hoelle said that some strip received from Austral Bronze had damaged edges which had been caused by tying the coils with wire rather than straps.
Honorable members can visualize a bundle of brass or copper strip coils tied with No. 14 gauge galvanized or black wire twisted around it damaging the edges of the strip and making it a product difficult to use satisfactorily in the manufacture of a radiator. If that allegation also is true there is no justification for any Australian manufacturer packaging his goods in that manner. The Parliament should always emphasize that the tariffs it imposes and the bounties which it grants depend upon Australian manufacturers maintaining the required standards of quality. We would be doing less than justice to the industries concerned, in which we are all interested, if we did not issue that warning.
I have had experience of this unsatisfactory position in relation to some of our products. Let us consider the galvanized iron which is produced in Australia to-day. lt is basically black iron galvanized by the application of a zinc dip. Galvanized iron produced in Australia to-day, whether or not it allegedly complies with the specificationslaid down by the standards association, will last without rusting, if you are lucky, for less than ten years, whereas galvanized iron which was imported from overseas 50 years ago is still rustless. There is no justification for our products being of the standard that I have mentioned. The same remarks apply to a wide range of Australian products. I am not here to cry stinking fish about Australian products, but we would be doing less than our duty if we failed, on every possible occasion when inefficiency and poor quality products are evident, to issue a warning in this Parliament about what will happen if there is a continuation of the present unsatisfactory standards. I issue that warning now. I hope that due regard will be paid to what I have said.
Clause agreed to.
Remainder of bill - by leave - taken as a whole, and agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
In Committee of Ways and Means:
Customs Tariff Amendment (No. 42)
Consideration resumed from 2nd October (vide page 989), on motion by Mr. Fairhall -
That the Schedule to the Customs Tariff 1933- 1962, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 989).
– The committee has before it for discussion twelve proposals to amend the Customs Tariff 1933-1962. There is also one complementary New Zealand preference proposal and one associated excise tariff proposal. I would suggest to the committee that these latter two proposals be considered with the main customs tariff proposals to which they are related.
The first of these twelve proposals was moved in the House on 4th October and the last was introduced last Wednesday. Honorable members will recall that full documentation was distributed at the time the proposals were tabled, but additional copies of the documents are available from the floor of the chamber.
The first proposals before the committee are Customs Tariff Proposals No. 42. These proposals follow a recommendation by a special advisory authority and impose temporary duties on certain handkerchiefs.
.- It is something of an anti-climax to come from high policy to handkerchiefs, but I suppose that is the way the Parliament works. In December last year the question of emergency protection was referred to a deputy chairman of the board under section 17a of the then Tariff Board Act. This act has since been amended. He found that emergency protection was not needed. He gave us a picture of the industry. It seems that handkerchiefs can be imported into Australia made up, or handkerchief material can be imported in a roll and cut and hemmed in Australia. This does not seem to be a very intricate process. The material comes in rolls with two sides hemmed; it i9 cut down the middle and hemmed and there you have a handkerchief. As I have said, the deputy chairman found that an emer gency duty was not justified. He made this comment -
While some portion of the requested duty on handkerchiefs would offset the duty payable by Australian handkerchief manufacturers on imported cloth, nevertheless, after this has been allowed for, the total duty requested represents a protective incidence ranging up to some hundreds per cent, on the value of production added in the Australian-end processing.
He did not impose this additional duty which was sought so the existing duty of 45 per cent, plus 5 per cent, primage, making a total protection of 50 per cent, was not altered. You would think that a protection of 50 per cent, would be sufficient to safeguard a simple process like cutting and hemming a handkerchief.
Then, the Deputy Chairman being uncooperative in this matter, the Special Advisory Authority was called in on 17th August - not quite eight months after the Deputy Chairman had given his verdict - and the Special Advisory Authority found that the manufacturers of men’s handkerchiefs were not being threatened by imports but that the manufacturers of cheap women’s handkerchiefs were being so threatened. So he imposed one of those beloved sliding duties to stop this happening. As a result, women and children will be unable to buy cheap handkerchiefs. I hope the Minister is paying attention to me, because this is a very serious subject.
One of two things will happen as a result of stopping the import of these cheap handkerchiefs. People who want cheap handkerchiefs will buy the handkerchief material in the roll and cut it up for themselves. The duty on the material is quite low. In fact, I understand that some of the biggest stores are already selling handkerchief material in the roll and people can cut it down the middle and hem it to make handkerchiefs. As I said, this is not a very intricate process. Is this kind of thing going to be frowned on? Is it going to create unemployment? If it is, I suggest that the Minister tell some of the people who are doing this that they are not employed. It would be interesting to hear their reaction.
The second alternative is even easier. It is cheap handkerchiefs that are at risk and it is cheap handkerchiefs that people are being prevented from buying. If people cannot buy them they will turn even more than at present to the use of paper tissues. My secretary, who is an authority on women’s handkerchiefs, has calculated that it costs one penny to blow one’s nose on a cheap ls. 6d. handkerchief, including a home laundry charge of Id., but it costs only one-third of this to do the same thing with a double tissue. So I am prepared to bet that if this rate of protection is adhered to there will be even less employment in the manufacture of cheap women’s handkerchiefs in this country in a year or so than there is now.
.- The Opposition supports this proposal, but I have to admit that I am a bit with the honorable member for Wakefield (Mr. Kelly) on the question of the common old handkerchief. Here we find that, on the recommendation of the Special Advisory Authority, a temporary duty is imposed at the rate of Id. for each Id. or part thereof by which the f.o.b. price is less than 2s. 9d. a dozen. A price of 2s. 9d. a dozen means 2£d. each. That is the landed f.o.b. price. Nowadays, a person is lucky to buy a handkerchief of reasonable size for under 3s. 6d., yet apparently handkerchiefs can be landed at a cost of 2£d. each. That is fairly cheap, and obviously the Australian manufacturer could not turn out a handkerchief for 2£d., nor would any one expect him to do so.
– The material has only to be cut down the middle.
– You can cut it wherever you like, but it is still pretty cheap. Obviously the Australian manufacturer needs some protection. But does he need protection that will enable him to charge the Australian consumer 3s. 3d. or 3s. 6d. for a handkerchief. After all, a handkerchief is only a bit of calico run around on the sewing machine. Sometimes a handkerchief is as hard as the devil and rubs your nose off. So, it appears to me that this is an item that might well be queried.
Then we find that the temporary duty is additional to the duty of 20 per cent, ad valorem under British preferential tariff or 45 per cent, ad valorem or ls. a dozen. That is only Id. apiece. Why are the local manufacturers, wholesalers and retailers pushing up the price to the public? I think the price of handkerchiefs is an outrage. After all, children get colds and housewives get allergy troubles like hay fever which are caused by rye grass or bog grass or something else, and need handkerchiefs, which are a very big item in a family budget. Why should the manufacturers, or anybody else, seek tariff protection on these things when the bulk of their income comes from the sale of a wide range of other products which enable them to make a sufficient profit? I hope that some of the people in the trade will pay heed to what I say.
Are the public taken down? A person may go into a vast emporium and see handkerchiefs at 18s. a dozen and think that they seem very cheap and are worth buying. When the purchaser gets the handkerchiefs home he finds he has been done. He finds that each handkerchief is only three-quarters the size of a normal handkerchief. He has been diddled. The people who suffer from this kind of thing are working-class people and people in the middle range of incomes who have big families. I think it is time that the manufacturers and wholesalers woke up to themselves and put out handkerchiefs at reasonable prices.
My remarks on handkerchiefs apply to a wide range of other products. I noticed in the report of a speech by Mr. Webster, a director of Bradford Cotton Mills Proprietary Limited, a statement that the Tariff Board will spend an enormous amount of time on determining whether a particular industry is making a one per cent, profit or has a one per cent, profit margin, but that on the other hand no time whatsoever is spent - he did not say by this Parliament - in consideration of the fact that between the time the product leaves the manufacturer, with his profit margin of one per cent., and reaches the purchaser the profit has expanded to anything from 33 per cent, to 50 per cent. Mr. Webster made that statement at the annual meeting of the shareholders of Bradford Cotton Mills.
That is one of the facets of Australian industry and Australian manufacturing production that this Parliament must in due course consider. Mr. Webster is 100 per cent, right. It is the function of the Tariff
Board to consider that one per cent, profit margin or any other profit margin, but the time is coming when this Parliament has to study the profits of 33 per cent, or as much as 50 per cent, which are added between the time that the product leaves the manufacturer and the time it reaches the purchaser. The humble old handkerchief is a case in point, and I am inclined to the belief voiced by my friend from Wakefield. I am not too sure whether this increase in protection for the humble handkerchief is really justified, though I saw in the press that the retailers and wholesalers have been complaining about it. Anyhow, the Opposition is prepared at this point of time to support the recommendation, but we will make a close examination before any future recommendation of this type receives our approval in this Parliament.
.- Mr. Chairman, I rise just to put the record straight, as the honorable member for Wakefield (Mr. Kelly) has referred to this material. It is sometimes of fine cotton and sometimes of fine linen and is bought in the piece and is hemmed down on the outer selvedges. All that is necessary to do to it is to cut it down the centre and you still have three sides unhemmed, so there are three sides to be hemmed. I have been through a factory where handkerchiefs were manufactured on a large scale. Such establishments are veritable beehives of activity, where every one works on a bonus system. The employees go for their lives in the production of these things. The problem of the price of handkerchiefs lies not with the manufacturers but with the retail stores. By the nature of these goods they are sold in a large number of places in each town. The manufacturers sell to the warehouses, which become the distributors, as I said this afternoon. But the first handler imposes a 33 per cent, mark-up and after that the retailer imposes a mark-up of 50 per cent, or even 75 per cent, and consequently a handkerchief which in the first place might have cost 2d. or 2d. ends up at a minimum price of ls. 6d.
I do not think the Tariff Board has looked sufficiently at the question of mark-ups after the manufacturer has finished with the products. I believe the protection given to the manufacturer is inadequate when I contemplate the wages and conditions under which workers perform in places such as Hong Kong, for many more hours in the week, with perhaps even more modern machinery than we have and practically no wages at all. I do not think the protection being given is too great. The trouble regarding prices cannot be laid at the door of the Australian manufacturer. It must be laid at the door of the first handler and of the retailer.
.- Mr. Chairman, the thoughtful contribution to the debate made by the honorable member for St. George (Mr. Clay) prompts me to make a few well chosen remarks about the charges made by retailers. It seems to me that there is something radically wrong with the powers of this Parliament. The Constitution allows an industrial tribunal to fix the price of wages that the worker employed in industry is permitted to charge for his labour. The Tariff Board, because of its operations in fixing tariff duties on imported goods, is in a position virtually to fix the prices of articles produced by the manufacturer, but there seems to be no authority vested with power to fix the margins chargeable by the wholesaler and retailer. This represents a very serious gap in the present system. I believe that if we had some adequate means of fixing a proper and reasonable level of profit for retailers and wholesalers on the products of Australian factories the consumer would eventually be able to buy Australian-made articles over the counters of stores in this country at prices competitive with those of goods produced overseas. Therefore I believe that the honorable member for Lalor (Mr. Pollard) and the1 honorable member for St. George have made a thoughtful contribution to the debate and one which I hope will eventually be taken up by some supporters of the Government.
This side of the chamber is prepared to support a move for a referendum to clothe the Parliament with power to fix margins for retailers and wholesalers, if the Government will play its part.
Order! The honorable member is getting away from the matter before the Chair.
– I realize that, Mr. Chairman, but I thought my remarks so important that they should be made now, because the opportunity may not come again for a long time. I conclude by saying that if supporters of the Government will play their part and support the Opposition in a move to give this Parliament the same power over the profits of retailers and wholesalers as it now exercises over wages and the margins on which manufacturers operate we might be able to deal with the problem in the proper way.
Question resolved in the affirmative.
Customs Tariff Amendment (No. 43)
Consideration resumed from 2nd October (vide page 990), on motion by Mr. Fairhall-
That the Schedule to the Customs Tariff 1933- 1962, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 990).
Question resolved in the affirmative.
Customs Tariff Amendment (No. 44)
Consideration resumed from 2nd October (vide page 991), on motion by Mr. Fairhall-
That the Schedule to the Customs Tariff 1933- 1962, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 990).
.- We are now to consider Item 120 (b) (3) which deals with bed sheets, pillow cases of cotton or containing a mixture of fibre in which cotton predominates. In regard to bed sheets the proposal is purely a drafting matter and we take no exception to it. We come next to pillow cases in sizes larger than 18 inches in length or 15 inches in width and having a value for duty not exceeding £1 13s. 4d. per dozen. I am not a mathematician, but that seems a pretty low figure for a pillow slip. Previously this duty was a recommendation by the Special Advisory Authority. We read -
A temporary duty is imposed from all countries at the rate of £2 10s. per dozen less ISO per cent, ad val. The temporary duty is additional to the existing duties of 22i per cent, ad val: B.P.T. and 45 per cent, ad val. M.F.N.
I am not sure that there is a strong case in regard to this item, notwithstanding the fact that the Labour Party remains forthrightly protectionist. But we have the right to protest and point out some obvious facts. My facts are directed not so much at the manufacturer as at the vast leakage regarding charges between the manufacturer and the purchaser, and this concerns the wholesalers and retailers.
I am now going to make a confession of which I am somewhat ashamed. I went shopping recently and saw four cotton articles displayed at 2s. lid. each and I thought they looked very cheap. I am a bad shopper where household commodites of that kind are concerned, but I thought these goods were exceptionally cheap. These cotton commodities had beautiful pictures of leaves and plants on them and I said I wanted four of them. On the selvedge was printed “Made in China”. I thought, “I should not be buying things made in China “, not because of the philosophy of China, but because I prefer to buy things made in Australia. However, I was intrigued by their cheapness and I went home tickled pink. But my wife said, “I do not think they are so cheap “. I said: “ All right, have it your own way, my dear. My conscience is rather sore at having bought things made outside Australia.” I recently went into a big city store and saw the same products displayed at four for 10s. or 2s. 6d. each. What justification is there for the difference between 2s. lid. and 2s. 6d., when the articles are of the same quality, made from cotton and made in China? Where is the protection for the Australian housewife or the Australian consumer?
I do not indict the manufacturer; I support this tariff proposal. However, this is in accord again with the remarks of Mr. Webster, the chairman of directors of Bradford Cotton Mills Limited, who pointed out that the Tariff Board can give endless time to considering the question of a 1 per cent, increase in tariff, but no thought is given to profit margins of 33 per cent, and 50 per cent, between manufacturers’ costs and the poor old consumer. In Melbourne, the price of the cotton article I have mentioned differs as much as 5d. between one shop and another. In one shop it cost 2s. lid. and in another it cost 2s. 6d. Is the Australian consumer being made into a bunny? Of course he is. This Parliament inevitably must deal with the problem of the excess cost loading on the Australian consumer.
The cost structure that adversely affects the primary producer is wrapped up in this problem. The moment the Australian housewife has to pay 33 per cent, or 50 per cent, more than is justified on a product, her husband must go to the Arbitration Commission and ask for an increased margin if he is an artisan or an increased basic wage if he is a labourer. That is passed on to the primary producer, who then cannot compete in the overseas markets.
For the moment, the Australian Labour Party supports this tariff proposal, but I ask the Government to say when it intends to do something to protect the consumer against the rapacity of the wholesaler on the one hand and very frequently the retailer on the other hand. Endless time is spent in questioning the efficiency of the manufacturer. He is indicted. It is said that he has a factory that is too large for his output, that he is not merchandising a sufficient proportion of his capacity, or that his plant is not modern. But not a word is said about the wastefulness of the wholesaling and retailing establishments. We can find in the suburbs of any of the metropolitan areas a dozen shops selling a product where three could sell it equally as well. At the end of the year, the banks report that people everywhere are investing their life’s savings in some small Australian business and losing the lot.
– Sometimes the manufacturers cause the retail price to be put up.
– Of course they do. This becomes a most complex economic problem. It does not end with the Tariff Board, with protection of free trade, or with any other subject. It will end with an investigation of the efficacy of the private enterprise system as a whole. It will be found that under private enterprise the price of so-called freedom and the vaunted competitive system is that the Australian housewife, the worker and those who produce the goods are being slugged right and left I leave it at that. I support the proposal.
.- I would like to congratulate the honorable member for Lalor (Mr. Pollard) on his thoughtful contribution to this debate. Obviously, everything does not fall into the same pillow cases fall into the same simple category as handkerchiefs. These matters are so easy to understand.
This proposal again follows the report of the Special Advisory Authority. Before the report there was a duty of 45 per cent. The honorable member for Lalor worried me about this matter. The additional duty awarded is 50s. a dozen less 150 per cent, value for duty. The Department of Trade gallantly came to my aid again and did the arithmetic for me. It means in effect, so I am told, that if the imported price is 33s. 4d. there will be no additional duty, but if the price falls, so the duty rises.
In this report, the Special Advisory Authority makes no mention of the price at which pillow cases are coming in and he does not say what percentage of the market imports are filling. We have not much to work on, so we must do the best we can with this. There is no mention, of course, of how many people are employed. Evidently, the industry is divided into two parts. The first is the cotton weaving section, which includes Bradford Cotton Mills Limited. This section of the industry weaves the material and makes it up into pillow cases or perhaps sells it to others who make the pillow cases. It is clear that the section of the industry that makes the cloth is not at risk. I have in my possession a letter from Actil Cotton Mills written early in August, in which the company says that it is unable to give delivery of this material until early December. Obviously there is not much to be gained by giving this company additional protection, because it cannot supply the demand anyhow.
The second section of the industry - this section seems to supply about 60 per cent, of the demand for pillow cases - imports the cloth and makes it up into pillow cases. This is the queer part. The material comes in under one of these sliding scale duties. The Special Advisory Authority does not mention it. This is one of the calculations I cannot understand without departmental assistance, and again I pay tribute to the department. 1 believe the rate of duty is 12i per cent, plus Id. for every Id. by which the value for duty is less than 11Od a lb. This is an incredible puzzle for a man of my simple nature, but it seems to work out at 25 per cent, or 30 per cent, ad valorem for ordinary weight pillow case material. The duty is much higher for low weight material.
This is the silly part and there is an element of irony in this that I thought we ought to appreciate. The man who imports the cloth and makes it up cannot buy the cheap quality material. Because of the high rates of duty he is forced to use the heavier material, so his pillow cases cost more. The importers found that people in Australia wanted to buy cheap, light-weight pillow cases. I do not know why, but evidently they do. These pillow cases probably wear out more quickly but they are cheap. So the importers started to import them and the opening to import them was deliberately made by preventing the manufacturer in Australia from having access to the cheap, light-weight material from which to make them. That is the position. I do not suppose it is terribly important, except to the people who want to buy cheap, light-weight pillow cases.
Now the Special Advisory Authority moves in and imposes a sliding scale duty that will effectively prevent the people from buying what they want to buy. In effect, his decision means that the Australian housewife shall use pillow cases of a certain quality and no others. One of these days he will be asked to give a judgment on women’s dress material which will mean that the women of Australia shall wear material of a certain kind and no other. All I can say is that I hope I will be around when that happens.
Question resolved in the affirmative.
Customs Tariff Amendment (No. 45)
Consideration resumed from 2nd October (vide page 991), on motion by Mr. Fairhall-
That the Schedule to the Customs Tariff 1933- 1962, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 991).
.- The item involved ir> this amendment is called 2,4,5-trichlorophenoxyacetic acid, which is known, for obviously necessary purposes of brevity, as 2,4,5-T acid. It is the base, I understand, of the chemical from which certain weedicides are produced. We all know that weedicides and insecticides are of very great importance to Australian primary producers.
The Special Advisory Authority has recommended that a temporary duty of ls. 3d. per lb. on imports from all countries be imposed. This temporary duty is additional to the existing duties of 15 per cent, ad valorem under the British preferential tariff and 22i per cent, ad valorem under the most-favoured-nation tariff. I have here the report of the Special Advisory Authority regarding this product. It says, in part -
The question of assistance to the production in Australia of 2,4,5-T acid, its salts and esters, and preparations thereof, was examined by the Tariff Board in its report dated 28th June, 1962. However, because the Board’s findings may not have been appropriate in the light of changed conditions, its recommendations were not implemented and, pending a further inquiry by the Board, the question of the industry’s immediate needs was referred for examination and report by a Special Advisory Authority.
Apparently the Tariff Board dealt with this product and made recommendations which were not favorable to the industry, and so the matter was referred to the Special Advisory Authority. The report goes on -
Evidence in this case was submitted to me by Union Carbide Australia Limited (the sole local producer of 2,4,5-T acid and a manufacturer of 2,4,5-T amines and esters), Nufarm Rural Products Pty. Ltd. (an esterifier of 2,4,5-T acid and formulator of 2,4,5-T products), Philips-Roxane (Aust.) Pty. Ltd. and Hardie Trading Limited (importers) and the National Farmers’ Union of Australia.
Finally a decision was made to impose the increased duties. Let me point out that the sole producer of this product in Australia is Union Carbide Australia Limited. These commodities are produced at the company’s vast new plant at Altona, in my own constituency. Having failed to get what it wanted from the Tariff Board, the company appealed to the Special Advisory Authority, which satisfied its requirements. There is some limitation even to my support for protection. It appears to me that this company, when it determined to set up its plant in Australia and become sole producer of this product, must have known what tariff protection was likely to be available. As a major pioneering enterprise, with enormous financial resources behind it. it should have had the capacity to stand some financial losses for a few years. Instead of taking such losses, however, it took advantage of our tariff procedure and went to the Special Advisory Authority crying for extra protection, which was given to it.
We are going to support this measure, because we want to encourage an Australian industry. But again I issue my warning that the day is coming when the wholesaling and retailing activities of these outfits, and prices charged to Australian consumers, will be examined by some authority very closely indeed, and some control will be imposed on the distribution end, and particularly on people who engage in exploitation. However, for the time being, and in the absence of any further elaboration or information, we will support the amendment.
– These debates on tariff proposals have been quite unusual, Mr. Chairman. For the first time that I can remember the Parliament has made a really close examination of these recommendations. I think this is a good thing. I believe that effective tariff protection should be given to Australian industries, and that, if necessary, embargoes should be laid dowa to give advantage to Australian industries capable of supplying the home market, provided that proper protection of Australian working conditions is guaranteed.
Order! I remind the honorable member that we have had a general debate in this Parliament on the Tariff Board and tariff procedure. There has been a secondreading debate on a tariff measure. The matters being considered by the committe now are particular matters mentioned in motions made by the Minister, and the honorable member’s remarks should be related to those matters. He should not engage in a general debate, as he has done previously and is attempting to do again.
– I see your point, Mr. Chairman. I know you have a job to do. I know that if honorable members stray all over the place in these debates we will be here all night, and we want to avoid that at all costs. But I want to say that I do not like the idea of giving this company the protection asked for without being satisfied that it is not able to do without it. If this company can carry on without such protection it should be made to do so. I agree with the honorable member for Lalor (Mr. Pollard) that apparently the company was knocked back by the Tariff Board, and that it then went to the Special Advisory Authority and obtained what the board has refused to give it. If we examine the profits of many of these large companies that ask for protection, including the particular company concerned with the manufacture of the item in question, we will find that they are quite able to carry on without the extra tariff protection that they sometimes ask foi.
– Who are the shareholders in this company?
– I have not gene into that, but I can say that in the case of most of these companies that exploit the public, the shareholders would, in the main, be prominent members of the Liberal Party. I have probably said enough to make my point. I shall just read to the committee the Labour Party’s policy on tariffs. For the sake of the record I think it should be recorded in “Hansard”. It is this -
Effective tariff protection of Australian industries and import embargoes in favour of Australian industries capable of supplying the home market - in each case subject to the control of prices,- and that is important - to protection of Australian working conditions and to due efficiency in production.
I shall not trespass on your good graces any further, Mr. Chairman. I think we should always keep these matters in mind when considering recommendations such as that now before us.
Question resolved in the affirmative.
Customs Tariff Amendment (No. 46)
Consideration resumed from 4th October (vide page 1205), on motion by Mr. Fairhall -
That the Schedule to the Customs Tariff 1933-1962, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 1203).
Customs Tariff (New Zealand Preference) Amendment (No. 8)
Consideration resumed from 4th October (vide page 1209), on motion by Mr. Fastball-
That the Schedule to the Customs Tariff (New Zealand Preference) 1933-1962, as proposed to be amended by Customs Tariff (New Zealand Preference) Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 1209).
– As the Minister has already stated that these two amendments are complementary, is it the wish of the committee that Customs Tariff Amendment (No. 46) and Customs Tariff (New Zealand Preference) Amendment (No. 8) be taken together and that the motions be considered as a whole?
– The Opposition does not object to the two amendments being discussed together, but it wishes to discuss particular items separately.
– Then that course will be followed.
Item 104 agreed to.
.- Mr. Chairman, I do not presume to know very much about this item. The honorable member for St. George (Mr. Clay) is well informed on the subject, so I leave it to him.
.- I recall that about twenty months ago I approached the Department of Trade on behalf of manufacturers of furnishing fabrics. At that time the Special Advisory Authority had not been appointed, and we were going through the phase in which we had deputy chairmen of the Tariff Board considering temporary duties. A deputy chairman conducted an inquiry which yielded not very satisfactory results to the makers of furnishing fabrics. Those manufacturers face the same difficulty as the makers of man-made fibre piece-goods. Time and time again when we have applied to the Tariff Board or the Special Advisory Authority for protection for the manufacturers of furnishing fabrics, overseas manufacturers have evaded the Tariff Board’s recommendation by slightly altering the nature of their fabric or its weight. This has meant that our attempts to secure protection for what I know to-day is a highly efficient and, I think, economic Australian industry, have met with defeat. It is with some regret that I notice that the Tariff Board gives very little help to the furnishing fabric side of the textile industry. It appears to me that unless this industry gets into even greater difficulties than it is in already there is no possibility of its getting before the Special Advisory Authority, wherein lies its only hope of rescue from an extraordinary difficult situation. Today a large volume of fabrics is being imported from overseas. However, I feel that little is to be gained by discussing this problem at length. It is one of those cases where, unless the industry gets into great difficulty again, it will be impossible to have anything done.
.- I should like to say a few words about the report on textiles and man-made fibres, and I want to say at the outset that I am disappointed with the result of the Tariff Board’s inquiry. Within my electorate, in my home city of Wangaratta, there are two fine and efficient mills which are affected by this section of the report. I refer to the Bruck Mills and the Wangaratta Woollen Mills, of which the city and people of Wangaratta are proud, and of which Australia can be proud. For the information of honorable members I should state that these mills are staffed by approximately 1,200 skilled workers, most of whom are Wangarattaborn and locally trained. Also among the employees of these mills are a number of people who have come from overseas.
The result of this report could be damaging to the welfare and prosperity of the man-made fibre mill in Wangaratta, although it is not possible to say definitely at the present time that that will be the result. It will probably be early next year before we know its full effect. When this industry applied for protection it was suffering damage from imports from the United States of America as well as Japan - a point that is often overlooked by many people. Honorable members must realize that this industry is a most important part of the whole textile industry of Australia. I have heard it said in this chamber that this industry employs only 1,900 or 2,000 people and so does not affect a very large proportion of the Australian work force, but what is lost sight of by those who say that is the fact that this industry is a link in a huge chain of industries which form the textile industries of Australia. The true position is that the employment involved in this industry is not 2,000, but about 70,000. The mills in this industry buy raw materials from other mills, and they then supply woven fabrics to other mills, which make them up into garments or use them in car upholstery and for the manufacture of tires, parachutes and other articles which are essential to the welfare and the defence of Australia.
What were the reasons for the inquiry as a result of which it was recommended that a 25 per cent, ad valorem duty be placed on materials costing 60d. a yard and over? One of the reasons was that the industry was being harmed by imports and the other was the economic climate of Australia at that time. In the Bruck Mills at Wangaratta 700 people worked a four-day week for seven months. I want to pay a tribute to the employees at those mills. I would have expected that some of them would have spoken to me, as their federal representative, urging me to ask the Government to take quicker action than it could take or was taking. However, not a single employee at those mills said a word of complaint to me. I think that is to be admired. It shows the quality of the people who are employed there.
What was the result of granting this 25 per cent, duty? The result was not, as some people have said and as was intimated in the full Tariff Board report, that the prices of the goods manufactured by the mill went up. In the main, prices came down. This raises another point which a lot of people overlook. Competition in this industry does not come only from overseas sources. There is keen competition within Australia. This is a factor which makes the firms concerned become efficient and keep their prices at reasonable levels. We have seen that this temporary duty saved the jobs of about 160 people in Wangaratta. It saved their jobs in a decentralized industry. I have said in this chamber before that it is hard enough to get industries to go into the country areas in the first place. Let us always bear in mind that where it is possible for the Government to take action, it must take action to protect industries that are established out of the metropolitan areas.
Some people have asked whether a textile, industry is essential to Australia. Of course it is essential to Australia. The Go- vernment realizes this, and every one else in this chamber should realize it. We must have a textile industry to cope with population increases and for defence purposes. Certainly, we all agree that it must be economic and efficient. The Wangaratta woollen mills and Bruck Mills at Wangaratta are efficient, but they do not claim that they cannot improve their efficiency. They can buy more modern machinery to improve efficiency, and they are doing this all the time. One of the mills in Wangaratta has bought £250,000 worth of American machinery, which is now being installed. I have it on good authority from the Commonwealth Scientific and Industrial Research Organization and from people in the wool industry and the textile industry that the textile industry is of great assistance to the woo] industry of this country. That industry is the backbone of our nation’s export income. That is another reason why we must encourage and protect the textile industry in Australia.
All the time, the textile industry is training people to play their parts in weaving woollen goods in the same way as goods are woven from man-made fibres. I know of two cases in which eminent people received their training at the Bruck mills. In one case, the man concerned is now a technical officer of the Australian Wool Bureau. In the other case, the man concerned is the Director of Wool Education in New South Wales, under the supervision of the State Government. Both those men received their textile training at the Bruck mills.
No one wants high tariffs. No one wants tariffs that are too high. But this seems to me to be the tricky problem that confronts anybody who has not had the benefit of conducting a full-scale inquiry into any industry: When is a tariff too high? Who can say? It is all very well to make flighty statements about tariffs being too high, but I have not heard any one in this chamber prove that a tariff is too high.
In referring very quickly to the report of the Tariff Board on this subject I want to make a balanced comment, not a one-sided comment such as we have heard in this chamber from time to time. Here is something that I have picked out of the report which indicates that, perhaps, a more thorough examination could be made of the situation. The report stated -
The main element in the cost of materials in the production of the goods under reference is the cost of man-made fibre yarns. The evidence received at this inquiry does not enable the board to make an assessment of the disabilities of the Australian weaving industry in the cost of yarns. However, from recent reports it has made on man-made fibre yarns, it is possible to indicate the order of the disabilities suffered by Australian yarn manufacturers. The level of duties payable on imported yarns may give a general indication of the order of the Australian weavers’ disabilities in respect of yarn used, though it should be noted that the board received no information as to the terms on which yarn is purchased by overseas mills producing goods of the type under reference.
Yarn is the main element in the cost. It seems to me to be very important to get information on the difference in the cost structures of overseas firms and Australian firms. The cost structure of the various industries seems to be at the root of the need for protection. The report stated that the board had received no information on these factors. In an inquiry in May, 1960, the then chairman of the board, Dr. Westerman, insisted on this information being made available from Japan and the United States of America, from which we get about 10,000,000 square yards of the goods under reference each year and from which we are getting extreme competition. Judging by some of the speeches that I have heard in this chamber on textile duties one would almost think that Australia had invented duties or other methods of protection. This has been going on since the year dot. Every other country of any size in the world has duties on man-made fibres.
– Order ! The honorable member’s time has expired.
.- Mr. Chairman, I take it that at this juncture one may discuss woollen piece goods and textiles of man-made fibres. I particularly want to make some comments about woollen piece goods. The second paragraph of Tariff Circular Memorandum 62/118 states -
The concept that fabrics containing any wool normally passed to Item 103 (f) (1) has been varied by requiring at least 20 per cent, by weight of wool to be present before the fabrics become subject to the wool fabric duties.
That principle is carried on in paragraphs 3, 5 and 6. In the Tariff Board’s report on woollen piece goods, I came across a reference to the industry’s apparent disability, and I should like to say something about it. In the last paragraph, under the heading “ Measurement of the Industry’s Apparent Disability “, at page 13, the board stated -
In support of the requested increases in duties one witness gave actual prices for a number of low-priced imported cloths, most of which were said to be of Italian origin, together with selling prices of local fabrics claimed to be similar. In every case the landed cost of the imported fabrics, including all duty presently payable, was much below the quoted Australian price. There was, however, no indication of the extent of current imports of any of the fabrics used in this comparison.
The last sentence is indicative of a situation that is something of a pity. I am inclined to predict that in the next twelve months there will be brought into this country from Italy quantities of cloth which will be found to contain a substantial percentage of reclaimed wool. Reclaimed wool can be made from scraps and from old woollen clothes, perhaps even 100 years old, because wool, so long as it is kept away from moths, seems to have an almost indefinite life. To reclaim wool, one can put it through a garneting machine and through various processes, including bleaching. After all these processes, it is very difficult to tell how old the wool is. But one thing is certain: You can buy what appears to be perfectly good wool, although it is reclaimed, at a much lower price than new material. As a consequence, these Italian cloths, which I am led to believe contain a high percentage of reclaimed wool, will be brought into this country and will sell at prices much lower than those of cloths made of pure, new
Australian wool of high quality. Therefore, I predict that great and grievous difficulties await the woollen manufacturers of this country before many more moons have passed.
The Tariff Board’s report on textiles of man-made fibres begins, as do nearly all the board’s reports, by stating the matter referred to it. In this instance, the reference is in these terms - whether assistance should be accorded the production in Australia of- piece goods, woven, wholly of or containing not less than 20 per cent. by weight of manmade fibres, which, if imported, would be covered by Item 105 (d) (1) (a), not being piece goods covered by Item 105 (d) (1) (a) (1), of the Schedule to the Customs Tariff 1933-1961- and, if so found, the nature and extent of such assistance; . . .
Once again, I ask: Is it a question of whether assistance should be accorded or of what assistance should be accorded? I think that it ought to be a question of what assistance should be accorded. A great deal more verbal junk is included in the report in an attempt to define within confined limits what goods made in Australia by Australians are to be considered for protection under the customs tariff.
I can tell the committee in a few words what the issue is. It is the future of the industry which produces textile fabrics woven in Australian mills by Australians for Australians by the following manufacturers: -
Burlington Mills (Australia) Proprietary Limited, at Rutherford, about 18 miles from Newcastle, New South Wales.
Bruck Mills (Australia) Limited, at Wangaratta, in Victoria, not far from the New South Wales border.
Byfas Proprietary Limited, at Abbotsford, in Victoria.
Davies Coop and Company Limited, in Melbourne.
James Nelson (Australia) Proprietary Limited, at Launceston, in Tasmania.
Prestige Limited, at Ararat, in Victoria.
Silk and Textile Printers Limited, at Hobart, in Tasmania.
Tootal Broadhurst Lee Company Limited, at Devonport, in Tasmania.
The two largest producers are Burlington Mills, at Rutherford near Newcastle, and Bruck Mills, at Wangaratta, in Victoria.
Even if one allows for the size and location of all the other manufacturers, it is immediately apparent that this branch of weaving in Australia is most decentralized and provides employment where it is most needed, namely, in the rural districts of New South Wales, Victoria and Tasmania. Decentralization and the provision of employment are important factors. I personally know six young men who live not far from my home. I discovered, to my surprise, that they all have come to Sydney from as far away as Inverell. These young men betwen the ages of nineteen and 25 could not get jobs in Inverell. If there were at Inverell at decentralized enterprise such as Bruck Mills or Burlington Mills, these young men would never have had to leave their homes and families and go to Sydney to seek employment. Jobs would have been available for them in their home town.
Prior to 15th August, 1961, the textile fabrics now being discussed received a level of protection which was proven to be insufficient, although it was beyond dispute that the industry was being conducted in a highly efficient and economic manner. Proof that the level of protection before 15th August, 1961, was too low is to found in the volume of imports from Japan and the United States of America in the preceding months. The industry appealed for emergency additional protection, and the Special Advisory Authority recommended protection of the Australian mills by a 25 per cent. ad valorem temporary duty. This duty abruptly interrupted the flood of imported man-made fibre piece goods which had caused the dismissal of several hundred Australian textile workers and caused the remainder to be put on a fourday working week of 32 hours.
I want it noted here that at that time the Minister for Labour and National Service (Mr. McMahon) would have had many more thousands of unemployed workers on his books and in his records had not the textile workers consented to a working week of four days - and, frequently, less than four days. At that time, there were thousands in that situation working short time, in addition to thousands who were dismissed. All of these people were not only producers but also consumers. They were buyers of the products of their own industry and of every other industry. Failure to give adequate protection to the textile industry added to the troubles and the muddle created by the credit squeeze, which threw a cold wet blanket over the whole country.
I remind the Government that if it accepts the Tariff Board’s report it will deal a deadly blow at an important section of the Australian textile industry and will sign and seal the dismissal notices of hundreds of Australians in rural districts who, to get other jobs, must leave their homes and join the great trek to the cities.
I should like to make several points about textiles of man-made fibres. This industry, as the honorable member for Indi (Mr. Holten) has pointed out, is completely decentralized. It provides work in country districts, although those manufacturers who establish themselves in rural districts know perfectly well that by so doing they raise their costs of production. This decentralized industry provides work for females in country districts, who, I think, deserve special consideration. There is practically no opportunity for females to obtain work in rural areas unless the textile industry or some similar industry goes to their rescue. The establishment in rural districts of industries such as those which manufacture man-made fibres avoids the need for many families to break up when the sons and daughters go elsewhere to obtain jobs.
I believe that proper protection for the textile industry will enable Australians to get a larger share of the Australian market and, as a consequence, will expand our economy and provide more employment. The development of a basic industry to produce man-made fibres for the weaving industry is essential to Australia. Yet the Tariff Board’s report on textiles of manmade fibres recommends the removal of the 25 per cent, ad valorem temporary duty. Despite some increases in costs of production for external reasons, the price of no fabric has been increased and some prices have been reduced.
We are entitled to express our utter disgust at the removal of the 25 per cent, ad valorem duty. This will plunge the industry back into the chaos which existed prior to August 1961. Between August 1961 and the present time, have the Aus tralian consumers or the retail stores suffered hardship attributable to the emergency ad valorem tariff of 25 per cent? The answer is that they certainly have not. A portion of the Tariff Board’s report is in these terms -
From confidential evidence the Board found that in 1960-61 the rate of profit in the Australian industry was generally less than the Board would regard as responsible and that some firms were incurring losses.
That is very significant. It highlights the fact that this is not an industry which exploits the people; it is an economic and efficient industry. The 25 per cent, ad valorem emergency protective tariff of August 1961 altered the then existing position. The mills have been reasonably busy since then.
A similar situation confronted Canada which lives beside the United States of America, that industrial giant, so Canada inserted a provision in its customs act which gave the appropriate minister the right to act very swiftly to prevent dumping of close-out sale materials in Canada. The existence of that provision in the Canadian act, and the knowledge that the Canadian Government might use it, is a deterrent to the importation of large quantities of closeout sale textile fabrics into that country. There seems to be no similar deterrent in Australia apart from the right of Parliament to reject the report of the Tariff Board if, in the opinion of the people’s representatives, the report will inflict injury on a section of the Australian people directly, and consequently upon the remainder of the people.
What would be the effect of the adoption of this report? Would the Australian people get cheaper textiles? The chances are that they would not. Would they get greater variety? Possibly, but at present Australian mills produce a great variety of fabrics which I have observed to be eminently pleasing to women who normally are not easy to please. I have seen some of the most beautiful fabrics in the showrooms of the Burlington Mills and I doubt whether any woman in Australia would not be pleased with the range and variety of the fabrics produced by those mills. I know that Bruck Mills also produce a wide range of goods.
Without a strong Australian textile industry we are at the mercy first, of the importers, and secondly, of the big retail stores. An examination of the list of those who want a low unprotective tariff, as contained in the report, reveals the names of Farmers, Mark Foys and David Jones. I presume that the other big retail stores thought it was sufficient to allow those three to act for them and that there was no need for them all to appeal. We can be sure that they all support the three firms which I have mentioned. Their concern is the greatest profit, not patriotism. The greatest profit lies in selling the products of cheap labour countries in a high wage country like Australia or, alternatively, selling in Australia the end-of-season materials which can be purchased at bargain basement prices from such countries as the United States.
This is an opportunity for members of the Country Party to strike a blow for the thing which they profess to admire so much - decentralization. The industry cries out for decentralization, but when private enterprise accepts the task of decentralizing and providing work for country people, a report such as the one before us is permitted to pass without a challenge. We should take a vote on the adoption of this report. It is a great pity-
– Order! The honorable member’s time has expired.
.- The duty of 2s. 8id. a square yard on artificial fibre piece goods which is the subject of this debate was founded on a Tariff Board report signed on 29th June. It was this report which led to the spokesman for the industry, Mr. Burgess, embarking upon a bitter campaign of criticism of the chairman and members of the board. We may expect the umpire’s decisions to be challenged bitterly by the people in the outer, but it is saddening to hear this abuse coming from the members’ stand.
Let us look at the history of the protection which this industry has received. Protection really started in 1950 when a duty of ls. 8id. a square yard was imposed on fabrics which consisted of 50 per cent, or more of artificial fibre. In its report the Tariff Board stated -
The Tariff Board is satisfied that any error there may be in the rate of assistance recommended is on the side of generosity to the Australian industry. In any case, it represents the heaviest burden that the Australian community should be called upon to carry for the sake of developing the industry.
In 1959 the rate was increased to 2s. 8£d. a square yard, less 15 per cent. In 1960 it was increased to 2s. 8id. a square yard and the scope of the protection was widened to include those fabrics which contained over 20 per cent, of man-made fibre yarn instead of the 50 per cent, which obtained previously. In August, 1961, an additional 25 per cent, emergency protection was imposed. This is the duty which the honorable member for St. George (Mr. Clay) was extolling. The last report of the board which we are now discussing removed the emergency protection of 25 per cent, and the duty now returns to 2s. 8id. a square yard. That is said to be too low. The duty works out on an ad valorem basis at 66.6 per cent, if the imported cloth costs 4s. a square yard; 55 per cent, if the imported cloth costs 5s. a square yard; 45 per cent, if the imported cloth costs 6s. a square yard and 39 per cent, if the imported cloth costs 7s. a square yard. Obviously the value of the duty falls as the value of the imported cloth rises. The cheaper the cloth the higher the ad valorem rate of duty.
The duty operates in this way because the Tariff Board felt that the Australian manufacturer has a good chance of meeting overseas competition with the help of these high ad valorem rates of duty on low cost lines - the bread and butter lines. It is on these lines that the Australian manufacturer, with the help of the duty, has an advantage because the yardage of cloth of the same pattern and colour is large. That means that the manufacturer can set up his looms and make a large quantity of a certain run without changing them. He can mix his dye-stuff in a vat and pass through a reasonably large amount of cloth. The dye left over after a large run can be spread over a comparatively large amount of cloth. For instance, the sample of material which I have in my hand is a bread and butter line, made I think by Burlington Mills, which sells in Australia at 3s. lOd. a yard compared with 4s. lOd. a yard for similar imported cloth. So, the Australian manufacturer can produce and sell this bread and butter line quite well.
However, when we leave the bread and butter lines the position becomes different. I have a graph which shows how the size of an order for cloth falls as the price increases. In other words, the more expensive the cloth the smaller the size of the order. At 5s. a yard the average size of the order is 6,000 square yards. At 7s. a yard the average size of the order drops to 500 square yards. You see, it is in the high price bracket at over 5s. a yard that the troubles of the Australian industry occur. It is not because the manufacturers cannot make the cloth; it is because they cannot make enough of a particular run of cloth to make it economically. The cost of setting up the looms and filling the dyeing vats is the trouble. To exemplify that it is not the fault of the industry I mention a high quality light blue material coming from Germany. It sells at 3s. 9id. a yard in Germany but, duty paid, it costs 8s. a yard in Australia. A dark blue material made in Australia which is the nearest I could get to the German material, costs 8s. 5id. a yard. As I say, all this is not “the fault of the industry. The reason for it is that women are women.
Honorable members know what it :s like. You walk down the street with your wife and you see her hackles rise as soon as she sees another woman wearing a frock of the same pattern as hers. In a speech in the House last year I pointed out that all the Minister had to do to make the industry efficient was to put women into uniform, to make them wear clothes of a common colour and pattern. If that were done, the industry’s troubles would be over. The press of Australia took my statement up and my wife spent the next week answering telephone calls from angry fashion editors all over Australia. I returned home at the end of the week to a very chilly reception. I think that my wife’s comment to one editor summed up the matter very well. She said, “ He has been married for 25 years; he ought to have more sense! “
But that is the nub of the matter. While women remain as they are - and we would not have them different - they will demand small quantities of high quality doth. There is nothing we could do about it, even if we would. If the Minister wants to try,
he is welcome to the experience, but I advise him not to go home for many weeks.
It is no solution to put a still higher duty on the dearer lines of cloth. As soon as you do that, you switch the demand to other materials. As soon as man-made fibre material becomes dear, women switch to cotton or wool. In Australia, in the three-year period that ended in 1949 - the year when protective duties were imposed we were using 9i square yards of manmade fibre cloth per head a year, compared with 5$ yards per head of population now. In the three-year period that ended in June, 1950, our consumption per head was 23 per cent, above that of New Zealand. Now, because of the higher Australian prices, the Australian consumption per head is 16 per cent, below the New Zealand consumption, and the climate in Australia is much more suitable for the wearing of this kind of material than the climate in New Zealand is. I went to some trouble to check on these facts. In South Africa, where only about 20 per cent, of the population enjoy a standard of living comparable with ours, the consumption per head of man-made fibres is about 8 yards, compared with 5i yards in Australia. In Britain, where the industry is not sp heavily protected and prices are lower, the consumption is 10 yards per head, compared to our 5J yards.
There are two morals in all this. The first is that you cannot force women to buy materials of similar colour and pattern. The second is that if you try to put the duties high enough to force women to buy expensive cloth, they will buy other kinds of material. All the eloquence of everybody, including the Minister for Supply (Mr. Fairhall) who is now at the table, will not make any difference. You are up against an irresistible force - the feminine mind - and you might as well be brave about it. In any case, all is not lost. The factories that are good at making cloth, that concentrate on the bread-and-butter lines, are doing all right. Nelson’s in Tasmania is doing very well. It does not have grandiose selling schemes. It does its job without spending all its energies shouting for help and pays 20 per cent, on shareholders’ funds. It is only the companies that think that they have a divine right to produce and sell the expensive lines that are in trouble - or the companies that have showrooms that are the laughing-stock of Flinders-lane because of their magnificence.
Are the duties to be made so high that we stifle demand in order to justify that kind of thing? But even if you would save those companies, you cannot. That is not because you do not want to. It is because you cannot. It is because women are women and have queer feminine minds. If those who, like the honorable member for St. George (Mr. Clay), are so eloquent in opposition to those duties really want to do something heroic I suggest that they start convincing their wives to wear uniforms of man-made fibre. I can tell you one thing - and this is a cry from the heart - I will never embark on this exercise again.
So there it is. This is the report that all the fuss was about. This is the report that caused Mr. Burgess, the spokesman for the industry, to abuse the Tariff Board. All I can say is that no tariff board with a sense of responsibility could have brought down a report recommending higher duties. In fact, it appears to my untutored mind that the industry is over-protected, if anything.
One of the arguments used in opposition to these duties is that unemployment will result. I point out that most of the piecegoods that are the subject of these duties are sold to garment manufacturers. If you make clothes dearer, people buy fewer clothes. Do you know, Mr. Temporary Chairman, that there are 30 times as many people engaged in the garment industry as there are engaged in making man-made fibre piece goods? We have been told that we should encourage the employment of feminine labour. I will not argue about that, but do you know that there are about 1,500 women employed in making manmade fibres compared with about 49,000 women employed in making garments? So, when honorable members talk about employment let them stop and think where the employment comes from. If the honorable member for St. George is so anxious on this count, I suggest that he tell the 58,500 people in the garment industry that their jobs are going to be jeopardized to save the employment of the 2,000 people engaged in making piece goods. He can go by himself. I will not be there.
– I listened again with interest to the honorable member for Wakefield (Mr. Kelly). It is difficult to know what will please him in respect of the tariff to help this industry in Australia, because even in the last few minutes of his speech he saw fit to criticize slightly the honorable member for St. George (Mr. Clay), who was concerned, as most honorable members are, with the 1,900 men employed in the industry. There are about 80,000 unemployed people now, and lack of protection for Australian industries would increase that number considerably. I suggest that the honorable member give some consideration to the interests of people being displaced as a result of the Government’s policy, especially people engaged in the making of textiles and furnishing fabrics, on which the Tariff Board has taken a rather peculiar attitude.
The honorable member for St. George spoke with intimate knowledge of these industries and brought some salient facts to the attention of the committee. I think that notice might well be taken of his statements, particularly those in reference to matters like the location of the industries concerned and their benefit to country districts. When factories are closed down in country districts, the employees laid off are unable to find employment. Even the honorable member for Indi (Mr. Holten) paid tribute to the value of these industries, so we cannot ignore the fact that there is considerable criticism of the board among members of the community as well as in politics in relation to these industries. I recently received a communication from the Textile Council of Australia, which has a close interest in the affairs of Australia’s textile industry. It refers particularly to the Tariff Board’s findings in relation to the two items under discussion. It states -
The Government tabled three Reports of the Tariff Board shortly before the Parliament rose on Thursday last, October 4th, 1962. Copies of these Reports now have been distributed to interested people and the opportunity to study the likely outcome of the Reports has been taken by those concerned.
I intend to read this to stress the importance of this decision and the effect on this branch of the textile industry -
The branches of the Textile Industry affected by the decisions are those engaged in the production of Wool Piecegoods, Manmade Fibre Fabrics and Furnishing Fabrics. In the case of Wool Piecegoods the Board has substantially reduced the emergency protection recommended by a Deputy Chairman of the Board last year.
Evidently the board does not trust its own deputy chairman on this issue -
In the case of Manmade Fibre Fabrics the Board has entirely removed the emergency duty recommended by a Deputy Chairman of the Tariff Board last year.
In the Furnishing Fabrics case the decision of the Board has left the duties practically as they were before, and it looks as though this section of the Industry will have great difficulty in surviving.
That is a critical statement to make in relation to a Tariff Board report and it shows the importance of these decisions and the need for some review or right of appeal, as mentioned by the honorable member for St. George (Mr. Clay), against decisions of this nature which could put this section of the industry out of business. The communication continues -
The Wool Textile Manufacturers of Australia have been advised by their Federal Executive Officer that the duties are far from satisfactory, and the President of the Wool Textile Manufacturers of Australia has asked the Minister for Trade to receive a deputation. In making this request the Wool Textile Manufacturers have advised the Government that the Association is gravely concerned at the serious loss of protection, especially as some sections of the Industry are still suffering competition from imports and have not yet recovered from the serious damage which occurred prior to the application of the emergency duties which the Tariff Board has now seen fit to reduce.
Even those duties were not sufficient, in the eyes of the industry. The communication proceeds -
Wool Textile Manufacturers have told the Government they expect to see a renewed flood of imports of wool cloth following the heavy reduction in emergency duties.
If history repeats itself in regard to tariffs that will prove to be the case. To continue -
It should be borne in mind in considering this strange Tariff Board decision that the Board has expressed the view quite clearly in its Report that the industry is worthy of long term protection, and this was a very important point made by the Minister for Supply, Mr. Allen Fairhall, when he tabled the Report in Parliament on Thursday.
How can the board justify a contradictory decision of that nature in view of its statement that the industry is worthy of longterm protection? That is a contradictory report which it is difficult to link up with the decision that has been given. The communication continues -
The Manmade Fibre Weaving Industry has protested to the Prime Minister about the damaging effects of the Tariff Board Report and has said that the Industry could be brought back very quickly to the same position in which it was placed two years ago following the removal of Import Licensing and prior to the emergency duties applied as the result of an inquiry by a Deputy Chairman of the Board.
In other words the board is putting the industry back where it came from. Even the emergency duty applied by the deputy chairman apparently is of no importance to the Tariff Board. To quote further -
The Government has been advised that the employment situation in places where mills are to be found is likely to deteriorate unless the Government moves quickly to restore protection to the Industry.
That was mentioned earlier to-night by speakers on both sides of the chamber. The industry is located in areas where it is of importance and any indication that it may close down or be seriously affected naturally affects the employment capacity of the district concerned. The Textile Council of Australia states, further -
The Cotton and Manmade Fibres Federation points out that the Tariff Board Report indicates that the Board failed to obtain cost evidence from Japan and the United States of America, although imports from these two countries represent 62 per cent of total imports.
It is hard to believe that the board would not have taken evidence on these two items, particularly as Japan is one of the nations involved. I can understand the United States situation to an extent but at the same time the board should have taken that evidence - if that were not done - particularly in the case of Japan, which could be expected to undercut the Australian product if it desired to do so. To quote further -
The Board’s failure to do the necessary job of obtaining cost information in the opinion of the Federation indicates a peculiar attitude-
I think that is quite mild - particularly when the Board has decided to remove emergency duties. Some members of the Federation have expressed the view that serious unemployment could follow and that the Board has given the “ kiss of death “ to a very important secondary industry.
The Federation has asked the Government to take the initiative to remedy the situation and has asked for advice as to what the Government proposes to do.
That is a report from the Textile Council of Australia, which has made an intimate study of the two items that I am discussing. It indicates that members of the council are hardly satisfied and they have shown the effect of the Tariff Board reports on these industries which, to say the least of them, appear to be extremely detrimental to the welfare of these industries and their employing capacity. I have mentioned textiles of man-made fibres and it is interesting to note in the Tariff Board’s report the following passage under the heading “Funds Employed “: -
At the time of the last inquiry, it was shown that the funds employed by the member companies of the R.C.W.A. in the production of textiles of man-made fibres were £10,500,000. On this occasion, the funds employed in the production of the goods under reference are about £8,300,000.
The reference, under the heading “ Employment” says -
The evidence indicates that currently there are about 1,900 employees engaged in the production and sale of the goods under reference in the mills of member companies of the R.C.W.A.
You cannot discard these 1,900 men and their employment in this industry. They are located in places such as Wangaratta, Rutherford, Abbotsford, Melbourne, Launceston, Ararat, Hobart and Devonport. They are widely scattered and some of them are in country centres, yet we get the type of report that has been criticised by the Textile Council of Australia, which has an intimate knowledge of the industry, and by the trade unions associated with it, as well as the employers’ side. Surely that calls for a review of the Tariff Board by the Minister to ascertain what protection is to be given to an industry which, to all intents and purposes, is on the way out because of the report which has been presented. While it is said that we cannot dictate to the Tariff Board, at least we can review it. There should be some appeal so that people could be given a further chance to submit a case which might meet with a better result. It is interesting to note that man-made fibre imports for the three months ended 30th September, 1962, went up to £1,953,000, compared with similar imports for the same period in the previous year amounting to £538,000, so the total had increased by three or four times.
Even with that knowledge behind it the Tariff Board saw fit to bring in that report, which is so detrimental to the industry.
Coming now to the furnishing fabrics section I will touch on one aspect of the report in particular. The funds employed in the production of furnishing fabrics by firms giving evidence before the inquiry, totalled, according to the board, more than £1,250,000 and the number of persons employed in the production and sale of furnishing fabrics was more than 450. In 1960, the board estimated employment in the production of woven furnishing fabrics at 400 persons and a further 40 were employed in the production of moquettes. That again shows how employment is affected, and we have a knowledge of the huge funds that are invested. Reports of this kind place in jeopardy not only the investment of those owning the industry but also the employment of about 450 people directly engaged, and other people in allied industries. I therefore suggest that the criticism of these reports is well justified.
I sincerely trust that some effort will be made to give justice to these two sections of the textile industry which, above all others, have suffered because of the Tariff Board’s approach to these problems and its inconsistency when compared with the reports brought in by a deputy chairman. I support the criticism from this side of the Parliament and I hope some effort will be made by the Minister and the Government to give a better deal and more justice to this section of the textile industry.
.- by leave - I thank the committee for giving me the opportunity to take a third period because, through a pure misunderstanding, I was deprived of the opportunity to speak at greater length earlier. There are a few things I want to say. In particular, I want to reply to the honorable member for Indi (Mr. Holten), who referred to the lack of information about the cost of producing fabrics in overseas countries. For his information I point out that it is safe to say that every time a Tariff Board inquiry is held Bruck Mills would pay something like £10,000, directly and indirectly, in presenting a case to the board, that Bradford Cotton would do likewise and that other mills would incur expenditure proportionate to their size. It would be even more expensive if they had to maintain staffs overseas in the various cities in the world where textiles are being made in order to arrive at the same accurate assessment of costs that they are able to obtain in Australia. Therefore, it is impossible to ask the textile manufacturers of Australia to assume this responsibility.
The honorable member for Wakefield (Mr. Kelly) seems to have the idea that I am endeavouring to prevent women from getting a large variety of pretty materials to convert into frocks. I direct the attention of the honorable member to the fact that the 25 per cent, ad valorem duty on a fabric costing 60d. per yard would be ls. 3d., and I know that the number of yards of material required to make a woman’s dress varies considerably from 3 to 6 or 7 yards. In some cases, using very fine fabrics, the amount required is much more; but when using the particular fabrics referred to here, the amount required would rarely exceed five yards. Therefore, for a few more shilings, if the women want imported fabric they can still have it very inexpensively. They can have a choice of the infinite variety of fabrics which are made in hundreds of different large textile mills throughout the world. I do not think the few shillings duty which would be added to the cost of the material would stop the women of Australia from being able to choose from a wide variety of fabrics from which to make their frocks. The honorable member for Wakefield referred also to the 50,000 people employed in the garment industry in Australia. I do not think that the restoration of the 25 per cent, ad valorem duty would cost a single male or female worker his or her job in the garment industry, and I say that advisedly as one who has had considerable experience of both the textile and garment manufacturing industries in Australia.
When I spoke on the first occasion I was about to pay a compliment to the honorable member for Cowper (Mr. McGuren) who has, at the moment, I think, only one very small textile factory in his electorate. I was going to say that it is a great pity that there are not more honorable members like the honorable member for Cowper. If the livelihood of the people in Grafton were threatened, as are the jobs of people in Devonport in Tasmania, Wangaratta in Victoria, and Maitland in New South Wales, the honorable member for
Cowper would come out fighting for his people, with all guns blazing, and I would like to see the same kind of attitude adopted by all honorable members who have large decentralized textile mills in their electorates.
I would like to ask whose voice is heard by the Government and its sounding board, the Tariff Board. Is it that of those who provide most of the employment in Australia - the manufacturers - or is it that of the big retail stores and the importers - Myers, David Jones, Farmer’s and others? These retailers will not employ one extra shop assistant whether the goods they sell over their counters come from the wealthy United States or from Japan. In fact, in the end, as more Australians get out of work, they will sell less. I recall that in the 1930’s our retail stores were jammed with cheap foreign goods, but the customers were few because they had been put out of work by the imports from cheap-labour countries. We cannot have it both ways. I repeat that this industry deserves to exist and to prosper because it is both efficient and economic. Now, it is about to face another period of stop before it gets the go signal.
By this recommendation from the Tariff Board, which has earned for itself the prefix “ low “, this section of the textile industry must return to the conditions which obtained before August, 1961. In the very near future, hundreds will be dismissed or placed on short time as a new flood of imports mounts and pours into this country from Japan and the United States of America. The spinners of acetate yarn and nylon in Australia will also be affected. There will be a laying-off at Courtaulds in Tomago, and there will be more laying-off at British Nylon Spinners in Victoria as the effect of this Tariff Board recommendation spreads with the fall-off in demand for Australian textiles made from man-made fibres. I have been obliged to listen in this chamber to a great deal of twaddle about the Japanese Trade Agreement and Japan’s unfavorable balance of trade with this country prior to entering into that agreement. I have never heard the French complain about an equally unfavorable balance. If Japan had cause to complain, so had France. But this Government wanted to do business with a cheap-labour country so that the world’s cheapest goods might come here to be sold at the highest possible prices that could be obtained whilst remaining just a little below the Australian prices, to the enrichment of importing interests and to the great detriment of the Australian textile industry in particular.
There is no price-fixing now. The Australian consumers found that the prices were only a little lower, but the importers and the big retail stores grew fat on the cheap labour of the Japanese people. The Japanese worker derives no benefit from the agreement other than a slightly greater certainty of continuous employment, thanks to the Australian market. The Australian textile worker reaped the consequences in short time and unemployment. I warn the Government that if it adopts this report it will be affixing its signature to the dismissal notices of 700 employees in what we call the rayon weaving mills of New South Wales, Victoria and Tasmania as well as the dismissal notices of others employed in the spinning plants. Government members themselves might just as well sign the dismissal notices. In Australia, as anywhere else, we cannot have it both ways. We demand a decent wage level. Over a century of struggle, we fought for a decent wage level with decent conditions and a fair and reasonable wroking week. These things have been won, and they are now an accepted part of the Australian way of life. Let no one imagine that because of these things any Australian textile worker gets it easy. Textile workers work at high pressure under incentive schemes. Is not that what the Government wishes from all industries? In the textile industry we have the utmost in efficiency, but what reward do the employees get? The only reward they enjoy is insufficient protection which is nearly as bad as no protection at all.
There is something else I want the Government to remember. Had this industry established itself in the big cities of Australia, it could have operated more cheaply in that transport costs would have been at the minimum instead of the maximum. But the industry did what governments want more industries to do. It went out into the country districts and provided work where previously there was none. If this Government permits the report to be adopted, it should never again speak about decentralization. If it does, it will be only double talk, lip service and hypocrisy. I now forecast what the Minister will say. He will say, “If the industry gets into trouble, it can appeal for another emergency inquiry “. Make no mistake about this; the industry will be in trouble, but from beginning to end, if the need for protection against unfair competition arises, it will be three months from the date that the need for protection becomes evident before it is granted.
I do not want to stand here next March, when the Parliament has its next chance to deal with this matter, and say, “ I told you so “. Let the Government reject this report right now and prove that it is really interested in the rural workers of New South Wales and in the decentralization of the textile industry.
.- I shall confine my remarks to the woollen piece goods industry, which I understand is covered by the proposal under consideration now. In particular, I shall direct the attention of the committee to the emergency tariffs that were applied against the importation of woollen piece goods containing nonvirgin fibres. I take the committee back to the beginning of 1960 when the Government abolished the system of import controls. We all know the devastation that followed in the textile industry in general and in particular in the manufacture of woollen piece goods.
After the abolition of import controls, there was a flood into the country, particularly from Italy, of cheap woollen piece goods containing non-virgin fibres. The practice followed in Italy in the manufacture of these goods is to reprocess old, used and worn garments, to reclaim the fibres and use them in the manufacture of cheap woollen goods. Obviously, these woollen goods have not the resilience and the durability of goods made from virgin woollen fibres, such as are manufactured in Australia. However, with the abolition of import controls, these cheap woollen goods flooded into Australia, and I stress that they were extremely cheap. Because they were made out of second-hand fibres it was possible for their price to be very much lower than the price of goods made from virgin fibres. It was also possible to put these goods on the Australian market at a price far lower than the Australian commodity because they were made in Italy where the cost of production is about half the cost of production in this country.
There are other considerations in the manufacture of these goods in Italy. A rather archaic system operates there. A man, his wife and family engage in the manufacture of these commodities on a contract basis. In very many instances, the man will have a job during the day and when he finishes his traditional employment he will go to his home and with his wife and family will engage, under contract, in the manufacture of woollen piece goods, using a machine that he has installed in his home. This sort of work is done on a large scale in Italy.
The importation of goods of this kind impinges on the security of employment of many thousands of Australian workers and affects the stability of the industry. I speak of the clothing industry in general. This industry is the second largest employer in Australia; it is second only to the metal industry. The industry engaged in the manufacture of these materials, particularly woollen piece goods, is making a great contribution to our industrial development. The abolition of import controls and the imposition of a rather severe credit squeeze caused loss of production estimated at about £700,000,000. The development of the country was put back 10 per cent. Because of this, the Tariff Board saw fit to introduce an emergency tariff to protect woollen piece goods manufactured here against the unfair competition of the cheap, rubbishy goods imported mainly from Italy. These imported goods, I repeat, were made from nonvirgin fibres. They were in bright, gaudy colours and sold at very low prices under the enticing label of imported goods. They attracted a large part of the consumer market.
The importation of these goods caused devastation to the home market and an emergency tariff was introduced. However, the proposition is now put up by the Tariff Board that this emergency tariff must be abolished. At the same time, it is said that the Tariff Board appreciates the need for protection of the Australian industry engaged in the manufacture of woollen piece goods, and suggests that perhaps the Government will undertake to establish some form of protection for those engaged in the manufacture of these goods in Australia. The Australian goods are made from our own primary products and Australians are engaged in their manufacture.
I sincerely hope that the Government will not adopt its usual attitude when the welfare of the Australian people is at stake, but will take some positive action to guarantee the security of this great industry which helps so much in the development of the nation and which employs many Australian workers. It was severely affected by the recent credit squeeze. Some segments of the industry suffered a 50 per cent, to 100 per cent, lay-off of workers. This industry has made a valuable contribution to decentralization. It is dotted throughout the length and breadth of the Commonwealth. I would have thought that members of the Australian Country Party would be most vociferous in fighting for the protection of this industry, because it uses virgin woollen fibres. It has been often said that the woollen industry is the most important industry in this country and members of the Australian Country Party often claim to be its staunch protectors. However, they have not shown any keenness to put up a strong, virile fight for the protection of the industry, or Australian industry generally, or for the protection of the employment of the many Australians engaged in the industry.
It would be regrettable if the Government did not do something to guarantee the security of this great industry and I sincerely hope that the Minister for Supply (Mr. Fairhall), who is now at the table, will make some definite statement assuring the large number of people employed in the industry that they need have no fears for their future; that their security will be guaranteed by government legislation so that the industry will not receive a further setback. During the credit squeeze, it was disheartening to go through Ipswich, where many factories engage in the manufacture of woollen goods, and find that so many people were out of work for lengthy periods.
The plight of such people is sad to contemplate. Invariably they have committed themselves rather heavily under hirepurchase agreements. They are paying off their houses, refrigerators, washing machines and other appliances purchased for domestic use. They receive a very poor income from the unemployment benefit and they are unable to meet these commitments. On previous occasions in this chamber we have heard from other speakers how difficult the hire purchase companies can be-
– Order! I think the honorable member is getting a little wide of the subject-matter before the committee.
– With due respect, Mr. Chairman, I was trying to make the point that it is necessary to protect this industry so that these people will not again suffer the setbacks that they have suffered as a result of the lack of Government action in the past. I conclude on this note: I sincerely hope that the Government will make a definite statement on the protection of this very important industry.
.- I want briefly to support the remarks made by other honorable members on this side of the chamber about the report of the Tariff Board on woollen piece goods, which is now under discussion. The Minister for Supply (Mr. Fairhall) in his explanatory speech, summarized the findings of the Tariff Board in respect of this item in this way -
Concerning woollen fabrics, the duties recommended by the board are lower than the existing combined ordinary and temporary duties but somewhat higher than those which applied before the temporary duties were imposed. The Tariff Board has concluded that the industry warrants long-term protection and has recommended new duties which are designed to safeguard the local industry against imports of both high-priced and low-priced fabrics. The board’s recommended duties on woollen piece goods apply only to fabrics containing 20 per cent, or more by weight of wool.
Once again the Tariff Board has considered that the industry warrants long-term protection, but is going about giving it in a strange way. As honorable members on this side of the chamber have said, the board does not appear to realize the urgency of the need for the protection of this industry. That has not been realized by the board or the Government. The honorable member for Oxley (Mr. Hayden) said that, of all the industries in this country that might be given protection, one would have thought that members of the Australian Country Party would have been unitedly behind proposals to give adequate protection to the woollen piece goods industry. But to-night they are hardly interested in this debate. They could not care less. They take no interest whatever in the findings of the Tariff Board on a matter which is of vital importance to many thousands of people.
Some of the greatest textile mills in Australia are in my electorate. The welfare of many people in my electorate depends on the prosperity of this industry. The fact that it has been written off, as the honorable member for St. George (Mr. Clay) said, and not given the protection to which it is entitled against all kinds of competition is a matter of great concern. Employees in the textile industry, particularly in the woollen piece goods section, have never forgotten that at one time the present Minister for Labour and National Service (Mr. McMahon) said that this was an industry that did not matter and that he did not care much whether it existed or not. That statement is indelibly recorded in “ Hansard “. The industry fears that that may be the attitude of the Government generally.
I was interested to read the conflicting opinions on the protection of this industry that appear on page 14 of the Tariff Board’s report. The report states -
The Board has reported on the protective needs of the woven woollen piece goods industry on several recent occasions. In 19S6, the Board recommended a higher level of protection to the industry than existed at the time. The Government did not adopt the recommendation.
In other words, a favorable recommendation was not endorsed by this LiberalCountry Party Government. The adoption of that recommendation would have given a measure of protection to the industry. I believe that when the Tariff Board recommends protection, the applicant is entitled to it because the board does not seem to give much away. The report continues -
In 1959, the Board recommended some reorganization of the relevant Tariff Items but could not support any increase in the existing protection afforded the local industry.
On one occasion the Government would not adopt the recommendation, and when the applicant put up a case again it could not get a decision from the board. The report went on to say -
In general, these recommendations, although slightly varied, were adopted by the Government. On 19th May, 1961, a Deputy Chairman investigated the industry under Section 17a of the Tariff Board Act 1921-1960 and recommended substantially increased protection by the addition of temporary duties on lower priced imports of a weight exceeding 4.S oz. per square yard. These recommendations were implemented by the Government.
In that paragraph we see a conflict of opinion and the difficulty that the industry had, not only in getting a decision from the Tariff Board, bat also on one occasion in getting the Government to implement a decision of the board. All in all, it appears that at every opportunity, for reasons best known to itself, the Government took it out on the textile industry by refusing protection. The board then gives an indication of the importance of this industry. The report states -
The production of woven piece goods of wool or containing wool is one of Australia’s oldest industries and it is firmly established. The conversion of one of Australia’s main primary products into finished goods is a natural extension of the wool-growing industry.
What better recommendation could this industry have for the fullest measure of protection? Yet protection has been denied to it. In the Minister’s own words, protection is not available to the industry. The honorable member for St. George has an intimate knowledge of this industry because of his associaton with the trade union that covers it. He said that many hundreds of men are receiving dismissal notices because of the Government’s failure to implement the Tariff Board’s recommendation and so give adequate protection to the industry.
The honorable member for Oxley raised the question of Italian competition and stated the basis of it. He referred to the fear that the industry has in this respect. The Tariff Board’s report points out that there is a considerable quantity of imports from Great Britain and also says -
Italy is the second most important supplier of imports to Australia, but imports of its lowerpriced fabrics have decreased considerably since the imposition of the temporary duties.
The report further states -
It is noted, however, that the Italian fabrics most feared by the local industry are those which contain reclaimed rather than virgin wool. Such fabrics, although of inferior quality to Australian cloths, were said to be comparable in appearance with some of the local fabrics. . . The Board is aware that it may be difficult to devise and administer legislation which would ensure that all fabrics containing reclaimed wool were clearly labelled as such. Nevertheless, it believes that such a provision would afford protection for both the customer and the Australian manufacturer of woollen piece goods and that advantages would accrue to both, if some means can be found to deal with this problem.
That in itself justifies adequate protection, at least until a solution of the problem is found or until it can be clearly shown that nothing has been put over the Australian manufacturers or that nobody is going under the neck of the Australian manufacturers in respect of imports of cheap fabrics of this kind from Italy. I believe that the Tariff Board would have been justified in recommending the maintenance of a very high rate of protection in order that the industry would not suffer in the interim while a solution was being found. That is another instance of the way in which industries, particularly the one under discussion now, are suffering as a result of the policy being adopted by the Tariff Board on these questions and the failure of the Government to realize the implications of that policy and the effects it will have.
Time does not permit me to tell the committee the amount of money involved. In my general second-reading speech on tariffs to-day, I mentioned the tremendous amount of capital employed in the Australian textile industry, particularly in this section of it. It is estimated that about one-fifth or one-sixth of the work force depend on this industry for employment. Australian women depend on the textile industry for the major part of their employment. Any attempt to break down the capacity of manufacturers to employ people in this industry affects the women of this country in particular, and also the five or six per cent, of people who are engaged in the industry in areas away from the metropolises and who depend on it for their welfare.
I suggest that the Government give consideration to my submissions. I suggest that members of the Australian Country Party wake up and see what is happening to their wool. Do they want to go back to what happened before the Second World War, when we sent all our wool to Great Britain and other places, had it made up there, and then bought the finished products? That is quite contrary to what is happening to-day, thanks to a Labour government. If protection is not given to this industry, it will not be there to continue to manufacture and we will face that prewar problem again. I suggest that the Government have a look at this proposal. It should see what is to be done about it. It should take appropriate steps to protect the industry and to bring more facts before this Parliament, through the Tariff Board, for discussion, in order that the industry will know that it has not been thrown to the exporters of other countries, to the detriment of Australian workers and of Australian industry.
.- Mr. Chairman, I want to make it quite clear to the committee that the Opposition is disgusted with this proposal, which actually reduces the duty that was giving protection to one of Australia’s most important industries. I refer to the textile industry. I do not intend to delay the committee. I shall leave it at that. We hope that our protest, as exemplified in the speeches of the honorable member for St. George (Mr. Clay), the honorable member for Oxley (Mr. Hayden) and other honorable members on this side of the chamber, will make some impression on the Tariff Board, the Special Advisory Authority and the Government. We hope for some better measures than have been taken up to the present time to protect the man-made fibre industry, the woollen piece goods industry and the furnishing fabrics industry in this country, all of which, as the Parliament should know, are not enjoying the prosperity to which they are entitled in existing circumstances.
.- There is a very important point in connexion with the piece goods industry that should be considered. I refer to the development of a very profitable industry which is concerned with the manufacture of wool tops for export. The demand for Australian wool tops is growing. I am told that this industry was established with the encouragement of the Curtin Labour Government.
I have been informed by people concerned with the woollen manufacturing industry that if they are to continue to produce wool tops for export profitably they will need all the help they can get. We must remember that this country needs to develop its export potential. In fact the Government has stressed this point on far too many occasions. I say, therefore, that it behoves the Government to take positive action to ensure that this particular export industry does . not suffer.
It has been found that if wool tops are to be produced on a basis that will allow the Australian product to compete in export markets, the various manufacturing organizations must engage in subsidiary activities. In the vast majority of cases these subsidiary or complementary activities involve the manufacture of woollen piece goods. About 71,000 people are engaged in the manufacture of woollen goods. This gives an indication of the magnitude of the woollen manufacturing industry, and it shows how necessary it is to nurture and encourage the industry.
The production of woollen piece goods in Australia has declined in recent years as a result of the Government’s economic policies. I think we all realize how necessary it is to protect our Australian woollen piece goods manufacturing industry, which uses virgin wool fibres. In 1959-60 the production of Australian woollen piece goods amounted to 30,235,000 yards. In 1960-61, as a result of the abolition of import control, this figure was reduced to 26,466,000 yards. In 1961-62 the reduction went even further, to 25,069,000 yards. This is an industry which keeps a large amount of money circulating and therefore makes an important contribution to the economy of Australia and the prosperity of the nation generally. It has been pointed out that 43 mills, selected at random for the purposes of a survey, spend about £30,500,000 a year. In the last two years 44 mills spent £5,000,000 in the purchase of capital equipment.
At this very time, when the Tariff Board has recommended the abolition of these emergency protective measures, we find that although the woollen piece goods manufacturing industry has benefited from the protection afforded it in recent times, there is still a long way to go. For instance, in 1958-59 imports from Italy of woollen piece goods using non-virgin fibres amounted to 13 per cent. of the total market. In 1959-60 the figure had increased to 21 per cent. and in 1960-61 to 33 per cent. The indications are that in thelast financial year there was a decline to about 20 per cent. This shows that while the emergency tariff measures were valuable, they were by no means sufficient to meet the position. If we are to make a worth-while contribution to the maintenance of the industry, these protective measures will have to be maintained for a much longer period, or even more effective measures introduced.
We must take a national interest in this matter, and develop national loyalties. I agree wholeheartedly with the slogan of the Associated Chambers of Manufactures, which is to the effect that if you buy Australian your money comes back. If we do not provide sufficient protection we will have a recurrence of the situation in which cheap and inferior foreign goods will be imported at prices with which we cannot compete. This will destroy Australian industry, create unemployment, set back our development and cause a heavy drain on our overseas resources, which is one of the very developments that caused the Government to introduce its credit squeeze. We can even now see indications of a similar cycle starting, in which our overseas deficit will be built up and a credit squeeze will be introduced for the purpose of reducing this overseas deficit. At the present time our overseas trade balances are seriously deteriorating and if we allow the importation of cheap, inferior, rubbishy articles from Italy and other countries our overseas balances will be in an even worse condition, and we may find that the Government will have to introduce another credit squeeze. The process could go on ad infinitum. It certainly has been going for a long time during the period of office of this Government. I urge the Government, for the sake of this industry and the people who depend on it for their welfare and the welfare of their families and children, to take steps to ensure that it will be adequately safeguarded.
Question put -
That item105 be agreed to.
The committee divided. (The Chairman - Mr. P. E. Lucock.)
Majority . . . . 1
Question so resolved in the affirmative.
Remainder of Customs Tariff Amendment (No. 46) - by leave - taken as a whole, and agreed to.
Customs Tariff (New Zealand Preference) Amendment (No. 8) agreed to.
Customs Tariff Amendment (No. 47)
Consideration resumed from 4th October (vide page 1206), on motion by Mr. Fairhall -
That the Schedule to the Customs Tariff. 1933- 1962, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 1206).
Question resolved in the affirmative.
Customs Tariff Amendment (No. 48)
Consideration resumed from 4th October (vide page 1207), on motion by Mr. Fairhall -
That the Schedule to the Customs Tariff 1933- 1962, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 1206).
Question resolved in the affirmative.
Customs Tariff Amendment (No. 49)
Consideration resumed from 4th October (vide page 1208), on motion by Mr. Fairhall-
That the Schedule to the Customs Tariff 1933- 1962, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 1207).
Question resolved in the affirmative.
Customs Tariff Amendment (No. 50)
Consideration resumed from 11th October (vide page 1441), on motion by Mr. Fairhall-
That the Schedule to the Customs Tariff 1933- 1962, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 1441).
Question resolved in the affirmative.
Customs Tariff Amendment (No. 51)
Consideration resumed from 25th October (vide page 1942), on motion by Mr. Fairhall-
That the Schedule to the Customs Tariff 1933- 1962, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 1941).
Question resolved in the affirmative.
Customs Tariff Amendment (No. 52)
Consideration resumed from 7th November (vide page 2118), on motion by Mr. Fairhall-
That the Schedule to the Customs Tariff 1933- 1962, as proposed to be amended by Customs
Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 2117).
Question resolved in the affirmative.
Customs Tariff Amendment (No. 53)
Consideration resumed from 7th November (vide page 2118), on motion by Mr. Fairhall -
That the Schedule to the Customs Tariff 1933- 1962, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 2118).
Excise Tariff Amendment (No. 1)
Consideration resumed from 7th November (vide page 2119), on motion by Mr. Fairhall-
That the Schedule to the Excise Tariff 1921- 1961 be amended as set out in the Schedule to these Proposals . . . (vide page 2118).
– As the Minister for Supply has already stated, Customs Tariff Amendment (No. 53) and Excise Tariff Amendment (No. 1) are associated. Is it the wish of the committee that the amendments be taken together and as a whole? There being not objection, that course will be followed. The question now is, “ That the motions be agreed to “.
Questions resolved in the affirmative.
Standing Orders suspended; resolutions adopted.
That Mr. Fairhall and Mr. Freeth do prepare and bring in bills to carry out the foregoing resolutions.
Suspension of Standing Orders.
Motion (by Mr. Fairhall) - by leave - agreed to -
That so much of the Standing Orders be suspended as would prevent the Customs Tariff Bills and the Excise Tariff Bill being brought in together and a motion being moved that the bills be passed.
Bills presented, and (on motion by Mr. Fairhall) passed.
The following bills were returnedfrom the Senate without amendment: -
States Grants (Special Assistance) Bill 1962.
Removal of Prisoners (Territories) Bill 1962.
Loan (Housing) Bill (No. 2) 1962.
– For the information of honorable members and as promised earlier by the Minister for Trade (Mr. McEwen) in his speech on the Tariff Board Bill (No. 2), I lay on the table of the House the following paper: -
Correspondence between the Minister for Trade and Sir Leslie Melville, Chairman of the Tariff Board, dated 16th February and 2nd March, 1962, concerning the establishmentof the Special Advisory Authority under the Tariff Board Act.
Motion (by Mr. Fairhall) proposed -
That the House do now adjourn.
.- Mr. Speaker-
Motion (by Mr. Davidson) put -
That the question be put.
The House divided. (Mr. Speaker - Hon. Sir John McLeay.)
Majority . . . . 1
Question so resolved in the affirmative.
Original question resolved in the affirmative.
House adjourned at 12.3 a.m. (Thursday).
The following answers to questions were circulated: -
y asked the Minister for Trade, upon notice -
– The answers to the honorable member’s questions are as follows: -
Applications referred to a Special Advisory Authority -
Engine bearings and bushings.
Polyvinyl chloride resins and moulding compounds.
Slide viewers and slide projectors.
Paper, paper board and paper felt.
Conveyor belts and belting.
Automotive electrical components.
Air cooled internal combustion engines.
Wrought iron and steel chains.
Towels and towelling.
Polyvinyl chloride products.
Penicillin and streptomycin.
Glazed ceramic wall tiles.
Corrugated plastic building sheets.
Weedicides and insecticides.
Vinyl acetate monomer.
Television deflection yokes.
Evaporative air coolers.
Applications refused -
Trailer axle and air suspension units.
Spark plug insulators.
Wedge wire sieves.
Tyre cord fabrics.
Unrefined coconut oil.
Fuel injection equipment.
Aluminium alloy ingots.
Hand pencil sharpeners.
Thermoplastic floor and wall tiles.
Automotive lamp bulbs.
Photo-engravers zinc sheets.
Magnet winding wire.
Sodium tripolyphosphate and tetrasodium pyrophosphate.
Malleable pipe fittings. Applications withdrawn or lapsed -
High stability resistors.
Grinding and other machine tools.
Wool piece goods.
Blankets and rugs.
Applications under consideration -
Bulk milk vats.
Frozen prawn meat.
Fatty acids and glycerine.
Portable tape recorders.
Domestic sewing machines.
Conveyor Belts and Belting other than of Leather.
Temporary duties replaced. The relevant duties are -
Certain Weedicides and Insecticides.
The Tariff Board’s recommendations were not accepted and the matter was referred back to the board and the Special Advisory Authority. As I explained at the time special circumstances were involved in that new information and amended requests on these products were submitted to the board just before the board was ready to report on a wide range of chlorine chemicals which included these products. The board decided that it should not delay submission of its report which did not, therefore, have regard to the new information. In these circumstances, and in view of the Special Advisory Authority’s finding which led to the imposition of temporary duties the Government believed that certain of the board’s recommendations relating to weedicides and insecticides might not be appropriate.
n asked the Acting Minister for Territories, upon notice -
What are the statistics in relation to the means of mass communication per 100 inhabitants of a country set down as a minimum standard by the United Nations Educational, Scientific and Cultural Organization and how do those statistics compare with the situation in the Territory of Papua and New Guinea in relation to the circulation of daily newspapers, the number of radio sets, and the number of cinema seats?
– The answer to the honorable member’s question is as follows: -
The minimum standards of mass communication media established by Unesco are that for every 100 inhabitants in any country there should be at least ten copies of a daily newspaper, five radio sets and two cinema seats. The Territory has no daily newspaper. There are two English language newspapers published in the Territory, one with two issues per week having a circulation of approximately 4,900, and one with one issue having a circulation of approximately 2,700. A newspaper published in Melanesian pidgin once weekly has a circulation of approximately 5,500. There are also numbers of news sheets in English or local languages published at varying intervals by missions, local government councils, the Administration and other bodies. The number of radio sets and cinema seats is not known. There are two radio stations at Port Moresby operated by the Australian Broadcasting Commission, and one at Rabaul operated by the Administration. There ere twelve commercial cinemas and approximately 250 16-mm. cinema units used for community education programmes. Special measures were instituted in 1959 to extend the means and techniques of mass communication by the establishment of the Division of Extension Services, which subsequently, in 1961, was placed within a new Department of Information and Extension Services. The work of the division has contributed to a considerable expansion in the use of publications, films and radio for dissemination of information to the indigenous people.
n asked the Minister for Labour and National Service, upon notice -
– The answers to honorable member’s questions are as follows: -
Yes. 2. (a) Vacancies exist in a wide range of skilled trades, and particularly in the electrical, engineering and building and construction trades. The following are illustrative of the award rates of pay in the metropolitan area of Perth in the skilled trades: -
Whether an employer in Western Australia will provide financial assistance for staff recruited in the eastern States to enable them to move to the west is a matter between the employer and the individual worker. The Commonwealth Employment Service is in a position to advance fares and limited travelling expenses on a repayment basis to unemployed workers in genuine need of such assistance. It is known that some tradesmen have gone to Western Australia.
d asked the Minister representing the Minister for National Development, upon notice -
– The Minister for National Development has supplied the following information: -
d asked the Postmaster-General, upon notice -
Has his attention been directed to the proposed action of the New Zealand Government to ban television and radio advertisements which might encourage young people to smoke?
n. - The answers to the honorable member’s questions are as follows: -
b asked the Postmaster-General, upon notice -
Will he consider encouraging the use of an increased number of Australian films on television?
– The answer to the honorable member’s question is as follows: -
It has been a particular concern of mine, since the inception of television services, to encourage the use of Australian programmes. As I announced some time ago, the Government had decided to set up an interdepartmental committee to inquire into the problem of how we could best encourage the production of Australian television films. In order that all relevant information may be available for its consideration, the committee has invited all those concerned with the development of Australian television film production to answer, with comment, a questionnaire which it is now sending out. It will be some considerable time before the committee will be in a position to furnish a report. The committee’s task is in the determination of facts and when these are placed before it the Government will decide what is best to be done.
People’s Bank of China.
t.- On 17th October, the honorable member for Chisholm (Sir Wilfrid Kent Hughes) asked me some questions about the visit to Australia of the president and officials of the People’s Bank of China. He asked -
Was the Commonwealth Bank Board consulted before the three visitors from China were invited to come to Australia? If so, did it approve of the invitation before the visit occurred? If not, who paid for the visit of these gentlemen and for their entertainment?
I replied at the time that the well-established practice for bearing the costs of reciprocal visits of this kind is that the visiting Governor pays his own expenses of the journey to the country to which he has been invited, and that the cost of his entertainment and accommodation in that country is carried by the bank which issues the invitation to him. I undertook to find out whether anything further could be added on the other parts of the question.
The Governor of the Reserve Bank has informed me that he issued the invitation for a reciprocal visit in general terms on the occasion of his visit last year to the President of the People’s Bank of China. The President later told the Governor that he wished to make a reciprocal visit in May or June of this year. The Governor told the Reserve Bank Board and the Government of what had transpired.
Cite as: Australia, House of Representatives, Debates, 14 November 1962, viewed 22 October 2017, <http://historichansard.net/hofreps/1962/19621114_reps_24_hor37/>.