24th Parliament · 1st Session
Mr. SPEAKER (Hon. Sir John McLeay) took the chair at 2.30 p.m., and read prayers.
– My question is directed to the Prime Minister. Does he recall appearing for the Australian Society of Engineers in the case before the High Court in 1920? Does he remember arguing the case against the claim of a State Minister that there could be no industrial dispute found to exist by plaint to the Commonwealth Court of Conciliation and Arbitration as between the Australian Society of Engineers and the State Implement and Engineering Works or the State Sawmills, they being State government concerns? Does he recall arguing that under our Commonwealth Constitution there was presumption in favour of wide operation, for the settlement of two State disputes requires national treatment and there should be no anomalies due to the accidental character of the employer? In the light of the success of his arguments in that case, how does he explain his Government’s contrary attitude in presenting the industrial legislation now before this House which will affect professional engineers and all other white-collar workers in State government concerns?
– The question is, perhaps, an argumentative one. It is quite true that I had the honour of appearing - and successfully - for what was then, I think, the Amalgamated Society of Engineers in the engineers case in the High Court many years ago. It is quite true that the argument I put then, which I still believe to be perfectly sound, and which was accepted by the High Court, was that in interpreting the Commonwealth’s powers - what the Commonwealth Parliament may do - there were to be no implied restrictions because of the existence of States; in other words, the power given to the Commonwealth should be interpreted fully and widely, subject only to express prohibitions in the Constitution itself. I think that is an accurate summary, and if the honorable member is interested - as he obviously is - he can see a full legal summary of the argument in the “ Commonwealth Law Reports “ in, I think, volume 28. I remember the case very well. It established the power of the Commonwealth. How the power should be exercised in a particular case is, of course, an entirely different matter. The issue at that time was one of constitutional power. Questions that now arise are questions of how the constitutional power should be exercised and within what limits. Those are clearly matters for this Parliament. I am happy to recall that the power of the Parliament was rendered, by the decision in that case, a very wide and comprehensive one.
– My question is directed to the Treasurer. Has he seen a statement recently attributed to Mr. Vines, managing director of the International Wool Secretariat, that Australian wool production should increase to meet the increasing world demand for apparel fibres? In view of this statement will the Treasurer undertake to reconsider the granting of a superphosphate subsidy because of the contributions this would make to lowering the cost of production, to aiding new development in pasture improvement and generally to increasing the production of wool?
– We all recognize the vital importance of wool production to the Australian economy. Consequently, I read with considerable interest the statement attributed to Mr. Vines, in particular the passage in which he urged increased Australian production. Undoubtedly the greater use of superphosphate would be a practical contribution to increased production and, as on other occasions, the Government will be examining the question of granting a superphosphate subsidy in conjunction with other matters when the Budget is being formulated later in the year. On that occasion, when the matter is before Cabinet, I shall have in mind the background which the honorable member has projected in quoting the remarks of Mr. Vines.
– I ask the Acting Minister for External Affairs: Has he noted the appointment of a distinguished negro as American Minister to Finland? Are aborigines eligible for appointment to the Australian diplomatic service? Will he encourage the training and appointment of one or two, at least, the general object, of course, being that instead of being more English than the English or more American than the Americans, we should always show a truly Australian face and speak with a truly Australian voice in world affairs?
– The Department of External Affairs, in recruiting people for the diplomatic service, very properly requires certain educational standards. If the suggestion of the honorable member is that an aboriginal, having achieved the necessary educational standard, is subject to some bar, all I can do is express my surprise and say that I will have the matter looked into.
– I desire to ask the Minister for Labour and
National Service a question. In view of the numbers registered as unemployed, why was the Commonwealth Employment Service unable to supply sufficient hop-pickers to fulfil the needs of the growers when harvesting the hop crop in the Ovens valley in Victoria?
– The House will be glad to know that last month the number of persons registered for employment fell by a little more than11,000 to about 84,000. The honorable gentleman will also be pleased to learn that about 8,000 adult males are now registered for employment in the whole of Victoria. We are receiving notification of about 13,000 jobs a week. This means that in Victoria, where only 1.3 per cent. of the work force is registered for employment, employees have a wide variety of jobs from which to pick and choose. In this situation we have difficulty in getting men for particular jobs, such as hop-picking. Nonetheless, my department is actively engaged in trying to solve this problem and is doing what it can to get hoppickers. If, later, any further information comes to hand about the success we have had in getting these people, I will be only too happy to let the honorable member know.
– I preface my question, which I direct to the Treasurer or the Prime Minister, by saying that on Wednesday last,10th April, the honorable member for Hunter asked the Treasurer whether the Government had ascertained the views of other governments in the South-East Asian and Indian Ocean areas on the establishment of the nuclear bases control centre in Western Australia, and the Treasurer said that he would see whether any information was available and could be made known to the House before the debate on this matter begins. I now ask: Has this Government at any stage ascertained or tried to ascertain the views of neighbouring governments on this question? If it has, what are their views? If no steps have been taken to ascertain the views of those governments, will those steps be taken and will the House be informed of the result?
– I regret that I was not here when this matter was raised originally, but now that the honorable member has raised it in my presence I will certainly have a look at it myself.
– Has the attention of the Minister representing the Minister for Health been directed to a statement in the Sydney press, attributed to the executive director of the Hospitals Contribution Fund of New South Wales, to the effect that that fund’s decision to limit future payments to the amount charged by hospitals, regardless of how much the contributors have paid each week, results from an edict issued by the Commonwealth Department of Health? If that statement is correct, is that edict not an unwarranted interference by the Government in the activities of the hospitals contribution funds and this fund in particular?
– I saw the report to which the honorable member has referred. I took the opportunity to discuss the matter with my colleague, the Minister for Health. I have been assured that no such edict was issued or even contemplated. It is a fact that in the past the Commonwealth
Department of Health has endeavoured to encourage funds throughout Australia to place some limitation, in particular, on their higher tables. If the present upper limits of the higher tables of the Hospitals Contribution Fund of New South Wales had not conformed to that principle, the contributions would be about ls. a week more than are payable now. The object of the Commonwealth Department of Health, in endeavouring to encourage funds in that connexion, is to produce financial stability in the funds and also to assist in maintaining the weekly contributions at the lowest possible figure.
It is a fact, however, that the new proposal submitted by the Hospitals Contribution Fund of New South Wales seeks to place limitations on all of its new tables. This, of course, is being done without the exertion of any influence by the Commonwealth Department of Health, which suggests as an encouragement that the figure for the upper scale should be. approximately 80s. a day. The application submitted by the Hospitals Contribution Fund of New South Wales was received only yesterday and has yet to be studied by the Minister for Health. I can assure the House, Mr. Speaker, that the Commonwealth Department of Health in no way seeks to dictate to the funds how they will formulate their policies in this connexion.
– Has the attention of the Minister representing the Acting Minister for Trade been directed to the report of the Commonwealth Serum Laboratories Commission which was issued recently and in which it is indicated that the relaxation of import restrictions has caused the sale of the commission’s many products to fall sharply? Is the Minister aware that the laboratories are the only basic manufacturers of crystalline insulin in Australia and that, despite our natural resources, imports of insulin continue to increase to such an extent that imported insulin represents 70 per cent, of Australia’s usage? In order to foster these excellent laboratories, will the Minister for Trade ensure that the Government restricts the importation of overseas biologicals where the Australian product is readily available?
– As the honorable member knows, last week I tabled in the House the annual report of the Commonwealth Serum Laboratories Commission. I noted in that report a reference to the importation of insulin interfering with sales of the laboratories’ products. I also noted, as I think the honorable member did, that the commission has decided to submit an application in respect of this matter for consideration by the Tariff Board. The only other comment I can make now is that the application, when received by the Tariff Board, will be considered in the usual way.
– I ask the Treasurer: Has his attention been directed to a statement purported to have been made in Brisbane last night by the Deputy Leader of the Opposition in which the honorable gentleman claimed that he would not allow steel pipes for the Moonie to Brisbane oil pipeline to be imported into this country? Do any balance-of-payments circumstances exist at present that would justify such an extreme attitude? Will the Treasurer consult with his colleagues to ensure that the minimum of damage will be done to Australia’s reputation as a trading nation by the unenlightened and irresponsible statement attributed to the Deputy Leader of the Opposition?
– I saw that some prominence was given to a statement along the lines of that referred to by the honorable member for Moreton. It seemed to me that the Deputy Leader of the Opposition, in his eagerness to gain some party political advantage, had allowed himself to be led into a gravely irresponsible position, because he could not fail to give some encouragement to those militant union elements that are trying to take direct action to prevent the entry of these steel pipes into Australia. The remarks, coming from the Deputy Leader of the Labour Party, could cause real concern in Japan, which had met competition from Australian manufacturers. As we know, Japan is Australia’s second largest customer and the balance of trade at this time between the two countries strongly favours Australia. No balance-of-payments situation exists which could justify the attitude attributed to the Deputy Leader of the Opposition. I feel that the oil company concerned, having at its own expense and by its own enterprise found oil in Australia, should be given every reasonable encouragement to produce and market that oil in the most economical manner possible.
– Will the PostmasterGeneral consider providing stamp cards to enable pensioners and low-paid workers to pay their half-yearly telephone rentals on a lay-by system? Similar provision is already made for the payment of television viewers’ licences and broadcast listeners’ licences. Telephone rentals are about 5s. a week and a savings stamp system would greatly assist pensioners whose pension is so very small.
– The honorable member is correct when he states that the system he advocates already applies to the payment of television viewers’ licences and broadcast listeners’ licences. I shall consider whether it would be practicable to extend the system to the payment of telephone rentals.
– Is the Minister for the
Interior aware that forecasts made by the weather bureau in Western Australia not infrequently are proved to be incorrect and that, as a result, serious inconvenience is caused to farming activities and, at times, serious loss is occasioned in burning off operations because too great reliance is placed on these forecasts? Is it intended to improve forecasting facilities in Western Australia in the near future so that more reliable prophecies can be made?
– I think it is well known that the Bureau of Meteorology faces greater difficulty in accurately forecasting the weather in Western Australia than it does in other parts of the Commonwealth but, having made due allowance for that, I must say that the degree of accuracy achieved is quite remarkable. Unfortunately, a mistake in a forecast is noticed but on the number of occasions when the forecast is completely accurate no comment is made. The honorable member will be happy to know that continuous attempts are being made to improve the standard of weather forecasting. It is hoped that with the assistance of the Tiros weather satellite and other modern devices the standard of weather forecasting in that particularly difficult part of the world will be improved.
– My question to the Treasurer is supplementary to that which was asked by the honorable member for Moreton. Is it a fact that the export of steel from Japan is heavily subsidized by the Japanese Government? Has this resulted in Japanese steel under-cutting Australian steel on the New Zealand market with the resultant loss of our steel markets there? Did the steel pipe recently imported from Japan for use at Moonie bear the subsidy to which I have referred? If so, is not this the reason why Japanese steel under-sold the Australian product? Why was there so much secrecy surrounding the letting of the contract to Japan for the supply of pipes for Moonie? Obviously, fabrication of the pipes demanded that an order be placed some months before delivery date, a period far in excess of the few weeks which elapsed between public announcement of the letting of the contract and arrival of the pipes.
– Most of the questions which the honorable gentleman has put to me lie outside my own administration and I shall ascertain whether I can obtain a detailed reply for him. However, had there been anything unreasonable about the letting of this contract I should have thought that was a matter of which both the Queensland Government and the competitive bidders would have been cognizant. I understand that a technical consideration relating to the strength of the steel pipes was one of the factors which led to the order being placed with Japan. In any case, I speak subject to correction on a matter which is not within my own detailed knowledge and, as I have said, I shall see whether I can supplement this reply.
– Some time ago, the Minister for Repatriation informed me that it was proposed to improve the airconditioning and the cooling system at the
Repatriation General Hospital at Hollywood, Perth. Can the Minister now advise whether action has been taken to effect these improvements? If such action has been taken, have the results been satisfactory?
– The honorable member has raised this matter on several occasions and I am pleased to inform him now that a considerable amount of work has been done on the air-conditioning and cooling system at the Hollywood repatriation hospital in Perth. We have at present one ward fully air-conditioned and that is working very satisfactorily. We have also a number of small air-conditioned rooms attached to most of the wards for special surgical cases. We have experimented with a new type of overhead fan, which has proved most satisfactory. We have two wards now completely fitted out with the new type of fan. I feel that, as the result of these experiments, within the limits of finance available in the next couple of years we can expect a great improvement in the cooling system at the Hollywood hospital.
– I direct a question to the Prime Minister. Will he inform the House of the exact nature of the negotiations entered into with the Government of the United States of America by the Minister for the Navy during his recent visit to the United States? What is the real meaning of the statement by the Minister for the Navy that arrangements have been made for stockpiling and storing naval supplies for use by the United States Navy in conjunction with the Australian Navy? Finally, has Australia been committed to any further purchases or any further expenditure in regard to naval requirements?
- Mr. Speaker, I will be very glad to have a statement prepared by the Minister for the Navy and to have it delivered in this House by the Minister representing the Minister for the Navy.
– I direct a question to the
Postmaster-General. Has he yet received the findings of the commission formed to investigate accusations of irregularities by certain employees of the PostmasterGeneral’s Department in Victoria in relation to starting-price betting? When does he expect to be able to make the findings available to this House?
- Mr. Speaker, a few weeks ago the royal commissioner presented his report on these inquiries to His Excellency the Governor-General, as was required of him. Copies of the report have been available to the relevant Ministers. This is a very voluminous report. The commissioner went into the matter very closely indeed and the report, by its nature, requires a great deal of study. I am therefore preparing a summary of the report for consideration by my colleagues and in due course it will be submitted for consideration by Cabinet, which will then determine what action should be taken. This is a matter which does not demand any immediate action but I can assure the honorable member that no time will be lost in giving proper attention to this important report. When a decision has been made by Cabinet the report will be available for public viewing.
– I direct a question to the Minister for Primary Industry. Is there any legislative connexion between Tasmania having a representative on the Australian Wheat Board and the Commonwealth subsidy for the carriage of wheat from the mainland to Tasmania? In other words, if Tasmania gets a representative on the Australian Wheat Board, as she now seems entitled to do, will the Commonwealth terminate the subsidy on the wheat which Tasmania imports for flour manufacture and bread-making?
– The Wheat Stabilization Act, which expires this year, makes no provision for representation of Tasmania on the Australian Wheat Board, but it does make provision for freight concessions payable out of the stabilization fund to assist the Tasmanian consumer. The new stabilization scheme is now under consideration and we will look at the point raised by the honorable member.
– My question is directed to the Minister for Immigration. I refer to the loss of the liner “ Brittany “ by fire which caused over 700 Greek migrants bound for Australia to be stranded in the port of Piraeus last week. Will the Minister support in practical fashion the assurance of the Inter-governmental Committee for European Migration that these people will be moved as rapidly as possible? To demonstrate how glad Australia will be to welcome them, is it possible to find an alternative means of transport and so reduce to an absolute minimum their present embarrassment?
– To be accurate, 725 Greeks were destined to come here in the ill-fated liner “ Brittany “. 1 shall certainly endeavour, in co-operation with the Intergovernmental Committee for European Migration, to have these unfortunate people brought out here as expeditiously as possible. I do not think there will be much trouble in relation to, speaking in round figures, 160 assisted Greek migrants who were travelling in the ship. It should be possible to transport them by air, although I can make no promise to the honorable gentleman about that. The majority of the remainder were coming as full fare, completely unassisted migrants. My information is that arrangements have been made for them to be returned temporarily to their homes while other forms of transport are devised. My honorable friend may be quite certain that my department will be most active in trying to bring them all out here as quickly as possible.
– I ask the Minister for Air the following questions without notice: - For what purposes are Royal Australian Air Force aircraft made available to persons other than service personnel? Who exercises authority over the use of R.A.A.F. planes for other than service purposes? Are Ministers, including the Prime Minister, able to secure the use of such aircraft upon request without any questions being asked? If not, has the Minister or the authorizing officer to be satisfied, before approving the request, that the mission is urgent and that commercial airline services are not readily available? Is it the frequent practice of
Ministers to use R.A.A.F. aircraft for transport purposes? Have Ministers on some occasions been accompanied by members of their staffs and families? Will the Minister for Air have prepared a list covering each of the last three years and the expired portion of the current year, -giving particulars of R.A.A.F. flights undertaken to transport other than service personnel, and showing the purpose of each journey?
– The honorable member knows that the only R.A.A.F. aircraft in which persons other than service personnel are transported are those of the V.I.P flight which was set up by the Opposition, when it was in office, in about 1946 or 1947. The honorable member was then a Minister and he would understand the rules and regulations that apply. I am afraid that it would be quite impossible for me at this stage to answer the great number of questions which the honorable member reeled off at great speed. I suggest that he place them on the notice-paper. I shall then have a look at them and give him a reply immediately.
– Does the Minister for Primary Industry, in the changed circumstances, favour giving the Australian dried fruits industry a further opportunity to approve a stabilization plan at a poll of growers? If so, is he willing to grant interviews to industry executives and growers with a view to the formulation of a mutually acceptable plan? As the cost of production figure has changed considerably since 1957, will he arrange for the Division of Agricultural Economics to make a survey of the industry so that, as an aid to discussions and in anticipation of a plan being submitted, an up-to-date found cost of production figure may be established?
– I shall answer the last part of the question first. The honorable member may be assured that the Department of Primary Industry has quite a lot of useful information about the costs of the dried fruits industry. The Division of Agricultural Economics has a full complement of survey work to undertake, and even if it were decided that a survey of the kind mentioned by the honorable member should be undertaken it would not be possible for the division to undertake it in the near future. Turning now to the question of whether the Government in the changed circumstances - as he puts it - would consider a stabilization scheme, I inform the honorable member that the industry submitted to me quite recently a scheme under which the Government would give a guarantee on an acreage basis. I have rejected that suggestion because it is not a basis upon which any government could give guarantees to an industry. However, the door is always open for representatives of the industry to suggest to me any substantial stabilization scheme.
– I direct my question to the Prime Minister. Has he read the text of Pope John’s Easter message and, if so, does he agree that it is one of the outstanding statements of our time in regard to world peace, disarmament, tolerance and goodwill to all men? Will the Prime Minister send a message of congratulation or a letter of appreciation to Pope John on behalf of the Australian Government?
– I have not been as closely in touch with details in the last few days as I would have wished. I know that His Holiness the Pope issued a message, and I am prepared to believe that it was a powerful message, because although I am myself a Presbyterian, I happen to be a great admirer of Pope John and his contributions to good sense and wisdom in the world. I look forward to reading the message with considerable interest, when the full text of it is received.
– My question is directed to the Minister for Repatriation. I refer to representations which were made to him by the Partially Blinded Soldiers Association for an increase in the disability pension for partially blinded soldiers to equate it with the 75 per cent. payment now applicable to soldiers who have lost one limb below the joint, compared with the present 50 per cent. pension allotted for the loss of one eye. Has the Minister yet reached a decision on this matter and, if he has not, will he give it earnest consideration in his budgetary submissions?
– It is customary at this time of the year for ex-servicemen’s organizations to make many submissions for consideration when the Budget is being prepared later in the year. Quite a number of submissions has already been made by the Returned Servicemen’s League and other ex-servicemen’s organizations, including that mentioned by the honorable member for Maribyrnong. The only assurance I can give the honorable member at this stage is that this matter will be carefully considered in the preparation of the Budget proposals.
– I desire to ask the Prime Minister a question without notice. He is not very clear on what Pope John said in his Easter message, but is he aware that the Reverend Yarnold, Designate-Moderator of the Presbyterian Church of Victoria, said that good Presbyterians should be supporters of the Labour Party? Is it true that in view of the statement of the Reverend Yarnold the Prime Minister is contemplating changing his political views, or handing in the resignation of his Government?
– I read the report of the statement by Reverend Yarnold with great interest. I believe it was published in a newspaper this morning. All I can say is that the Reverend Yarnold frequently talks politics - indeed, he seems to be more vocal on politics than he is on theology - and the first time that he says something of a political kind that I agree with, I will send a special urgent telegram to the honorable member for Scullin.
– I wish to ask the Minister for Primary Industry a question. In view of the fact that neither France nor Argentina is likely to be a large seller of wheat to Communist China this year, does the Minister consider that it would be advisable for Canada and Australia to co-ordinate their offers of credit sales, as to the length of time of payment and also the rates of interest charged? The latter, I believe, have never yet been published. Has Communist China recently been asking Canada for three years’ credit, due to Canada offering Poland three years’ credit on wheat sales? As there is an international agreement covering the price of wheat, would it not be advisable to seek a similar agreement in relation to the maximum period of credit given and the rates of interest charged?
– The suggestion by the honorable member will be referred to the Australian Wheat Board, which sells the wheat that Australia produces. I know that it has not been easy to obtain information concerning the terms upon which the Canadian Government makes its contracts. The Canadians have not been very forthcoming in that respect. Perhaps it is a matter of trade or of business considerations. The reports which appear in the press regarding the terms requested are not always correct. I shall consider the implications of the honorable member’s question and see whether there is anything more I can do. I shall certainly pass on his suggestion to the Australian Wheat Board.
– My question is addressed to the Prime Minister. In view of the right honorable gentleman’s statement that the proposed naval communications centre at North West Cape will be solely a radar centre, a view which is supported by the American Vice-Admiral J. S. Thach, will he further consider the establishment of a naval base with docking facilities at Cockburn Sound, or some other suitable place on the western coast?
– I must admit that this question is rather puzzling. Does the honorable member mean that, since he has been disappointed in not having an American naval base established at North West Cape - which, of course, there is no proposal to establish - he wants to have one at Cockburn Sound? As he knows, this is a very old proposal. It has been in the air, so to speak, for very many years. It has been the subject of expert investigation. If the honorable member would like to know the last professional view on the matter, I should be happy to provide it.
– My question is directed to the Treasurer. Is he aware that it is reported that the honorable member for Eden-Monaro has announced a competition regarding the naming of the proposed decimal currency and that the first prize will be equal to 50s.? Is it legal to conduct such a lottery? If it is, can the Government improve on the prize money?
– The honorable gentleman has asked me for a legal opinion. It would certainly not be within my province as Treasurer to give such an opinion, and in any case I have been so remote from the law for years now that I would hesitate to give an opinion as a lawyer. In addition, Mr. Speaker, I think that it is contrary to the Standing Orders to invite a legal opinion from a Minister in this place. However, putting those considerations on one side, may I say that I read with interest the report concerning the honorable member for Eden-Monaro - he spares no pains to attract press interest in what he says during the week-end - to the effect that he was sponsoring a private competition with a modest prize. I think that, if a number of people sent in the same name and the prize had to be divided amongst them, they would receive very little more than the postage involved in forwarding their suggestions. The Government’s attitude has already been made clear. We hold ourselves open to suggestions on this matter. We have no intention of conducting a competition, but we shall be glad to receive suggestions. Out of the multitude of advice, perhaps we shall secure the perfect answers we seek.
Motion (by Mr. Davidson) agreed to -
That the House, at its rising, adjourn until tomorrow at 2.30 p.m.
The following bills were returned from the Senate: -
Without amendment -
States Grants(Additional Assistance) Bill 1963.
Wool Tax Assessment Bill 1963.
Without requests -
Wool Tax Bill (No. 1) 1963.
Wool Tax Bill (No. 2) 1963.
In Committee of Ways and Means:
Consideration resumed from10th April (vide page 605).
Customs Tariff Amendment (No. 61)
Consideration resumed from 28th March (vide page 196), 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 177).
Customs Tariff (Canada Preference) Amendment (No. 8)
Consideration resumed from 28th March (vide page 196), on motion by Mr. Fairhall -
That the Second Schedule to the Customs Tariff (Canada Preference) 1960-1962 … be amended as set out in the Schedule to these Proposals . . . (vide page 193).
– The question now before the committee is the motion proposed by the Minister for Supply (Mr. Fairhall) on 28th March, in connexion with Customs Tariff Amendment (No. 61). As the Minister has already stated, this amendment and Customs Tariff (Canada Preference) Amendment (No. 8) are related. Is it the wish of the committee that these two amendments be considered together and that the motions be considered as a whole? There being no objection, that course will be followed.
.- Mr. Chairman, I have had a look at Customs Tariff Amendment (No. 61) and I find that it embraces a fairly large range of Australianmanufactured products. The items dealt with in this amendment all have been examined by the Tariff Board. Some of the recommendations made by the board and some of the proposals advanced by the Government are unexceptionable, and the Opposition supports them. Other proposals should be subjected to some criticism, to say the least of it.
I notice that on 4th February, 1963, the Minister for Customs and Excise (Senator Henty) made an announcement in the press regarding the acceptance of recommendations by the Tariff Board in relation to automotive electrical equipment, tapered roller-bearings, taxi-meters and styrene and other plastic materials. He stated that the new duties on starting motors, generators, voltage regulators, ignition coils and distributors for internal combustion engines are higher than the present ordinary duties but lower than the combined ordinary and temporary duties which now apply to these products when they are fitted as original equipment in motor vehicles. That is to say, these goods, when incorporated in a motor car, are imported at a duty lower than the rate imposed on goods imported separately as parts which the ordinary consumer buys from time to time. By “ ordinary consumer “ I mean people such as maintenance engineers.
When we look at the very wide range of automotive electrical equipment dealt with, we realize exactly what this must mean, in particular, to all those branches of the engineering industry in Australia which, in the main, are engaged in the production of specialized parts for use by the motor car manufacturing industry. These parts include magnetos, carburettors, voltage regulators, distributors and distributor caps. Most of these articles, like radiators and other equipment for motor vehicles, are made by manufacturers who, in the main, produce on a small scale but who, in bulk, make hundreds of thousands of parts in their small factories which specialize in these products. Considerable funds are employed in this industry. A very wide and embracing inquiry into the industry was undertaken by the Tariff Board. The result of that inquiry is the recommendations made by the board in this instance, the acceptance of which will have the effect of increasing duties on imported parts of these kinds which are manufactured so widely in Australia in a large number of separate factories.
I notice that among the firms which will be affected is Robert Bosch (Australia) Proprietary Limited, which manufactures Bosch electrical equipment in Australia. Anybody who knows anything about internal combustion engines, whether used in motor cars or for supplying power otherwise, knows that the magnetos and electrical control equipment used in the ignition systems of prime-mover plants for all forms of industry are very important parts of the engine. Over a long period, the Bosch company - a German firm - has been prominent in this field of manufacture, first, I suppose one would say, for Bosch magnetos, which are famous for their durability, suitability and other qualities. This company is still engaged in this field of engineering manufacture since the motor car has come along, and it now makes starters, generators and other equipment incorporated mostly in motor cars manufactured in Australia at the present time. lt is interesting to note that the Bosch company began manufacturing in Australia some years ago partly with Australian capital and partly with German capital. As the Tariff Board report states, unfortunately the measure of success and profits anticipated have not been such as quite to satisfy the company, with the result that the German interests bought out the Australian shareholders. So the Australian branch of the company is now an entirely Germanowned concern. That is regrettable. It is not that we do not like German products; but we would have preferred this firm to have at least a proportion of Australian capital invested in its manufacturing subsidiary in Australia. We hope that at some time, in certain circumstances, the company will again be able to make some of its shareholding and capital investment available to Australians. After all, the Australian tariff wall enabled this firm to establish itself in this country and now enables it to continue its operations here. The company, in its Australian operations, uses Australian labour and Australian materials and, indeed, Australian managerial capacity. I am pretty sure, Mr. Chairman, that I noticed some time ago listed among the names of the directors of this firm the name of Sir John Jensen, a former Secretary of the Department of Munitions in this country. It is obvious that some of the foremost brains of Australia are engaged in this substantial industry.
I note that Joseph Lucas (Australia) Proprietary Limited, which is engaged in manufacturing activity similar to that of the Bosch firm, is concerned also. The Lucas company turns out first-class products. In the main, its capital is British. However, it is good to have such a firm manufacturing in this country. I notice that the manufacturers of various distributors and all sorts of voltage control instruments and other kinds of electrical equipment for internal combustion engines also are concerned in these proposals. These manufacturers are engaged in an industry which, in contrast to some other forms of Australian industry, employs in total a very large number of Australians on both the technical and the managerial sides. The Opposition wishes these companies well. We want to see the industry expand. The greater its capacity to turn out all the equipment of this type for Australian motor car production, the greater will be the employment opportunities for Australians.
Customs Tariff Amendment (No. 61) proposes acceptance of the Tariff Board’s recommendation that tapered roller bearings be accorded increased protection. I do not quarrel with that, because Australian Timken Proprietary Limited, a roller-bearing producer, has established itself in the city of Ballarat and employs 100 or more Ballarat people. It turns out a good product and the employees live in the healthy suroundings of Ballarat city. I have only one criticism. In the light of a Tariff Board report tabled last week, this firm might be engaged in what one would be justified in calling nefarious activities. If press reports are correct, Mrs. Timken died in New York seven or eight days ago a very wealthy woman - perhaps a multimillionairess. One wonders whether this firm is making too great a contribution in dividends to its overseas shareholders. Nobody objects, of course, to the Timken organization’s investing in Ballarat; we applaud it.
– You do not mind, as long as it does not make any money.
– The honorable member is always an old Jeremiah. All he has been concerned about all his life is the making of money. He knows that Labour’s record in relation to protection and the encouragement of investment in Australia bears a much closer examination than do the activities of the free trade association of which he is a member. Everybody knows that he is very actively associated with foreign banking institutions in this country and spends, or did spend, a good deal of his time as a director of those institutions, which are merrily exporting their dividends and excess profits.
– Order! This has nothing to do with the matter before the Chair.
– One is tempted to say something upon being rudely interrupted and accused of bating anybody who makes a profit. After all, it is the invariable practice of the Australian Labour Party in this Parliament to assist manufacturers who are engaged in useful activities, are progressive, and are not exploiting the Australian people. We have assisted them by tariff protection, by bounty, and by giving every other encouragement that can be given. We object to them only when they become a menace and exploit the people. In the latter circumstances, we have had no hesitation in saying that they ought to be stopped. The honorable gentleman would not help us to deal with such people. He belongs to a government that talked in the election campaign about a bill to deal with restrictive trade practices. Nothing has been heard since about that matter, except a little airy-fairy talk, and nothing will ever be done about it. I leave it at that and come back to the subject of rollerbearing manufacture in Ballarat.
The Opposition wishes this industry well. We support the granting to it of increased protection. Its output is very large. But it is notable that this organization is an associate of the Timken importing organization. As soon as protection is accorded the local people, probably the price of the imported article will be pushed up. Up to date, this firm has not used Australian raw materials entirely in the production of roller bearings at Ballarat. It is importing some of its raw materials. We hope that the day is not far distant when the Broken Hill Proprietary Company Limited, or some other metal manufacturer, will be able to turn out the necessary raw material, thereby satisfying raw material requirements with 100 per cent. Australian products.
I am sorry that the honorable member for Ballaarat (Mr. Erwin) is not here to say a few words about this subject. In the past, I have been somewhat critical of the failure of Australian manufacturers to turn out first quality materials. I am glad to be able to say - and I say it generously, I hope - that the quality of these locally-made bearings is unquestioned, as is shown by the Tariff Board report. That is gratifying, indeed. Very large quantities of these products are made here. It is very interesting to note a remarkable practice operating in relation to the selling of these products - a practice which, however, does not detract from the desirability of having this industry here.
Table No. 2 of the Tariff Board report sets out the selling price of these tapered roller bearings, including the list price and the price for original equipment purposes. For bearings of a certain shape and size, the list price as per catalogue was 40s. 3d. To an Australian manufacturer, the price of the Australian-made bearings was10s. 9d. and of the imported bearings 9s. 8d. This shows the discount allowed off the list price. An extraordinary practice seems to prevail in relation to discounts in the roller and ballbearing business. A big customer may get a discount of 60 per cent. off the list price, while the little fish gets only 25 per cent. So the game goes on. A small manufacturer of machinery goes along to these great bearing combines and asks the price of a gross of bearings of a certain size. Although he is not told in so many words, in effect he gets an allowance of 25 per cent. off the list price. On the other hand, if a representative of General Motors-Holden’s Proprietary Limited or the Ford Motor Company Limited comes along, wanting 100 gross of bearings of the same size, he will be allowed 60 per cent., or perhaps 66 per cent., off thelist price. What do these people do about encouraging manufacturers in a small way of business?
I should also like to deal with the recommendation for new duties on taximeters.
– Order! The honorable member’s time has expired.
– With the concurrence of honorable members, I shall take my second period now. I suggest to the Minister for Supply (Mr. Fairhall) that proposals such as those contained in Customs Tariff Amendment (No. 61), relating to taximeters, roller bearings, electrical equipment and styrene cannot be adequately discussed in the time allowed. I suggest that the allotment of ten minutes to a speaker is rather farcical. One could talk - I should hope fluently - for at least half an hour on some of these engineering items and other items required for primary production. Even then, much more could be said. We have a thought-provoking Tariff Board report and this Parliament should have a greater opportunity to discuss these matters. I take the opportunity to point out that the honorable member for St. George (Mr. Clay), an expert on the textile industry, will find ten minutes inadequate. Some consideration should be given to extending the time allowed for dealing with these subjects.
– Mr. Chairman, will you tell me what we are discussing under this item?
– The honorable member for Grayndler should know that we are dealing with Customs Tariff Amendment (No. 61), and Customs Tariff (Canada Preference) Amendment (No. 8), as intimated to the committee at the commencement of this debate.
.- I wish to say a little about roller bearings. I am glad that the Government has seen fit to increase the tariff on this item, but in my opinion the tariff is not yet high enough. Many firms are making this product in Australia at the present time. It has been brought to my notice that roller bearings can be manufactured in America, shipped across the Great Lakes to Canada - to a branch of the firm manufacturing the bearings - and thence shipped to another Commonwealth country under preferential tariff arrangements. I should like the Tariff Board to discover whether or not this practice exists and, if it does, to stamp it out. I think it is wrong that roller bearings can be made in a foreign country, shipped to a Commonwealth country in unmarked cases and then re-shipped to Australia and receive preference.
.- I do not wish to take up a great deal of the time of the committee, but it is interesting to note the number of increases that have been made in the tariff on many products dealt with in item 61. If you go through all the items - taxi-meters, alternating current motors, and so on - you will see that there has been an increase in tariff on most of the items we are discussing. This in itself, indicates a desirable change of front by someone in government regarding the need to protect the industries concerned in these items, as well as those mentioned by the honorable member for Lalor (Mr. Pollard).
– They have always had that protection.
– I do not think they have always had it. Let us be quite frank. Even supporters of the Government in the newspaper world admit that the Minister for Trade (Mr. McEwen) is a free-trade Minister, and he is supported in his views by some members of the Liberal Party with whom the honorable member is associated.
I have before me some information which, I think, explains why the Government has been prompted to take action in respect of goods covered by this item. I have here figures showing the value of imports for the two six-month periods that ended in December, 1961, and December, 1962, respectively. The items range from tea to chemicals and plastic materials and include a considerable number of the items we are discussing. Many of these items can be manufactured in Australia and their import represents a terrific drain on the resources of this country. It is desirable that action be taken by the Government, not only to protect the industries concerned1 - which are providing useful employment and bringing prosperity to Australia - but also to preserve our overseas balances. I think that these factors have been taken into consideration.
On the question of tariff policy generally, I think that the Government is bankrupt of a sound policy. The latest figures that I have been able to procure show why the Government is acting as it does. The preliminary statement of overseas trade statistics for January, 1963, puts the legislation that has been introduced into this Parliament in a very peculiar light. Imports of merchandise recorded in January, 1963, compared with imports in January, 1962, show an increase of £A20,800,000. Exports of merchandise recorded in January, 1963, compared with exports in January, 1962, disclose an increase of £A1,500,000. In January, 1963, the recorded excess of imports over exports was about £A6,400,000 compared with an excess of exports of £A1 2,900,000 in January, 1962. For the first seven months of 1962-63 recorded imports exceeded recorded exports by about £A39,600,000 compared with an excess of recorded exports of £A 126,400,000 in the corresponding period of 1961-62.
Those figures, which are undoubtedly involved in these proposals, are taken from official sources. They show that not only has the policy of the Government been designed to react against Australian manufacturing industries but also that it has seriously affected the balance of Australia’s trade. The figures I quoted did not take into account freight charges and items of that nature. Not only is Australian industry suffering because of the Government’s failure to protect it - as has been recognized in certain sections of the proposals under discussion - but the country has been going bankrupt from the point of view of balance of payments because of the failure of the Government to protect industries that manufacture goods the same as those on the importation of which we have been spending our resources. In that way we have been breaking down our overseas financial credit.
I make that observation. Like the honorable member for Lalor, I think that the Government’s action is belated. The lesson of the December, 1961, general election is sinking slowly into the Government’s mind, but at the same time Australia is not being protected from international bankruptcy - as the figures I have mentioned indicate - because of the failure of the Government to take action earlier.
Questions resolved in the affirmative.
Customs Tariff Amendment (No. 62)
Consideration resumed from 28th March (vide page 196), 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 179).
.- This proposal concerns polyethylene and certain knives incorporating “Waterloo bolters “. That is a new term to me. I am not sure whether many people know what a “ Waterloo “ bolster on a knife is, but as there is a Tariff Board report on the item the meaning can be found out.
Let me deal first with polyethylene. This is a product of the petro-chemical industry. It includes resin and is used for pipe compounds and table compounds. It is one of the bases of our plastics industry. We have only two manufacturers of it in Australia. They are Imperial Chemical Industries of Australia and New Zealand Limited and Union Carbide Australia Limited. Incidentally, both of those manufacturing concerns are in my constituency and employ a large number of good Australians at the nontechnical, technical and professional level. From my recent reading I understand that the Union Carbide company has established its plant at Altona and that the plant has a capacity in excess of local needs.
Whilst I do not come within the category of people referred to by the honorable member for Corangamite (Mr. Mackinnon) a few moments ago, who do not like to see people making money, I do wish to say that in the case of an industry where there are only two manufacturers in Australia, those manufacturers need watching. There is no reason why in any circumstances they should be allowed to exploit the Australian people. This is where the Australian Labour Party comes into the picture. Nobody can doubt the efficiency of these companies or the modernity of their plant and equipment; but in a field such as this it is very easy for companies to put their heads together. Tariff Board reports reveal that almost invariably large manufacturing concerns quote the same price for the same product. The representatives of these concerns invariably prattle about the value of competition in industry, but there does not appear to be any competition, nor is it likely there really is any competition. Under those circumstances some safeguard should always be necessary.
What often concerns me is that these great firms both incorporate a vast amount of- overseas capital. They come to this country and invest vast sums. How those vast sums were made we do not know. Perhaps they were made by rendering a good service and by charging a fair price to consumers in other countries and to us as former importers of their products. Perhaps those vast sums were made by shameless profiteering - we do not know - but the firms invest this money in Australia. What always astonishes me is that at the first blast of adversity those firms look for tariff protection and when they get it, the price invariably increases. I suppose the honorable member for Corangamite would say that you cannot expect them to operate at a loss for two or more years, but the ordinary man who has saved his wages or salary for a number of years and who establishes a small merchandising business, a store-
– Or a man who clears scrub?
– Yes, or the man on a farm frequently carries on for half a lifetime receiving less than the basic wage. The man on a farm seldom, if ever, gets any protection from tariffs. Sometimes, as the honorable member for Wakefield (Mr. Kelly) will admit, he may receive something in the way of a bounty or subsidy, but that is quite rare. But why is it that big concerns come to this country and expect this sort of assistance? One would expect them to be able to live on their fat for a few years.
We must appreciate, and this is where the honorable member for Corangamite is all astray, that if you do not give these businesses a run they do not make a profit from the outset and consequently will not come to this country. If they do come here, it is pretty difficult to refrain from giving them tariff protection which allows them a profit. But if they are not given that protection they will not come here, and there is no way of ensuring that they are not exploiting their customers. I make those remarks advisedly because I think the time is fast approaching when some’ authority in this country must have control. I do not suggest that it should be an authority like the Tariff Board, which already does a certain amount of this work. The suggested authority would probe very closely into many of these instrumentalities which are so well protected by the laws of the Commonwealth of Australia.
We support the proposal, Mr. Chairman, with the hope that the firms concerned will prosper, continue to employ good Australians, expand and, above all, supply to the Australian people a product that they are entitled to expect.
I want, now, to deal with the tariff proposal in respect of knives incorporating “ Waterloo “ type bolsters. I understand that a knife without a “ Waterloo “ type bolster is one that is forged without a handle, and one with a “ Waterloo “ type bolster is a different type of knife altogether. I understand, too, that the firm of Wiltshire is about the only manufacturer of these knives in Australia and finds that competition from outside sources is severe. Wiltshire is a fairly large employer and the Labour Party favours its encouragement in order that it may continue to make, and even increase the production of, this article in Australia. At present its production is fairly large. Th; item is described thus -
Table dessert grill steak or barbecue knives with cutting blades of metal, serrated or not, having forged stainless steel blades incorporating “ Waterloo “ type bolsters, the handle not being forged in one piece with the blade.
This firm is supplying a market tha’, could absorb 350,000 dozen knives a year. I hope they are all used for the purpose for which they are intended.
.- Mr. Chairman, I want to speak briefly in relation to low density granules for use in the making of polyethylene. I should like to comment early that certain materials seem to be fairly frequently the subject of inquiry, and to remark rather bitterly that the more difficult the chemistry and the more difficult the name to pronounce, the more often it seems to appear. I notice that the honorable member for Lalor (Mr. Pollard) and I do not agree on the pronunciation of polyethylene. I do not know whose pronunciation is right, but this difference between us shows how complex the problem is.
I cannot help remarking, also, that the bigger the company the more frequent seems to be its appearance before the Tariff Board. There are many such companies. C.S.R. Chemicals Proprietary Limited seems to be pretty regular; Union Carbide Australia Limited and Monsanto Chemicals (Australia) Limited are others. But, surely, the most frequent of them all is Imperial Chemical Industries of Australia and New Zealand Limited. In fact,
In the last ten years, I.C.I, has made 26 appearances before the Tariff Board in support of increased protection. I have always been taught that the purpose of the tariff is to help infant industries, but it seems to me that some industries, although seeming to lack independence, do not lack stature or eloquence - in fact, the strongest part of their make-up seems to be the lustiness of their crying.
But let us come back to polyethylene and see the shuttle system, to which I referred last week, by which references are shuttled backwards and forwards between the Special Advisory Authority and the Tariff Board. Here, I correct the honorable member for Lalor. The item with which we are dealing does not spring from the Tariff Board’s report but from a report of the Special Advisory Authority.
– I accept the correction.
– When the legislation to establish the Special Advisory Authority was before the House last year I mentioned that this system of shuttling references backwards and forwards could lead to very great danger and to an erosion of the authority and independence of the Tariff Board. On that occasion I was castigated by the Minister for Trade (Mr. McEwen) for raising that point, but I now do so again.
I think we should look at the programme and the time of the various reports, of which this one was the last. Until May, 1961, polyethylene carried a duty of 12i per cent., and this was evidently sufficient for I.C.I, to start production. In April, 1961, the full Tariff Board began in inquiry, but it was felt that imports were a danger and, while the inquiry was going on, a deputy chairman was asked, under the old legislation, to examine the industry. The deputy chairman gave emergency protection of 3d. per lb. But that was not enough, even then. Although the full board’s report must have been known to be just round the corner, the deputy chairman was asked to have another look in September, 1961, and he then granted an increase of id. per lb. for every Id. per lb. by which the f.o.b. price was lower than 28d. All the duties combined, that is, 12i per cent, plus the two emergency duties, gave a duty of about 57i per cent, if the f.o.b. price was 20d. per lb.
In December, 1961 - only eight months after the Tariff Board had received the reference - the report came to hand. The Tariff Board has always been castigated for being slow with its work, but this report came to hand only eight months after the board had received the reference, and then the Government waited for three months before taking action on it. I shall have to refer to the report of the full board, because it gives the background to the industry that we have to consider. The full board’s report deals with the matter in great detail. The annual capacity of the Australian market seems to be about 13,000 tons of polyethylene low density granules. At the time the inquiry opened, I.C.I, was the only firm producing the granules, but it would not publicly divulge what its production capacity was. Union Carbide Australia Limited began production before the report was printed, and its expected capacity was 7,000 tons at the time of commencement of production, rising to 14,000 tons by 1963. It is clear that the total capacity of the two companies together was considerably more than tha market could take. That is quite important, because this is a capital intensive industry. If there is more capacity than the market can take, either the price must rise to carry the unused capacity or a loss must be suffered. The honorable member for Lalor has referred to that. The companies evidently are grimly determined that the loss will not be much.
Labour costs do not loom large in this industry. They account for only about 5 per cent, of the cost of production. The chief material cost is the cost of ethylene, which is most cheaply obtained from the oil refineries. Evidently ethylene costs the Australian producer considerably more than it does the overseas competitors. The LCI. company gets its ethylene from Shell Refining (Australia) Proprietary Limited, and Union Carbide gets its supplies from Altona. One cannot help but be sceptical of the prices charged by the oil refining companies for ethylene, which is a byproduct of oil refining. I suppose they could put any book figure they liked on the product. It is simply a matter of allocating proportions of the overhead costs to various products of the refinery. I cannot help thinking that the refineries are inclined to charge what they can get away with. They are more inclined to charge a higher price for their product when they know that their client industries are going to get tariff assistance anyhow.
The same comment could be made about the apportionment of overhead costs by I.C.I. , which is a tremendous organization. How can the Tariff Board do other than accept l.C.I.’s judgment as to how overhead costs should be spread? It must be a terribly difficult task for the Tariff Board to go straight in and say, “ The overhead costs shall be allocated in this way “. The board must accept l.C.I.’s opinion.
After looking at this question, the Tariff Board ended up by saying that with the two companies operating there would be considerable excess of capacity and that strong competition between the two giant companies could be expected. The board then recommended a duty of 35 per cent, and added the rider that the industry should be looked at again in two years’ time, when Union Carbide’s costs were known. I guess the board was uneasy about the height of the duty on a product which is a raw material used by many other industries. It should be noted that eight manufacturers gave evidence against increasing the duty, and I understand that these manufacturers employ a great deal more labour than is employed in the making of the granules.
That is how things stood in March, 1962. After three inquiries had been held in twelve months, one would have thought that the job had been done, but that was not so. In January, 1963, the Special Advisory Authority was called in and he awarded emergency protection of Id. per lb. on every pound for which the f.o.b. price was less than 24d. That meant an ad valorem rate of 55 per cent, at an f.o.b. price of 20d., which was approximately the rate that was recommended by a deputy chairman a year before but was later rejected by the full board as being unnecessarily high. This was done because the price of the overseas product was falling. Although, as he himself admitted, imports had not been important, the Special Advisory Authority felt that they might be important in the future. Now it goes back to the full board for another report. This will make a total of five reports since the beginning of April, 1961. Therefore, I ask whether I was far wrong in pointing out on a previous occasion what might happen while we have in operation this shuttle system, this system of references to a special advisory authority and to the board.
There seem to me to be seven salient points that I should mention. The first is that the full board foresaw rather bitter competition between the two giant companies but this appears to have been wishful thinking. The companies seem to have a common price list, if we are to accept the Special Advisory Authority’s report. The only thing that could force their prices down in the absence of competition between themselves is competition from imports, and this they seem to have successfully prevented. The second point is that, between them, the two companies have deliberately constructed more capacity than the market can take, and the consumer is now asked to pay higher prices because of this error of judgment. The third point is that these two companies are not poor struggling companies. Imperial Chemical Industries of Australia and New Zealand has paid up capital and reserves amounting to £51,000,000, and it is an off -shoot of an overseas giant which has a capital of over £800,000,000. Union Carbide Australia Limited has paid up capital and reserves in Australia amounting to over £4,000,000, and it is an off-shoot of an American giant that has a capital of over £200,000,000 and operates over 400 plants and laboratories.
During a recent debate, I was criticized for being prepared to allow companies to wither and die without emergency protection. That was a touching picture, and I was moved. But let no one tell me to-day that I.C.I, and Union Carbide are going to wither and die if they do not get this emergency protection. If they do, then, even in their withered form, I hope no one gives me the job of interring their carcasses.
My fourth point is that, besides being big, these two companies are complex. For instance, I.C.I, produces in Australia explosives and chemicals of all kinds. Looking through the company’s annual report, I found that it makes at least 95 products. Let us assume that this emergency protection was not granted and that things got as tough as we were told they might do. Will anyone tell me that the other lines could not have carried a loss on polyethylene for a while? I am a mixed farmer. I am not an expert like the honorable member for Grayndler (Mr. Daly), who seems to know all about everything, but I do the best I can. I grow fat lambs, wheat, barley, oats, wool and so on. In recent years I have been making a loss on my fat lambs, but I do not go whining to the consumer, asking him to make up the loss. I would be even less justified in doing so if I had a wealthy parent.
A fifth point is that we should continue to remember that by making dear products that are used as raw materials for other industries further down the production line, we make the position of those other industries more difficult. It is not enough to say that you will protect them in difficult times. If, by so doing, you make their products more expensive, you switch the demand to substitute materials. By protecting polyethylene in this way, we jeopardize employment in the other client industries.
My sixth point is that there is at the moment a very interesting new development in the pressing of wool. The industry now has come to rely almost completely on the use of polythene bags when pressing wool. The method used is to place the wool in a polythene bag and suck the air out with a vacuum pump. It may well be that an increase in the duty now under consideration will mean an increase in the cost of these polythene liners of from 7s. to 10s., which in turn will make it more difficult for this new system to develop.
My seventh and last point is that the method of introduction of this protection, with a continual spate of references and re-references, strikes right at the roots of the independence of the Tariff Board and confirms my gloomiest forebodings as to what could happen when this legislation was being enacted. I shall deal with this matter further when referring to one of the later proposals, but I emphasize again that if we continue pursuing this method of reference and re-reference, if we continue with this shuttle service, we will inevitably weaken the whole fabric of what hitherto has proved to be a successful fiscal machine -the Tariff Board.
Question resolved in the affirmative.
Customs Tariff Amendment (No. 63).
Consideration resumed from 28th March (vide page 196), 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 180).
.- This proposal involves duties on cotton yarns. It springs from a recommendation of the Tariff Board. I notice that it concerns mainly the firms that gave evidence in support of increased duties. They are substantial firms, such as Bradford Cotton Mills Limited, Davies, Coop and Company Limited, Bond’s Industries Limited, Australian Cotton Textile Industries Limited and H. B. Dickie Limited. Certain other firms in the textile industry gave evidence in opposition to increases of duties on cotton yarns. They included Nile Industries Proprietary Limited, J. and R. Morley Proprietary Limited - this is a Ballarat firm, but the honorable member for Ballaarat (Mr. Erwin) is not in the chamber at present, and I do not know what he thinks about this - Jubilee Knitting Mills, F. H. Latham and Son Proprietary Limited, Goulburn Knitting Mills Proprietary Limited and Maryborough Knitting Mills (Cuttle) Limited. Here we have, within the ambit of one Australian industry, certain people seeking increased duties on cotton yarns, and other people, engaged in the manufacture of garments, opposing increased duties on cotton yarns.
After an analysis of the evidence, the Tariff Board made a recommendation, the effect of which, if adopted, would be to extend the range of protection to cover fine cotton yarns which are now being produced in Australia. Coarser yarns, which have been produced in Australia for many years, would remain dutiable at rates similar to the existing rates.
I do not claim to be as well qualified to speak on this matter as my colleague, the honorable member for St. George (Mr. Clay), so I will leave the matter there for the time being.
.- The cotton spinning industry in Australia does receive some assistance, in connexion with what is called fine-cotton spinning, arising out of this Tariff Board report. About eleven companies are engaged in the spinning of cotton yarns in Australia. Three of them have quite recently extended their spinning activities to include the spinning of finer cottons than those previously spun in this country. Their basic activity in fine spinning will be what is called the spinning of 50’s. As a result of the extension of activity in this way it is estimated that there will be additional employment for about 500 people, directly and indirectly, as operatives in the industry.
I notice that the Tariff Board, after examining this section of the industry, has referred to the industry as being highly efficient and competent. I presume it made that observation after some investigations of the way in which the industry is conducted. I have had very lengthy experience in the cotton side of the industry. I know the people in it very well, both on the employed side and the employing side. I think I could give testimony that the industry in Australia is probably more efficient than comparable industries in any other part of the world. I can recall a report made by a visiting American time and motion study expert who, after examining the Australian cotton industry, said that Australian cotton spinning operatives appeared to him to be more efficient and more effective than any he had ever seen anywhere else in the world. That would include certain European countries, Japan and Hong Kong, as well as the United States of America. It was a very high tribute indeed coming from such a man.
I notice a reference in the report to the fact that what is known as the Textile Council made a comparison of wages paid in the Australian and the Japanese textile industries. Comparisons are always valuable. The Tariff Board said that the average hourly wage in Australia of an adult employee was 97.2 pence, while in Japan it was only 14.2 pence. The council also claimed that there were other factors which contributed to the high cost of labour in Australia. It said that there was a higher proportion of male employees and a lower proportion of females than was the case in most other countries. It also said that there had been a significantly decreasing proportion, over the past twenty years, of young people employed in the Australian cotton textile mills.
All these things I believe to be perfectly correct, but I would make the comment that the comparison between Australian and Japanese wages does not take into account the numerous fringe benefits that are available to the employees in the textile industry in Japan. It is very difficult to estimate what fringe benefits are worth, of course. In Australia an operative receives a wage based on a basic wage determined by the Commonwealth Conciliation and Arbitration Commission, with a margin for skill according to the job being done. You could look at the total wage thus obtained and say that it is so many pence an hour, and that it compares with so many pence an hour paid to an employee in Japan. As I said, it is most difficult to estimate the value of these fringe benefits, but I can tell the committee that in quite large numbers of Japanese mills it is customary for employees to be provided with housing or accommodation so that they do not have to travel long distances and pay fares when going to and from work. They are also supplied with many of the goods they use in their homes, at very low prices. As a consequence, it is extremely difficult, if not impossible, to arrive at a fair comparison between Japanese and Australian wages. But one thing is certain: The difference is not as great as is shown in the report of the textile council.
I notice that Bradford Cotton Mills Limited said that it was its objective to work its fine spinning plant on three full shifts. It said that if tariff protection enables it to do this it will be able to reduce its prices. I would say that not only will it be able to reduce its prices, but also that it certainly will reduce its prices if the protection is extended for long enough time and proves, upon trial, to be adequate.
I notice, further, that the prices of British yarns, which make up the bulk of the imported yarns, have tended to fall during the last few years. I have always noticed that when Australian firms bring evidence that they intend to produce something previously not produced here, overseas manufacturers immediately tend to lower the prices of the goods they send to this country, in the hope of discouraging Australians from embarking on the manufacture of those goods - in this case, the finer yarns. A number of independent knitters in Australia have, I understand, raised their voices in some alarm about the possibility of an increase in the price of the yarn. Let us say at the beginning that their fears may prove to have been unjustified. If the Australian spinners have a market large enough to enable them to operate their plants on a full three-shift basis and so reduce their unit cost, they will, I am sure, reduce the price of the yarns made available to the independent knitters and also used by the spinners. Frequently the company engaged in spinning fine yarn will also make up the fine yarn into garments. The most notable example of this is the making of cotton singlets. Davies, Coop and Company Limited and Bond’s Industries Limited engage largely in the manufacture of these garments after first spinning the yarns. In the past, they have been obliged to import all the fine yarns from which the garments were made. In the future, they will be able to make the garments from their own yarns produced in this country.
It should be borne in mind that the Australian cotton-growing industry is very largely dependent upon the success of the Australian cotton textile industry. Whilst the Australian manufacturers of cotton goods may import the bulk of their requirements, they must buy the whole of the Australian cotton crop. With all due respect to Australian cotton, it has not the quality of cotton grown overseas and sent here, but, after blanking, it can be used in the Australian mills. So there is an assured market in this country for the whole of the cotton grown in Queensland and used as yarn in our mills.
As I said, the board found that this industry was efficient and worthy of protection. It recommended protective rates of duty on cotton yarns coarser than count No. 50. There was a reason for this. Frequently in the textile industry, if protection is given to the production of one count - say, No. 50 - the independent knitters may decide to make singlets or other underwear from a coarser count and if no protection is given to No. 40, they will use that count. If protection is confined to 50’s, they may decide not to use 40’s, but to use 60’s or 70’s. In that way, the manufacturer can be cheated and deprived of the protection given ic him. The board, in its wisdom, has decreed that protection shall be given to 40’s, 50’s and 60’s. I think the board is very wise.
That is all I wish to say about protection given to the spinners of fine cotton in Australia. It now remains to be seen whether the duty is adequate, and this can be proven only by trial and error. If the protection is sufficient to enable the manufacturers of fine cottons to work their plants on full shifts for 24 hours a day, the unit cost must fall and they will be able to produce cotton at a price comparable with the price of cotton now available to the independent spinners. I think that the manufacturers will accept this as a challenge, and will do their utmost to ensure that the Australian people will receive the benefit, that employment will be available to an additional 500 people and that the price of the finished garments will not rise but may even fall.
.- I want to add a few remarks to those of the honorable members for Lalor (Mr. Pollard) and St. George (Mr. Clay) and to reply to some of the comments of the honorable member for Wakefield (Mr. Kelly), who said that I knew everything about everything. I do not profess to be so bright, but I find it difficult to understand his attitude. He professes to be a member of a party that advocates protection to Australian industry, but he endeavours, more than any other member of the Parliament does, to break down the living standards of the Australian people. He argues against tariff protection whenever it is raised in the Parliament. He should be consistent. He should either support his party on protection for textiles and other goods or vote against it. That is the test of his sincerity on this issue. With all due respect to his knowledge of this subject, 1 do not appreciate his attitude. In sponsoring the cause of free trade he is undermining the welfare and future security of countless thousands of Australians.
Textile yarns have been the subject of inquiry by the board on a number of occasions since 1925. The figures show that the value of imports of a number of items increased for the year ended 31st December, 1961, as compared with the year ended 3 1st December, 1962. The value of these imports has increased since import restrictions were lifted and the Government failed to protect Australian industries. Imports of yarns and man-made fibre increased from £2,627,000 to £5,785,000. Imports of cotton and linen piece goods not impregnated increased from £15,540,000 to £20,028,000. Imports of piece goods of man-made fibre increased from £2,220,000 to £3,368,000. It is clear that the Government is allowing the import of these goods to increase. It is little wonder, as the honorable members for St. George and Lalor have said, that people in the textile industry are very concerned about conditions in what is undoubtedly one of our most important industries. During the last war, the Australian textile industry had to produce many of the most essential requirements of war. Any weakening of the structure of the textile industry weakens our whole economy. The industry is important to Australia in peace or war.
The honorable member for Lalor referred to the people who supported the request for increased protection for the items we are discussing. The list of these people is too extensive to mention here but it includes a number of the major textile industrialists of this country. The report gives the number of people employed in the industry. Those seeking protection, not only for the industry itself and the capital invested in it but also to safeguard the employment of Australian workers, included the major Australian textile interests. Arraigned against them in opposition to increased protection were such people as the Australian Association of British Manufacturers and the Lancashire Cotton Corporation Limited. These interests naturally want to export their goods to this country so that employment will be provided for their people and their capital will be protected. They do not care whether Australian industry goes to the wall or whether Australian jobs are lost so long as their interests are protected. Their aim is to protect those who are not employed in Aus tralia and they have very little interest in the general welfare of the Australian people.
When we consider the recommendations of the Tariff Board for protection for the textile industry, we should keep in mind that those opposed to this protection in many instances come from cheap labour countries. The people seeking to export textiles to Australia do not give their employees the same fringe benefits, the same protection, the same wages or the same hours and conditions as the Australian textile industry gives its employees. I adhere to the policy outlined by the honorable member for Lalor and other honorable members on this side of the chamber. If Australian industries are to give their workers the conditions to which they are entitled and which we seek, the industries are entitled to protection from time to time. That applies particularly to the textile industry, which, as has been pointed out, employs a great proportion of adult labour in comparison with other industries that employ juvenile or junior labour.
On page 6 the Tariff Board’s report sets out briefly the main reasons submitted by witnesses in support of the industry’s requests. I think they are worth recording in order that people will see that this industry should receive protection. The reasons are -
The Australian cotton spinning industry is -
Compared with competitor spinning industries overseas it suffers disadvantages because of-
Then the answer to that case is set out in the report. It follows the usual pattern. It mentions that the industry is not economic and a few other factors of that kind. I believe that incorporated in the case for the industry is the clear reason why this industry should be protected and the reason why this matter comes before this committee.
On the same page the report mentions that the total funds employed on spinning would be at least £17,000,000, and that when the funds employed in fine spinning - which are estimated to total about £4,750,000 - are added to the investment, the overall total of funds employed by the cotton-spinning industry would be in the vicinity of £18,000,000. This is a huge industry in a young country, and it is entitled to protection. The report goes on to say -
In all of the operations of the seven companies, . . the collective funds employed amounted to approximately £40,000,000.
Later in the report the board stresses the question of employment. This Government should bc particularly interested in that question at this stage when, in round figures, 100,000 people are unable to get work. The report states -
Total employment in the production of the goods under reference-
That is under this item alone -
The seven companies collectively employ, in spinning operations, 3,730 persons of which 2,512 are directly engaged in production.
Bradford, Bonds and Davies Coop claimed that on a three-shift basis fine cotton yarn spinning will provide employment for about 500 direct and indirect operatives.
That stresses the need to protect this industry. It shows that apart from the people who are directly engaged in the industry there are many workers in industries allied to it, so the effect is always spread over a much wider range of employment. That should bring home to the Government and to the Tariff Board the fact that the industry has been a Cinderella as far as protection is concerned. Whenever tariff reductions have been made, and whenever any attack has been made on protection, the target has been the textile industry. It has suffered greatly from attacks on protection and from the Government’s failure to meet adequately the requirements that are outlined in the report, such as labour conditions and things of that nature.
I do not say that the textile industry should receive all it asks, but there is a wide gap to be bridged because of differences in wages, hours and conditions between Australia and countries that send textiles to this country. I wish to read out a statement which appears on page 10 of the report. I read this because not all people read the reports of the Tariff Board. The report states -
The Textile Council compared wages in Australian and Japanese cotton textile industries. The average hourly wage in Australia of an adult employee was said to be 97. 2d., while in Japan it was only 14.2d. The Textile Council also claimed that other factors which contributed to the high cost of labour in Australia were the higher percentage of male employees to female compared with most overseas mills . . .
And so on. If we expect men to have reasonable incomes and if we expect reasonable wages to be paid we cannot expect Australians to compete with Japanese labour at 14.2d. an hour which works without our conditions, amenities and social benefits. That in itself indicates that all our industries, but particularly the textile industry, must have continual protection. The report also states -
Davies Coop claimed that, on the basis of using 1.52 Kwh per lb. of yarn produced, the cost of electricity in Australia was 3.0d. per lb. of yarn and in Britain and the United States of America it was 1.90d. and 1.89d. respectively. Other items in which the local industry was said to have a cost disability were freight rates, fuel oil and depreciation.
These things are apparent to all. I do not say that we should break down our conditions and import cheaply. It is no good having unemployed people without purchasing power in this country while the markets here are flooded with cheap textiles from cheap-labour countries.
Not so long ago I went into a shop in Sydney and endeavoured to buy an Australianmade tie. I found it was impossible to buy a tie made of Australian wool. Every tie on sale was imported. I could not buy a scarf that was made in Australia. They were made in Scotland. In some of the average shops in Sydney it was impossible to buy a textile article made from
Australian wool, because of the huge flood of imports. The shops are doing what 1 suppose is the practical thing for them to do. They sell articles with the highest profit margin, and they make more profit on imported goods than on Australian goods. . Unless protection is given, and unless we make our products competitive and maintain not only efficient industries but also industries that know they are assured of the support of the government, people will continue to buy imported goods. It is far better to have Australians employed than to have Japanese employed. It is far better for Australians to be in work and paying a little more, if necessary, for Australian goods, than for them to be out of work and unable to buy the imported goods in the shops.
Whenever the textile industry is under consideration, and whenever matters of this nature come before us, what has been said by the honorable member for St. George (Mr. Clay) and what is outlined in the report now before us should receive the full commendation of this committee. Whether we are primary producers or manufacturers, the success and prosperity of the textile industry means much to the Australian people generally and to Australia’s prosperity. On a national basis, in peace-time it is necessary to have the strong textile industry which was built up under the Scullin Labour Government; but, in war-time - if such a crisis should ever arise - if the textile industry is weak we will have a weak defence effort and we will not be able to produce supplies for our forces. Therefore, whatever the report may recommend in the way of benefits, 1 believe that the tariff should be increased. I hope that whenever the textile industry is under consideration the factors mentioned in this report, the evidence submitted to the board and what has been said in this Parliament will be given full consideration.
.- Mr. Chairman, I want to say how obscene and offensive I found the remarks directed at the honorable member for Wakefield (Mr. Kelly) by the honorable member for Grayndler (Mr. Daly), early in his speech. I cannot believe that anybody in this committee, other than the honorable member for Grayndler himself, thinks tha’t, by reflecting on the honorable member for Wakefield’s doing the job that he is elected to this Parliament to do he is promoting the interests of this Parliament. Does the honorable member for Grayndler deny that the Parliament has a responsibility to examine and control the executive branch of government? Surely that is the reason for its existence. One of the reasons why the honorable member for Wakefield has to do the enormous amount of work that he has done in order to produce the reasoned conclusions that he produces is that members of the Opposition are too lazy and too bone-headed to do their own homework. That conclusion is amply justified by the contribution of the honorable member for Grayndler. He was not even aware that the honorable member for Wakefield did not on one occasion discuss the textile reference, yet he referred entirely to the textile reference and used it as an iron, as it were, with which to brand the honorable member in this way.
I submit that in treating the Tariff Board references as he does the honorable member for Wakefield has gone a long way towards restoring to this Parliament its proper function, but in this process honorable members have to do a bit of homework so that they may be in a position to examine critically what is put up to them by the Executive. The honorable member for Grayndler had not even thought of that. He had not read the textile reference to which he referred. That was obvious. He held the report in his hand and read from it, attempting to convey the impression that he had great knowledge of it. AH he did in fact was read from the report the list of reasons given by the industry why it should receive protection. That is a standard part of every Tariff Board report. The honorable member did not attempt to give a balanced evaluation of the situation, as the board does later in the report, and then arrive at a conclusion. If the honorable member for Grayndler and his colleagues, including the honorable member for Lalor (Mr. Pollard) were to do those things, the honorable member for Wakefield would not need to be on his feet as much as he is.
I think that the honorable member for Wakefield, by undertaking these exercises, has done a great service to this Parliament as an institution. Honorable members opposite bring no credit upon themselves or this Parliament by criticizing the honorable member’s reasoned evaluation of these matters and by accusing him of being a free-trader and of trying to grind the Australian worker into the dust. This afternoon the honorable member for Wakefield, with a wealth of detail, has attempted - soundly in my view - to show the Parliament that by following an unwise policy of protection at the base, the base being one which employs very few workers in Australia - about 5 per cent, in this particular case - you increase the price to people further along the line to such an extent that you really do affect employment in a big way. What has the honorable member for Grayndler to say about that? Why does he not answer the arguments put up by the honorable member for Wakefield?
– Order! The honorable member for Barker is getting away from the subject matter of the debate.
– I content myself with those few remarks. If they have the effect of leading the honorable member for Grayndler to behave as a responsible member of this institution and to do the work he is paid to do and obliged to do, my efforts will not have been wasted.
.- How silly can some people get! We are discussing a tariff proposal dealing with a specific Australian product. The honorable member for Wakefield (Mr. Kelly) at least makes constructive suggestions from time to time but the honorable member for Barker (Mr. Forbes) - the former university lecturer on economics who has plenty of self-esteem - does not know anything about the proposal under discussion. He delivered a lecture on behaviour. He accused members of the Opposition of not knowing anything about the subject of the debate. He accused them of not reading the Tariff Board’s report. What can he do? Nothing! He should be ashamed of himself. He may have lectured other people but he will not lecture us without getting a retaliatory comment. All he did was make a fool of himself. I leave it at that.
.- I support the remarks of the honorable member for Barker (Mr. Forbes). He and I rose simultaneously, but he received the call. He more or less took the words out of my mouth, so I will be brief. The honorable member for Grayndler (Mr. Daly) obviously has no knowledge of the subject about which he spoke. He misrepresented the situation when he compared wage rates in Australia with wage rates in Japan. His argument was completely misleading because he knows that there are all sorts of benefits associated with employment in Japan which do not come into the picture in Australia.
The honorable member for Grayndler, as befits a member of the Labour Party, has a peculiar view of what constitutes an economy in Australia. His policy is high protection so that eventually we will be isolated from the economies of the rest of the world. We will have in Australia what some people like to call a closed circuit economy where we buy at tremendous cost what we produce from our factories, and the unfortunate primary producers and even those manufacturers who have endeavoured to sell overseas will be at a tremendous disadvantage. The important object of these fair tariffs, which we on this side of the Parliament support, is to keep costs in Australia down and to maintain employment. Recent figures indicate that we are doing very satisfactorily in maintaining employment in Australia.
.- The honorable member for Mcpherson (Mr. Barnes) said that we must keep costs down and maintain employment. The policy that he supports is responsible for 100,000 Australians being out of work to-day, and the Country Party-
– Order! The debate seems to have wandered away from the proposal before the committee. I suggest that further discussion be strictly confined to the proposal.
– Thank you, Mr. Chairman, for the wisdom of your ruling. I was pleased that you directed your remarks mainly to honorable members from your side of the Parliament, as they were the chief offenders. The honorable member for Barker (Mr. Forbes) thought he was at school once again and gave us a lecture. Personally, I would not listen to a lecture from him. However, if some people are sufficiently unintelligent to do so, he is entitled to earn his money under false pretences.
I had read the Tariff Board’s report. The honorable member for Barker did not even have a copy of the report in his hand when he spoke. He, like the honorable member for Wakefield (Mr. Kelly), is a free-trader. I do not deny that the honorable member for Wakefield has a knowledge of this subject. But if honorable members think I am his only critic they should read “Hansard” and see what the deputy leader of the Country Party and the Deputy Prime Minister think about him. We had the spectacle in this Parliament of-
– Order! I suggest that we keep the discussion to cotton yarn, not yarns.
– Thank you, Sir, but I think I am entitled to reply to the insinuations of the honorable member for Barker. My criticism of the honorable member for Wakefield is that his views are contrary to the protectionist tariff policy enunciated and pursued by this Government. In the Tariff Board’s report under discussion a reason is given for protection, but the honorable member is continually arguing against protection on this and other items. In that he is supported privately by Government supporters, including the honorable member for Barker, who, while allowing the Government to breach protection, attacks these reports in every way and tries to whittle down whatever influence the Tariff Board may have in giving protection to the textile industry.
I believe that you must give certain fringe benefits to Australian workers, and they are certainly entitled to good conditions. The fact that the honorable member for Wakefield and others argue against them does not increase in my eyes the prestige of those honorable members. They are in this place to vote for the Government. Although they criticize the Government, they give lip service to it for the sake of holding their seats. If you could talk privately with the
Minister for Trade (Mr. McEwen) he would tell you that a dozen members of the Liberal Party in this place, including the honorable member for Barker, would abolish all protection and throw Australian industry aside. That is obvious. I give the honorable member for Wakefield this much credit: He is the only one with the courage to stand up and say that publicly. The honorable member for Barker praises him because he is prepared to say things publicly that the honorable member himself will say only in the corridors. With all his great knowledge, the honorable member for Barker has not bothered to look at the report. He knows nothing about the textile industry-
– Order! I think the honorable member for Grayndler should resume his seat.
Question resolved in the affirmative.
Customs Tariff Amendment (No. 64).
Consideration resumed from 28th March (vide page 196), on motion by Mr. Fairhall-
That the Schedule to the Customs Tariff1933- 1962, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 181).
.- This proposal relates to aluminium alloys. I have risen on this occasion only to make the committee realize that the industry is feeling considerable concern at the continually increasing value of aluminium imports. For the year 1961-62 the value of imports of aluminium and aluminium base alloys was £1,641,000. For the year1962- 63 that amount grew to £5,605,000, representing an increase of almost 400 per cent. Undoubtedly the industry has fair reason for concern. The figures speak for themselves. Theylet all know that unless some effective action is taken, not only in relation to this item but also to others the import of which has increased considerably, the whole structure of the industry easily could be threatened.
Question resolved in the affirmative.
Customs Tariff Amendment (No. 65).
Consideration resumed from 28th March (vide page 196), 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 182).
.- This proposal relates to a Tariff Board report on vegetable oils, which include linseed oil, soya bean oil and safflower oil, and it incorporates a recommendation that higher duties be imposed. The new duties are in accordance with the board’s recommendations except that the sliding scale component of the duty on linseed oil has been modified out of consideration for the trade interests of the developing countries in accordance with Australia’s world commodity policy.
The Opposition supports this proposal. 1 would expect members of the Country Party to make some comment about this matter because it concerns that section of the Australian community which, according to the Country Party’s usual protestations, it purports to represent. In the hope that some member of the Country Party will make some contribution to the debate on this proposal I shall leave my further remarks until later.
Question resolved in the affirmative.
Customs Tariff Amendment (No. 66).
Consideration resumed from 28th March (vide page 196), on motion by Mr. Fairhall -
That the Schedule to the Customs Tariff 1933- 1952, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in (he Schedule to these Proposals . . . (vide page 183).
.- This proposal relates to the emergency duty on furnishing fabrics. Last year, I remember, if no one else does, that in this chamber I discussed sixteen different tariff proposals. That was a particularly difficult thing to do. On this occasion I shall confine myself to five items, on the basis that it is better not to spread your fire too wide. I regard this proposal as even more classic than those relating to rubber belting fabric and polyethylene in our shuttle system of references between the Special Advisory Authority and the Tariff Board. The board inquired into furnishing fabrics in June, 1960, and recommended a duty of 2s. 8id. a square yard for man-made fibre fabrics and a 50 per cent, duty on cotton fabrics. In December, 1960, a deputy chairman of the
Tariff Board was asked to reconsider the duty, and he increased it. Then the matter went back to the Tariff Board in June, 1962, and essentially the board’s report substantiated the emergency duty. The recommended duty was a minimum of 50 per cent., but in the case of man-made fibre goods there was a floor of 2s. 8)d. a square yard or 50 per cent., whichever duty was the higher.
What does this mean? It means that on material costing 5s. a square yard the ad valorem rate works out at 54.2 per cent., and rises to 90.3 per cent, if the material costs 3s. a square yard. This, surely, is generous treatment. The Tariff Board must have had the uneasy feeling that it had been generous because in its report of 22nd June, 1962, it stated -
The Board believes, however, that it would be uneconomic to produce in Australia those fabrics which cannot be manufactured profitably by an efficient mill with the recommended protection of SO per cent, ad valorem. The Board feels that the cost to consumers of having this industry is already high, and is reluctant to recommend protective duties which might result in any further cost to consumers.
During this inquiry by the board much play was made of the problem of “ close out “ sales. Manufacturers mentioned this aspect continually. The board specifically recommended that the Department of Customs and Excise consider the problem, and I understand that this is being done. But this problem is far from easy to solve. The board found that the problem of “ close out “ sales was not nearly as serious as the manufacturers contended and certainly was not significant enough to justify panic legislation.
The board’s recommendations were implemented in October, 1962, and the Government embarked upon an examination of “ close out “ sales in an effort to decide what could be done about them. I thought that the industry would have been content to battle it out with imports with a protection of 50 per cent., rising to 90.3 per cent, in the case of cheap imports, but this did not happen. On 25th January, 1963, the Special Advisory Authority was asked to have another look at the industry because apparently the duties were not considered to be high enough. I have often paid tribute to Sir Frank Meere for the frankness of his reports. I do so again for his report on furnishing fabrics. He turned first to the problem of “ close out “ sales. One section of the report reads -
As might be expected, the question of “ close out” sales was featured prominently in the course of my inquiry. The Australian manufacturers claimed that it was an important problem and, while they could produce considerable evidence to show that furnishing fabrics of overseas origin were being offered in Australia at “ close out “ prices, they were unable to produce evidence to show what quantities of “ close out “ materials were being actually imported into this country. On the other hand, the representatives of Australian wholesalers of furnishing fabrics and the Australian Council of Furniture Manufacturers stated that it was not in their best interests to handle “ close out “ materials, and they maintained that the quantities being imported would be very small.
These are not my words; they are from the findings of Sir Frank Meere. He continued -
It was suggested to me that a considerable part of the imports of fabrics at “ close out “ prices would be those of the large retailers importing direct from overseas. While these interests did not discuss the matter directly with me, there was sufficient information available to me to show that the retailers are not importing “ close out “ materials in any great quantities and that, in any event, they are mainly concerned with printed materials, which are outside the terms of my reference.
His report continues -
The Department of Customs and Excise has already commenced a comprehensive inquiry into this question and is collecting information both in Australia and overseas. These inquiries may not be completed for some months. As a result of my own inquiries, I am of the opinion that, while “ close out “ sales may have contributed to the Australian manufacturers’ present difficult position, the contribution has been only a minor one.
That is not my opinion but is the opinion of Sir Frank Meere, the Special Advisory Authority.
Having laid low the bogy of “ close out “ sales, Sir Frank Meere went on to examine the industry. He found that sections of it were still having difficulties, not because of “ close out “ sales but because the recommended duty was not sufficient. He recommended a temporary duty which, when added to the old duty, works out at 50 per cent, on materials which cost 16s. a square yard. But on the cheaper materials this ad valorem duty rises steeply. On material costing 10s. a square yard it works out at 57.5 per cent.; on material costing 8s., at 62.5 per cent.; on material costing 6s., at 70.8 per cent.; on material costing 5s., at 81.7 per cent.; on material costing 4s., at 105.2 per cent.; and on material costing 3s., at 144.4 per cent.
I should like to make two comments at this stage. The first is made with grim amusement. People are not obliged to buy furnishing fabrics manufactured from manmade fibre; they can turn, and are doing so, to fabrics made from plastics. One of the inevitable results of these high duties will be that people will turn even more to plastics, one of the main manufacturers of which is Imperial Chemical Industries of Australia and New Zealand Limited. So in the future we will have the picture of these two sections of the industry going behind the tariff wall and slogging it out to see who will get the furnishing fabric market. It will be a rather noisy encounter, with both sections squealing loudly for protection. I have an idea that the plastics section of the industry will win. If that is so, it will be a poor consolation to the manufacturers of the man-made fibres that they have put themselves in their present position by continually requesting inordinate rates of protection.
My second comment is made without any sense of amusement whatever. Here we have another grim example of what I said would happen when the legislation in question was before the Parliament. In June last the Tariff Board recommended high protection and then said that any mill which could not carry on with this duty could not be considered to be economic. Now sections of the industry are suffering, so once again increased duties are granted. So, in this case, the policy that an industry should be economic and efficient is plainly discarded. That was a policy upon which the Government fought the last election and which I supported. If this yardstick is to be discarded - and it has been discarded in this case - what policy is to replace it? We have been told that the Tariff Board is expected to keep its ear to the ground and listen for Government pronouncements from time to time. But as yet there has been no clear pronouncement. Is the implementation of this recommendation such a revelation? If so, let us look at it more closely.
The only justification for Sir Frank’s recommendation is that some mills will have to dismiss staff. Is this to be the new criterion? My friends opposite will certainly approve, and kind-hearted, wellmeaning people will support them. So this is what is wanted? Any section of the industry, however inefficient and uneconomic it may be, can claim protection because it employs labour! That is to be the position, even though the duties are unnecessarily high and make it possible for certain sections of the industry to make high profits, as is certainly happening, even though the high duties increase costs to the furnishing manufacturers and so jeopardize employment within the industry, and even though the higher cost of furniture is built into the wage structure of the country. These things do not matter now! They were weighed in the balance by the Tariff Board in June last and have now been discarded for this new policy which seems to revolve around getting protection in large lumps for anybody who employs labour, no matter how hopelessly inefficient he may be.
What is to happen now? This case will now be shuttled back to the Tariff Board for yet another report. That will mean that five reports will have been submitted since 1960. Will the Tariff Board be expected to give in on this occasion and recommend even higher duties? If so, why have a tariff board at all? Why continue with the masquerade? Why not get the department to fix a duty? Just let us think of the time that would be saved if that were done. But if the Tariff Board sticks to its guns and still believes that an efficient mill can operate with a minimum of protection, that is a duty of 50 per cent, rising to 90.3 per cent., what will happen? I suppose the matter will be shuttled back again to the Special Advisory Authority for another report. When the relevant legislation was before the Parliament, I said that this sort of thing could happen. When Sir Leslie Melville resigned as chairman of the Tariff Board, he made the rather stringent comment that he found the present arrangements little to his liking. I find myself in complete agreement with that statement.
.- The honorable member for Wakefield (Mr. Kelly) seems to have dealt a devastating blow at the furnishing fabric section of the textile industry. I think he has been far too harsh in his treatment of the industry. I contend that the furnishing fabric section deserves to exist and that if its existence is threatened, it is threatened only by competition from overseas which is anything but fair. If the competition to which we in Australia are subjected were fair, I would have no doubts in my mind about the continued solvency of almost every manufacturer of furnishing fabrics. This matter has been referred to the Special Advisory Authority on several occasions and in the natural order of events it has gone from him to the Tariff Board. On the last occasion on which Sir Frank Meere dealt with the matter, he recommended a blanket rise of 2s. a yard for all furniture fabrics costing up to 16s. a yard. There rs no additional protection for fabrics costing over 16s. a yard. Under the conditions which are prescribed by the industrial laws of Australia, it is almost impossible to make, for less than 10s. a yard, the kind and quality of fabric which is most in demand in the upholstery trade. I am referring to the manufacturers of whom, I believe, the honorable member for Wakefield (Mr. Kelly) has expressed his most stringent criticism - the manufacturers of moquettes. Fabrics very similar to those made in Australia by such manufacturers can be purchased from Spain or from East Germany at 3s. and 4s. a yard. After payment of handling costs, duties, freight and insurance, these fabrics can be sold here at 6s. and 8s. a yard, as against 10s. for the Australian product. It might be said that there is not a great deal of difference - only 2s. a yard - but to a businessman using thousands of yards a week, it is sufficient to induce him to give his preference to the cheaper fabric. He knows that the imported fabric resembles the fabric produced in Australia and that only an expert examination will reveal any difference. As the overseas product is a little cheaper, the businessman elects to buy it.
One might ask how it is that in Spain - a newcomer to the furnishing fabric export field - and in East Germany, manufacturers can produce fabrics to be sold in Australia at such a price. I understand that the Department of Customs and Excise is about to conduct an inquiry into what are called “ close out “ sales. I suggest that the Department might extend its field of inquiry and attempt to find out by what strange means fabrics can be produced overseas at about one-third of their cost of production in Australia. If these fabrics are being produced in Spain or in East Germany at these seemingly impossible prices, there is something going on about which we ought to have a great deal more information. I do not know what resources will be available overseas to the department. Inquiries could perhaps be made of government departments in Spain and East Germany as to whether a subsidy is being paid. Hourly rates of pay, living standards compared with those in Australia, the cost of power, and a number of other such things could be ascertained, but I understand that the inquiry is to be restricted to “ close out “ sales. I believe this is insufficient.
I can imagine that any investigator who went to East Germany or Spain to find out how certain products can be manufactured at prices which seem impossibly low would have every obstacle placed in his pathway by the appropriate government departments of those countries. I cannot imagine that he would receive any assistance whatsoever, but I can imagine that he would receive every possible discouragement to prevent him finding out by what ways and means fabrics can be produced at such absurdly low prices.
Australian manufacturers, in the course of their appeals to the Special Advisory Authority and to the Tariff Board, have always referred to quantitative restrictions and offered suggestions as to a quarterly quota of imports of furnishing fabrics. I am not referring here to moquettes. An amount of 200,000 yards a quarter has been suggested after investigation of the size of the Australian market and the capacity of the Australian mills. On very few occasions has the Government resorted to quantitative restrictions, although in the case of the aluminium industry the Government was most sympathetic to this form of protection.
I would like to quote from a statement made by the Deputy Prime Minister and the Minister for Trade (Mr. McEwen) when he was dealing with the aluminium industry. The Minister said that the reference to the Tariff Board on aluminium had arisen from commitments entered into by the Commonwealth when it sold its Tasmanian Bell Bay plant to the Aluminium Production Corporation, now known as Comalco Aluminium (Bell Bay) Limited. Among these commitments entered into by both parties was an undertaking by the Government to provide protection until 3rd January, 1965, so that the company would not be prevented by imports from maintaining for its Australian sales prices equal to those obtained before the sale of the plant. The report continued -
So far the Government’s obligations have been honoured by means of quantitative restrictions. The Tariff Board was asked, however, to recommend a level of tariff assessment which would fulfil the government obligations.
The Tariff Board was asked to recommend a level of tariff assessment which would fulfil government obligations, but let us see what happened. The Minister added -
The Government, in order to ensure that those obligations are met, has therefore decided not to adopt the Board’s present recommendations but to continue quantitative restrictions pending a further examination by the Board in the changed circumstances.
I wish only that the Government would show the same regard for the textile industry as it is so ready to extend to the aluminium industry - an industry which is anything but Australian-controlled.
I referred earlier to a proposed investigation by the Department of Customs and Excise and said that an attempt ought to be made to discover the manufacturing practices which enable furnishing fabrics to be produced overseas at such absurdly low prices and landed here to sell at prices which place the Australian manufacturers in economic jeopardy. As I have said, great difficulties would be placed in the way of our investigators and I feel that a thousand Perry Masons would be necessary to conduct such an investigation successfully.
It is apparent that the only answer to the problem of the Australian furnishing fabric manufacturers has been ignored and will continue to be ignored in future. Unless one has lived in the atmosphere of the textile industry for a long time and absorbed the atmosphere it is very difficult to understand the difficulties that can arise. I am sure that when the Special Advisory Authority, who lacks this advantage, listens to the representations made by the textile industry - and I include furnishing fabrics - he goes home every night with a firstclass headache. Similarly, when the Tariff Board members hear the representations of the textile manufacturers in Australia and the counter-representations of the importers, they, too, go home with first-class headaches. It is possible with yarns and fabrics to devise substitutes in such a way that the objects of the Special Advisory Authority or the Tariff Board are negatived within a few days. But you cannot get around quantitative restrictions. Cunning may be resorted to and all sorts of devious devices employed to defeat the aims of the Special Advisory Authority and the Tariff Board, but quantitative restrictions cannot be defeated and this is the only means by which adequate protection can be given to the furnishing fabrics section of the Australian textile industry. It is with regret that I notice that there is no attempt by the Special Advisory Authority to resort to the only method which would give this adequate protection.
.- The report under discussion refers to tariffs which affect the great textile industry of Australia. I do not intend to enter into an argument with any honorable member, but I should like to put forward a few points for consideration on this matter. On each occasion that a report of the Tariff Board relating to textiles is brought before the Parliament certain honorable members are keenly critical of the findings of the board if they are to the effect that the rate of tariff should not be reduced, and they are particularly critical if the rate of tariff is to be increased. It seems to me that the question we must ask ourselves is: Do we or do we not want a textile industry in Australia? If the answer to that question is “ Yes “ - and members of this Government have said, in answer to a point-blank question from me in those terms, that the answer is “ Yes “ - then we must ask ourselves the further question: Does the industry need protection and, if so, how much does it need?
The main criticism of reports, of either the Tariff Board or the Special Advisory Authority, seems to consist of the vague statement that the tariffs are too high. The fact that tariff is imposed at the rate of 90 per cent, does not necessarily mean that it is too high, because the rate of tariff must be sufficiently high to protect the industry concerned and the goods produced by it. It would not matter that the rate of tariff was fixed in a particular case at 300 per cent., if that were the rate required to protect the industry. So, merely to say that tariffs are too high is to be too vague, even if specific tariffs are mentioned. We could argue all day and all night about whether a rate of tariff was too high or not high enough.
Let us face it, the Australian textile industry cannot compete with that of overseas countries. The reason is that the textile industry overseas can send goods, such as furnishing fabrics and other textile yarns, into this country for less than we can produce them. The honorable member for St. George (Mr. Clay) asked how it is possible for overseas countries to do that. I am not an expert on this matter, but I think I understand the obvious economic principle that is involved in it. Let us take the United States of America as an example. There is in that country a home market of 180,000,000 people. The American textile industry produces sufficient furnishing fabrics and other textiles for 180,000,000 people. What enormous scope for production. It enables the American manufacturers to operate their machines at a much lower cost. They may sell the surplus to other countries at a lower price. That is the position with many of the products that are coming to Australia. The producers in other countries sell so may million yards of textiles on the home market and have so many million yards left over. They look at the surplus materials in their store-rooms and then say: “ Let us get rid of it somewhere. It does not matter much about the price. We have made our profit on the home market.” The Tariff Board is faced with an extremely difficult problem.
It has been stated that “ close out “ sales present an important problem, and that while the manufacturers could produce considerable evidence to show that furnishing fabrics were being offered in Australia at “ close out “ prices they were unable to produce evider.ce to show the quantity of “ close out “ materials that were being sold in this country. While the figures relating to quantities might be difficult to obtain, evidence was produced to the Special
Advisory Authority that considerable quantities of furnishing fabrics were being imported. Surely that is good enough. Why should the manufacturers have to state exact figures? Where could they obtain exact figures? Who could supply them? After all, the companies which manufacture furnishing fabrics manufacture other things as well. Furnishing fabrics are only a part of their production. Nevertheless, the production of furnishing fabrics keeps men in employment. As with the whole of the textile industry, there is a base, a starting point, from which production fans out to many other factories which provide employment for many people.
As I have listened to debates in this place on tariff reports concerning the textile industry I have often heard references to the high protection that is afforded to the industry. It seems to me t’-.at some of the speakers try to give the impression to the people of Australia, and particularly to the people in their electorates, that Australia is the only country which protects its textile industry. If the figures were to be ascertained, Mr. Chairman, we should find that, generally speaking, the Australian textile industry is les? well protected than is the industry in most other countries, including Japan, the United States, France, Italy and Germany. All of those countries impose a rate of tariff per square yard, plus ad valorem duties, plus quantitative restrictions. Even in America, that great textileproducing country, there are quantitative restrictions on the importation of textiles from Japan, and vice versa. Italy and France impose duties at a very high rate.
The textile industry is an extremely complicated one. Its difficulties cannot be summed up in a few words or by statements that the protection is too great or not great enough. Other countries which are much more advanced industrially than is Australia and with a much higher home consumption, lower wage rates and more efficient production because of the volume of production, must impose restrictions and duties on the importation of textiles.
In discussing this subject we should not refer only to furnishing fabrics, because the production of those fabrics is only a small part of the textile industry. Similarly, we should not speak only of cotton fabrics. We must look at the industry overall. We are training men who are skilled in the arts of textile weaving and spinning and in producing finished textile goods. Surely that is important to the future of this country. Those people are engaged not only in the manufacture of man-made fibres but also in the production of woollen goods. They are acquiring skills. As I have pointed out in this chamber on previous occasions, the skills they are acquiring are not confined to the production of artificial or man-made fibres; they may be used in just the same way in the wool industry, our greatest export income-earning industry. There are numerous instances of people who have acquired skill in the man-made fibres industry transferring to the wool textile industry and giving to it the benefit of their knowledge and experience.
An honorable member referred earlier in the debate to the people running the Lancashire spinning mills who protested about the protection afforded to the Australian industry, and he asked, “ How can those people in Britain expect to sell their goods in this country if we have not people working and earning the money with which to buy the goods? “. If the gates were opened, nearly every industry in Australia, in both the primary and the secondary fields, might be seriously affected by the competition from imported goods. It would pay us well to keep that in mind. The steel industry, the motor-car industry, the dairying industry, the shoe-manufacturing industry and many other primary and secondary industries are vulnerable to overseas competition. This matter resolves itself into the question: Are tariffs too high or too low? That is a very difficult question for an expert, much less a layman, to answer.
Finally, Mr. Chairman, I want to make the point that there are cries throughout the country from all kinds of organizations, including returned servicemen’s associations, various political parties, the Associated Chambers of Manufactures of Australia and the Association of Australian Chambers of Commerce, for the spending of more money to strengthen Australia’s defence. I do not see how we can strengthen our defence if we do not have a large enough population. If we do not have strong secondary industries as well as primary industries, we shall never increase our population. Without a big enough population, we shall be an easy mark for any country that wants to overrun us.
.- Mr. Chairman, I should like briefly to support the remarks made by the honorable member for St. George (Mr. Clay) on quantitative restrictions. I had not intended to speak on this matter until the honorable member for Wakefield (Mr. Kelly) went through a range of duties on furnishing fabrics which were priced between 3s. and 16s. a yard. He stated that those duties worked out at astronomical rates. I could not help believing that he was putting an absolutely impossible interpretation on the situation in trying to arrive at some practicable method of protecting an Australian industry. How can we possibly arrive at a rate of duty which will afford protection for a commodity with a range of prices so wide as is the range from 3s. to 16s. a yard? Protection can be afforded only in one way - by adopting quantitative restrictions on imports and by working, as has been suggested by the honorable member for St. George, on a base year to enable us to determine the number of yards of the particular material that our community can absorb and to assess the respective shares of the overseas manufacturers and the Australian manufacturers. Once a distributor or retailer has bought the required amount from Australian sources, he can supplement those purchases by buying as much as he wants from any importer that he likes to choose. To put it another way, any one could be allowed to buy as much imported material as he liked provided he first bought a specified amount of Australian material.
Duties on a sliding scale, which have been mentioned in relation to other goods such as polyethylene and cotton yarns, have the effect of keeping prices level, but they still do not do the job that quantitative restrictions would do in ensuring that all the weaving and other machines used in the manufacture of furnishing materials in this country are kept going for three shifts a day. The machinery must be kept operating for three shifts a day if the manufacturers are to get their costs down to the level that we want and that must be maintained if our local manufacturers are to be able to compete with imported goods on the Australian market. This objective can be achieved by a sliding scale of duty, but not nearly so effectively as it can be achieved by quantitative restrictions.
I could go further and apply the same kind of argument to generators, distributors and voltage regulators for internal combustion engines, which we discussed earlier. We would do the job much more effectively if, instead of raising the duty on imported components, as has been done, to induce Australian manufacturers of motor cars to use Australian-made components, we said to the Australian manufacturers of motor vehicles, “ If you want to use imported parts, you may use as many as you like provided that you first use a specified number of Australian-made components “.
.- Mr. Chairman, I wish to supplement my previous remarks on this subject with some additional information on the problems that face manufacturers in this country. Frequently, Australian manufacturers are chided about their inability to compete with overseas manufacturers. It is quite true, as the honorable member for Indi (Mr. Holten) said, that manufacturers in countries that produce on a scale vastly greater than that on which we in Australia manufacture almost invariably end up, after a period of manufacturing a particular line, with surplus supplies which they are unwilling to dispose of on their home markets. The natural thing for them to do is to see that the surpluses are sold in some other country. The manufacturers concerned do not care particularly which country is chosen. However, if the country in which the surplus occurs wants to buy our wool, it needs Australian exchange to do so. Therefore, if it can dump its surplus production in Australia, that is precisely what it will do. By that means, manufacturers in the country that produced the surplus can at least get something for their surplus production, which, if sold in their own country, would tend to depress prices below a level profitable to them. For this reason, they prefer to sell in Australia at a loss rather than to sell in their own country at a loss and depress the home price for their products.
One of the big difficulties of Australian manufacturers is that they are not properly informed about price levels in other countries that produce similar goods. I do not see how it is practicable for our manufacturers properly to inform themselves on this matter, because they cannot afford to maintain agencies in all other countries where products similar to their own are manufactured, and thereby keep themselves abreast of current costs of production in other countries. Any attempt to do so would impose a great additional financial burden on Australia’s manufacturers solely to enable them to satisfy the Tariff Board, which calls for this information. Since the board continually calls on Australian manufacturers to supply this information that they cannot supply, and, frequently to the detriment of Australian manufacturers, acts in the absence of the information, I should like it placed on record that this is a big difficulty to which Australian manufacturers, and especially manufacturers of textiles, are subject.
– Mr. Chairman, like other honorable members on this side of the chamber, I have always had great respect for the honorable member for Wakefield (Mr. Kelly). It causes me great distress to find myself, on matters of this kind, so continually at variance with the views that he expresses. For that reason, I should like to say something about the basis of the differences between us. I am a protectionist, not purely on grounds of expediency, but, I hope, on sounder theoretical grounds.
An economy in which fixed costs do not form a great part of the total cost of production is virtually self-regulating. But in an economy such as that which we have now, in which the total cost of production of manufactured articles includes a high proportion of fixed costs, that self-regulatory feature is no longer valid. The honorable member for St. George (Mr. Clay), a few moments ago, illustrated one aspect of this when he spoke of overseas manufacturers dumping goods in Australia at prices which were greater than their marginal costs but less than their total costs. In an economy in which investment provides a great deal of employment, this becomes of particular importance, because, when prices are cut below the level of total costs, new invest ment stops and unemployment grows. This means that, in the kind of modern economy that we have, you will not get the selfregulation of which I spoke. Government intervention is necessary to maintain high industrial capacity and a high volume of output.
– Mr. Chairman, I take a point of order. Will this open up a general debate on subjects of this kind? If it will, I would be glad to enter into such a debate. I suggest that, if the honorable member for Mackellar is allowed to speak in this strain, other honorable members should be given an opportunity to do likewise.
– Order! The honorable member for Wakefield has anticipated intervention by the Chair. I was about to suggest to the honorable member for Mackellar that this was not the time to enter into what would amount to a general debate on tariffs and the correctness or otherwise of tariff measures. That would not be appropriate to the consideration of the tariff proposals now before the committee.
– In deference to your ruling, Mr. Chairman, I shall not pursue the matter further. I hope that at some future time I shall have an opportunity in this place to state as clearly and as precisely as I can the real differences between my point of view and that of the honorable member for Wakefield. It distresses me to find this division between us, because, as I have said, for theoretical and not merely for practical considerations I find myself by nature a protectionist.
.- I shall deal briefly with two of the arguments that have been raised. I am sorry that the honorable member for Indi (Mr. Holten) is not here. I think he stated that I had said that in my opinion “ close out “ sales were not important. I made no judgment on that. I merely quoted the Special Advisory Authority’s opinion, as stated in his report. Neither did I say that emergency tariffs were too high. I said that the Tariff Board had stated, after looking at the industry with some care, that protection ranging between 50 and 90.3 per cent, should be sufficient for any efficient, economic industry. I repeat that I did not say that the emergency duties were too high. I said that the Tariff Board thought the present emergency duties were high enough. I pointed out that almost as soon as these duties were imposed the industry went hotfoot to the Special Advisory Authority and that the duties were altered again. I am not discussing whether protection should be high or higher. What I am saying is that a fiscal machine in the form of the Tariff Board, which has worked well because it has been respected and independent, is at risk as soon as we introduce this shuttle system, which deliberately undermines it. The other thing I should say to the honorable member for Indi is that I am sure the wool-growers in his electorate, like the woolgrowers in mine, will be interested to find that their problems are going to be eased by teaching people to weave hand-made fibre. I leave the matter there.
It is clear that tariff discussions are at last breaking us apart to some extent and causing cross arguments on one side of the chamber, which I find refreshing. It is interesting to find the honorable member for McMillan (Mr. Buchanan) agreeing with the honorable member for St. George (Mr. Clay) that the imposition of quantitative restrictions is the way to meet the problem. He knows - if he does not know, he should know - that during the period of quantitative restrictions, when we laboured under import licensing-
– I did not say “ import licensing “.
– It is the same thing, as the honorable member well knows. If he does not know, he should know. There is no essential difference between quantitative restrictions and import licensing.
– They are entirely different.
– They are essentially the same. He knows, as we all know, that that system increased our costs. I have many examples of industries which, during that period, were selling their goods at prices which were 60 per cent, above the dutypaid prices. If that is the kind of. thing that he and the honorable member for St. George want to see again, I should like to assure the committee that I certainly do not want to see it.
Question resolved in the affirmative.-
Customs Tariff Amendment (No. 67).
Consideration resumed from 28th March (vide page 196), 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 187).
.- I want to make some brief observations on one important item. It has been said by a cynic that this is a woman’s world, but two of the greatest inventions of recent years for the benefit of mankind have been the motor-powered lawnmower and the electric shaver. This proposal deals with electric shavers. I must say at the outset that I am a very confirmed and convinced protectionist, but I do not like to see the Australian public being taken for a ride by exploiting importers or manufacturers. I believe that in the matter before us there is ample evidence of restrictive trade practices and of prices control, by mutual consent, by importers and manufacturers, the victim of the whole show being the poor Australian male who uses an electric shaver to remove his beard.
The report is very informative. On page 6 we find a résumé of the f.o.b. prices of imported electric shavers. In the year 1961-62, 10,032 shavers were imported from the United Kingdom, the average price being £3 15s. The average price of shavers imported from Germany was 30s., loaded on the ship in Germany. The Japanese shaver cost less than £1.
– How much?
– In 1961-62, 2,031 shavers were imported from Japan, their total value being £2,000. As a result of the operations of the price control ring that has been established by those who are associated with this business, all of those articles sell at about £16 16s. in Australia. A representative of one of the companies which was giving evidence said that it was the company’s general policy to manufacture locally any parts for which the Australian cost was not more than 25 per cent, higher than the cost of the article in Britain. If the Australian manufacturer is producing a shaver at a cost 25 per cent, greater than £3 15s., which is the cost in Britain, I should say that he is charging an excessively high price for his commodity in Australia.
I object to manufacturers who shelter behind a tariff wall and exploit the Australian consumers. The matter has got out of hand. The real cause - I go back a few years - lies in the defeat of the prices referendum submitted to the Australian people by the Chifley Government. At the present time, of course, we have prices control, but the price is fixed by the sellers or the manufacturers. These people form rings and exploit the Australian consumers. I make my protest against this practice, but I do not change my view as a protectionist. I am illogical enough to say that nothing should be imported and that everything we need should be made in Australia. But it is wrong that manufacturers should, in the interests of making profits, continually take the Australian public for a ride. The tragedy is that all of the companies engaging in this practice are companies that have established industries in Australia merely for the sake of exploiting still further the Australian consumers.
.- The honorable member for Griffith (Mr. Coutts) has raised a very important point. Most electric shavers on sale to the Australian people cost about £15 15s. or £16 16s. I know that many honorable members have electric shavers. I prefer a cut-throat razor; I learned to sharpen one many years ago and I have never forgotten the art. The prices of electric shavers appear to be exorbitant. We have it on record that over 2,000 shavers made in Japan were imported at a cost of £2,000, which is under £1 a shaver landed here. That means that they are making them for less than £1. If it can be shown that the razors being produced are efficient then this Parliament should not sit by inactive while such an exorbitant profit is being made on a product from Japan. It might be said that the profit made on razors imported from elsewhere is also extortionate, but it is not as extortionate as a profit of 1,600 per cent, or thereabouts that is being made on Japanese razors that are being sold to the Australian people.
I do not know whether the Japanese razors have been put on the general market or whether a limited number of people were allowed to benefit by buying them at a considerably reduced price. Two thousand razors does not represent a large number when we take into consideration several million males who use razors. However, if exorbitant profits are being made from products such as this, I think it is high time that the Government inquired into the matter. If it is found that exorbitant profits are being made, the Government, having the power, should act. If the Australian people can buy a decent electric razor for, say, £5, they should be permitted to do so. If a ring is operating to keep the price up, I entreat the Government to do what it can to break that ring. I think that these practices are entirely unscrupulous. It is distasteful to me to think that such things could happen. I hope that the Government will take appropriate action.
.- The points raised by the honorable member for Griffith (Mr. Coutts) and the honorable member for St. George (Mr. Clay) are of sufficient importance for us to hear something from the Minister about them. It may well be - I hope it is not so - that some mistake has occurred in the interpretation of the schedule which is attached to the Tariff Board’s report. It seems incredible that an electric shaver to be used on a human face can be manufactured for as little as 30s., or £1 in some cases, and for as little as between £3 and £4 in others.
The schedule discloses that in 1962, 2,000 shavers were imported from the United Kingdom at a cost of £6,300 or a little more than £3 a piece; that from Italy 3,700 shavers were imported for £4,700 - a little over £1 each; and that from Japan 198 shavers were imported for £292. This is beyond my capacity to understand. Other items in the schedule provide similar justification for a misunderstanding. Then there are the items “machines being portable “, and “ human hair shavers “. It does not say whether the hair comes off the face or off the head. There is the item, “unassembled and parts” and another which reads “ shavers and hair clippers, human hair with self-contained (i.e. built-in) electric motor or vibrator “ and so on. They all run out at prices which appear to me to be absurd in view of the actual verbiage of the Tariff Board’s report. It indicates that an electric shaver manufactured in Australia and retailing at about £16 16s. is at a price disadvantage of only about 25 per cent, compared with shavers manufactured and imported from other countries. Before I say any more perhaps the Minister for Supply (Mr Fairhall) might throw some light on this situation.
– I have taken some advice on this matter. It is all right for my honorable friends opposite to talk about a selling price of a razor and then try to draw false assumptions; but the fact is that, on the market to-day, there are, to the best of my knowledge, three razors which are selling at a price in the £16 range. The Japanese razors to which the honorable gentlemen have referred and which have come into Australia at a price of about £1 have, in fact, been sold at between £4 and £5. We should not be confused between these two types of razors.
Of course, the question of quality has also to be considered. When one considers the price, one must also consider the quality of the product. I think we are all well aware that, despite the magnificent capacity of Japanese manufacturers to turn out some of the world’s best quality products, all of their products are not of good quality. It seems to me that if anybody in any country of the world can turn out a fully operating electric razor and sell it in a foreign country for £1, it is a tribute to the ingenuity of that country’s industry, and it gives us something at which we in this country can shoot. We are looking for decreasing costs of production in Australia. If this is something that other people can do, then it is something at which we should aim. .
I do not want this debate to develop into a witch hunt for people who are profiteering. The fact is that the retailers who are selling razors at £16 16s. are not making an enormous profit. As I have indicated, the Japanese razor which is being imported at a low price is also selling at a low price and, in fact, nobody is being exploited.
.- The explanation of the Minister for Supply (Mr. Fairhall) is far from satisfactory. He says, in effect, that if somebody can land a razor in Australia at £1, good luck to him. He is then entitled, apparently, to charge the public £16 16s.
– I did not say anything of the sort. In fact, nobody would pay £16 16s. for a razor of that quality.
– How do you know? If the fellow who sells it can get away with it he will charge that price.
– He does not get away with it from discerning buyers.
– How do you know? The Tariff Board’s report discloses that English electric shavers - if the total number and the total price indicated in the schedule are correct - are being landed in Australia at slightly more than £3 each.
– Is there anything to’ say whether they are battery-operated or not?
– It does not make much difference whether they are battery-operated or not. This is the sort of thing that is making people wonder - making them critical. Let me quote the section dealing with prices in the Tariff Board’s report. The board said -
The standard retail price of Remington’s main line of electric shaver has been £16 16s. since before the sales tax increased in August, 1960. Prices of Sunbeam, Ronson and Philips main line of electric shavers varied from time to time prior to May, 1961, but since that date, with one minor exception, remained at £16 16s.
Listen carefully to the next paragraph -
Actual retail prices vary from the standard because of the application of a number of factors includings discounts for superseded models, trade-in allowances and similar price concessions. A large part of the total sales made by each of the main suppliers is at reduced retail prices.
Then we find this further paragraph -
Factory prices are set by deducting specified discounts from retail prices. These discounts vary according to the quality involved. There is a similarity between the discount patterns of the four main suppliers.
In other words, as was illustrated from a previous report that I quoted, these people have got their heads together.
– They have to be competitive.
– Competitive my foot! How are they competitive when the board says that there is a similarity between the discount patterns of the four main suppliers? The board continued -
In recent years, average ex-factory selling prices of both Sunbeam and Remington electric shavers have tended downwards.
The Board assessed notional selling prices for Australian electric shavers, based on costs of production and allowing a reasonable profit on funds employed.
It is pretty obvious that these firms get together on prices, which is not unnatural in our existing state of society. There is nothing to prevent that. But what does appear perfectly clear is that an electric shaver which can be landed in Australia for less than £4 costs the average purchaser, after he has paid the retailer’s profit, £16 16s. I will stick to the old blade. When it is remembered that an estimated 300,000 electric shavers are sold in Australia each year and that if they are priced at only £15 each the Australian community pays £4,500,000 annually for them, I suggest, with all due respect to the people employed in this industry, that in view of our serious balance of trade situation the Government might well recommend that people should go back to the old blade razor, and issue instructions on how to sharpen them.
Businesses that make undue profits deserve to be criticized in this Parliament. If there were a Tariff Board investigation of shearing machines, the people who use them might be in for some big surprises when they consider the prices of Sunbeam combs and cutters. I hope I have set a train of thought going and that the matter will not just end here.
Question resolved in the affirmative.
Sitting suspended from 5.58 to 8 p.m.
Customs Tariff Amendment (No. 68).
Consideration resumed from 28th March (vide page 196), 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 188).
.- This proposal has also been the subject of inquiry by the Special Advisory Authority and refers to conveyor belting which is used largely for industrial purposes. It relates to belting not wholly of rubber or synthetic rubber. The Special Advisory Authority recommends a temporary duty of 20 per cent, ad valorem. The Opposition has no objection and supports the recommendation.
.- I am interested to hear that the Opposition supports the proposal, for the fact that the Opposition supports it is a clear indication that the proposal has received but scant examination from the Opposition. This proposal refers to conveyor belting. Let us see how this shuttle system of ours has worked in connexion with this item. Again I refer briefly to the time-table. First I refer to the Special Advisory Authority’s report dated May, 1962, in which he recommended a duty of about 55 per cent, with a sliding scale duty. The Tariff Board made its report in June, 1962, and reduced the temporary duty to 27i per cent. Then, in January, 1963, came the recommendation of the Special Advisory Authority as a result of which the duty on the fabric from which the belting is made was increased. Then we have this last report, dated March of this year, in which the Special Advisory Authority has recommended increasing the duty again to 47i per cent. Now, of course, the matter will have to go before the Tariff Board again for another hearing. As I say, this is the shuttle system in operation.
Before discussing this report in detail I want the committee to remember that this is one of the items in connexion with which the Tariff Board has directed attention to the restrictive trade practice operating in the industry. The Special Advisory Authority himself recognized its existence in his previous report, in which he directed attention to the practice of collusive tendering that has developed, a practice by which, in some remarkable way, all tenders are exactly the same. So I should have thought that competition from imports was even more necessary here than in any other instance.
Having said this - and it needed to be said - let me look more closely at the report that seeks to justify this recent increase in the duty. The Special Advisory Authority himself again admits that imports are not coming in in large quantities, and I again pay tribute to him for his frankness in this matter. In his report the Special Advisory Authority says -
Although official import statistics for recent months do not indicate that urgent action is necessary to protect the Australian industry, I believe that the following matters must be taken into consideration.
Prices for British belting have been reduced in recent months, and, in some cases, the reduction has been as much as 10 per cent. The effect of these reductions has been that, even with the recent increase of 10 per cent, ad valorem in duty, some British belting can be landed in Australia at prices below those operating prior to May, 1962.
He goes on to say -
The information given to me at the inquiry shows that at least in some cases there has been a trend towards the use of imported rather than locally-made belting.
It is evidently not happening to any great extent. So there it is. It is quite clear that imports are not coming in in great volume, and it is evident that the threat that they may do so and so break up the effectiveness of this price ring is what necessitates the increased duty. But there is another reason which the Special Advisory Authority uses in seeking to justify the increased duty which he recommends, and again I quote from his report, where he says -
In arriving at a conclusion as to the level of protection required, the Tariff Board indicated the possibility of the Australian manufacturers being in a position to effect substantial reductions in their costs for raw materials.
In other words, they would be able to buy cheaper belting fabric, the Tariff Board thought. The authority goes on to say -
The present circumstances are such that these savings cannot now be achieved.
In other words, the cheaper belting fabric is not obtainable. This is a sound kind of considered statement. He has obviously done a fair bit of research on this matter, because he comments that this cheap belting fabric is not now available. Of course, the reason why it is not available is that two months ago the Special Advisory Authority himself increased the duty on the fabric, thus making it completely impossible for the people concerned to do the very thing that would have got them out of their diffi culty. I do not think that, on balance, any great research was necessary. So the temporary duty is put on in this case.
What does it mean? What am I getting worried about? I think I had better quote a few figures, because eloquence does not seem to do much good. South Australian Co-operative Bulk Handling Limited, a non-profit-making co-operative company comprised of wheat-growers, has indicated that the additional cost of this duty to it was £6,128 for last year. If it could import the belting duty free it could save in the vicinity of £10,000 a year. Cooperative Bulk Handling Limited of Western Australia uses an average of 14,800 feet of belting a year. If that company could import its belting duty free it would save £12.136 a year. Of course, I am referring now only to wheat-growers. It would seem obvious that in many people’s eyes the wheat-growers are of not very great importance. But what about other industries? For instance, what about coal? We are all very eloquent about how we helped to build up the coal industry’s very vital export trade. We are all very eloquent about what we are doing and what should be done to help the employees in this industry. Let us see how we are helping them in this case. The Tariff Board recognized the importance of building up the new coal export trade, and here I quote from its report, which says -
The cost of conveyor belting for a large coal producer may represent between two per cent, and five per cent, of the total cost of production. Duties at the level requested by local manufacturers could raise the costs of coal production, thereby inhibiting the Australian coal industry’s export trade, particularly to Japan.
The coal market overseas is a competitive market, and we are really on trial here. If we could win a firm foothold in Japan for our coal great benefit would accrue to the employees on the coalfields and there would be i great improvement in our trade balances; but a rise of 2i per cent, in the price of our coal could well tip the scales against us. Coal authorities have estimated that the increase in the cost of belting would mean a rise of 6d. a ton in the price of coal. In 1960-61, 1,000 men mined 1,500,000 tons of coal for export. This market could well be lost to us. In introducing into this House the legislation which sought to remove the excise of 5d. a ton on coal the
Minister for Labour and National Service (Mr. McMahon) became quite excited about how the removal of this excise would help the coal export trade. But apparently no one minds increasing the cost by 6d. a ton by imposing a duty on conveyor belting.
Let us take a few more figures relating to coal, because it is obvious that mere eloquence cannot help. In 1960-61, the State Electricity Trust of Victoria bought £376,000 worth of belting. Had it been able to buy that belting duty free the trust would have saved £100,000 in that year. In the coal mines from which the New South Wales Electricity Commission buys its coal there are 25 miles of belting. Those mines buy an average of 40,000 feet of belting a year and the cheapest belting costs them £34,400 each year. During 1961 the coal mines of New South Wales - all of them, except the group I have just mentioned - bought 115,000 feet of belting. The extra duty cost them £94,300. The South Australian Electricity Trust opposed this increase of duty when the matter was before the Tariff Board, and with good reason. In 1960, in the time of import licensing, the trust applied for and received a licence to import under by-law 1,925 feet of 36-in. belting. The Australian price was 70s. a foot, while the United Kingdom price was 41s. 2d. The trust saved £2,776 by being able to import that belting duty free, or nearly £1 18s. a lineal foot. That was when the rate of duty was 17i per cent. With the new rate of 47i per cent, the saving would be £7,533 on just one order of 1,925 feet of belting.
So much for coal. A similar pattern can be seen throughout the industrial field. We are all excited about possible developments at Weipa. The Weipa installation includes 8,600 feet of belting. The extra cost to that industry works out at £7,052.
I have told the committee of the impact of the duty on various industries. Let us now try to bring them all together. I have done this to the best of my ability, and I have found that for every man we employ in making rubber belting in Australia the users of that belting pay an extra £1,944.
Let us continue our examination of the industry. The Special Advisory Authority said that the Dunlop, Olympic and Good year companies, as well as two smaller companies, gave evidence. The Tariff Board pointed out that the industry has far more investment in it than the market can take. Is this the fault of the consumer? The consumer is evidently expected to pay for the companies’ error of judgment. The latest figures I was able to obtain show that the Dunlop company had a return of 19.8 per cent, on share capital and 10.2 per cent, on shareholders’ funds. The figures for the Olympic company were 19.4 per cent, and 10.2 per cent, respectively. The Goodyear company did not show its return on share capital, but its return on shareholders’ funds was greater than that of the other two companies, being 12 per cent. As I have said, the big companies seem to be struggling along somehow. I am sure that the wheat-farmers, in my electorate at least, will be relieved to know that the big companies are getting a reasonable return on capital.
That is the sorry story so far, but of course the end is not yet. The Tariff Board will have to examine the matter again. It will have to be shuttled back to the board again, and if the board examines the industry again on the basis of economy and efficiency, with due regard to the costs to user industries, it must reduce the duty again. What will happen then? I suppose the matter will go back to the Special Advisory Authority, and once more we will see the shuttle system in operation.
.- I will be brief, Mr. Chairman. I rose to speak because I heard the honorable member for Wakefield (Mr. Kelly) make some remarks about the tariff on belting. If I understood him aright, he said that one of the difficulties was that when there was no tariff on belting there was a tariff on the materials that are brought to Australia for the manufacture of belting. I have a publication before me entitled “Major Gaps in Australian Industry”, which was produced by the Manufacturing Industries Advisory Council. This tells us that imports in 1959- 60 of belting, other than of leather, rubber, or rubber in composition with other materials, were worth £90,000, while in 1960- 61 the value, of such imports had increased to £ 1 52,000. We are told also that during that period there existed in Australian factories a capacity to produce all the belting of this character that was required in Australia. The following comment also appears on page 58 of this publication: -
Raw Materials and Availability -
Canvas, duck, cotton, nylon and rayon fabrics as base materials, with plastics as a covering material. It is understood that all these materials are available from domestic production.
Then there is some information regarding rubber belting, and belting of rubber in composition with other materials. In 1959-60 the value of imports was £267,000, while in 1960-61 it was £563,000. Then the following information appears: -
The value of domestic production in 1959-60 of flat transmission and conveyor belting was £2.1 million. Details in respect of Vee belting and other types are not available but it is thought that annual output would not be less than about £700,000.
Raw Materials and Availability -
Principally compounded of rubber (i.e., baled rubber, either natural or synthetic, to which fillers, carbon black and other chemicals have been added), and canvas duck. All raw materials except baled natural rubber should be available from domestic production.
This shows that in Australia there is ample capacity in the factories, and that there are ample resources of man-power and of the basic materials required, for us to produce all the belting that we need. At the same time, of course, there is unemployment in Australia and our overseas funds are depreciating. We are growing more dependent upon the importation of capital, per medium of loans or investment funds.
– Just stick to belting.
– I am sticking to belting. I am proving my point in connexion with belting. My point is that if this country is to employ its idle resources of man-power and natural materials - for the production not only of belting but also of a vast number of other commodities which are listed in this document - then we must see that materials which can be provided in Australia do not come here from overseas and that the importation of goods that cannot be produced in Australia but which are essential to the sound working of the Australian economy is not prevented by lack of overseas funds. That is simply common sense, but one would not, of course, expect the application of ordinary common sense to a problem of this nature - or, for that matter of any nature - by the honorable gentlemen who now occupy the treasury bench. It is not a question of the promotion of industries, the utilization of unused resources, the placing of men in industry or the protection of our overseas funds so that they will be available for purposes most essential to our economy. It is a question of honorable members opposite seeking to destroy Australian industries by opposing the increase of duties on goods coming from overseas.
I wish to make this point particularly clear. I do not believe that a tariff is a cure-all for the ills of the community. I do not think that a tariff prevents the private businessman from exploiting the consumer. But I do believe that we must have some type of protection for our industries. We must have some plan for the development and promotion of our industries and we must not permit them to be destroyed by an inflow of goods that can be placed on the market here without any tariffs being imposed on them at all.
Although a tariff does not cure every economic ill, it does prevent industries from being destroyed. If this industry - that is, the belting industry - were destroyed, it could not be revived overnight. This applies not to one industry but to a vast number of industries. What is happening to the belting industry is typical of what is happening to dozens of Australian industries. While our industries have unused capacity, our growing market is being supplied not by Australian producers but by overseas producers.
– Order! I suggest to the honorable member for Scullin that he has given sufficient examples of the point he is making.
– The honorable member for Wakefield has risen in his place to make more easy the exploitation of the Australian market by overseas manufacturers. Sir, I suggest with all due deference that the Government should carefully consider the question of protection - not only the protection of industry but also the protection of the consumer.
.- We listened for some time to-day to the honorable member for Wakefield (Mr. Kelly) and I think that possibly we have been in danger of losing our sense of balance on this matter of tariffs. The honorable member has used the words “ economic and efficient industries” many times to-day. I wonder whether he has forgotten that another adjective went with the two adjectives he has mentioned, particularly in the thirties. It was used on many occasions by his father. It was said that not only must we consider whether industries are economic and efficient; we must also consider the prospects of growth of the industries. The question is not necessarily whether industries are now economic and efficient but whether they are likely to become economic and efficient industries if given tariff protection.
The honorable member for Wakefield has given the present figures and does not seem to have considered whether industries may be economic and efficient in the years to come. I think he sometimes forgot to look at the possibility of growth and looked only at the present or the past situation of an industry. I suggest that it would be wise for him sometimes to look, as his father did before him, at the possibility of industries developing and at the possible part they will play in our overall economy in the years to come, instead of considering only their present situation.
In considering the general question of tariffs, it would be wise for us to look at a useful document prepared by the Subcommittee on Foreign Economic Policy of the Joint Economic Committee of the Congress of the United States. This document was produced in 1961 and is entitled “ Trade Restraints in the Western Community with Tariff Comparisons and Selected Statistical Tables Pertinent to Foreign Economic Policy “. It contains a list of the degrees of protection accorded first to selected agricultural products and then to industrial products by various countries of the Western world.
– Order! I suggest to the honorable member for Fawkner and to other honorable members that there is a tendency to make a speech upon general matters relating to tariffs. Whilst an honor able member may give examples in explaining a point of his argument on the subjectmatter before the committee, honorable members should not devote their speeches to general tariff principles. The tendency to deal with general matters is appearing in the speeches of honorable members from both sides of the committee. I draw the attention of honorable members to the fact that we are now considering the matter of conveyor belts and belting.
– I entirely agree, Mr. Chairman, but you will recall that the honorable member for Wakefield dealt with the coal industry and wheat-growers and co-operatives, and explained some of the difficulties confronting the wheat co-operatives. As he dealt with the tariff on belting and the difficulties it caused for some of his wheat-growers and cooperatives, I wanted to stress that the report to which I have referred shows that the large tariffs on agricultural products coming into the country are a danger to Australia as a whole. As you allowed the honorable member for Wakefield to speak about wheat-growers-
– Order! The honorable member for Fawkner will remember that the matter raised by the honorable member for Wakefield was related to the use of belting in the industries to which he referred. The honorable member for Wakefield dealt with the subject before the committee and I think it would be to the advantage of the committee if all honorable members did so.
– I wanted to show that whilst this tariff is a part of the tariffs on industrial goods and is raising our general tariff level slightly, the level of tariffs on industrial goods is lower than the level of tariffs on agricultural products. The dangers in the matters mentioned by the honorable member for Wakefield are not as great as the dangers inherent in tariffs on other products. I hope that we will remember this.
.- During the last 30 or 40 years, the textile industry, or some section of it, has taken a quilting or a belting from the Tariff Board on many occasions. It seems to me to be quite appropriate to-night to discuss belting, because the textile industry has suffered many beltings. Belting is a fabric for which there can be no substitute name or word which might enable some overseas manufacturers, by subterfuge, to land large quantities of this material in Australia to the detriment of this section of the textile industry. The subterfuge to which I referred this afternoon takes very curious forms. It might do the committee good to know that quite recently a fabric of manmade fibres was brought into this country and on the selvage of it were small crosses, 4/10ths of an inch by 4/10ths of an inch, the same colour as the fabric, at intervals of nine inches. That fabric was able to come into Australia as embroidery with a 17i per cent, duty compared with a duty of 2s. 8id. a square yard that would have been payable on it had it been designated as intended for wearing apparel.
In this case there can be no resort to subterfuge. This fabric is either belting or it is not. I am quite aware, as the honorable member for Wakefield (Mr. Kelly) pointed out quite rightly, that in the coal industry and the wheat industry enormous quantities of belting are used, and if an overseas product can be bought for less than the local product, naturally, economies can be effected in both those industries. I have not been able to work this out, but I suppose that the economies in those industries would be noticeable if cheaper belting could be bought overseas. But that kind of argument applies broadly to almost any Australian industry and any Australian worker. I doubt whether there is a commodity made in this country which could not be bought more cheaply somewhere else in the world at some time or another. Since Australia is not short of importers who would take advantage of the existence of cheaper fabric elsewhere, I have no doubt that they would import it. They would not take long to get it here. That is one of the difficulties that we have to overcome.
Great Britain can make this fabric more cheaply than we can make it. That has been done by reducing the price temporarily by 10 per cent, when they are able to make it more cheaply for a little while. But, upon investigation, we might find that the facts of the matter are that the large British mills that make it have a lot of it left on the shelves in warehouses. Remember that they are making it for a home market population five times greater than ours, so I presume that their unit costs would be a little lower than ours. The material cannot be kept on the shelves in warehouses for too long. It has to go out; otherwise it will depreciate. What is more natural than to sell it to Australia at a lower price and put our industry out of existence, even if only temporarily? That is precisely what has happened in respect of practically every textile fabric. That is precisely what happened in this case.
I think I ought to direct the attention of the committee to the fact that it is usually three to five years before Australia is allowed to buy the latest, most modern and fastest textile machinery. It becomes available to the manufacturers in the United States of America, Great Britain or on the Continent several years before our people are allowed to buy it. Wherever wage levels and power costs are comparable, the speed of the machines is the determining factor. If we had a substantial depreciation allowance on all machinery in Australia and manufacturers could write off the cost more quickly than they can at present, they could replace their machinery at more frequent intervals. Even then we would still have the handicap that our manufacturers cannot buy new machinery for several years after nearly everybody else in the world has it. So, in this country we are labouring under a serious and grave disadvantage.
These things should be borne in mind. I suppose the Tariff Board, when it recommended this 20 per cent, ad valorem duty, had those things in mind. The disadvantage from which Australia suffers, as a result of the factors about which I have spoken so briefly, is of grave consequence. If industry cannot get protection through the Tariff Board at the moment that it is needed, an importer does not require a very big ship to bring in enough conveyor belting to lay all the machinery in this country idle for twelve months. In view of the fact that in this case the Tariff Board has recommended what appears to be reasonable protection, in the form of a 20 per cent, ad valorem duty, this committee ought to give the proposal its support. Personally, I am very greatly in favour of it.
.- I want to comment on the point made by the honorable member for Scullin (Mr. Peters) about the application of common sense in respect of this proposal. The honorable gentleman got to his feet-
– Will you repeat that? I was not listening.
– I want to comment on your reference to the application of common sense. You will remember that you made great play on the words “ common sense “. Mr. Chairman, the honorable gentleman accused the honorable member for Wakefield (Mr. Kelly) of being theoretical in his arguments. The honorable member for Scullin said that one had only to apply common sense in order to realize the stupidity of the arguments advanced by the honorable member for Wakefield and the desirability of protecting the belting industry at almost all costs. Maybe the honorable member’s conception, understanding or definition of “ common sense “ is different from mine. Nevertheless, let us apply common sense as I understand its application to this case. Let us take some of the facts adduced by the honorable member for Wakefield and see where the balance of advantage is when they are measured against the common-sense criterion that the honorable member for Scullin introduced, and where the comparison leads us.
The honorable member for Scullin related his common-sense argument to the question of employment. The belting industry employs approximately 250 people in Australia. Remember that, Sir. In order to protect the jobs of those 250 people, you protect an industry to such an extent that, amongst other things, the protection involves an increase in the price of coal and adds, say, 6d. a ton to the cost of producing coal. The coal industry employs hundreds of thousands, not 250. It is facing highly competitive conditions. The margin on which the product can be sold is absolutely vital. It is competing for export markets. Honorable members representing the party to which the honorable member for Scullin belongs are always bewailing in this chamber the state of this industry. This is the application of common sense: You ruin the competitive advantage of an industry that employs many tens of thousands of people in Australia in order to protect the jobs of 250 people. Where does common sense lie in that?
To take another example, in order to protect the jobs of 250 people, you involve the various electricity authorities around Australia in increased costs of hundreds of thousands of pounds, when they are all put together. In this connexion, one needs only to consider the number of people employed by the electricity authorities and to compare that number with these 250 people, quite apart from considering the consumers of electricity and the importance of keeping down the price of electricity to the great complex of Australian industry. Where does the balance of common sense lie in that situation?
We do not have to make this an argument between primary producers on the one hand and secondary industry on the other, as the honorable member for Fawkner (Mr. Howson) tried to make it. We can leave the wheat-growers out of it completely, although I suggest to the committee that they should receive at least some consideration. The enormous extra cost to them of such things as their co-operative silos should be taken into account. But leave that out! We know that honorable gentlemen opposite could not care less for the wheat-growers. But let us take this case on their ground - purely from the point of view of manufacturing industry. I have dealt with two cases. This matter was mentioned by the honorable member for Wakefield, who was accused by the honorable member for Scullin of being theoretical and not employing common sense because he was talking about jobs for 250 people as opposed to jobs for hundreds of thousands of people in Australia. I suggest that the balance of common sense is on the side of the honorable member for Wakefield and not on the side of the honorable member for Scullin. I ask the committee to exercise a sense of perspective in considering these proposals.
.- I would not have entered the debate on this subject were it not for the issue raised by the honorable member for Barker (Mr. Forbes) of where common sense lies in this argument. I think we need to look a little more closely at the argument of the honorable member for Barker, who relied upon the case put by the honorable member for Wakefield (Mr. Kelly). I have not examined the additions to the costs of the coal-mining industry because of the higher price of belting made in Australia compared with belting imported from overseas, but let us accept the argument of the two honorable members opposite that the manufacture of belting in Australia, giving employment directly to 250 people, will impose upon the coal-mining industry an additional cost of 6d. a ton. Was that the figure?
– That is just an extra duty.
– An additional 6d. a ton. Let us accept that as the basis for argument and see whether we can come to some conclusions with regard to common sense and where the balance of probabilities lies. Many different elements are involved in the cost structure of the coal-mining industry. Transport is an important element. The clothing worn by coal-miners, having regard to their standard of living, would comprise an element of cost. The food that they eat would be an element. If any one of those items could be reduced, as clothing would be reduced if none of it was manufactured in Australia and all of it was imported from overseas at a lower cost, certainly the cost of the coal-mining industry would be reduced by something very greatly in excess of 6d. a ton. The argument raised by the two honorable members opposite with regard to common sense is reduced to the point of absurdity by the very fact that the additional cost to the coal-mining industry as a result of this extra duty is so very small - only 6d. a ton. But other items, some of which I have mentioned, would impose on the coalmining industry an increased cost of very much more than 6d. a ton.
The same argument as is applied by the honorable members to belting in this case could be applied to every other element of cost in the coal-mining industry. The honorable members have been able to confine attention in this matter to an examination of one single element of cost. They have said that because this element of cost will mean an addition to the costs of other industries, we should not support the proposal now before the committee. As the honorable member for St. George (Mr.
Clay) said a few minutes ago, the same argument could be applied to every other item in the Australian cost structure. It could be applied with ten, twenty or even one hundred times the weight that it carries in respect of the manufacture of belting in Australia.
Where would honorable members opposite stop in applying this argument? I ask them to test their assumptions of judgment because, as has been shown clearly from this side of the House, costs in industries in Australia and costs overseas are not always the same. An industry operating overseas is very often operating on a far bigger scale than similar industries in Australia. Cost is not the only thing that determines the price of a product when it is imported into this country. Very often we will get for twelve or eighteen months an established price for certain goods imported from overseas, but, once our capacity to compete with overseas countries is destroyed, the price of the imported goods will increase not by 50 per cent., but probably by 100 per cent, or 200 per cent. All the arguments that honorable members opposite apply in the name of common sense to this small industry may be applied to every other industry in Australia to the degree that the number of employees engaged in those industries is greater than the 250 employees whom we are discussing. Far be it for me to defend the conditions of production in Australia at present. A couple of firms with international connexions are engaged in this industry in Australia. We are protecting the subsidiaries in Australia against the competition of their parent bodies overseas. I do not think it is sufficient to attempt to solve this problem simply by relying on the method that has been adopted so far, particularly by conservative governments. I think there is a great deal of force in the criticism which I understood the honorable member for Wakefield to level at many of these industries because they are making excess profits, but the profits made by Dunlop, for example, are not made from the manufacture of belting.
– How do you know7
– Belting must represent a very small proportion of that company’s total production and therefore any profits from the manufacture of belting must be a very small part of its total profits. It is invalid to argue that because a company of this kind made 12 per cent, profit on its invested capital as a whole, it must have -made 12 per cent, profit on its capital invested in the manufacture of belting. The aggregate accounts of these companies, on which the honorable member relies for his argument, convey nothing whatever to prove his case in relation to the manufacture of belting. That is another example of how the common sense of honorable members opposite is not all that the honorable member for Barker indicated it was.
I am not one to defend the present system, but in the existing circumstances it seems to me that in relation to the manufacture of belting there is nothing better than the system of tariff protection. We are involved in a shuttle process which includes consideration by the Tariff Board, by the Special Advisory Authority and by the honorable member for Wakefield. Everything that he said to-night was said last year. When is all this to end? I feel sure that sooner or later - it will be sooner, I am sure - something different from the present system will have to be devised, but in the light of what can be expected from this Government, there is no course available to us now but to adopt this method of tariff protection.
.- A good deal of reliance has been placed on the use of common sense. The more common sense I see used in this place the better I like it. The argument is advanced in the name of common sense that whereas only 250 people are employed in making conveyer belting, many thousands of people in the coal industry, the wheat industry or some other industry are affected by the price of conveyor belting, whatever it may be. But since we are to use common sense we might ask ourselves a very pertinent question: Is it not possible at almost any time somewhere in the world to buy whatever commodity we are discussing here at a price lower than the price for which it can be made in Australia? If there were no tariff protection against overseas manufacturers - I could name half a dozen - they could send their products here and give thousands of people in the coal or wheat industry the benefit of lower priced belting, but the important question is for how long would we get cheaper belting once the Australian industry was destroyed. The first aim of every overseas manufacturer who sells his wares in Australia is to put the Australian manufacturer out of business. Once he has done that the sky is the limit for his prices. Let no one tell me that even then competition between overseas manufacturers would still keep prices down. Cartels spring into existence, and we would end up with no Australian industry while paying a higher price for the imported article than we otherwise would have had to pay.
We were asked to use common sense. I believe we are carrying the commonsense approach a little farther than we were asked to do. There is more common sense in the Opposition’s view that the Australian industry must be preserved at all costs than there is in anything advanced by Government supporters.
.- I did not intend to speak again on this proposal, but I was surprised by the remarks of the honorable member for Barker (Mr. Forbes). There are few more important elements in Australian secondary industries than conveyer and other types of belting. It can be well said with truth that if you destroy an Australian industry such as the conveyor belt industry you will in effect almost bring Australian secondary industry to a standstill. Belting suffers from severe deterioration. It is not like a machine which has a lifetime of 25 or 30 years. Conveyer belting might have a lifetime of six, twelve or eighteen months, and that is the end of it. In those circumstances it is essential for this Parliament to ensure that the Australian industry is not destroyed.
The honorable member for Barker said that the 250 men involved do not matter.
– I did not say that.
– The honorable member did not say that exactly, but probably that is the inference to be drawn from his statement. I do not want to be unfair to him. He probably meant that the 250 men could be better employed. But would work be available for them in the wheat or other primary industries? Is the honorable member not aware that just as the belt industry employs 250 men there are 100 or perhaps 1,000 other industries which also employ only 250 men? If my arithmetic is correct, 100 industries employing 250 men means employment for 25,000. If you have 1,000 Australian industries enjoying tariff protection which also employ 250 men each you have 250,000 men in jobs. The important factor is not so much that you will be exploited by the Australian manufacturer. lt is that without this industry, and without the tariff which is applied to protect other Australian manufacturing industries, you would be completely at the mercy of exploiters from overseas. Instead of being able to obtain the manufactured product at the price now quoted by overseas manufacturers you would be required to pay a substantially higher price for it. As a trained economist the honorable member for Barker should know that. I think that he does know it.
The honorable member ended his speech with a sneer. He asked, “ What does the Labour Party care about the wheat industry? “ In passing, let me remind him that the Australian wheat industry stabilization legislation stands on the statute-book of this country to the everlasting credit of the Australian Labour Party, which introduced the legislation when it was in office. For the first time in our history the Australian wheat-grower received protection.
– Order ! The honorable member is getting away from the subject of belting.
– I was making only a passing reference, Mr. Chairman. The honorable member for Wakefield (Mr. Kelly) referred to a co-operative group to which he belongs which uses a substantial quantity of conveyor belting to convey its wheat to storage bins. He took into consideration, perhaps, but did not mention, the cost of balata belting per bushel of wheat handled. What is the cost of belting per ton of coal handled? One honorable member mentioned 6d. a ton which is the estimate of some manufacturer who has an axe to grind. Probably the cost of belting does not amount to more than Id. a ton. But if there were no protection the cost probably would be ls. a ton, because the belt manufacturers in Japan, America or anywhere else would soak the Australian consumer to the utmost. That is why the Australian Labour Party supports the policy of tariff protection. Exploitation and excess profits can be dealt with in the ways mentioned by the honorable member for Yarra (Mr. Cairns).
The honorable member for Wakefield and, I think, the honorable member for Barker, mentioned the cost of belting to the coal-mining industry. No doubt the State Electricity Commission of Victoria uses miles of conveyor belting. If you consider that the annual production of brown coal for the commission is about 3,000,000 tons, divide that figure into the cost of belting and relate it to the unit cost of electricity to the consumer, the belt component in price probably would not amount to very much. Probably if you asked the commission directly to state the decimal fraction of cost per unit and then asked the consumers whether they would rather pay that decimal fraction more for each unit of Australian-produced electricity, thus giving employment to their sons and daughters, or prefer to accept an imported product which, for a very brief period, might be cheaper but in the ultimate would belt the life out of them, I am sure that they would prefer to support the Australian product. I leave the matter at that.
.- I shall occupy the time of the committee for only a few moments. The honorable member for Lalor (Mr. Pollard) has become quite heated about this matter. Is it not a fact that he is supporting the Government’s proposals on this occasion?
– Of course I am supporting the tariff proposals. I was merely dealing with the remarks of some Government supporters.
– The honorable member has admitted that he is supporting the proposals. So let us get on with the job.
Question resolved in the affirmative.
Customs Tariff Amendment (No. 69).
Consideration resumed from 28th March (vide page 196), 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 189).
Question 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) - byleave - agreed to -
That so much of the Standing Orders be suspended as would prevent the Customs Tariff Bills being brought in together and a motion being moved that the bills be passed.
Motion (by Mr. Fairhall) proposed -
That the bills be passed.
.- I should like very briefly to say something about the general principles that are embodied in the bills now before us. These measures set a level of tariff, and as such they call into question some of the principles upon which we decide our general tariff levels. We must decide to what extent we are protectionists and perhaps give some justification for our coming down on one side or the other.
With very great regret I find myself at some variance with the opinions expressed in this chamber by my friend the honorable member for Wakefield (Mr. Kelly). Perhaps I may briefly say something about the nature of that disagreement. An economy in which production is not involved in high fixed charges can to a great extent be self-regulatory. This is the old classical theory - the theory upon which so much of free trade policy was built. This theory does not work in an economy where a great deal of production comes from factories in which there is a high level of fixed charges nor, indeed, in an agricultural economy where so much of the farmers’ costs are fixed charges.
This, of course, is of particular moment, because a great deal of employment depends upon investment, and investment cannot be maintained when it is unprofitable and manufacturers or farmers are selling at prices which recover their marginal costs but not their full costs. In these conditions the economy does not work in a self-regulatory fashion and it is therefore incumbent upon the government from time to time to take measures, monetary and otherwise, to maintain full employment and to ensure work at full capacity. This is of the nature of the modern world.
An economy in which imports and exports are flowing freely must keep pace with the measures of inflation or deflation that are undertaken by other countries. Otherwise, there will be an ungovernable tide of exports and imports, price cutting and dumping on an international scale, and heavy unemployment in various countries. Surely these things are obvious. That being so, we must fashion economies in which the bounds of economic activity are reasonably - I stress the word “ reasonably “ - co-terminous with the bounds of political authority. This situation is inevitably being forced on countries, very often against their will because they have not understood the process in the economic history of the world over the past 50 years. We inveigh against a tendency towards national selfsufficiency, but perhaps we do not always understand the sound reasons upon which such a tendency should reasonably be based as a matter of government policy. I use the word “ reasonably “ because in all these things there must be a certain amount of flexibility.
Many commodities cannot be produced in certain countries at any price at all, and other commodities can be produced only as a result of extravagant costs being incurred. So all the time we must have a certain degree of balance, but we should have a tendency - not an exaggerated tendency, but a real one - to work towards national self-sufficiency as a conscious policy, not applying it, as I said, in any exaggerated fashion, and certainly not in a way which would penalize great export industries which are based on very real margins of natural advantage. This high ratio of fixed to current costs, Sir, does provide a theoretical basis, a basis which is much more than one of mere expediency, for a proper policy of national selfsufficiency, not carried to any great extremes but pursued as a conscious objective of international trade. It is much better for us in Australia, for example, when we are considering, as we are now, the level of protection to be afforded to place emphasis on industries which can be created to replace imports rather than to place an exaggerated emphasis - I do not say no emphasis at all - on those industries which are devoted to the production of goods for export. We must have to some extent a balance in our trade. It is very germane to any consideration of the level of tariff for us to realize that at the present time Australia is overimporting to the extent of approximately £300,000,000 a year and is making good its deficiency in balance of international payments by relying, inordinately I believe, on the import of capital from overseas. In all these things we must apply policy in moderation, not making any violent changes but keeping in mind the proper objective of increasing little by little our degree of national self-sufficiency without doing violence to the great export industries on which so much of our past prosperity has been built.
I have mentioned these points very briefly. It is obvious that Australia is a very small market. It is obvious indeed that some of our internal market is so small that some of the industries which supply our needs cannot operate with complete efficiency, but as our market and our population expand we should be looking for a greater degree of Australia’s requirements to be provided by Australian manufacturers in the home market. One matter which I think the Government may well consider is the possibility of our joining in to a greater degree with New Zealand, a brother country which has a great deal in common with us and which, because it is small, may be suffering even more than we are from the tendencies towards self-sufficiency which are being exhibited under the inexorable pressure cif events on the other side of the world. What is happening in Europe is that the people there are attempting, in the Common Market, to make the bounds of economic activity become, not exactly but more and more, coterminous with the bounds of political authority. In a modern world, a sophisticated world, where you have the condition that most of the things that men make are made in factories where the proportion of fixed costs is high compared with total costs, this process is indeed inevitable. Those who endeavour to withstand this process without understanding it - I think my friend the honorable member for Wakefield, with all his good intentions, must be put in that category - will simply continue to find themselves the victims of events they cannot control.
.- I believe that at this relatively late stage of the discussion of this matter it is essential for somebody on this side of the House to say that the speech just made by the honorable member for Mackellar (Mr. Wentworth) seems to be sound. The responsibility for answering the case made by the honorable member for Mackellar has been forced upon the honorable member for Wakefield (Mr. Kelly), the honorable member for Barker (Mr. Forbes), the honorable member for Wentworth (Mr. Bury), I think, and upon a number of others who appear to share the views of the honorable member for Wakefield.
We notice that the rather persuasive arguments adduced by the honorable member for Wakefield are all particular, all detailed, all individual. These arguments become truly relevant to discussions in the committee stages of this industry or that industry. In the committee stages it is next to impossible for honorable members to discuss the situation of the economy in general, of which the particular industry being considered for tariff attention is only a part. Therefore, in committee the detailed case in relation to costs and efficiency made by the honorable member for Wakefield, and supported by a number of other somewhat free trade members on the other side of the House, could not be put into the general context into which it has now been put by the honorable member for Mackellar.
The honorable member has correctly stated, I believe, not the purely competitive equilibrium theory of economics, which might support the position taken by the honorable member for Wakefield, but the general economic history of all countries that have made any real progress, excluding those like Great Britain that were fortunate enough to establish their industrial capacities long before they had any serious competitors. The kind of economic theory that was developed in Great Britain in the eighteenth and nineteenth centuries - but only at very great cost, because the process was not, even in those days, anything like self-regulatory - gave Great Britain greater industrial efficiency and power than other countries. This theory seemed to work out in the national interest. However, in the nineteenth century possibly and certainly in the twentieth century the only country that has made any significant economic progress has been a country that has adopted various positive measures of developing its own self-sufficiency. Countries that have been forced, because they possess no political independence, to be subservient economically to other countries - countries which have been prevented by their lack of political independence from developing by positive measures their own economies - have remained retarded and underdeveloped. The under-developed countries of the world are those countries that have not possessed a sufficient degree of political independence to be able to design the development of their own economies.
I think that what the honorable member for Mackellar says in this respect is quite correct. Some positive measures have to be taken. Australia has adopted tariff procedures. It was the tariff inquiry of 1927 which produced a report that argued - I think correctly - that if we had not used tariffs we would have had at that stage a population of about 3,000,000 people, as against an actual population then of 6,250,000 people. Those 3,000,000 people would have had a higher average standard of living than the 6,250,000, but there would have been only 3,000,000. They would have been engaged mainly in primary industry. They would have been supporters of the honorable member for Wakefield and the honorable member for Barker. They would have been living and working in primary industry, but there would have been very few of them. Those have been the alternatives. Australia has adopted the course of seeking a considerable measure of self-sufficiency. The natural free-trade market would not have allowed us to develop as we have done, if we had relied upon that market.
One other point I want to make at this stage relates to the question of efficiency. It is much too glibly considered. Those honorable members who have criticized a number of these measures are guilty of a rather glib consideration of efficiency. Efficiency consists of and can be measured by - quite objectively and quite materially - the output of certain commodities in relation to the input of the factors of production. In many respects, if that kind of test is applied - if we consider the physical output as against the physical input - it will be found that many Australian industries compare favorably with overseas industries. The difference in costs arises not so much in relation to the physical equation as in relation to the money values of the physical equation. In Australia, the physical input - so many hours’ labour time - has a different money value from the physical input in, for example, Japan. That is because the standard of living or the wage element of the labour input in Japan is so much lower than in Australia. It should not be our duty and our responsibility merely to adopt the standards of low-wage countries, or to be dominated by the standards of the low-wage countries. It should be our responsibility, as we have accepted it over the years and as we are doing now, to endeavour by protection of some sort to raise our own standards and to focus attention upon the low-wage countries as the wrong-doers. We should say to the Japanese Government and to the Japanese people, “You should raise your standard of living and your standard of consumption rather than that we should accept the low standards that you have as a reason for refusing to raise ours “.
Australia is at a great disadvantage on this question of efficiency. The honorable member for St. George (Mr. Clay) pointed out that in the textile industry in Australia it is sometimes three to five years before machinery that is invented and supplied overseas can be purchased and brought here for use in Australian industry. The overseas manufacturers who produce the machines use them until they have become more or less common place, or even outdated, before they are willing to sell them to the colonial buyers from Australia and countries such as this.
We must pay attention to this question in relation to self-sufficiency, rather than rely so much, as we do, on imported capital. The honorable member for Mackellar mentioned, 1 think in its proper context, that we are over-relying on imported capital. Instead of relying almost exclusively on imported capital, first to balance our overseas payments, and secondly, to acquire industrial machinery and know-how for the development of our own industries, we should decide that we are going to be even more self-sufficient in this respect. We should be putting far more of our resources into scientific development and the scientific education of our people. The proportion of our national product devoted to those subjects is one of the lowest in the world to-day.
Instead of repeating ad nauseam the undeveloped and inadequate free-trade theories which come from the honorable members for Wakefield and Barker, honorable members opposite should be applying their intelligence - I am sure they have some, although to listen to them speak on this subject it is impossible to find traces of it - to working out more effective ways of developing self-sufficiency in this country. I do not refer only to scientific education. We ought to do as the Japanese have done right from the very beginning. They have established pilot plants to evolve the kind of machinery that is necessary to increase the speed of development of their own industries. The Japanese were not too worried about breaching the patent laws from time to time. They were able to develop machines which were close copies of those they had seen overseas but slightly different. They were able to escape the obligations of the patent laws in this respect.
The Australian economy operates in a very scrupulous fashion. There is a measure of subservience to American and British capital that is equalled only by the kind of subservience that conservative people in this country have to American and British politics. They seem to have a far greater affection for the capital and politics of these countries than they have for those of Australia, and this attitude finds its way into economic policy. We ought to be devoting far more of our resources to the scientific education of our people. We ought to be setting up institutes of technology, or whatever we like to call them, to develop the kind of tech nical machines we require in Australia. It does not seem to me to have been necessary, for example, to go to America to have a motor-car industry set up in Australia. Perhaps it would have taken us a little longer to set up our own industry, but if we had taken a little additional time to produce the machines necessary to manufacture a motor car we would not now find that of the £110,000,000 invested in the industry to-day only £2,000,000 is held by shareholders; and that probably less than £1,000,000, and certainly far less than £1,500,000, has come from overseas. That is not much of a contribution by overseas funds. We could have bought the machinery that has been installed by General Motors-Holden’s Proprietary Limited in Melbourne half a dozen times over for what it has cost us in dividends for its use. We could have subsidized the industry probably to ten times the extent that it has cost us and still have done better.
A policy of self-sufficiency in the development of the economy is something without which no country in the world can hold its own to-day. The only essential involved is that the development should be made as intelligently, as correctly, as appropriately and as efficiently as possible; but when that has been done it is not just sufficient to leave the people who happen to possess control of the resources to do exactly as they wish in relation to prices, profits and wages. We have in Australia a system of regulating wages. It is more detailed, more substantial and more effective than that of any other country. Broadly, it is impossible for general wage rates to increase without the permission of a public authority. But there is no control of any kind upon the other side of the equation. Manufacturers may fix whatever price the market will bear and may extract whatever profits they can from that price. It does not seem to have occurred to the Australian people that if it is correct and balanced to regulate wages and salaries as meticulously and as carefully as is done under the Australian system, it is common sense also to pay some attention to the other side of the equation.
The time must come - and it must come soon - when we simply will not be able to continue to hand out protection in the form of tariffs, or anything else, to attempt to achieve something like the self-sufficiency without which Australia cannot progress unless, at the same time, we pay some attention to what those people who happen to control the large corporations and companies are making out of the process. The time must come before long when dividends are regulated and when the issuing of bonus shares and the appreciation of capital values does not go on just as those people who are in charge of the situation see fit to make it go on.
– What would you do?
– I can understand the honorable member asking what I would do, because he has given no thought whatever to this question. The example which comes to my mind is General Motors-Holden’s Proprietary Limited, one of the largest industrial concerns in Australia. It is using capital funds worth £110,000,000. Where did that £110,000,000 come from? The United States of America? No, because only £2,000,000 of shareholders’ funds are involved in that sum, and of that £2,000,000, £800,000 was in the form of issued shares. So, no more than £1,200,000 could have come initially in cash, and the probability is that most of the £2,000,000 came from Australia in any case.
If £2,000,000 is shareholders’ funds, what does the balance represent? It has come through the profit and loss account. The balance of the invested funds - of the employed funds of that huge company - amounting to £108,000,000, has come from the price of the product which has been sold on the Australian market over the years. This has been achieved either by direct transfers through the profit and loss and appropriation accounts, in respect of which I think the figure is something like £64,000,000, or by an issue of £11,000,000 of bonus shares in the year before last. You know, Mr. Speaker, that is not bad. Having invested £2,000,000 in capital, in one year you give £11,000,000 in bonus shares, or more than five times the amount of your investment. Honorable members on the other side of the chamber say that any form of criticism of this company is in some way disloyal. Disloyal to whom? To the United States, I suppose. I suggest that we cannot go on for ever in this rightful pursuit of self-sufficiency and national development by allowing these very large concerns which have become part of our economy to do exactly what they like with regard to prices and profits.
The tariff system that we have been considering here to-day is not a sufficient answer to our requirements. Sooner or later - I think it will be sooner - something will have to be done to attempt to solve this problem. The comments of the honorable member for Mackellar in this respect were quite right. The alternative of the assumption of a self-regulating market and of free or relatively free international trade would do nothing but destroy not only the present economic structure of Australia but also the possibilities of further development. That alternative would mean vast and increasing unemployment. It would mean that we could employ nothing like the work force of the population of 10,500,000 people that we have achieved under the system of protected self-sufficiency.
Vast and increasing employment would be the cost of refusal to increase a tariff on imported goods of the kind produced by this industry or by that industry.- This would be the aggregate cost of adopting the aggregate attitude taken by the honorable member for Wakefield on every tariff measure that comes before this House. It is not sufficient for the honorable member to confine his attention to the details of a particular tariff. He ought to consider each and every one of the relevant industries in the context of the general economic situation of Australia.
.- Mr. Speaker, it seems rather unfair to inflict a long second-reading speech on the House at this stage. However, I have been attacked from both before and behind and I think that some reply is called for. The honorable member for Yarra (Mr. Cairns) seemed concerned because I had limited my discussion of the tariff proposals to the proposals themselves. He suggested that a general discussion appropriate to the second-reading stage of a bill would have been more to the point. I point out for your benefit, Sir, that the Chairman insisted on limiting our discussion to the particular proposal before us at the time, and I am sure that you would have concurred in that.
If he had not done so, we would have been continuing this debate during the next week of sitting.
The honorable member for Mackellar (Mr. Wentworth) does not agree with me. I am not quite sure why. With a due sense of humility, I remind him that I have not had the academic opportunities of many people here. Obviously, I lack understanding of much that the honorable member said about matters such as selfregulating economies and things that are co-terminous. He may be right in his criticisms. All I can say is that I just could not understand what he was talking about. Undoubtedly, the fault in that is in my limited understanding of such matters.
What do I believe in? I think that this ought to be stated again, because all through the consideration of the tariff proposals that we have been discussing I have been taunted with being a free-trader. The honorable member for Yarra has used that taunt continually. So have other honorable members, some on my side of the chamber and particularly some on the other side. You all know that the taunt contains no truth. What do I believe in? I believe in the protection of economic and efficient industries. That is the first thing that I believe in. That is the policy on which we went to the country and the policy on which I supported the Government. I support it still on that policy. What is this talk about my being a free-trader? How many of the tariff items went through to-day without my opposing them when I could see that they were justified, although, in some instances, duties were to be increased? I have devoted myself to criticizing the proposals that I think are wrong, and I must say that the quality of the argument that has been advanced against the statements that I have made has not been particularly illuminating.
– The Minister for Trade did not agree with you.
– No, indeed. But does that prove anything in particular?
The other thing in which I believe very strongly and to which I think all of us have paid lip service in the past is the independence of the Tariff Board. I think we all have said that we believe in the independence of the board as a fiscal instrument that is geared to do any job of economic assessment. My continual complaint throughout the consideration of these tariff proposals has been that the independence of the board is at risk if this continuous process of shuffling recommendations backwards and forwards continues. Do honorable members say that I should not direct attention to that? Does it matter whether the independence of the Tariff Board is at risk? Do honorable members want us to go back to tariffs fixed by lobbying, as used to be the case, I understand, in the days when the parliamentary corridors buzzed with people who hoped and expected to get - and, indeed, did get - particular advantage out of the ability to lobby freely? The protection of economic and efficient industry, and the independence of the Tariff Board1, are the things that I believe in. These are the things that the party to which I belong believed in at the time of the last general election and, I hope, still believes in.
We believe in the protection of economic and efficient industry. Is this to go by the way and are we to make some sacrifice on the altar of growth, whatever that may be? What is meant by that expression? My colleague, the honorable member for Fawkner (Mr. Howson), was critical of me on the ground that I did not allow enough for growth. What kind of growth do you get if growth is not based on economic and efficient industry? You get hot-house growth. Is that the kind of growth that honorable members expect to develop a country such as ours- which faces the extremely difficult problems that beset us to-day? Are we to turn away from this kind of challenge which our forefathers met? Are we to say: “ Economy and efficiency are outdated. They are not suited to the present situation.”?
We must have a policy suited to growth. I recognize that we face problems in measuring economy and efficiency and that there always will be problems in this respect, particularly as industry becomes more demanding of capital. But if we are to depart from the cardinal principle that, to be protected, industry must be economic and efficient, there is no hope for growth in an expanding economy. Australia was not developed in the past by singing, “ Oh, how beautiful to sit in the shade “. It was developed by those who went out and did things. A bit more of such a spirit and attitude in this House and a bit less careless, easy criticism about free trade would be, I think, of general benefit to our country.
.- Mr. Speaker, on the general subject that we have been discussing, I am in complete accord with the honorable member for Wakefield (Mr. Kelly). Perhaps I have not supported him on some minor things that have come up, but I am right behind him in what he said generally about what is happening. The honorable member for Mackellar (Mr. Wentworth) said that we must not exaggerate the value of the industries that supply goods for our export markets. He was supported by the honorable member for Yarra (Mr. Cairns), who said that the observations of the honorable member for Mackellar were very correct. I do not think that we can exaggerate the value of our great export industries - the primary industries of this country. The case that I advance against the honorable member for Mackellar and also the honorable member for Yarra is that they do not appreciate the great value of primary production and the great work and progress that it has made possible in this country. They cannot, or will not, understand this.
The honorable member for Yarra, supporting the honorable member for Mackellar, spoke of the great profits that General Motors-Holden’s Proprietary Limited has made. Does the honorable member for Yarra not think for one moment of the money that has been saved for Australia because this firm has been manufacturing motor vehicles here? Does he think about the extent to which our overseas credits would have been sapped if this company had not been efficient and had not built a great motor industry in Australia which made it unnecessary for us to buy so many motor vehicles overseas? Does he not appreciate the fact that the activities of this firm have made it possible for Australia to save many millions of pounds? No! He does not appreciate these things. He cites the example of General Motors-Holden’s Proprietary Limited for only one purpose - a purpose that ignores these facts.
Labour is always very quiet about the standard of employment provided by this company, because Labour supporters cannot fault it. Australia is one of the world’s great primary-producing countries and will remain a great primary-producing country for very many years to come. No one can foresee the future and say when we shall be no longer a great primary-producing country. The primary industries of Australia are the very basis of employment here.
– They cannot employ many people!
– Indirectly, they employ practically everybody in Australia. This, I know, is tedious repetition. I have been saying all the time that if it were not for our primary industries, the exports that they make possible, and the building up of overseas balances - this does not seem to suit honorable members opposite - we could not possibly buy the raw material that keeps in operation our secondary industries and keeps in employment the men employed in those industries. That is the whole story, but Labour sees it in only one way.
The honorable member for Yarra brought in the subject of price control, which Labour espouses so strongly most of the time. What would price control do? There would be price control not only on the goods one buys in the shops but also on stock on the hoof, as was the case in Queensland at one time under a Labour government. Labour would go into our markets and put on a one-bid auction, as they did in the past! Some honorable members do not realize that under price control during the war the authorities appointed men to go along the pens of fat lambs or sheep at the Newmarket saleyards and value the stock. He would say, “This pen is worth £1 a head and that one is worth 22s.” The moment that bidding for the stock in the first pen reached £1 - it might have been the first bid - the stock had to be knocked down to the buyer, irrespective of what price it might have brought under competition. We believe in competition, which is the lifeblood of trade. Labour believes in stifling competition by price control.
In this great country of ours we cannot have the kind of policy supported by Labour; we cannot stand for it. I speak as a Country Party man. We believe that there must be a certain amount of protection. Our leader has gone so far as to introduce the system by which a Special Advisory Authority acts to meet emergencies. Therefore, we are in favour of protection, but we do not believe that protection should run riot and wreck this country, especially the primary producers. If all of our primary products were sold in Australia they would be sold at prices according with the Australian standard of living - at the Australian homeconsumption prices. But a vast amount of our goods produced from the soil is sold overseas to countries with a lower standard of living, at a lower price. As I have said so often, the primary producer must purchase in Australia’s high-price economy everything that he uses in the production of those goods. If we were to follow the honorable member for Mackellar, the honorable member for Yarra, and Opposition supporters generally, there would be tariffs to such an extent that primary production could not continue. One speaker to-night said, “ If I had my way I would not allow into this country any goods that could be manufactured here “.
– That is good Australian policy.
– He would do that, irrespective of what it cost to manufacture those goods and irrespective of the efficiency of the industries by which they were manufactured. That is what Labour is saying. We cannot support that sort of thing. We know that this country was built on primary production. We know the old saying that if you burned down the cities they would be rebuilt as if by magic, but if you burned down the farms the grass would grow in the streets of every city in this country. Everybody knows that, metaphorically speaking, that is true. I speak as a Country Party man with the good of the whole of Australia at heart. It wis time that some one else came into the debate. I did hear the speech of the honorable member for Mackellar, and I heard the honorable member for Yarra say, “ I agree with the honorable member for Mackellar”. I immediately sensed that something was wrong - and something is wrong.
The honorable member for Wakefield put up a good case to-night. He always does, although sometimes I think he exaggerates on minor things. But he puts up a good case for the fundamental principles on which this country was built and on which it will be sustained and maintained.
.- I shall detain honorable members only for a moment. I have had levelled against me the same terrible accusations as were levelled against my friend, the honorable member for Wakefield (Mr. Kelly). The honorable member for Yarra (Mr. Cairns) described us, I think, as half-baked freetraders; we were not even real free-traders, but we had free-trade ideas. Until quite recently, I was never quite able to understand the emotions that were aroused in the early years of this century and at the end of the last century by the issues of free trade and protection. These issues were such that the division of the parties in those days, not only in the colonies but also, after federation, in the Commonwealth, was based on them. To some, “ free-trader “ was a dirty word; to others, “ protectionist “ was a dirty word. I have never felt the same sort of emotion. Quite recently, as a result of the initiative taken by the honorable member for Wakefield - I give him the credit; it was certainly not I who took the initiative in this matter - we have given some serious discussion to our tariff and protectionist system. Since then, watching the reaction of honorable members opposite and, indeed, that of some honorable members on this side of the House, I have for the first time been able to comprehend the depth of the emotions that must have been felt in those faraway days.
All that the honorable member for Wakefield and I - we were the two referred to, but we have others with us - have tried to do is to discharge our responsibilities as members of this Parliament in examining not the whole basis of whether or not we should have protection but the means by which our protectionist system operates. This nonsense of the honorable member for Yarra, that the honorable member for Wakefield is a free-trader or I am a freetrader, is so contemptible that it is not worth mentioning. Neither the honorable member for Wakefield nor I have ever called the system into question. What we have done is to question the means by which our protectionist system operates, the duties by which the protection is provided and also, in some cases, the level of protection. There is a very big difference between, on the one hand, being against the whole idea of protection, returning, as the honorable member for Yarra said, to being primarily a nation of primary producers and, on the other hand, accepting that if we are to grow and develop as a nation we must have protection, while realizing the dangers that can come from excessive protection, and examining the specific implementation of the policy of protection. The latter, Sir, I submit, is all that we have tried to do. But instead of the arguments that have been put forward on the specific cases being met, we have been subjected to a torrent of abuse in general terms, and a questioning of our motives. At least the honorable member for Yarra should, with his background, have realized that one does not answer a person’s argument by questioning his motives. To destroy an argument you must answer it. He did not even attempt to answer our argument to-night. Still less did the honorable member for Grayndler (Mr. Daly), and other honorable members opposite who shouted at us, attempt to answer our argument.
Just let us consider some” of the arguments raised by the honorable member for Wakefield and others who have closely examined, not the principle of protection, but the means by which protection is brought about, and the level at which it is imposed. One of the things we have said time and time again is that, on the evidence of the reports brought forward - particularly by the Special Advisory Authority - protection is granted to Australian industries, not because they are affected by imports, but because the demand for their products has been affected by some other cause. This does not seem to us to be a legitimate exercise of the protectionist system.
Surely it is legitimate for us to stand up and point out that inconsistency! Why should an extra duty be imposed on foreign imports just because an industry happens to be affected by some other cause? What has the honorable member for Yarra to say to that? We on this side have quoted time and time again the statement of the
Special Advisory Authority who has said, referring to a particular industry, “This industry has not been able to produce evidence that it has been damaged by imports, but nevertheless I have recommended an extra duty.” Is that a system to protect an Australian industry and help it to grow against unfair foreign, or even fair foreign, competition? Or is it a system to be misused and distorted in order to provide compensation in other circumstances? For my part I will keep on examining the means by which protection is given and the level at which it is imposed. I will not be deterred by the cheap type of abuse which comes from the other side. It is based, not on argument, but on smears and an attempt to discredit, because honorable members opposite cannot answer our arguments.
I can never get out of my head the argument that was put so forcefully by the honorable member for Mallee (Mr. Turnbull). I cannot forget that Australia is still dependent on primary products for 80 per cent, of its export income. That statement has been made many times in this House; I am not stating anything new. What is so involved about such an argument that honorable members opposite completely ignore it when trying to make their case, and merely abuse the honorable member for Wakefield and me? What is wrong with the argument that if it were not for this 80 per cent, of our export income, many of our manufacturing industries - which admittedly provide employment - could not survive? Are honorable members opposite suggesting that we can do without export income? Are they suggesting that our secondary industries can rapidly replace the export income that we obtain from our primary industries? Maybe they are, but they do not say so. They do not attempt to answer this argument.
The important fact that I have mentioned is very much in my mind and will continue to be in my mind as long as I am in this House. It appears to me to be relevant to any argument about the level of protection and the means by which that protection is provided. Until honorable members opposite answer that argument they are not entitled to abuse members on this side of the House with cries of “ free trader “ and so on.
I have just one more point to make. The honorable member for Yarra emphasized that Australia must become selfsufficient as quickly as possible. He said that it cannot get on if it is not selfsufficient. A few weeks ago the honorable member was preaching in this House about international brotherhood and goodwill. He referred to the danger to world peace from problems created by the low standard of living of the countries to our north, others in South America, and Cuba. He is fond of harping on this. He has referred to the danger of communism growing in a situation of low living standards, and so on. Australia is one of the wealthiest countries in the world in terms of living standards and per capita income and yet the honorable member for Yarra - when he is talking from the other point of view - harps on this question. He says that we should march at tremendous pace towards the goal of self-sufficiency. This is the very thing that will prevent the countries to our north from raising their standards of living. “ Oh, yes “ he will say, “ they will keep on buying things from us.” Next week he will no doubt suggest that we should be exporting this product or that product to this country or that country. He says that we should become self-sufficient, but if we do not buy the goods of these countries how will they obtain the foreign exchange they need so desperately to enable them to raise their standard of living?
The honorable member for Yarra quoted with approval the policy of the Scullin Government in the1930’s which caused tariffs to be raised to a level that invited reprisals by many countries. At the time every nation was doing the same thing. What did that achieve in terms of world peace? I should like the honorable gentleman to examine his conscience, and to realise that as a nation we owe an obligation to the less favoured parts of the world. Although looking after our own interests we should accept our obligations and not rush on towards the goal of self-sufficiency to the complete and absolute detriment of other nations.
.- Mr. Speaker-
Motion (by Mr. Fairhall) put -
That the question be now put.
The House divided. (Mr. Speaker - Hon. Sir John McLeay.)
Majority . . 2
Question so resolved in the affirmative.
Original question resolved in the affirmative.
– Mr. Chairman, I add to the gaiety of the evening by providing a little raw material for the next debate on tariffs. I move- [Customs Tariff Amendment (No. 73).]
[Customs Tariff Amendment (No. 74).]
[Customs Tariff (Canada Preference) Amendment (No. 9).]
[Customs Tariff (New Zealand Preference) Amendment (No. 14).]
Cite as: Australia, House of Representatives, Debates, 17 April 1963, viewed 22 October 2017, <http://historichansard.net/hofreps/1963/19630417_reps_24_hor38/>.