Senate
20 June 1933

13th Parliament · 1st Session

  1. Senate
  2. 13th Parliament
  3. 1933

The. President (Senator the Hon. P. J. Lynch) took the chair at 3 p.m.,” and read prayers.

page 2421

OVERSEAS TRADE BULLETIN

Mr. S. M. BRUCE, M.P.

Visits to London

On the 16th June, Senator Rae asked the following questions, upon notice, of the Minister representing the Prime Minister :

Willhe make available to the Senate the following information : -

The number of visits the member for Flinders (Mr. Bruce) has made to England either in an official or private capacity ;

dates of departure from and return to Australia of those visits,

The cost to the Commonwealth of such journeys, in fares, travelling expenses, and allowances?

I am now in a position to furnish the following information in regard to the official visits of the right honorable member : -

  1. Mr. Bruce has, while a member of the House of Representatives for the division ofFlinders, visited England three times in an official capacity, in each instanceas a member of the Commonwealth Government, namely, in 1923 and 1920 to attend the Imperial Conferences in those years,and in 1932 as Minister representing the Commonwealth. (b)(1) Imperial Conference, 1923.Departed from Melbourne 1st September, 1923, arrived at Melbourne, on return, 8th March, 1924;

    1. Imperial Conference, 1926, Departed from Melbourne 2nd September, 1926; arrived at Melbourne, on return, 7th February, 1927;
    2. On 21st June,1932, Mr. Bruce left Melbourne to attend the Imperial Economic Conference at Ottawa, at the conclusion of which he proceeded to London as Minister representing the Commonwealth, arriving on 7 th September.

  2. Considerable investigation and conse quent expense would be involved in attempting to separate the expenditure incurred by Mr. Bruce for transport and other expenses from that of the other members of the Commonwealth delegations, including staffs, to the imperial conferences. It is not considered that the expenditure which would be caused in obtaining this information is warranted. The total cost of the delegations on these two occasions was as follows: -

page 2422

TRADING BANKS

On the 9th June, Senator Barnes asked the following questions, upon, notice : -

What is the total paid-up capital of all the trading banks of Australia at the latest date for which figures are available?-

What is the amount of the reserves held by those banks?

What was the average rate of dividend granted on paid-up capital by those banks per year since 1915 to the latest date for which figures are available?

What was the cost of establishing the Commonwealth Bank and the Commonwealth Savings Bank?

What is the total profit shown by both banks from inception to the latest datefor which figures are available?

What is the total profit shown on the Commonwealth note issue since its inception?

The answers to the honorable senator’s questions are as follows: - 1.Paid-up capital of all trading banks of

Australia as at 30th June, 1932, was £60,602,816.

page 2422

QUESTION

AUSTRALIAN CURRENCY

What are the amount and value of the gold now held in Australiaas hacking to the Australian currency?

I have now to advise that the total amount ofthe reserve held in gold and sterling against the Australian note issue is£11,506,950.

page 2422

QUESTION

TARIFF BOARD

Senator DOOLEY:
NEW SOUTH WALES

– I ask the Leader of the Senate if, in view of the general criticism of many of the Tariff Board’s recommendations for lower protective duties, and also because of the enormous responsibility cast on the board through the Ottawa agreement, the Government will consider the advisability of amending the Tariff Board Act to provide for the appointment of two additional members, one to represent the Australian Associated Chambers of Manufactures, whose valuable output is approximately £300,000,000, and one to represent the trade unionists of Australia whose membership is approximately 800,000?

The PRESIDENT:

– I remind the honorable senator that, under the Standing Orders, opinions may not be expressed when questions are being asked.

Senator Sir GEORGE PEARCE:

– As a former Minister, Senator Dooley must know that it is not customary to make a statement of government policy in reply to a question.

page 2422

QUESTION

NORTHERN TERRITORY

Darwin Unemployed

Senator Sir GEORGE PEARCE:
Minister for Defence · West ern Australia · UAP

[3.8]. - by leave. - On the 9th June, on the motion for the adjournment of the Senate, Senator Dunn raised the question of unemployment relief in the Northern Territory, and I promised to bring the matter under the notice of the Minister for the Interior. I have been supplied. by the Minister with the following reply: -

Early in 1932, the number of unemployed in the Northern Territory had increased to such an extent that the financial provision on the Estimates for the relief of unemployment had become exhausted, and it was necessary to obtain special funds from the Treasury to meet the cost of maintaining the men.

It was ascertained that the majority of the unemployed in question were not bona fide residents of the territory, but were men who had proceeded to the territory from the various States, principally from Queensland and Western Australia. This influx of unemployed from the States showed no signs of diminishing, hut, on the other hand, was increasing from week to week.

The Government realized its obligations towards the unemployed who were legitimate residents of the territory, but did not consider that it should accept the responsibility for the maintenance of increasing numbers of new arrivals from the States.

It was decided, therefore, that unemployment relief would be granted only to men who had been in the territory at least twelve months prior to the 31st December, 1931. A register of such persons was prepared, and instructions were issued that no unemployment relief was to be granted to persons whose names were not on the register.

The men who wore not entitled to have their names placed upon the register wore offered free passages back to the States from which they proceeded to the territory. The majority of them accepted the Government’s offer.

It was further decided that no additions to the register were to be made, except in the case of mcn who were bona fide residents of the territory and became unemployed after the date the register was compiled.

Representations have been made to the Government to revert to the old practice of supplying relief to all unemployed, whether permanent residents of the territory or not, but it has been decided to adhere to the existing arrangement.

There are no prospects at present of the Government being able to fmd funds for public works of any magnitude in the Northern Territory. Consequently the avenues for employment are negligible.

It is considered that it is in the interests of the unemployed in the States, not to encourage them to go to the Northern Territory in search of work.

The Government is doing everything possible for the legitimate unemployed of the Northern Territory.

page 2423

QUESTION

WORLD ECONOMIC CONFERENCE

Limitation of “Wheat AREAS

Senator DOOLEY:

– I ask the Leader of the Government in the Senate if the

Government’s attention has been directed to an article appearing in to-day’s Sydney Daily Telegraph, stating that the delegates to the World Economic Conference nowsitting in London are entering into further negotiations with the Australian Government with a view to arriving at some understanding with respect to the limitation of wheat acreage, and, if so, is there any danger of the Government agreeing to such a proposal?

Senator Sir GEORGE PEARCE:

– I have not noticed the paragraph referred to. The policy of the Government on this matter has been publicly announced by the right honorable the Prime Minister (Mr. Lyons), and I do not think that there is any possibility of that policy being departed from.

page 2423

QUESTION

MONETARY GOLD

Senator BROWN:
QUEENSLAND

– I ask the Leader of the Government in the Senate what is the total amount of monetary gold held in Australia by - (a) the Commonwealth Bank; and (6) the other Australian banks ?

Senator Sir GEORGE PEARCE.Honorable senators are aware that the control of the Australian note issue and of the gold reserve is with the Commonwealth Bank. The question on this subject, of which the honorable senator gave notice last week, was referred to the Commonwealth Bank Board, and its reply was read to-day. The question which he now asks is, so far as the Commonwealth Bank is concerned, a repetition of his previous question. No other reply is likely to be furnished by the board.

Senator BROWN:

– Last week, I asked to be informed what was the amount of gold held in Australia, and I now ask what amount of gold is held by the Commonwealth Bank, and by all the other Australian banks. In its reply, the Commonwealth Bank Board says that £11,506,950 is held in gold and sterling. [ have an object in asking the quantity of monetary gold held by the banks. If it is not the policy of the Commonwealth Bank Board to give the information I require, I shall have to be satisfied with the information supplied. I submit that my question is not a repetition of the question previously asked.

page 2424

QUESTION

JAPANESE GOODS

Senator COLLINGS:
QUEENSLAND

– Is the Minister representing the Minister for Trade and Customs aware that -

  1. Large quantities of merchandise - the products of Japanese factories - arc being landed in Australia at prices which must prove ruinous to Australian manufacturers of similar articles?
  2. Samples of collars, the products of Japanese factories are now being shown in Melbourne at a landed cost of 2s. 6d. per dozen after all charges, including sales tax, have been added, and that a collar of comparable quality made in Australia from British material would cost at least 9s. per dozen, and that the manufacturers of this Australian collar assert - Melbourne Age, 17th June - that the cost of the material alone landed in the Australian factory is more than that of the finished Japanese article?
  3. Japan is landing in Melbourne bicycles at 26s. each, and perambulators at 4s. 6d. each, after all charges have been paid ?
  4. Will the Minister make a statement to the Senate regarding the action, if any, the Government propose to take to prevent this dumping of foreign goods into Australia ?

The PRESIDENT (Senator the Hon. P. J. Lynch). - In framing his question, the honorable senator has come perilously close to an infringement of the Standing Orders by expressing an opinion as to whether the goods he mentions are interfering with Australian trade.

Senator Collings:

– I have not expressed any opinion.

The PRESIDENT:

– I differ from the honorable senator. The purpose of a question is to obtain information, not to express private opinions.

Senator Sir WALTER GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– I ask the honorable senator to give notice of the question.

page 2424

QUESTION

WIRE NETTING

Tariff Board’s Report on Dumping Duties.

Senator E B JOHNSTON:
WESTERN AUSTRALIA

asked the Minister representing the Minister for Trade and Customs, upon notice -

  1. Has the Government received the report of the Tariff Board on the application of dump ing duties to wire netting imported from Great Britain?
  2. If so, when will same bc available to the Senate?

Senator Sir WALTER GREENE.The Tariff Board report has not yet been received.

page 2424

QUESTION

INVALID AND OLD-AGE PENSIONS

Senator DUNN:
through Senator Brown

asked the Leader of the Government in the Senate, upon notice -

In view of the reductions in taxation aggregating £1,300,000, as disclosed in the budget Estimates for 1933-34, will the Government, before presenting the budget to the Senate, make provision for an additional sum of £1,300,000 for invalid and old-age pensions-, if not. why not?

Senator Sir GEORGE PEARCE.It is not customary to make statements of policy in reply to questions. The matter of invalid and old-age pensions will be considered in connexion with the budget for 1933-34.

page 2424

QUESTION

MATERNITY ALLOWANCE

Senator DUNN:
through Senator Brown

asked the Leader of the Government in the Senate, upon notice -

In view of the contemplated addition of £400,000 to the defence vote in accordance with the Government’s policy of strengthening the defence services of Australia, will the Government consider the question of making provision in the budget of 1 933-34 for an additional sum of £400,000 for maternity allowances for the future mothers of Australia; if not, why not?

Senator Sir GEORGE PEARCE.The Government’s policy in regard to maternity allowances will be considered in connexion with the budget for 1933-34.

page 2424

QUESTION

AUSTRALIAN BROADCASTING COMMISSION

Sydney Orchestra - Appointments

Senator MCLACHLAN:
Minister in charge of Development and Scientific and Industrial Research · SOUTH AUSTRALIA · UAP

– On the 14th June, Senator Foll addressed to the Minister representing the PostmasterGeneral, the following questions, upon notice: -

  1. Will he state the reason why the Broadcasting Commission on Friday last reduced the Sydney orchestra from 30 to 24. members?
  2. It is a fact that the commission’s shari’ of the revenue last year from broadcasting licences was over £251,000?
  3. Is not this revenue steadily increasing?
  4. Have economies been effected by reducing the number of rehearsals, which also affects the salaries of musicians?
  5. Is it a fact that the bulk of broadcasting programmes are provided by musicians?
  6. Is ita fact that considerable unemployment has been existing in the ranks of musicians due to the advent of talkies, and that the Broadcasting Commission’s operations have helped to relieve this?
  7. Will the commission have to repay to the Commonwealth Government £17,000 by the end of June, money advanced by the Government?
  8. If so, is this the reason for the dismissal of these musicians?
  9. Will not the quality of the programmes supplied be seriously affected by this reduction in the size of the orchestra?
  10. Will the Minister make representations to the commission not to spoil good music by cutting down the number of instrumentalists’?

I am now in a position to inform the honorable senator as follows: -

  1. The Australian Broadcasting Commission statesthat additional men had been added to the orchestra to bo trained in anticipation or a visit from Dr. Malcolm Sargent, when it was intended to broadcast special musical programmes under his conductorship. Dr. Sargent’s visit has been abandoned for some time at least, and there is no justification for retaining the services of more musicians than the stations actually require.
  2. For the first complete year of its operations, which ends on the 30th June, 1933, it is estimated that the commission will receive nearly £250,000.
  3. Yes.
  4. The commission states that rehearsals are carried on as and where required for the purposes of any particular production or musical number. No change has been made in this policy.
  5. No. Whilst musicians make a substantial contribution to the broadcast programmes, other items occupy a considerable portion of the hours of transmission. (i. This would appear to be the ease.
  6. £16,200 was advanced to the commission, of which £8,100 will be repaid by the 30th June. 1933.
  7. No. See answer to No. 1.
  8. The commission states that the quality if the programmes will not be affected.
  9. See reply to No.9.
Senator DUNN:
through Senator Brown

asked the Minister representing the Postmaster-General, upon notice -

  1. Is it true that one of the new members of the staff of the Australian Broadcasting Commission was asked to sacrifice his position in Melbourne as secretary tothe Victorian Association of Bankers in order to accept a post in Sydney?
  2. Is it a fact that five other Victorians havebeen appointed to the staff of the Australian Broadcasting Commission at Sydney, while several members, of the local organization for years, have been put off?
  3. Is it true that the Sydney men who have lost their positions have been broadcasting for years, and had established a big following with listeners-in, both children and adults?
Senator McLACHLAN:

– The commission has furnished the following answers : -

  1. No.
  2. No.
  3. No case is known in which this has occurred.

page 2425

QUESTION

WORLD ECONOMIC CONFERENCE

Senator MacDONALD:
QUEENSLAND

asked the Leader of the Government in the Senate, upon notice -

  1. Is it a fact that at the World Economic Conference, now sitting in London, the delegate from the United States of America stated that the conference should proclaim that economic nationalism, comprising every known method of obstructing international capital and trade, was a discredited policy, and that theRussian delegate stated that Russia was ready, if credit facilities were forthcoming, to place orders abroad to the extent of 1,000,000,000 dollars for the development of her resources?
  2. Will the Government consider taking steps to ascertain how much Australia can place in the way of orders with Britain and the United States of America, so as to develop Australian resources, and quickly share in the likely renewal of the export of capital from the great creditor nations, and so take definite measures to end the present unparalleled and deplorable unemployment.

Senator Sir GEORGE PEARCE.The replies to the honorable senator’s questions are as follow: -

  1. Statements along the lines indicated have appeared in press reports of the proceedings of the World Economic Conference.
  2. The Government through its delegation is keeping in close touch with the World Economic Conference, and in a consideration of proposals it will be actuated by desire for an improvement in world conditions which will bring about an improvement in Australia.

page 2425

QUESTION

DARWIN MAIL SERVICE

Senator DUNN (through Senator

Brown) asked the Leader of the Government in the Senate, upon notice -

Has he seen a press statement to the effect that a Japanese shipping firm may secure the contract for the mail service to and from Darwin, Northern Territory?

Did the Lyons Government receive a mandate from the peopleof Australia at the last federal election to turn the Northern Territory of Australia into a Japanese colony?

It was reported in the Sydney press of the15th June that steps werebeing taken to induce a Japanese shipping service to tender for the mail contract between Darwin and southern ports. The report, apparently, emanated from a press correspondent in Darwin. It does not state who is offering the inducement to the Japanese shipping company. The position in regard to this matter is that in May last, tenders were invited for a shipping service between Darwin and the southern ports. Tenders will bo accepted up to the 30th June. It is not the practice of the Government, when calling for tenders, to offer inducements to any particular firm or company to tender. No departure from that practice has been made in this case.

There is not the least justification for the suggestion contained in this question.

page 2426

PAPERS

The following papers were presented : -

Air Communications within and beyond Australia - Report of the Inter-departmental Committee - Melbourne, October, 1932.

Defence Act - Regulations amended - Statutory Rules 1933, No. 70.

Norfolk Island Act - Census Ordinance - Regulations.

page 2426

QUESTION

CUSTOMS TARIFF 1933

In committee: (Consideration resumed from 16th June, vide page 2421).

Schedule

Group 1. - Items under which the rates are the same as those operating under the 1921-30 tariff.

Division 4. - Agricultural Products and Groceries

Item 86 (Rice root).

Senator McLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

.- On Friday last Iwas asked for an explanation of the term “ rice root “. I have since ascertained that rice root is the stem of the rice plant. Under the process adopted in Australia for the harvesting of rice, the straw or stem is useless, and a limited quantity of it has to be imported for broom-making. The importations are infinitesimal, consisting of £19 worth in 1931-32, and £24 worth for the nine months ended the 31st March, 1933. “Rice straw”would be a better term to employ than “rice root”. The rice-growers of this country were approached, to ascertain whether action was necessary to safeguard their interests.

They prefer not to harvest their rice in such a way as to produce stems that might be used for broom-making, and do not desire any alteration of the tariff.

Item agreed to.

Item87 (a) agreed to.

Item88 (Salt)

Senator MacDONALD:
Queensland

– The general tariff on salt, and table preparations thereof, is 30 per cent. From what I have seen of the salt in-“ dustry in this country, that appears to be scarcely sufficient protection. There are large salt works at Bowen, Queensland, and in South Australia. I should like to know what are the importations of table salt and of other coarser qualities.

Senator McLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

.- The 1921-30 tariff on this item has not been altered. The importations consist mainly of peculiarly refined salt, such as Cerebos. Last year, the value of the importations was £16,000 in the case of the United Kingdom, and £1,513 in the case of the United States of America. I understand that the particular quality of salt involved is not produced in this country.

Item agreed to.

Item89 (a) (b) agreed to.

Item 90 (Sausage casings).

Senator COLLINGS:
Queensland

– Sausage casings are admitted free under all heads; yet they are produced to a large extent in Australia. What is the reason?

Senator McLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

– I am not certain that the final preparation of these casings is carried out in Australia. I have some personal knowledge of the matter, and I understand that they have to be imported. During 1931-32, we imported £9,291 worth from New Zealand, £84,732 worth from the United States of America, and £5,089 worth from other countries, and we exported sausage casings of a different class to the extent of £182,000 worth. At one time, the bulk of this preparation was carried out in Germany; but, since the war, the field of operations has probably shifted to the United States of America. I believe that the casings have to undergo special treatment.

Senator COLLINGS:
Queensland

– I suppose that that will go on indefinitely.

Senator McLachlan:

– It will go on until proper plant is installed in Australia.

Senator COLLINGS:

– Then we should remove these goods from the free list so that our local manufacturers might have a chance.

Item agreed to. item 91, sub-items (a) (c).

Senator COLLINGS:
Queensland

– I should like to know from the Minister what seeds and nuts are included. In Australia, we can grow all the castor oil beans we need, and local growers could supply the home market if they were encouraged. Tung oil nuts can be produced in Queensland, while peanuts, as we know; grow well there, and peanut oil can be produced in any required quantity.

Senator McLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

.- The rates of duty on these articles have not been altered. Hemp, cotton, kapok, &c, were formerly admitted under a by-law which reads as follows : -

Seeds and nuts, except peanuts in the shell, for the manufacture of oil, oil cakes and other by-products, may be admitted under 91a, subject to security.

The quantity admitted was so small, and the value so little, that no separate record has been kept.

Sub-items agreed to.

Item 92 (Seed, &c)

Senator COLLINGS:
Queensland

– I presume this item relates to cotton seed. I have here a return prepared by the Department of Statistics, which shows that a considerable quantity of kapok is imported annually into Australia. I happen to know that kapok is being produced in Queensland at the present time, though not in commercial quantities.

Senator McLachlan:

– This item refers to seed, not to kapok. The total quantity imported for the year 1931-32 was valued at £1,376.

Item agreed to.

Remainder of division, viz., items 93, 95, 96 (b), 97, 98 (a), 99, 101, 102, 103 (a) (b), 104 (a) (c) agreed to.

Division 5. - Textiles,felts and Furs, and Manufactures Thereof, and Attire.

Items 105 (a2) (aa1) (i), 106 (a) to (f), 10S(a1, 2), 111 (a) (b), 112 (c), 113 (b), 114 (a), and 119 agreed to.

Item 121, sub-items (a) (b) -

  1. Curtains and Blinds, n.e.i. (not including blinds attached to rollers) -

    1. When not containing wool, ad val., British, 20 per cent.; general, 35 per cent.
    2. When containing wool, ad val., British, 35 per cent.; general, 50 per cent.
Senator PAYNE:
Tasmania

– If honorable senators look at the item, they will see that curtains and blinds, n.e.i., not including blinds attached to rollers, carry a duty of 20 per cent. British and 35 per cent. general, when not containing wool, but that if they contain wool the duty is 35 per cent. British, and 50 per cent. general. We in Australia are largely dependent upon the export of wool to maintain our national income, and it seems strange, therefore, that we should discourage overseas manufacturers from using wool, by imposing a duty of 15 per cent. more on those articles which contain wool. 1 do not know of any blinds which contain wool, but certainly many kinds of curtains do. Hardly any of the materials used for making curtains are manufactured in Australia. We must of necessity import them, and we should, therefore, encourage the overseas manufacturers to use our wool for the making of them. Most of us in this chamber are householders, and we know what curtains are There are curtains hanging over the doorways of this chamber, and I should say that they contain a fairly large proportion of wool. Poor quality tapestry curtains contain, perhaps, no wool at all, but in the better quality article, in. order to make them hang nicely, and so that they shall be soft to the touch, a small quantity of wool is added. Material of this kind is not made in Australia. Chenille curtains also contain some wool, and they are not made in this country. Why, then, should we penalize the overseas manufacturers for using our wool? The same thing applies to felt curtains and, perhaps, to many other materials which I have not enumerated. We should not allow it to be understood by manufacturers abroad that we discourage the use of wool in the goods they make. I move -

That the House of Representatives be requested to make the duties, sub-item (a) - ad valorem, British, 20 per cent., general, 35 per cent.”

Senator REID:
Queensland

.- Although I am in favour of helping the local wool manufacturing industry, I desire to know whether this amendment will prove injurious to the cotton industry. It is advantageous to have cotton goods made from cotton grown in Australia.

Senator O’Halloran:

– In 1931-32, only £100 worth of these curtains were imported.

Senator MCLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

– The two sub-items now under consideration were the subject of an inquiry towards the end of 1925 by the Tariff Board, but the matter was not deemed of sufficient importance to be made the subject of a separate report. These duties were imposed on the recommendation of the board, but I have not before me the board’s reasons for its recommendation. The importation of these goods was prohibited by the previous Government, and that accounts for the fact that only £103 worth of curtains were imported in 1931-32. But in the previous year, the importation was worth £35,000.

Senator PAYNE:
Tasmania

.- I consider that the policy that has been adopted in the past is wrong. Unless it nan be shown conclusively that the introduction of a small percentage of wool in either the finished curtain or in material imported by the yard is prejudicial to an Australian industry which is worth protecting, we should remove the anomaly to which J have referred, and not impose a penalty on the users of curtains merely because one of our most valuable raw materials, namely, wool, is being used by their manufacturers overseas. We should welcome, instead of discouraging, the use of wool. The slogan is often heard, “ Wear more wool “, and I support it. Yet we say to our users of curtains, “ We will make you pay more for them if they contain wool.” We should, try to bring about the greater use of wool, and should be prepared to buy goods from overseas containing some Australian wool, if we can do so without interfering with our own secondary industries. I feel justified in pressing the request.

Senator BARNES:
Victoria

.- I oppose this request. The Scullin Government prohibited the importation of these curtains and blinds. Previously, our importations of such curtains were valued at £35,000 per annum. During the period in which the prohibition operated, curtains to the value of only £103 were imported. This shows either that the people did without these blinds, or that they used a substitute. If they used a substitute, there is no reason why they should not continue to do so. As the Government has indicated that it is not prepared to continue the prohibition, I shall support the duty set down in the schedule.

Senator GUTHRIE:
Victoria

– I inn in favour of the protection of all branches of our textile industry on an equitable basis, but I cannot see why we should differentiate in favour of cotton as against wool. If a duty of only 20 per cent, is considered satisfactory on blinds containing cotton, why should a duty of 35 per cent, be imposed on blinds containing wool? Any preference should be in favour of wool, the production of which, as everybody should know, is easily our greatest primary industry.

Senator MCLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

– Honorable senators should be apprised of the rather curious history of this item. In 1925, the Tariff Board, acting under instruction from, the Minister, made an inquiry into the item with a view to the deletion of the words “ or silk “. The old item read, “ cotton blinds, n.e.i., including blinds attached to rollers (1) when not containing wool or silk, 20 per cent. ; when containing silk, 35 per cent.” Clearly, the higher duty was directed against blinds containing silk. The next alteration was that the word “ wool “ was eliminated, but the word “ silk “ retained. Under the 1921-24 tariff, cotton blinds, when containing wool or silk, were dutiable at 35 per cent. British, 40 per cent, intermediate, and 50 per cent, foreign. Experience showed that very few blinds containing silk were imported, but in consequence of the use of the word “ silk “, all importations had to be closely examined. It was considered that in view of the small amount of duty involved, it would be advisable to delete the words “ or silk “. Apparently, the board did not pay any attention to the point that is now raised. The issue before us is not so simple as it seems at first sight. It appears to me that the whole subject is worthy of serious, consideration. We shall have to decide sooner or later what our attitude on it will be, and I shall be glad to hear a full-dress debate on it. Speaking offhand, it seems that there is something wrong with the wording of the item. The intention cannot be, as suggested by Senator Reid. to protect cotton; otherwise the reasoning would have been all the other way. Wool is the article that should be protected. We certainly should do our best, in a case like this, to assist the Australian woollen industry. It may be that we are manufacturing some woollen curtains in Australia. It may also be that the quantity of such material which is manufactured here is so small that no harm will be done by leaving the duty as it is. I shall endeavour to obtain some more information on the subject before the debate closes.

Senator O’HALLORAN:
South Australia

– The information before the committee is certainly meagre. It seems to me that if, during the two years when the prohibition was in force, the people of Australia used Australian-made curtains, or did without curtains, there is every reason why we should hesitate to approve of Senator Payne’s proposal. The prohibition imposed by the Scullin Government was agreed to only after careful consideration. Honorable members who were in the Senate during the debates on the Scullin Government’s prohibitions and surcharges will remember that these imports were placed on classes of goods which were obviously luxury items, or classes of goods which it was possible for us to manufacture in Australia. Obviously, curtains are a neces<sity, and there is still a demand for them, despite the depression. This prohibition was imposed on the 4th A.pril, 1930, and the value of curtains imported during 1930-31 was £306. .As honorable senators are aware, the regulations provide that goods which are prohibited may be ad mitted under special circumstances, and with the permission of the Minister; which accounts for these articles coming into Australia. In the next year, during which the prohibition still operated, curtains to the value of £103 were admitted. So that for two years, Australia imported only £409 worth of these goods, which affords circumstantial evidence that there are mills in Australia which are manufacturing them. That assumption is supported by the fact that, although the duty has been in operation since 1921, and manufacturers and importers have had an opportunity to request that it should be either reduced or increased, Senator Payne is the first person to request an alteration.

Senator McLachlan:

– Can the honorable senator account for the differentiation ?

Senator O’HALLORAN:
SOUTH AUSTRALIA · ALP

– I am hoping that the Minister will be able to obtain information from his experts in that regard. I should also like to know whether the sub-item refers to curtains ready for hanging, or to piece goods for manufacturing into curtains.

Senator Brennan:

– If piece goods were meant, they would be classified ad such.

Senator O’HALLORAN:
SOUTH AUSTRALIA · ALP

– Textiles are admitted under many items as piece goods at a comparatively low rate of duty, which, if manufactured, would be subjected to a considerably higher rate, as their manufacture provides a good deal of employment in Australia.

Senator COLLINGS:
Queensland

– It seems to me that this difficulty can be easily overcome. It would appear that Senator Payne is concerned only about what is apparently an anomaly, that when a curtain does not contain wool, the British preferential rate is 20 per cent., while when it does contain wool the rate is 35 per cent. I suggest that the difficulty can be overcome by making both rates 35 per cent., or, if the honorable senator would prefer it, by making the rate 45 per cent, when a curtain does not contain wool, and leaving the duty at 35 per cent, when it does contain wool; which would give him an additional 10 per cent, duty in favour of the line in which he is interested. Senator Payne may rest assured that honorable senators who sit on this side of the chamber will resist, to the last ditch, any attempt tha’, may be made to lower existing duties.

Senator DUNCAN-HUGHES:
South Australia

– I am really astonished at the moderation of Senator Collings. I should have expected that he would request a duty of 100 per cent. British preferential, and at least 250 per cent, foreign. If the honorable senator is prepared to accept a duty of only 45 per cent., plus exchange, primage, freight, and many other charges, making the aggregate a trifling 70 or 80 per cent, that is, for him, an extraordinarily temperate request.

I recognize that this is a large schedule, and that it is not reasonable to expect the Minister to have every detail about it at his fingers’ tips; also that this is not the honorable senator’s department. However, it appears strange that the Minister should come to the Senate, and say, “I should like you to explain to me why these figures appear in the schedule?” If the Minister is not conversant with the matter, he should surely either give good reasons why the rates are those which figure in the schedule, or be prepared to consider an alteration tq them. We were told that the word “ silk “ has been, eliminated, while the word “ wool “ bas been left in the sub-item. Senator Payne is endeavouring to eliminate the word “ wool “, in which I cordially support him. Anybody who takes the trouble to refer to Chambers Australian Encyclopedia will discover that, since the first decade of the 19th century, the history of cotton-growing in. this country has been one of constant failure. In the circumstances, I cannot see any reason why cotton should be put in a better position than wool. I take it that there is general recognition of the fact that woollen industries have been established in Australia, also that a number of honorable senators realize that, to a great extent, Bradford and the English trade generally, together with our relations with the Home Land, are bound up with the wool industry, and I say, without hesitation, that the rates of duty which Senator Payne suggests should be ample for any industry, particularly in view of the additional protective incidence of the other charges to which I have referred.

Senator MCLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

– I am having inquiries made concerning the genesis of this differentiation, for which, at the moment, I can see no reason. The only evidence in the records is that the matter went to the Interstate Commission, which was the precursor of the Tariff Board, and it recommended the differentiation. I cannot give the Senate an assurance on the point, but, apparently, the difference is due to the fact that curtains containing wool are manufactured in Australia. In order that the fullest information may be made available to the committee with respect to this sub-item, I move -

That item .121, sub-items (a, b) be postponed.

I suggest that the postponement be until the end of group 1 ; if necessary, a further postponement could then be made.

Senator PAYNE:
Tasmania

.- I welcome the motion for the postponement of this sub-item, because I want it to be debated in the light of the fullest possible information on the subject. I suggest, however, that the postponement be until the whole schedule has been dealt with, because there are several similar items in each group.

Motion agreed to; sub-items postponed.

Remainder of division, viz., items 125, 127, 128. 129 (a) (b), 131 (a) (b), 132, 133, 134’ (a) (b) and 135 agreed to.

Division 6. - Metals and Machinery

Item 136, sub-items (c2) (f.1) (o) (Iron and Steel).

Senator E B JOHNSTON:
Western Australia

.- Sub-item 136 f1 covers hoop-iron, one-eighth of an inch in thickness. I understand that the duty on this material has been referred to the Tariff Board. Has the Minister received any report regarding it from the board, and, if so, what is its nature ? If no report has yet been received, will the Minister consider postponing this item? Hoopiron is largely used to secure wool-bales.

Senator McLachlan:

– This sub-item has nol been referred to the Tariff Board.

Sub-items agreed to.

Item 137, sub-items (a1, 3) (Aluminium, nickel).

Senator FOLL:
QUEENSLAND · NAT; UAP from 1931

.- 1 should like the Minister to explain why there is any duty at all on aluminium and nickel, which are covered by subitem 137 a1. These metals, which are not produced in Australia, are used by Australian manufacturers for making various utensils for domestic use.

Senator McLachlan:

– The duties give a preference to British suppliers of these materials.

Senator FOLL:
QUEENSLAND

– The aluminium used by Australian manufacturers comes principally from Canada, not from Great Britain, so, that in placing this material on the free list, we are making what is only a mock concession to the Mother Country.

Senator McLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

– The total importations of these goods last year amounted to 2,683 cwt., valued at £15,000. Of that quantity, 40 cwt., valued at £208, came from Canada. The duties give a preference to Britain.

Sub-item agreed to.

Items 139 (a), 140 (a) (b), 141, 142, and 144 (a) (c) agreed to.

Item 147-

Iron and Steel, viz. -

Plates and sheets, plain tinned, ad valorem, British, free; general, 10 per cent.

And a deferred duty as follows: -

On and after 1st October, 1933 -

Iron and steel, viz., plates and sheets, plain tinned, per ton, British, 70s.; general, 115s.

Senator E B JOHNSTON:
Western Australia

– On and after the 1st October, 1933, deferred duties of 76s. and 115s. per ton British and foreign respectively are to operate on tinned plate, covered by item 147. Tinned plate is used chiefly by Australian processors of fruit and meat. Over £20,000,000 has been expended on irrigation schemes for the growing of fruit, and it does not seem right that the fruitgrowing industry should be subjected to these high duties, especially when efforts are being made to dispose of Australian jams, preserved fruits, and butter in Java and other Eastern countries. I move -

That the House of Representatives be requested to leave out ofthe item the provision for imposing deferred duties.

Senator McLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

– The Government realizes that tinned plate should be made available at the lowest possible cost to our export industries, which require this material, and, therefore, it has referred the deferred duties on this item to the Tariff Board. The board has been asked to recommend what rate of duty should be incorporated in the tariff in the event of it considering a deferred duty to be necessary. Clause 12 provides that the Tariff Board, when inquiring into deferred duties, shall consider whether the goods in question are being manufactured in reasonable quantities, are of satisfactory quality, and are being sold at fair prices. The duties under the 1921-30 tariff had regard only to quantity and quality; it is now proposed that the price factor also shall be taken into account. The deferred duties are now under the consideration of the Tariff Board, which will take into account the price of Australianmade tinned plate.

Senator PAYNE:
Tasmania

– I should like to know from the Minister how the rates set out in the schedule were arrived at? He has explained that they apply only to a duty which is at present deferred according to the schedule, until on and after the 1st October, 1933. How was the Government guided in the preparation of this schedule, and in fixing the rates of 76s. British preferential, and 115s. general, when the Tariff Board has not reported on the matter?

Senator McLachlan:

– Those rates will not operate until after the Tariff Board has presented its report, and, of course, may not become operative at all.

Senator PAYNE:

– I understand that; but I wish to know how the rates at present appearing in the schedule in the form of a deferred duty, were arrived at.

Senator McLachlan:

– The deferred duties have been in the tariff schedule since 1921.

Senator PAYNE:

– Has the Tariff Board reported from time to time in respect of the imposition of this duty?

Senator McLachlan:

– I think that there has been an intermediate report.

Senator Sir WALTER GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– The only report is to the effect that the local manufacture of tinned plate has not yet been begun.

Senator PAYNE:

– If the Tariff Board recommends a rate of duty different from that set out in the schedule, will the committee have an opportunity of considering it?

Senator McLachlan:

– Of course.

Senator DUNCAN-HUGHES:
South Australia

.- This deferred dutyhas been in existence for some thirteen years, and the Minister has given that fact as a reason for continuing it in the future. But circumstances have somewhat changed since it was first introduced. It has been stated that the manufacture of tinned plate is likely to be undertaken in Australia. Therefore, the possibility of local manufacture, which has existed for some thirteen years, has now become a probability or, at least, a greater possibility, and that fact should be borne in mind before we come to a decision on this item. It cannot be said that, because this deferred duty has not been operating, this country has been unfairly treated by the importers of tinned plate. The figures show that the average price per ton was for 1928-29, £22 10s.; 1929-30, £23; 1930-31, £21; and for 1931-32, £168s.; the total value of imports varying from £800,000 to £1,300,000. I hope that Senator Johnston will press his amendment. If the local industry were established, and this deferred duty became operative, the costs not only of the growers of fruit, but also of the growers of any kind of primary product which has to be canned, would be enormously increased. It would therefore be most undesirable to leave this item in the schedule in such a way as to enable the deferred duty to be brought into force at any time. We have had bitter experience of deferred duties being imposed in order to encourage an industry or a branch of an industry. Once an industry has been established, there is the greatest reluctance on the part of both Houses of the Parliament to take any action that would be detrimental to it. I suggest that if anything is to be done to discourage the establishment of this particular branch of the iron and steel industry, now is the time to take action.

Senator Sir WALTER GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

[4.26]. - I was responsible years ago for the inclusion of this deferred duty in the tariff, and perhaps it might be just as well torecall to the memory of honorable sena- tors the reasons why the Parliament at that time agreed to my proposal. During the war, Australia lost millions of pounds in respect of products which could not be tinned and therefore went to waste because of our inability to obtain supplies of tinned plate. With that tragic happening fresh in mind, the Parliament at that time readily agreed to the incorporation of this deferred duty in the tariff schedule. While there is an opportunity to establish this industry in Australia, we should hesitate before deciding to omit this deferred duty from the tariff. I need not stress the tremendous importance of the iron and steel industry to Australia, particularly in the event of the need arising for us to defend our country from enemy invasion. This industry is needed for the manufacture of munitions in war time, and for the preservation of our fruits in both war and peace time, and for that reason, we should lose no opportunity to establish it in Australia.

Senator COLLINGS:
Queensland

– We should endeavour to have something like an Australian policy in. regard to such industries as the one affected by this item, particularly in view of the position that has been stated by the Assistant Treasurer (Senator Greene). As other honorable senators have explained, this deferred duty has been in the tariff for a number of years in the hope that Australian manufacturers would be encouraged to establish the tinned plate industry in Australia.

Senator Brennan:

– They have taken no such action for thirteen years.

Senator COLLINGS:

– Thirteen years is not a long period in the development of a national policy. Possibly manufacturers have not given their attention to this particular industry, because they have discovered the need for even greater protection than is provided for in the deferred duty. For honorable senators to suggest that because the deferred duty appears in the schedule, our primary producers whose products require to be canned will be penalized, seems tome to be assuming something which is not supported by evidence. Over and over again Australian manufacturers have proved their capacity to supply articles of better quality at cheaper rates than have been charged for imported goods. Our pri- mary producers are not being penalized by this deferred duty, which I prefer to regard as a friendly gesture to prospective manufacturers. “We all remember the tragic circumstances during the war when Australian fruit-growers, particularly in Tasmania, were in a desperate plight owing to the shortage of tinned plate. It is all very well to say that such a calamity will not happen again. Surely honorable senators realize that tho menace of war is, perhaps, more imminent now than it was for a year or two prior to 1914. I hope that the deferred duty will not be struck out. .

Senator SAMPSON:
Tasmania

– The Assistant Treasurer (Senator Greene) reminded us that there might be another war, and emphasized the heavy losses sustained by our primary producers during the Great War owing to the shortage of essential materials such as tinned plate. Those heavy losses were not due so much to the lack of essential materials as to the lack of transport. Allied shipping was being sunk at the rate of millions of tons monthly. If, unfortunately, another war does come, this question of canning our fruit will not interest us very much, because the war will be conducted on such a vast scale that we shall not be able to get our produce overseas. This talk of war also reminds mc that if this country is not going to defend itself, but will continue to depend on the Mother Country, our greatest menace will be the lack of shipping facilities. In any case, I view with mixed feelings these proposals to impose deferred duties for the purpose of encouraging artificial industries.

Senator Brown:

– What is an artificial industry ?

Senator SAMPSON:

– One that has to be spoon-fed, and is economically unsound. Already we have started too many such industries in this country. As this deferred duty has been in our tariff for thirteen years without encouraging the establishment of the tinned plate industry, no good purpose will be served by retaining it.

Senator DUNCAN-HUGHES:
South Australia

.- The Assistant Treasurer (Senator Greene) argued that if we should be involved in another war, the establishment of the tinned plate in dustry in Australia would be a valuable safeguard, enabling us to send our canned products overseas; but Senator Sampson has properly asked how, in the absence of shipping, we should be able to do that. The point I wish to make is that practically the whole of our tinned plate comes from Great Britain, and if, following the establishment of the industry in Australia, the duty were made effective, it would shut out that portion of British, trade which relates to the manufacture of tinned plate. Yet, in the event of another war occurring, if we wished to send our canned products overseas, we should only be able to do so under the protection of the Navy of Great Britain, whose trade, by this deferred duty and other similar proposals, we are seeking to shut out.

Senator BARNES:
Victoria

– After the explanation given by the Assistant Treasurer (Senator Greene), I fail to” understand why any honorable senator should object to the “retention of the deferred duty, because it may encourage manufacturers to develop the industry in this country, thus safeguarding the interests of certain of our primary producers. I understand that there is a possibility of the industry being established. If so, it’ will be of very greatvalue to Australia. Instead of our fruitgrowers being obliged to destroy the bulk of their crop, as was the case during the last war, they should be able to have it processed.

Senator BRENNAN:
Victoria

– It seems to be futile, in view of the admitted facts, for any honorable senator to argue that this deferred duty will safeguard the interests of Australia in the event of another war, which, Senator Collings has hinted, may be nearer than most people think. It has been in the tariff for thirteen years, but nothing has been done under it. It is suggested that if this deferred duty is allowed to remain, it may encourage the establishment of the tinned-plate industry in Australia, and so be of service to this country in time of war. If the industry is essential, as one of the safeguards for this country in time of conflict, and, if, as has been suggested, there appears . to be some danger of another war, steps should be taken at once to have the industry established. But, in my opinion, since nothing has been done for thirteen years, it is useless to retain the deferred duty in the schedule.

Senator Sir GEORGE PEARCE:
Minister for Defence · Western Australia · UAP

[4.41]. - Senator Sampson was under a misapprehension as to the facts when he said that the difficulty experienced by Australia in procuring supplies of tinned plate and other essential commodities during the Great War was due to the absence of shipping. That was not the case at all. Our trouble, as regards supplies of tinned plate, was due to the action of the British Government, when the demand for munitions became acute, in taking over plants which had been employed for the manufacture of tinned plate, and using them for the manufacture of munitions. We had sufficient skipping available to us to send all our tinned products away, but, as I have explained, we were in difficulty because of the shortage of tinned plate for the reason given.

Senator COLLINGS:
Queensland

– Senator Sampson and other honorable senators who agree with him are wrong in their diagnosis of our difficulties during the war period mentioned by the Assistant Treasurer (Senator Greene). The claim is not that we could not export our jams and other products, but that, because of the shortage of tinned plates for the making of containers, we were unable to can our fruit required for consumption in Australia. The retention of this deferred duty in the schedule is not doing any harm, but there is a possibility that it may encourage the establishment of the tinned plate industry in Australia. This being so, why should we strike it out? Senator Brennan mentioned that this deferred duty had been in the tariff for thirteen years, and then he asked how much longer we were going to wait for the establishment of the industry. My reply is that it is doing no harm, and it may do an infinite amount of good.

Senator McLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

– I am afraid that I have not made quite clear the functions of the Tariff Board in this matter of deferred duties. In the event of a deferred duty being considered necessary, the board will recommend what rate should be incorporated in the schedule. To appease the minds of those honorable senators who are concerned about our primary industries, I refer them again to section 12 of the act governing this matter. That clause provides that goods must be manufactured in reasonable quantities, of satisfactory quality, and at a reasonable price, having regard, among other things, to the probable economic effect upon other industries. An investigation must be made by the Tariff Board. Heavy initial capital expenditure has been incurred as a first step towards the manufacture of tinned plate in Australia, and the continuation of the undertaking will depend largely upon the report of the Tariff Board. If the industry is not worthy of assistance, it cannot expect to receive further protection from the Government. In view of the heavy capital expenditure incurred, the industry should be given a chance to continue, particularly as an investigation is being made by the Tariff Board to determine whether the deferred duty should be allowed to remain.

Senator PAYNE:
Tasmania

.- I listened with interest to the speeches delivered by the Assistant Minister (Senator Greene) and the Leader of the Government in the Senate (Senator Pearce), explaining why this deferred duty should be retained. When this item was discussed in the Senate in Melbourne in 1921, as is the custom when deferred duties are agreed upon, definite statements were made to the effect that the requirements of Australia would be met within a reasonable period from the imposition of the deferred duty. Although a deferred duty on tinned plate was included in the tariff schedule in 1921, and we are now in 1933, tinned plate has not yet been commercially manufactured in Australia. Surely it is reasonable to suggest that within a period of, say, three or four years, an industry should be capable of manufacturing in commercial quantities. If it cannot, the deferred duty should lapse and, if necessary, another application be made. The conditions existing in 1921 may differ materially from those of to-day, and a totally different duty may now be required. By agreeing to this duty, the committee is pledged to the protection given in 1921, although the circumstances surrounding the industry may be totally dissimilar. I cannot forget what can happen under a deferred duty. It depends to a large extent upon the Government in power whether full effect is, or is not, given to the letter of the law. I recall an instance in which the customs law was absolutely violated and a dutywas imposed by resolution before the particular commodity concerned had been produced in Australia. This allowed huge profits to be made by those who had accumulated stocks in anticipation of the deferred duty being levied. The act provides that this shall not be done until a report has been received from the Tariff Board to the effect that the industry concerned is supplying a reasonable proportion of Australia’s requirements. I mention this to show the danger of allowing a deferred duty to remain in the schedule for eleven or twelve years without an application being received or without a further report being received from the Tariff Board.

Senator Collings:

– Surely the honorable senator can trust the Government of which he is a supporter.

Senator PAYNE:

– If this Government were likely to remain in power indefinitely, I should be willing to trust it. It was not this Government that was responsible for the action to which I have referred.

Senator Collings:

– This Government is asking the committee to allow the deferred duty to remain as it is.

Senator PAYNE:

– I am thinking more of the country than of the welfare of the Government. As this deferred duty has not been utilized since it was inserted in the schedule, it should be removed. If any industry is capable of meeting the requirements of Australia on reasonable terms, it can make a fresh application to the Tariff Board.

Senator CARROLL:
Western Australia

– It appears to me that the Minister in charge of the bill (Senator McLachlan), who said that the whole matter will shortly be considered by the Tariff Board, has given the strongest possible reasons for the deletion of this deferred duty. Surely it is not suggested that any persons are likely to establish an industry between now and when the board submits its report. It is unlikely that the board will report that the existing duties shall remain. If this subject is being investigated by the Tariff Board, and in all probability the Government will act upon its report, what objection can there be to the deletion of the duty? Clause 12 of the bill provides that industries protected by a deferred duty must manufacture in commercial quantities without injury to any other industry. I would emphasize the point made by Senator Payne, that what one government may consider production on a commercial basis another government may not.

Senator McLachlan:

– The Tariff Board has to review the whole matter.

Senator CARROLL:

– That is so.I do not desire to impute anything improper to the Tariff Board, but the way in which that board’s reports arc coloured to meet the wishes of the government in power is extraordinary.

Question - That the request (Senator Johnston’s) be agreed to - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)

AYES: 14

NOES: 13

Majority 1

AYES

NOES

Question so resolved in the affirmative. Request agreed to.

Item 147 agreed to sub ject to a request. Items 148 (b), 149, 150, and 152 (b1, 2) agreed to.

Item 153, sub-items (a) (c) -

  1. Cast-iron pipes excepting cast-iron soil and rain-water pipes from 2 inches to 6 inches internal diameter both sizes inclusive, per ton - British, 48s.; general, 80s.
Senator E B JOHNSTON:
Western Australia

– Item 153, sub-item a, relates to “ cast-iron pipes, excepting east-iron soil and rain-water pipes from 2 inches to 6 inches internal diameter, both sizes inclusive.” The rates of duty provided are - British 48s., and general 80s. per ton. I move -

That the House of Representatives be requested to make the duties, sub-item (a) - British, free; general. 15 per cent.

I agree with the remarks of the Assistant Minister (Senator Greene) with respect to the value of this industry, which, I maintain, should be assisted by means of a bounty, so that every one in Australia would contribute, and not by the imposition of heavy duties, which press very severely upon some of the most desperately hard-up persons in Australia. I have before me a letter, dated the 26th November, 1931, from the then Minister for Works in Western Australia, Mr. John Lindsay, who, in referring to duties on pipes, says that they unduly increased the cost of four water supplies in the eastern wheat districts in Western Australia, which comprises very dry areas, in which the only water available is conserved in rock catchments provided by nature.

Senator McLachlan:

– Is not the honorable senator bringing this matter forward under the wrong item?

Senator E B JOHNSTON:

– I think that this is the right place. In these dry areas the average annual rainfall is from 9 inches to 11 inches. The Western Australian Government has made provision for conserving water in rock catchments, and, according to the advice I have received, pipes of the diameter under consideration, as well as others, are used. In the case of the No. 1 Barbalin district supply, the pipes ordered were from four inches to eight inches. The cost of the pipes, exclusive of duty, was £39,069, and the duty totalled £10,368. The pipes for the Narembeen district supply cost £4,284, and the duty totalled £1,150. The pipes for the Kondinin district supply cost £3,785, and the duty totalled £1,016. The pipes for the Goomalling extensions cost £2,157, and the duty totalled £579. The total cost of the pipes for those works was £49,295, and the aggregate duty amounted to £13,113. Mr. Lindsay adds-

These purchases were made before the imposition of the primage duty. These works were constructed from loan funds and consequently the State is paying interest and sinking fund not only on the actual value of the pipes but also on £13,113 duty paid. Although each scheme was completed well within the estimate, the cost of the three district water supplies was so heavy that it was found impossible to levy a rate which would be sufficient to cover interest, sinking fund and operating expenses on the full capital account, and so for a period of throe years it was decided to exclude from capital account the cost of the head works.

I was in this district a few months ago, and not only saw the conditions mentioned by Mr. Lindsay, but was also told by a number of settlers that although the water supply had been brought to their boundary, the cost of the pipes was so heavy, and had been increased to such an extent by the duty, that those who were growing wheat at a price which did not equal the cost of production were unable to find the necessary money to carry the water on to their property. It will be observed from Mr. Lindsay’s letter that, apparently, this is not a case of an Australian industry receiving the benefit of protection, because the pipes had to be imported. I submit that the duty is a charge on the primary industry of wheatgrowing which it could not stand even in the good times, and is altogether out of the question in the times that we are passing through to-day. The settlers cannot pay interest and working expenses, and as the State Government has not called for payment, it has had to bear the tax. This is but one public undertaking that cannot pay its way, the capital cost of which has been substantially increased by a duty which goes into federal revenues. I commend to the committee the request that I have moved.

Senator BARNES:
Victoria

.- Obviously, there must be substantial reasons for the imposition of this duty. I am not sufficiently well informed to say definitely that these particular pipes are made in Australia, but I do know that pipes suitable for this class of work are manufactured in this country. That being so, I shall need much stronger reasons than have been advanced by Senator Johnston to induce me to support his request.

Senator Guthrie:

– A thing may be made, but only at a pricewhich is an excessive one to charge the user!

Senator BARNES:

– The user of the pipes is well able to look after himself. Apparently, he has no thought for those who are employed in pipe-making. While it may be beneficial to persons in Western Australia to obtain their supplies from some other part of the world, I want to know what is likely to happen to those who are making pipes in this country if that practice is permitted. I do not desire that the farmers shall be overburdened with such taxes, but I wish to be assured that these pipes are not made in Australia.

Senator Sir WALTER KINGSMILL (Western Australia) [5.6]. - I propose to support the requested reduction of the duty, because this case has a very special aspect. In addition to any duties that may be imposed on pipes imported into Australia, there is the protection of the freightwhich is charged on them. That protection is much larger proportionately in the case of these low-priced goods than in the case of other goods. Furthermore, pipes being hollow and charged according to measurement, the freight on them is high, and that should ensure ample protection to the Australian manufacturer.

Senator Sir WALTER GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– Ballast freights are charged on all these pipes.

SenatorSir WALTER KINGSMILL. - Even so, on account of their being hollow the freight is higher than in the case of other goods. These are the most important articles that a dry country needs; and a good deal of Australia is very dry. It is time that some of our industries were placed on what may be termed a common-sense working basis. I may not be so anxious as the Leader of the Opposition (Senator Barnes) to conserve the interests of those whom he represents. Within recent years, however, they have run mad on the subject of protection ; they have subordinated the needs of settlers and of everybody else to their desire that employment should be provided under what they are pleased to call Australian conditions. Representing these primary producers, whose very existence depends on a water supply, I cannot do other than support the request.

Senator McLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

– I take it that if this attack is persisted in, the protective duty on pig iron and on everything else which forms the basis of the operations of the Broken Hill Proprietary Company Limited will also be attacked. The present duty was imposed in 1921. Under the 1908-11 tariff, the rates of duty were 35s. and 40s., and under the 1914 tariff they were increased to 40s. and 50s. The Interstate Commission then took a hand in the matter, and recommended rates of 50s. and 60s. The report of that body contained the following statement : -

Cast-iron pipesare largely produced in Australia. The local manufacturers can supply all the requirements. The rate of duty is largely influenced by the duty on pigiron, which is the raw material used in manufacture. The average value for duty of cast-iron pipes and fittings based on the figures shown in the official statistics for1913, was £7 10s. per ton.

The honorable senator is probably aware that for water supply purposes cast iron is being replaced by steel tubing. That reminds me of the announcement in today’s press that a company has been formed for the manufacture of pipes and tubes which, according to the statement of the Premier of New South Wales to a conference in Sydney last night, will provide employment for a large number of men.

Senator Dooley:

– For 1,800.

Senator McLACHLAN:

– Mr. Stevens stated that this project would aid the development of this country, relieve unemployment, and prove a worth-while concern. This industry was further investigated by the Tariff Board, that body concerning which Senator Carroll a few moments ago made a remark that was unworthy of him. Its report was made in 1927, when there was in power a government that did not try to influence its decision, and, even if the honorable senator’s charge were correct, was not of a colour that would seek higher duties. On the 15th March, 1927, the existing duties of 48s., 65s., and 80s. were referred to the board for report, upon the application of Metters Limited, John Crase and Company, and E. Sachs and Company.

The duties originally requested were very high indeed, but when the investigation had been partially completed, those embodied in the tariff were proposed. The importations, which were practically confined to products of the United Kingdom, were 55,659 cwt. in 1924-25, 6,502 cwt. in 1925-26, and 52,091 cwt. in 1926-27. The board dealt with the question of wages and hours, and apparently accepted the evidence that a tremendous amount of money had been invested in the industry. At page 7 of its report, the following passage appears: -

On account of the low landed duty paid wist of British cast-iron rainwater and soil pipes and the higher cost of production in Australia through higher wages, shorter hours, and the use of Australian pig iron which costs nearly twice as much as the British manufacturer pays, applicants cannot compete with these imported pipes and fittings. There is, however, a wide margin .between the two requests for increase in duty.

The board dealt with the different contentions of the various applicants, and pointed out that the rate asked for by the Queensland manufacturers was double that sought by the New South “Wales manufacturers. Having examined the whole question, it made the recommendation which is the basis of the tariff that we now have before us. The suggestion now is, I understand, that these pipes should be admitted free from Britain. I remind honorable senators that that would mean the extinction of the cast-iron pipe manufacturing industry in Australia.

Senator Duncan-Hughes:

– Senator Johnston suggested that a bounty should be paid.

Senator McLACHLAN:

– There is no concrete proposal to that effect before the Senate, and, in any case, no such proposal could emanate from a private member. Perhaps the duty has worked disadvantageously, as Senator Johnston said. We know that there are other means of conveying water than by cast-iron pipes. Lately, steel pipes have come into use, and have proved satisfactory. I am informed by the department that the duty on castiron pipes represents only 6 per cent, or 7 per cent, ad valorem. That is all the protection the manufacturers of this commodity are asking for, and it does not seem a great deal when we consider the high wages which have to be paid, and the high cost of pig iron. If there is a case for the abolition of this duty, then half the duties in the tariff should go.

Senator E B Johnston:

– Mr. Lindsay informs me in his letter that duty to the amount of £13,113 was paid on £49,295 worth of pipe. His letter is dated the 26th November, 1931.

Senator McLACHLAN:

– That is over 25 per cent, ad valorem. I should like to know whether tlie amount includes exchange, primage, &c.

Senator E B Johnston:

– It was before the imposition of primage duties.

Senator McLACHLAN:

– I have quoted to honorable senators the information supplied to me by the department. Various State Governments are engaged in the manufacture of cast-iron pipes, including South Australia, and, I think, New South Wales.

Senator J B HAYES:
Tasmania

– I hope the amendment will be carried. Always, when municipalities or other local bodies install or extend a water system, the rates have to be increased, and they have the greatest difficulty nowadays in collecting rates. Most people will agree that this is not the time for increasing taxes. Whether a proposed new water scheme is installed or not. generally depends on the cost. I know of one proposed scheme which is hung up indefinitely, because it would cost too much, and the people cannot afford to pay rates which would cover ‘ the cost. Every one will agree that good water is essential to the health and comfort of the people in any town, and the provision of a good water supply ought to be made as cheap as possible. If any duty should be abolished, it is this.

Senator O’HALLORAN:
South Autralia

– I trust that the committee will not accept Senator Johnston’s motion. There is no case in support of his proposal, more especially when we consider the information which he himself placed before us. He quoted a letter written by Mr. Lindsay, who was at one time a Minister in the Government of Western Australia. In that letter it was stated that over £13,000 was paid in duty on cast-iron pipes used in Western Australia. The letter was written in November, 1931, and presumably, referred to importations for that year. If honorable senators Will consult the latest issue of the Trade Bulletin, they will see that the total importation of pipes of this kind into Western Australia in 1931-32 was 12 cwt., valued at £61. The letter quoted by Senator Johnston is typical of the propaganda used by the freetrade senators in their arguments against those of us who are trying to support Australian industries. I am convinced that the official figures, which were compiled by officials of the Trade and Customs Department, cannot be successfully challenged. I come from a State where pipes of this kind have been used more thanin any other State in the Commonwealth.

Senator Duncan-Hughes:

– All the more reason why the honorable senator should support the amendment.

Senator O’HALLORAN:

– South Australia has, probably, a greater mileage of piping laid down than all the other States together. At Glanville, the Government has established pipe-making works, and is manufacturing pipes more cheaply than they can be made anywhere else in the “world. The firm of Mephan Ferguson were, until recently, also engaged in the manufacture of iron piping, but now, with the change-over to steel pipes, they have closed their works. Another consideration which should induce honorable senators from South Australia to hesitate before agreeing to this amendment is that the manufacture of these pipes creates a demand for iron ore from the Broken Hill Proprietary Company’s works at Iron Knob.

Senator Duncan-Hughes:

– Iron Knob will not disappear if this duty is abolished. Let us do something for the country people.

Senator O’HALLORAN:

– As a former member of the Parliament of South Australia, I have a personal knowledge of the manufacture of these pipes at the Government works in that State. I know the quality of the pipes produced, and the price at which they can be delivered. The works provide employment for Australian workers, they use Australian raw materials, and they support the iron ore industry, which is of great value to the State of South Australia.

Senator McLachlan:

– And to every State of the Commonwealth.

Senator CARROLL:
Western Aus tralia

– I wish to reply to Senator O’Halloran, who sought to ridicule the figures produced by Senator Johnston regarding the importation of piping into Western Australia.

Senator O’Halloran:

– I quoted the official figures.

Senator CARROLL:

– Yes, for one year only. The letter written by the exMinister for Works in Western Australia did not state that all the money for piping was expended in the year 1931. The schemes referred to have been under construction for a number of years, but the piping was imported while this duty was in operation. If Senator O’Halloran will look back a little further in the Trade Bulletin, he will find when the piping was actually imported. The letter did not state that it was all imported in the one year.

Senator McLachlan:

– The rate of duty quoted by the ex-Minister in his letter seems to be all wrong. Last year 118 cwt. of piping was imported, and according to the official figures, the amount paid in duty worked out at the rate of 6 per cent. or 7 per cent. ad valorem.

Senator E B Johnston:

– All the piping referred to in Mr. Lindsay’s letter did not come in under this item.

Senator CARROLL:

- Senator O’Halloran hasalso furnished us with a very strong reason why the duty is not necessary. He said that the South Australian Government is engaged in the manufacture of piping of the kind covered by this item, and is able to manufacture and supply it at less than the price at which similar piping can be imported. If that be so, there is no need for a duty.

Senator DOOLEY:
New South Wales

. - I trust that the amendment will not be carried. Senator Kingsmill said that he was afraid the present duty might have the effect of restricting employment, because local bodies would not be able to afford to undertake water schemes. In answer to that argument, let me read the following article which appeared in the Sydney Morning Herald of to-day: -

Regular employment for 1,800 men will be provided by an Australian company known as Buttweld Proprietary Limited, having a capital exceeding £1,000,000, and formed by Broken

Hill Proprietary Company, in association with Stewart and Lloyd’s, the great Scottish iron and tube manufacturers.

An announcement to the foregoing effect by the Premier (Mr. Stevens) at a concert held under the auspices of the United Australia party at the Town Hall last night was loudly cheered.

Mr. Stevens added that the money would not have been invested in New South Wales but for the policy that the present Government was putting into effect.

Giving evidence before the Tariff Board in Melbourne last March, Mr. George Thompson, chairman of directors of Buttweld Limited, said that the works could not be completed for production before the beginning of 1934. The principal raw material, steel “ skelp “ and “ strip,” furnished by the Broken Hill Proprietary Company, would be treated on a modern continuous mill.

I have read sufficient of the article -to show that it would be dangerous to reduce the duties. I have yet to learn that any government has made complaints regarding the prices paid to local manufacturers for these pipes.

Senator Sir Walter Kingsmill:

– Western Australia has to obtain them under the conditions of transport imposed by the Navigation Act. How charming!

Senator DOOLEY:

– We should encourage local manufacturers at every opportunity, particularly as the company . to which I have referred is prepared to invest over £1,000,000, and to give employment to 1,800 men.

Senator GUTHRIE:
Victoria

– I am afraid that I cannot support Senator Johnston in this matter. I propose to deal with each item on its merit. The Minister tells us that the present duty is equivalent to only 7 per cent. Even allowing for the present exchange rate, the duty is not excessive. It is desirable that municipalities throughout Australia, and private persons requiring pipes for the conveyance of water from windmills to tanks on farms and stations should be able to purchase pipes as cheaply as possible; but I do not regard these particular duties as excessive. The rates are those recommended by the Tariff Board after investigation, and, therefore, this is an entirely different matter from a proposal to impose high duties without a recommendation by the board. Even at the risk of being licensed of being inconsistent, I shall vote on every item as my conscience dictates. According to. Mr. Stevens, the Premier of New South Wales, the local industry is being extended, and will provide employment for a large number of men. In view of all the circumstances, I cannot support the request.

Senator O’HALLORAN:
South Australia

– In reply to Senator Carroll’s suggestion that I have been unfair to Western Australia, I may say that I have been able to procure figures relating to Western Australia’s imports of this particular kind of piping for only four years.

Senator E B Johnston:

– What about 4-in. piping?

Senator O’HALLORAN:

– My figures relate to piping covered by the item in the tariff which the honorable senator seeks to amend, and are as follow: -

Senator E B JOHNSTON:
Western Australia

– When I quoted from the letter received by me from Mr. Lindsay, the Minister for Works and Water Supplies in Western Australia,I showed that it clearly referred to pipes measuring from 4 inches to 8 inches in diameter. Although the request relates to 8-in. pipes, I am on the look-out for the item covering smaller pipes. I have not the slightest hesitation in accepting as correct the figures appearing over the signature of Mr. Lindsay. The Overseas Trade Bulletin, No. 25, at page 295, refers to “ Other wrought iron and steel pipes and tubes not more than 3 inches internal diameter “. I am not sure whether the sizes mentioned by Mr. Lindsay represent the internal or the external diameter. Of the pipes referred to in the bulletin from which I am quoting, Western Australia, in 1930-31, imported 15,219 cwt., worth £17,604, and, in the following year, 5,180 cwt., worth £6,049. The Western Australian Government may have had stocks of pipes on hand for two or three years. I was particularly requested by Mr. Lindsay to take this matter up, and I have no doubt whatever that the Western Australian Government paid in duty the sums stated by Mr. Lindsay.

Question - That the request (Senator E. B. Johnston’s) be agreed to - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)

AYES: 12

NOES: 14

Majority . . . . 2

AYES

NOES

Question so resolved in the negative.

Bequest negatived.

Sub-items agreed to.

Item 154, sub-items (a) (b) (c) -

Railway and tramway material, viz.: -

  1. Sails weighing 50 lb. per yard and over, per ton, British. 50s.; general. 100s.
Senator E B JOHNSTON:
Western Australia

– I move -

That the House of Representatives be requested to make the duties, sub-item a, per ton, British, free; general, 15 per cent.

Rails weighing 50 lb. per yard and over are imported and used mainly by State governments and tramway authorities. The amendment which I moved a fewdays ago with the object of securing the free admission of all imports for State governments was regarded sympathetically by a number of honorable senators, but the opinion was expressed that the terms of it were too wide. The amendment I have just moved relates almost exclusively to rails for use by government authorities. The present Australian prices for rails weighing 60 lb. or more per yard is £11 9s. 6d. per ton, c.i.f., any capital port. The latest information which I can get of United Kingdom prices shows that the Australian price is approximately £3 per ton higher than the United Kingdom landed cost, free of duty, provided exchange were normal. Australian rails lighter than 60 lb. per yard cost £14 2s. 6d. per ton, c.i.f., capital ports at present. These lighter rails are not used for railway purposes in the ordinary sense, but are used in coal and other mining and quarrying operations, and also in timber getting. The length of rails of 60 lb. or heavier, is between 35 feet and 40 feet according to weight. It requires 94 tons of 60-lb. rails to lay one mile of single track. Figures for heavier rails are as follow: -

Rails of 100 lb. and 120 lb. per yard are generally used for suburban lines, those of 90 lb. for main lines, and those of 60 lb. and 80 lb. for branch lines. Such rails are also used for main lines in States where 3 ft. 6 in. gauge railway systems are operating. Honorable senators will realize instantly that the difference in cost of £3 per ton, with exchange at the normal rate, would place a very heavy burden upon the purchasers, when multiplied by the tonnage required for each mile. It would, of course, be necessary to multiply this again if more than a single track were laid.The increased cost of fishplates,tieplates, and rods would be greater per ton than that of rails.

Honorable senators are aware that the Constitution provides, in section 114, that the Commonwealth Government shall not tax the property of a State government. My object in moving this amendment is to ensure that the State governments will not be taxed through the customs for rails which they import for new work. Work has been provided in Western Australia for some considerable time for men who would otherwise have been unemployed, in constructing the earthworks for certain new lines which the State Government intends to lay as soon as possible, but it is now at its wits’ end to know how to meet the expense of the rails required for these new lines.

Senator Foll:

– What is the difference between the price of imported rails and the price of Newcastle rails ?

Senator Sir WALTER GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– There is practically none; if anything, it is cheaper to buy Australian rails.

Senator E B JOHNSTON:

– It must be remembered that we are considering this tariff without having regard to exchange. If it were not so, the Government would adjourn the discussion until the report on exchange for which I have asked could be made available to us. Under normal conditions my amendment would. if carried, give a considerable measure of relief to the Governments of those States which are most backward in their development.

Senator MCLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

– After the debate on the amendment Senator Johnston moved a few days ago, in relation to imports by State Governments, there should not be need for a long debate on this subject. Honorable senators must make up their minds either that the iron and steel industry is not worth very much to Australia, or that it must be adequately protected. If they desire to retain the industry, they will not support the amendment. In 1926, the Tariff Board conducted a comprehensive inquiry into the iron and steel industry. Thai investigation was, as a matter of fact, one of the most exhaustive that it ha3 ever made. It is obvious, of course, that if this industry is to be protected, the capital cost of our railways and tramways must be increased to the extent of the protection given. The board looked at this subject from every aspect. It considered the value of the industry in using the coal, iron ore, and flux deposits of this country. It also gave attention to the value of the industry to Australia if war should occur. At the time it made that investigation, the duties on rails weighing 50 lb. per yard and over were British, 35s.; intermediate, 60s ; and general, 70s. per ton. The board made the following statements in its report: -

The evidence against the request was directed mainly to an endeavour to show that tlie protect’on at present enjoyed by the local industry in the form of the present duties, together with the natural protection from freight and other charges, is sufficient to cover any disadvantage under which such industry may be suffering by reason of wages. It has already been shown in this report that amounts as under would be required to make up to Australian manufacturers the disadvantage under which they are carrying on by reason of higher wages in Australia as against the United Kingdom. After making due allowance for any disadvantage they may have in the matter of freights -

It will thus be seen that the duties asked for are not in excess of those shown to be necessary under existing conditions. So far as the goods covered by this item are concerned, it has been proved to the Tariff Board that in general, the local manufacturers have been enabled to do business only by reason of the policy of Governments and other undertakings granting a substantial preference to the Australian product. The Tariff Board is satisfied that the rates of duty asked for are not unreasonable, and that they are essential to enable the Australian industry to successfully compete with products from countries oversea with lower standards of living and consequent lower production costs. Since the request for increased duties was made, there have been considerable falls in the prices of the oversea products, which have rendered the duties asked for all the more necessary.

It proceeded to discuss the effect of the increased duties on other industries, in which connexion it stated -

In its consideration of this matter, the Tariff Board naturally kept in mind the effect which the granting of all or any of the increased duties asked for would have upon the industries in which the products concerned form the basic raw materials.

It went on to say -

During the public inquiry held by the board, the representative of the Broken Hill Proprietary Limited publicly announced that if the increased duties asked for were granted, advantage of such duties would not be taken to increase prices providing conditions remained as at the time the assurance was given. This assurance was also shared in by Hoskins Iron and Steel Works Limited (except as to merchant bars), and also by other parties to the application. While the Tariff Board accepts in good faith the assurance given, there is, of course, no guarantee that existing conditions will continue and that at any time wages might not be increased or hours shortened, involving increased costs of production. Accordingly, the board desired to inform its mind as to what the effect of the increased duties would be on other industries concerned, assuming that it became necessary to take advantage of such increased duties to raise the prices of iron and steel products. It was only natural to expect that an investigation of so great importance to the engineering and metal working industries, as well as to undertakings such as railway departments, would have created an intense interest on the part of those engaged in such industries or undertakings, and that steps would have been taken by those interests to have adequate representation at the public inquiries. On the contrary, the investigation proved to bc unique in that there appeared to be little or no opposition or even criticism from such quarters. All the great interests and instrumentalities that the board expected would voice some criticism or protest, or at least some warning as to the result upon other industries, if the increased duties were granted, were silent.

I’ have noticed that the board had a similar experience when it inquired into the effect of the coasting trade provisions of the Navigation Act. The quotation continues : -

The silence became so ominous and incomprehensible that the board found it necessary through its chairman to publicly invite evidence from interested sources. Little or no response followed this, and a further public announcement was made by the board of its surprise and disappointment at the fact that although specially and publicly invited to do so, only two representatives of manufacturing engineers and scarcely any merchant distributors, save agents of manufacturers overseas, had. come before the board of their own volition to assist the board with expert evidence as to the probable incidence upon their respective industries and businesses of the increased duties asked for.

I do not desire to weary honorable senators with too many extracts from this report, but I advise them to consider the findings of the board under the various headings given in the report. In coming to its conclusions, the board intimated that it had taken cognizance of the speeches made in the Senate and the House of Representatives on the iron and steel industry in 1916. It also examined the basic principles of the tariff in relation to the iron and steel industry from the time of the late Mr. Alfred Deakin onwards. It did not flinch from examining the problem from every point of view, including that of wages and the financial position of the applicants for the duty. The board then made its recommendations, which are to be found at page 43 of the report. For the information of honorable senators, I shall give a comparison of the rates on these rails comprising those which operated prior to 1926, those recommended by the Tariff Board, and those which are now operating -

The rates that are embodied in this tariff were adopted by the predecessors of the Scullin Government, and are substantially lower than those which were recommended by the Tariff Board.

Senator Sampson:

– Why were the recommendations of the Tariff Board not accepted ?

Senator McLACHLAN:

– I was not a member of the Government at the time, but I have no doubt that the rates recommended were considered to be too high. An industry such as the Broken Hill Proprietary Company Limited, with its huge capital, supplying, as it does, the needs of a scattered population of only 6,000,000, cannot exist unless it is given an opportunity to supply the whole of the demand for which it caters. This company is at present manufacturing sheet steel which is superior to that imported from the Mother Country by a concern with which I am closely associated, because it is not’ liable to flaking. I believe that the Broken Hill Proprietary Company Limited is out to help the country, because, in doing so, it is helping itself. Certainly now, more than ever before, we have need for such a concern. From certain points of view, it may not be considered sound economy to assist this company by imposing high duties on. the products which it can manufacture, but. the investment is there, and the iron and steel industry has its branches all over Australia. If this company were precluded from manufacturing certain of these lines, it would be unable to carry on with the small market that would then be available to it. So that, while our tramways and railways may be. paying a little more for their material than if the tariff were lower, they are paying less than would be the case if the recommendations of the Tariff Board had been accepted. I urge the Senate to reject the request.

Senator BARNES:
Victoria

.- The Government should be put on its defence for ignoring the recommendation of the Tariff Board and for making the rates what they are rather than for having made them inordinately high, as certain honorable senators claim.

Senator McLachlan:

– The Scullin Government also accepted these rates.

Senator BARNES:

– Then for its action in that respect it was deserving of censure. The iron and steel industry is a vital one to Australia, and it is essential that it should receive adequate protection. Any relatively small costs which are incurred by the public in providing that protection must be regarded as part of our expenditure on defence. Certainly, in this instance, a high tariff is justified. The Government has acted reprehensibly by reducing the recommendation of the Tariff Board by at least 25 per cent. It is extraordinary, too, that representatives of the Country party, who claim that the Tariff Board is essential to the welfare of the nation, should urge a reduction of rates’ of duty which are. decidedly lower than those recommended by the board. They must know that to put out of commission the great iron and steel industry would assist to place Australia in a defenceless position. How can Senator Johnston and his colleagues from the West justify to young Western Australians the endeavour to push this essential industry out of existence? The Broken Hill Proprietary Company Limited could not <arry on if it had available to it only the minor requirements of farmers and other private individuals. Of necessity it must receive a proportion of the’ big State contracts which are connected with water conservation schemes and railways! We need this huge industry to supply our requirements of big machinery. We have an almost inexhaustible supply of the necessary raw material in Australia, and we have men whose labour is not excelled. There is, literally, a mountain of iron ore at Iron Knob in South Australia, and, I understand, that there is an island off the coast of Western Australia that could supply the world’s iron ore requirements for 1,000,000 years. Why, then, should we import such a commodity as iron ? I have always maintained that that board can do useful work in guiding this Parliament, and one of the considerations which should influence its decisions is the need to enable industries to pay wages which will permit the continuance of a reasonably high standard of living. It is a part of its duty to make recommendations that will ensure that our industries shall not have to compete on equal terms with countries in which low wages and a low standard of living prevail. It would be unthinkable to support industries which objected to our countrymen being given a reasonable standard of living. I repeat, if the Government is deserving of censure in this matter it is because it departed from the recommendation of the Tariff Board. If I thought that I had the remotest chance of carrying my request, I should move that the recommendation of that body be accepted.

Senator PAYNE:
Tasmania

.- Nobody realizes more clearly than I do the importance to Australia of the Broken Hill Proprietary Company Limited, which is conducting what I have always regarded as one of our key manufactures. I hope that the prosperity which it is at present enjoying will continue. At the same time, I can understand why some honorable senators should express a desire that relief should be afforded to those who use the articles which are manufactured by this huge company, and I do not wonder that sections of the community become restive when the workers in this industry are permitted to continue to enjoy conditions which are not applicable to any other industry in Australia. I should like to know whether the Minister can give a definite assurance that these duties are absolutely essential to ensure the continuation of the operations of the Broken

Hill Proprietary Company Limited. It does not follow that because a certain rate of duty is necessary to-day it will be needed in five Or ten years’ time. There may be changes in the interval to justify the reduction of the duty. The Government should see that inquiries are conducted at reasonable periods to ascertain whether relief may be afforded to those who use these goods without imperilling the stability of the enterprise concerned.

Sitting suspended from 6.15 to 8 p.m.

Senator PAYNE:

– The protection afforded to the iron and steel industry has placed the employees of the Broken Hill Proprietary Company Limited at Newcastle in a more favorable position industrially than that of any other section of workers in Australia. It is, therefore, only fair that the burden which that protection places on other sections of the community should be lightened. While I cannot go so far as Senator Johnston would have us go, I think that there is room for a reduction of the existing rates of duty. Surely it does not follow that, because Parliament approves of certain duties in order to enable an industry to become established, those duties must remain for all time. If, by reason of the protection given to it, an industry is enabled to establish itself successfully, and biter, to improve its plant and increase the efficiency of its workers, it is only reasonable that those who purchase the goods it makes, should look forward to a reduction of the duty and a correspondingly lower, price for those goods. That principle should apply to many Australian industries. Duties imposed in order to enable an industry to become established on a sound footing, should be reviewed at the end of a given period, say, every five years.

Senator Dooley:

– That is done now.

Senator PAYNE:

– It is not done systematically. In 1921 the duty on railway iron was, per ton, 35s. British and 75s. general.

Senator Dooley:

– Were the works of lbc Broken Hill Proprietary Company Limited established in 1921?

Senator PAYNE:

– Yes; but they were not nearly so big as they are to-day.

Senator Collings:

– The tariff has enabled the industry to develop.

Senator Dooley:

– The company was not making steel rails in 1921.

Senator PAYNE:

– I am aware of that. The position of this industry wa3 reviewed in 1926 when further duties were imposed on railway iron. In view of the fact that prices generally have dropped throughout the world, the position of this industry should be reviewed, with a view to affording some relief to the purchasers of its products. I suggest that the duties revert to the rates which existed in 1921.

Senator O’HALLORAN:
South Australia

– I hope that the duties on this sub-item will not be reduced, as suggested by Senator Johnston. The Minister has given many excellent reasons why the committee should reject the request for amendment. South Australia is particularly interested in this sub-item, because practically the whole of the iron ore used in. the iron and steel industry comes from Iron Knob in that State. As has frequently been pointed out, the iron and steel industry is a key industry which would be of inestimable value to Australia in the event of another war; but, if it i.s to serve the nation in war, ir must live in times of peace. Undoubtedly, the manufacture of railway and tramway material has done much to develop it to its present proportions; and any injury to this section of its activities would strike a death-blow at the industry as a whole. The iron and steel industry provides employment, not only for those directly associated with it at Newcastle, but also for those engaged in its subsidiary industries in different parts of Australia. I am, however, chiefly concerned with its importance to South Australia. The South Australian YearBoole shows that, for the six years ended 1932, South Australia produced iron ore to the value of 4,525,661, t’he yearly production being - 1927, £S30,7S9; 1928, £711,063; 1929, £974,9S5; 1930, £1,067,651; 1931- which witnessed the worst period of the depression - £322,556, with a recovery in 1932 to £618,617. That iron ore would not have been produced in South Australia had it not been for the existence of the steel works at Newcastle, and its production has placed large sums of money in circulation in South Australia. I hope, therefore, that Senator Badman and other senators from that State will vote to protect this industry. As conducted by the Broken Hill Proprietary Company Limited, the mining of iron ore in South Australia is one of the most economically operated industries in the world, with the result that there is a steadily increasing export trade in iron ore. Should the amendment of Senator Johnston be agreed to, the future for this industry will be gloomy.

Senator E B Johnston:

– There could be a bounty.

Senator O’HALLORAN:

– It is indeed strange that the request should have been moved by an honorable senator who professes to want to help our primary producers. Because of some imaginary grievance, the honorable senator has moved a requested amendment which, if made, would mean that in future money, which in the past has been expended in South Australia, would be sent abroad. That State would lose approximately £4,500,000 every six years, and the 500 workers directly engaged in the production of iron ore at Iron Knob, Hummocks Hill, and Whyalla would be thrown out of employment. The primary producers who supply those workers with their requirements would, in turn, find their market reduced. Any injury to the iron ore industry would also affect the Associated Smelting Works at Port Pirie by dislocating their transport arrangements, because the coal used by the smelters is used as back loading by the vessels which convey the iron ore to Newcastle. I do not know how Senator Badman and other South Australian senators will vote on this sub-item, and, consequently, I have placed these facts before the committee in order to show how serious a vote in favour of the request would be.

If the amendment were made it would also adversely affect Tasmania. During 1931, the Broken Hill Proprietary Company Limited used 55,000 tons of Tasmanian flux, valued at £20,000. According to the Tasmanian Year-Booh, more than 1,000,000 tons of flux has been sent from Tasmania to Newcastle. Near Devonport, I saw an extensive quarry from which this flux is obtained. If the iron and steel industry at Newcastle were wiped out, what would become of the Tasmanian flux industry, and those persons associated with it? In a normal year, the Broken Hill Proprietary Company Limited directly employs 5,000 men at Newcastle, and, in addition, probably 10,000 men are engaged in subsidiary industries. The iron and steel industry is of great value to our coalmining industry, because 2 tons of coal are required to smelt 1 ton of iron ore. The smelting of 4,500,000 tons of iron ore would mean the production also of 9,000,000 tons of coal. The bulk of the iron ore produced in South Australia is used by the Newcastle Steel Works; only during the last year or two has the export trade reached any considerable dimensions. It will be seen therefore that the iron and steel industry, both directly and indirectly, employs an army of workers, who constitute a valuable market for the primary producers whom Senator Johnston professes to wish tohelp. I feel sure that, if acquainted with all the facts, the primary producers of Australia would rejoice to know that the committee had rejected Senator Johnston’s proposal.

Senator BADMAN:
South Australia

– It may set at rest the fears of Senator O’Halloran if I inform the committee at the outset that I cannot support the request submitted by Senator Johnston. Not only is the iron and steel industry a key industry, but it also provides employment for large numbers of Australians. This industry converts raw materials into semi-raw materials for other industries to manufacture. These subsidiary industries are, in my opinion, somewhat, over-protected. The steel industry prepares the raw material, which is distributed to other industries throughout Australia, to the ultimate benefit, directly and indirectly, of the people of this country. We need not worry about the rail manufacturing industry for some considerable time, because it is not likely that the governments of Australia will have much money to expend upon the construction of new railways or the relaying of existing railways. At the same time, I cannot support a requested amendment, the object of which is to admit rails into this country duty free.

Senator E B JOHNSTON:
Western Australia

– I have several reasons for moving my request. I object to the Commonwealth taxing the States. I am fully aware of the value of the Newcastle Steel Works, because I have visited them twice, on the last occasion less than a year ago. I spent u couple of days inspecting the works, and I know all about them. The question is, how are they to bc assisted? Kails are almost entirely used by governments, and are required at present mainly by the States that are less developed. Western Australia, which in area represents one-third of the Commonwealth, and has only its south-west corner developed by railways, promises to be the biggest customer for rails. With its large areas of light rainfall and dry country, it is essential that railways should be built, and built cheaply, and even in these bad times the Government of Western Australia is proceeding with the construction of earthworks for two railways that were authorized by the State Parliament some years ago. That State requires to obtain rails as cheaply as possible, and the Premier has stated that, as the State is expending all the money available on the construction of earthworks in order to employ labour, it will be a difficult matter to find sufficient funds to enable rails to be purchased. 1 agree that the Broken Hill works at Newcastle, and other iron and steel works, must be kept in operation. There are two methods of doing that. One is by the imposition of a high tariff, which places the burden entirely upon the people of the undeveloped States. I strongly object to that method. The other method - one which was adopted by the BrucePage Government - is to assist the industry by means of a bounty.

Senator Sir WALTER GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– The Bruce-Page Government did not pay a bounty on the manufacture of rails.

Senator E B JOHNSTON:

– No; but it assisted the iron and steel industry by bounty in respect of the manufacture of galvanized iron and in other directions. Hundreds of thousands of pounds have been paid in bounties to assist sections of the iron and steel industry. The richer States of New South Wales and

Victoria carried out a large proportion of their railway development at a time when there was’ no Federal Government, and when rails could be obtained free of duty. If it is desired to assist this industry, let the people of those States contribute their fair share. I object to the entire burden being placed upon the undeveloped parts of the Commonwealth, and, in particular, upon Western Australia. This is a tax upon transport. Like other honorable senators, I wish the iron and steel industry to be kept in operation, and if we assist it by means of a bounty, we shall know the exact cost to the Commonwealth.

Senator COLLINGS:
Queensland

– I wish to refer particularly to the attitude adopted by honorable senators who are advocating an alteration of the existing tariff. Senator Payne has alluded to the condition of the workers in this industry, but I cannot imagine that he would be prepared to change places with any man who is working in it. When he speaks about the labour conditions of this industry being better than those of any other industry, either he does not know what he is talking about, or the workers in other industries must be in a bad way, indeed. Surely he knows that, for health reasons alone, no man would work in this industry except under compulsion ! The ore has to be mined, and at every stage of the. industry the men are engaged in hard, sordid manual toil.

Senator Payne:

– All manual work is hard toil.

Senator COLLINGS:

– It is not. Certain forms of manual toil afford enjoyment to those engaged in it: but there is no ‘enjoyment in the manual labour at the iron and steel works. It seems to me that, in view of the differences of opinion among honorable senators, this debate 13 more or less futile. Obviously, it is to be a fug-of-war between the Country party and the other parties in this chamber. The members of the Country party are continually professing sympathy with the primary producer ; yet they advocate the very process which would cut the ground from under his feet, and make his condition infinitely worse. The members of the Country party want no tariff at all. They are un-Australian and unscientific in their outlook. Where would Australia be to-day had this country been, left to the primary producers?

Senator Guthrie:

– The primary producers have made Australia.

Senator COLLINGS:

– What would the primary producers have done with their products had they been without the shelter of our policy of protection? How would they have been able to find customers for their products? I submit that they have been able to carry on only because of tariff protection. Senator Badman has said that, in view of the depression, there i3 not likely to be much demand for rails for some considerable time; yet every supporter of the Government has said that prosperity is just round the corner, and that shortly everything in the garden will be lovely. As a matter of fact, rails are used, not only by governments, but also by tramway organizations in various parts of the Commonwealth, and not all of them are government-owned. Rails must, of necessity, be required for repairs and reconditioning of lines. The Newcastle Steel Works are interested in other things besides rails. The fiscal policy which has been adopted in this country by successive governments enabled the iron and steel industry tq carry on in the time of prosperity, and, if any portion of the tariff protection is now withdrawn, the producing capacity of this industry will be considerably curtailed. As Senator O’Halloran has said, many subsidiary industries depend entirely upon it. In addition, we have to consider the question of defence. It is essential that we should establish in this country large works for the manufacture of our requirements of peace time, which, in war time, could be used for the manufacture of armaments and of munitions. It is questionable whether the people of Australia, including the primary producers, would thank us if we carried Senator Johnston’s request. Naturally, they would favour it if they were told that its object was to relieve them of a considerable burden ; but they would certainly oppose it if they knew that its effect would be to place hundreds of thousands of workmen in Australia out of employment, to kill many other primary industries, such as coal mining and that of converting coal into coke, and at the same time to place Australia in greatly enhanced danger in time of war.

Senator BRENNAN:
Victoria

– I have already expressed my views on this question generally, and I take it that they are known, but none the less I do not think that, on this occasion, I can support the request submitted by Senator Johnston. We, on this side of the chamber, have indicated that we are content, in this present tariff struggle, to be guided by the opinions of the Tariff Board. This is a case - I do not know whether it is the only case, but I should imagine so - in which the Government has fallen actually below the recommendations of the Tariff Board ; and, as the Vice-President of the Executive Council (Senator McLachlan) has -informed us, the board made its report after a most exhaustive inquiry, in which it dealt with every phase of the subject. I am as strong an advocate of State rights as Senator Johnston. One of the reasons which he gave for his request was that he objected to the Commonwealth taxing the States. In giving that reason, he opened a closed book. The question whether this was a tax upon the property of a State was decided in two cases heard about the same time - one known as the Wire Netting Case, and the other as the Steel Rails Case. The court, in the Steel Rails Case, came to the decision that the word “ tax,” as used throughout the Constitution, did not embrace customs duties. That settled the matter once and for all, and made it clear that is was one thing to tax the property of government within a State, and another thing to say that the Commonwealth had complete control of customs, and that the authority of the States does not extend beyond their territorial limit3. The Commonwealth had complete power to declare that nothing shall enter a State until it has complied with certain conditions. I cannot, therefore, be induced to support Senator Johnston’s request on the ground that there is involved in these duties the principle of taxing the property of a State government. With his general remarks as to the difference between a protective duty and a bounty I am in sympathy. In the case of an industry assisted by means of a bounty, we know what it is costing the country. If maintained as a national industry, it is being paid for by all the people, whereas in the case of an industry which enjoys the benefits of protection, no one can estimate exactly what it .is costing the country, and its cost, whatever it may be, is paid by those who use its product, and by those only.

I feel that if I were to support the requested amendment, I should stultify myself in action which I may have to take when other items are before the committee. But the occasion does seem appropriate for some general remarks which, while they might apply particularly to this item, nevertheless have general application in this tariff debate. We should, I think, distinguish between two subjects that are totally different, and ought to be considered separately. One is the subject of defence, and the other the subject of protection. It is the first duty of the government of every country to see to its defence. I am not one of those who believe in the extension of government activities, but I hold that it is the duty of a government to take whatever action is necessary for the defence of its country.

Senator Barnes:

– Why not leave defence to private enterprise as the honorable senator would do in regard to everything else?

Senator BRENNAN:

– For the very best of reasons, namely, that there are certain duties which are the essence of government. The first is the protection of the country. Possibly the next in importance is the preservation of internal peace. These are fundamental functions of government, and cannot be got rid of or handed over to private individuals. There was a time when the defence of cities and towns was, to a certain extent, left to private enterprise, but that practice had to be abandoned because of the corruption that followed. It was then conceded that governments must be responsible for the protection of their citizens by the establishment of police forces, and this, as a cynic said, for a time put an end to the practice of corruption. But I am digressing somewhat, and must return to my subject.

Senator McLachlan:

– Get back to the rails.

Senator BRENNAN:

– Yes. I shall await a more appropriate occasion for a general discussion on the subject of defence, but I may be allowed to say that if the development of the iron and steel industry is necessary for the defence of this country, the Government should consider whether it should not control it. It seems to me to be so much hypocrisy for men like Senator Collings and those associated with him to appeal for support of these high duties, because of the essential part which, they say, the industry plays in our defence scheme. These are the men who have cut, and would cut down to the very lowest limit, our defence vote, but when it is convenient for them to use defence as an argument in support of these duties, they like to appear as patriots, utterly regardless of the amount of money involved in providing for the defence of this country.

Senator Collings:

– We shall justify our attitude when we are dealing with the defence proposals of the Government.

The CHAIRMAN:

– Order ! I ask Senator Brennan not to pursue that line of argument.

Senator BRENNAN:

– That, at all events, is the position which they have taken up, but it is not the sole reason for their support of these duties. Their leader (Senator Barnes), and many of his camp followers have made it plain that they are not going to consider any question at all except that of maintaining the highest duties on every item that appears in this schedule.

Senator Collings:

– For the sake of Australia, yes.

Senator BRENNAN:

– To do this they invoke the sacred name of a patriotism which they claim for themselves, but disallow to every one else. They use the same arguments when they talk of the defence of the Empire and the reason for maintaining it, but other things arise when it comes to a question of protective duties for Australian industries.

We are told that these duties are necessary because the iron and steel industry is a key industry. I do not know exactly what that means, but I do know that the expression had a great vogue during and subsequent to the war, and this industry, in particular, has been spoken of as one of our key industries. Therefore, when we are considering the amount of protection to be allowed to it we have to bear in mind the great number of persons who use its products. They are entitled to consideration because they are the people who, in the long run, have to pay for these protected products. It has also been said that those who vote for lower duties will be dealing a death-blow to the industry. We have no wish to do that, and, moreover, we do not believe that lower duties will mean a death-blow to this industry. Senator Collings, of course, had a great deal to say in reply to Senator Payne’s remarks upon the favoured position of the workmen employed at the Newcastle steel works. As a matter of fact, one of the pleas put forward on behalf of this industry is that the employees are very highly paid. That, I suggest, is something that ought to be taken into account, because the industry is confined entirely to one State.

Senator Dooley:

– A great many of the workmen are highly skilled.

Senator BRENNAN:

– I am not now raising the question as to whether they are overpaid or not. All I am doing is to show that one of the reasons advanced by the industry itself is that it is entitled to high protection because its workmen ure highly paid; and I put it to the committee that, if any section of the community enjoys advantages which are not shared by others, then they must be enjoying those advantages at the expense of other sections. It follows, therefore, that when one State claims toll from people of all the States for benefits which are given to the people of one State only, a policy which permits that to be done is contrary to the basis of federation under which we live, the foundation principle of which is that there shall be no inequality as between State and State. Nevertheless, I feel that I should be stultifying myself if I were to vote for something which runs contrary to the recommendations of the Tariff Board and, later, have to ask the committee to follow the recommendations of that body. Therefore, I cannot support Senator Johnston’s requested amendment.

Senator BROWN:
Queensland

– As there seem to be well defined dif ferences of opinion between certain honorable senators with regard to a considerable number of items in this schedule, I suggest that it would be a good thing if Senator Johnston were permitted to specify the various items in respect of which he wishes to move requests for amendments, so that we could have a general debate on the principle involved, and, when the vote was taken, regard it as conclusive. If it were possible to do this we should, probably, save a great deal of time in this debate. As to the item under notice I am entirely opposed to a reduction of the duties, not because I am not in sympathy with our primary producers, but because I believe that Senator Johnston is wrong in attacking the iron and steel industry.

Senator Guthrie:

- Senator Collings seems to be in sympathy with the primary producers.

Senator BROWN:

– Yes, and so are all honorable senators on this side of the chamber. But while our sympathies are with our primary producers, and while we are prepared to do all that is possible to assist them, we contend that their position will not be improved by reducing the duties in this item and in so doing injuring the iron and steel industry, which is an important industry in this country. I do not suggest that we are desirous of seeing the Broken Hill Proprietary Company making huge profits, but, though the Newcastle steel works is part and parcel of our present capitalistic system, we intend to see that it has efficient protection.

Senator Brennan has accused us of hypocrisy. I fail to see how that charge can be levelled against those who are opposed to Senator Johnston’s request. Nor do I consider that our attitude in regard to defence can be so described. Our contention is that the defence of this country is served just as effectively by the development of its industries as by securing the loan of warships from the Old Country for service in Australian waters. The products of the Newcastle steel works would, in time of war, play no unimportant part in the defence of the Commonwealth; and in time of peace the maintenance of the company’s enterprise gives employment to large numbers of our own people in important, skilled occupations. This, in my opinion, is the best way to ensure the defence of this country.

Senator Brennan:

– Does the honorable senator believe in peopling Australia?

Senator BROWN:

– I am heartily in favour of it. That is why my colleagues and I are keenly desirous of preventing men like Senator Johnston from destroying Australian secondary industries. The honorable senator presumably wants these rails to be free of duty. Then, having given an impetus to a British industry, he would give the Australian industry a bounty. It is of no use to try to induce the honorable senator to change his ideas, because they are petrified and ossified. The mental development of some honorable senators having reached senility, it is practically impossible to convince them that they are in error.

Senator Sampson:

– They are not all on one side of the chamber.

Senator BROWN:

– I realize that there is a possibility of my ideas percolating into Senator Sampson’s inner consciousness. Senator Johnston has argued that, by means of the duty on steel rails, we are penalizing those States whose development has not progressed very far. I point out to him that the Australian people, as a whole, assist Western Australia by means of a grant. Personally, I should like to see it assisted a good deal more, because I recognize that it is a primary producing State, and that its development is somewhat backward. But in regard to the payment of a bounty to this industry-

The CHAIRMAN:

– I remind, the honorable gentleman that the question of a bounty is not under consideration.

Senator BROWN:

– Senators Brennan and Johnston were allowed to “get off the rails”. May not I also do so for a moment ?

The CHAIRMAN:

– The honorable senator may make a passing reference to the matter.

Senator BROWN:

– I am making a passing reference to it. Senator Johnston has intimated to the Minister that the difficulty caused by the removal of the duties could be overcome by the payment of a bounty; but he did not indi cate where the revenue could be raised to pay the bounty. It is all very well for honorable senators to make such illuminating suggestions, as though the Government could conjure out of the national exchequer the amount involved. I am not clear as to whether the honorable senator would pay a bounty to every industry that is now protected by means of the tariff. It seems to me that’ this is merely an emanation from the honorable senator’s brain, and is designed to advance the cause of freetrade.

Senator E B Johnston:

– It is a definite policy.

Senator BROWN:

– Senator Brennan “ left the rails “ to talk of defence and of policemen, and endeavoured to show that the production of steel rails is not a function of the Government. I would point out to him that under the present, system a government owes its existence to clashing interests in society. I admit with him that the primary function of governments is to exercise control over different class interests, and the different sections that are fighting one another. When Labour’s policy is given effect, and class interests are eliminated, government “ of the people, by the people, for the people “ may have an altogether different meaning. We who sit on this side are strongly in favour of retaining the existing duty on steel rails. Although we appreciate the manner in which Senator Johnston has brought his proposal before the committee, wc are entirely opposed to him, and hope that he will not persist in continually bringing forward requests for amendments, but will indicate the items upon which he wishes the duties to be removed, so that we may discuss them all at the one moment, and so avoid wasting the time of the committee.

Senator SAMPSON:
Tasmania

– I am not able to support Senator Johnston’s proposal, because the existing duties on steel rails are in conformity with the 1921-28 tariff, which I vividly recollect was the objective of the Government party at the last elections. Although a lower rate has been adopted than was recommended by the Tariff Board, the protection is actually greater than that body considered necessary, because, even if the tariff were removed, there would still he protection equal to from 25 to 30 per cent. on account of exchange and primage.

Senator DOOLEY:
New South Wales

– I remind honorable senators that the capital employed in this industry was invested because those who are engaged in it believed that the promise made by the government of the day would be honoured. The existence of a protective tariff is tantamount to a promise that support will be given. Before any alteration is made, we should seriously consider all the implications. At one time, at least 5,000 employees were actively engaged in the steel works in and a round Newcastle, while to-day I suppose the number is fewer than 2,000.

Senator Badman:

– It is about 4,000 at the present time.

Senator DOOLEY:

– During a period of plenty, the industry could produce in competition with other countries. It should not be interfered with in the present depressed conditions. Senator Brennan referred to the wages earned in the industry. I agree that the employees have been highly paid; but I point out that they were also highly skilled. It may be news to Senator Brennan and to other honorable senators, that the Newcastle Steel Works were built up on task work, the men being paid according to results. The general class of labour was paid the minimum basic wage, and above that there, were about 30 separate awards. Any one who received more than the award rate earned it by way of a bonus. Senator Payne argued that the industry has been sheltered. I doubt whether he could stand the heat of the furnaces.

Senator CARROLL:
Western Australia

– Senator Dooley has stated that this industry has been protected because of a government promise. I have a distinct recollection of an inaugural dinner that was given when these works were established at Newcastle, and of Mr. Delprat, the general manager, making the public statement that the company was not receiving any assistance by means of the tariff, and was able to carry on without it.

Senator Brennan:

– He said that it would not carry on if it had to depend upon protection.

Senator CARROLL:

– Long before that date, Hoskins carried on at Kembla and made a fortune, the only assistance received being that of a bounty of 8s. a ton on the material produced. The argument that a reduction of the protection afforded would ruin the industry, will not hold water.

Request negatived.

Senator PAYNE:
Tasmania

– I move -

That the House of Representatives be requested to make the duty, sub-item (a), per ton. British, 35s.

In 1921, the duty on these rails was 35s. a ton, and in 1926 it was raised to 50s. a ton. Notwithstanding the fact that, according to the Minister, the Tariff Board had recommended that the rate should be 60s. a ton, the government’s proposal on that occasion was accepted by Parliament. At that time there was no primage duty on imports, and there was no heavy exchange rate to be paid in connexion with purchases overseas. We must take these things into consideration when determining whether, under a duty of 35s. a ton on British rails, the Broken Hill Proprietary Company would not really be receiving even higher protection than that recommended by the Tariff Board in 1926, namely, 60s. a ton. Let us assume that the cost of rails free on board in Great Britain is £10 a ton, and at that, I think, I am over-estimating rather than under-estimating the price, having regard to the average weight of rail used in Australia. With a duty of 50s. a ton, exchange on £10 would amount to 50s. a ton, and primage would cost 20s. a ton. The total impost would thus be 120s. a ton. If my suggested amendment is made, the exchange of 50s. a ton and 20s. a ton primage will still have to be paid, but the total impost will be 105s., which, however, will be still a great deal higher than the protection of 60s. a ton recommended by the Tariff Board in 1926.

Senator O’Halloran:

– How much higher will it be if the exchange rate goes back to par?

Senator PAYNE:

– I do not anticipate any great change in the exchange rate for some time.

Senator O’Halloran:

– Why not wait for the Tariff Board’s report on the exchange rate?

Senator PAYNE:

– The report, when it comes, cannot affect the rate of exchange. We know that there is a possibility of the exchange rate altering, but the probability is not great.

Senator Brown:

– Does the honorable senator really believe that the exchange rate amounts to as much as 25 per cent. ?

Senator PAYNE:

– It was as highas 33 per cent. at one time; but, even if the rate were reduced to 121/2 per cent., the effective protection would still be much higher than that recommended by the Tariff Board.From 1926 until, Ithink, 1929, there was no adverse exchange rate, and during that time the Broken Hill Proprietary Company was able, under the 1926 tariff, to build up its business, and make rapid progress. Immediately Australia turned the corner, the company was able to take advantage of the position.

Senator Dooley:

– How does the company get the benefit of the exchange?

Senator PAYNE:

– It gets the benefit of the extra protection which the exchange affords. It would be absolute folly to retain the high rates of duty provided in the schedule. They are not necessary to enable the company to carry on. I do not wish to jeopardize the prospects of the company; but I feel certain that, if my proposal were accepted, the company would not be handicapped in its turnover, or in the demand for its products. It would still enjoy a higher rate of protection than it did up to the time the exchange rate began to operate and primage duty was imposed.

Senator McLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

– When considering this tariff, we cannot have regard either to exchange or primage. Primage duties were imposed for revenue purposes, owing to the country’s financial need, and have no bearing whatever on the protective incidence of the tariff. I understood that honorable senators realized that exchange would have to be dealt with quite separately from the tariff. If I were to give reasons why the exchange rate does not have quite the effect which honorable senators suggest, it would be necessary to disclose matters which I do not think it proper to place before the Senate just now. We have to deal with the tariff as a static thing, something which is to prevail under normal condi tions. Whatever we do in regard to exchange will have to be done in a separate measure. Honorable senators might truly say that the Broken Hill Proprietary Company could, in respect of some of its operations, carry on without any protection at all. I know that to be true in regard to one or two lines, but that is due only to a condition of affairs which may disappear before we know where we are; it is due to the incidence of the exchange rate and primage duties. To allow an industry of this sort to be dependent for its protection on those two things, one owing its existence to the exigencies of our financial position, and the other to our monetary position overseas, wouldbe extremely dangerous. I wish the tariff to be discussed absolutely apart from the exchange rate. Certain assurances have been given to honorable senators by my leader in regard to this matter. We are discussing this schedule as a protective tariff for Australia, and must consider it as if conditions were normal.

Question - That the request (Senator Payne’s) be agreed to - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)

AYES: 8

NOES: 17

Majority . . . . 9

AYES

NOES

Question so resolved in the negative.

Request negatived.

Sub-items agreed to.

Item 156 (a) agreed to.

Item 157 -

Barbed wire, per ton, British,68s. ; general, 180s.

Senator S B JOHNSTON:
Western Australia

.- I move-

That the House of Representatives be requested to make the duties, British, free; general, 15 per cent.

I should like to inquire from the Minister why the duties on barbed wire should be 68s. British and180s. general, when the rates on wire netting are free, British, and 200s. general. As a matter of fact, owing to the operation of a dumping duty, wive netting is not admitted free from Britain. Honorable senators should know that both barbed wire and wirenetting must be used in the construction of an ordinary vermin-proof or sheepproof fence. The barbed wire is essential if great stock, that is, horses and cattle, are to be provided against. All over the Commonwealth, fences are falling into disrepair because landholders cannot afford to buy fencing material. The standard rabbit and vermin-proof fence has at least one barbed wire. We all know how necessary it is that more rabbit-proof fences should be erected. A recent report from Western Australia shows that it is estimated that, over a large portion of the wheat belt, rabbits are eating 20 per cent. of the crops and half the pastures, and I believe that similar trouble is being experienced in many parts of the eastern States.

Senator Dooley:

-The pest is said to bo diminishing rapidly in New South Wales.

Senator E B JOHNSTON:

– That is not the experience in Western Australia. A standard rabbit-proof fence, as generally used on farms, has at least one barbed wire. The dingo and the fox are also increasing, and it is essential to have barbed wire for vermin-proof fences.

Senator Dooley:

– How many barbed wires are required to keep out dingoes?

Senator E B JOHNSTON:

– I have seen some fences with as many as six barbed wires. That number is not usual, but one or two barbed wires are always considered necessary. This commodity is made in Australia, and if my requested amendment is agreed to, it will be necessary to move a similar request to item 59, sub-itemb, which deals with “ wire, iron, and steel for use in the manufacture of barbed wire and wire netting, as prescribed by depart mental by-laws “. I believe that this duty was not imposed until 1927, when, for a, number of years, wheat and wool had fetched high prices. According to Production Bulletin. No. 25, the prices were as follow: -

Senator McLachlan:

– These duties were imposed in 1920.

Senator E B JOHNSTON:

– I am glad to have that information. In 1919- 20, the price of wheat was8s.81/2.per bushel, and in 1920-21 it was8s. 61/2d. per bushel; therefore, the highest prices that have been obtained for wheat in the last twenty years were experienced when these duties were imposed. In 1919-20, wool fetched 16.69d. per lb., and in 1.920-21 the price realized was 14.53d. per lb. At that time, the primary industries were, perhaps, in a position to meet such a tariff, but with wheat fetching only 2s. 3d. or 2s. 4d. per bushel to-day, the farmers are quite unable to bear it. The price of wool also has been very greatly reduced.

The cost of barbed wire to-day is about £25 to £25 10s. a ton. It wouldbe £6 a ton cheaper, if there were no duty against Great Britain, according to information supplied to me. This commodity is used exclusively by the agricultural and pastoral industries, so this tax is levied only on those industries, and it, is imposed at a time when they cannot pay their way, and when the rabbit, the dingo, and the fox have never been more in evidence than they now are in some of the States. In Western Australia, there is much new pastoral country which should be used eventually, but which will never be occupied until fencing material becomes cheaper than it is to-day. These primary industries should have all the relief contemplated under my requested amendment. I ask the Minister to state in reply why barbed wire carries, under item 157, the heavy duty of68s. per ton, British, and 180s. per ton, general, while wire netting, which is an equally essential article in the construction of a fence, is free and 200s. per ton in the British and general columns respectively.

Senator McLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

.- This item falls within much the same category as fencing wire, except that the wire rods from which barbed wire is drawn already carry duties of 33s. and 84s. per ton. The duties on barbed wire have stood since 1920 at 68s. and 180s. per ton. This matter was investigated by the Tariff Board in 1926, when it recommended the retention of the duties which appear in the present schedule. A review of the present Australian prices of barbed wire landed in store shows that the local article is selling at a price lower than that at which English barbed wirecan be landed duty free. Of course, the local manufacturers have the advantage of the exchange position; but they are not taking advantage of either the exchange or the tariff. They are selling their goods on the basis of production costs. The following is a comparison of the landed into store costs, exclusive of duty, of British barbed wire, and the cost into store of Australian barbed wire at all capital cities: -

I do not consider that these duties should be regarded as high, because, even with the present low prices of English barbed wire, they represent on the 14 gauge article, only 17 per cent., and, on the 121/2gauge wire, only 19 per cent.

Senator Plain:

– The local manufacturers did not ask for a duty.

Senator McLACHLAN:

– But, as I pointed out some time ago, if we left this industry dependent on the vagaries of exchange, its protection might disappear in a month or two. We must deal with the tariff on the basis of a static position, and must assume that there is no other protection afforded. The present high exchange rates and the primage duty might disappear. As the Leader of the Senate (Senator Pearce) has pointed out, the exchange position will be dealt with as an entirely separate matter. We are now considering the protective incidence of this tariff qua a protective tariff. The manufacturers require definite protection ; but they are not taking advantage of it, and, I think that that fact will commend itself to this committee.

This matter was exhaustively investigated by the Tariff Board in 1926. The iron and steel industry, generally, has considerably reduced the prices of its products, including fencing wire and wire netting, in the last few years; and when this is considered in conjunction with what I have already said about the price of the Australian product being lower than the duty free landed cost of the English article, honorable senators must appreciate what the establishment of an industry of this kind means to Australia. A number of persons appeared before the Tariff Board in favour of the application for these duties, and among those who opposed them was a gentleman from Western Australia who is ever with us when the tariff is being discussed in another place. The evidence tendered both in favour of and against the application was analysed by the board, and effect was given to its recommendation in, I think, the Pratten tariff. The competition of Germany at that time had to be taken into consideration. It was asserted by the representatives of one of the principal applicants that barbed wire was being landed in the Commonwealth from the United States of America, and sold at prices against which the local industry could not successfully compete. The report of the board stated that no quotations or invoices that had been submitted supported that statement. The following prices, c.i.f. and e., Australia, quotedby German manufacturers were included in thereport of the board: -

These prices, after allowing for duty, are considerable lower than the Australian selling prices of barbed wire. The board drew the attention of the public to the fact that, in producing this barbed wire, the British manufacturers were using wire rods of continental origin. After hearing the whole of the evidence, including that of two distinguished members of

Parliament whose presence still graces the House of Representatives, the hoard came to the conclusion that these duties should be placed upon this commodity for the reasons that I have given. As no advantage has been taken of the position by the local manufacturers, as the duties that operated during the regime of the Bruce-Page Government have not been altered, and as they are supported by the Tariff Board, I now urge honorable senators to vote for their retention.

Senator GUTHRIE:
Victoria

– Barbed wire is absolutely necessary to every farmer throughout Australia, and also to other primary producers, particularly at a time like this, when it is desirable that every mile of rabbit-proof fencing that can be constructed should be constructed to counteract the rabbit plague which is sweeping across the country.

Senator McLachlan:

– Will barbed wire keep rabbits out ?

Senator GUTHRIE:

– If the Minister knew anything about this subject, he would realize that a rabbit-proof fence is of little use without a barbed wire to protect it. The honorable gentleman has shown conclusively that a duty of 68s. a ton is not necessary against Great Britain. Senator Collings has insinuated that the primary producers benefit through the operations of the local, manufacturers.

Senator Collings:

– I said that they benefit because the ‘employees in our factories provide a market for primary products.

Senator GUTHRIE:

– They consume only an infinitesimal proportion of Australia’s primary produce. Surely honorable senators know that it is necessary for us to export 90 per cent, of our wool clip year after year. I have said in this chamber on other occasions, and I repeat now, that if a law were passed to compel every man, woman, and child in Australia to wear woollen clothing, we should still have to export 85 per cent, of our clip. Wc also have to export by far the largest proportion of out wheat, meat, fruit, and other primary produce. It should not be necessary in these days to emphasize the fact that Australia lives on her primary production. Statistics prove year after year that between 96 per cent, and 97 per cent, of the total value of our exports is accounted for by primary products. Although our manufacturers have large supplies of raw materials available in Australia as, for instance, the iron ore at Iron Knob, in South Australia, they are apparently not able to conduct their enterprises with sufficient efficiency to assist this country to pay its overseas interest bill by exporting any of their products. I believe that the Broken Hill Proprietary Company’s steel works at Newcastle is an efficient enterprise. But it is a damaging fact that our secondary industries account for only 3 per cent, of the value of our exports. There has been no equality of sacrifice in this country. Taking the index figure as 1,000 in 1911, we find that the price of secondary products in Australia to-day gives an index figure of 1,900. The price is, therefore, nearly double what it was in 1911. The reverse is true of primary products, the index figure of which is to-day below that of 1911.

The CHAIRMAN:

– I ask the honorable senator to connect his remarks with the item.

Senator GUTHRIE:

– I am endeavouring to show that barbed wire, which is a necessary commodity for every man on the land, should be made available at as low a price as possible in order to help in reducing the price of production. Fencing wire is 106 per cent, dearer today than in 1914. Honorable senators cannot deny that the manufacturers and their employees at Newcastle have fattened under a high and almost prohibitive tariff, and that the workers in the industry have enjoyed relatively high wages and short hours. The farmers of Australia, and the primary producers generally, have been forced to work just about double the hours that are worked by those engaged in secondary manufacture. Honorable senators opposite seem to think that a high tariff will cure all our ills, and provide all our people with employment. They appear to forget that the United States of America, with the highest tariff in the world, has a greater percentage of unemployment to-day than any other country. The Wool Inquiry Committee, which was appointed by this Government, showed clearly, in its report, that the cost of producing wool, which is our greatest primary product, has boon increased by 15 per cent. in consequence of our high tariff. I am not a freetrader. 1. believe that our iron and steel industry is valuable. I am not altogether in favour of saying, “ Put this item on the free list “. I do not say that I shall vote in favour of Senator Johnston’s amendment, but I should like the Government to agree to a reduction of duty.

Question - That the request (Senator E.B. Johnston’s) beagreed to - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)

AYES: 12

NOES: 14

Majority 2

AYES

NOES

Question so resolved in the negative.

Request negatived.

Senator GUTHRIE:
Victoria

– I move -

That the House of Representatives he requested to make the duty, per ton, British, 40s.

I desire to bring about an even balance between the primary and secondaryindustries, and not to cripple either. The Minister has made it plain that this duty is not at present necessary to the manufacturers at Newcastle, and, as the cost of barbed wire is a contributory factor to the general cost of production of our primary producers, I desire to assist them by having this reduction of the duty effected.

Progress reported.

Senate adjourned at 9.47 p.m.

Cite as: Australia, Senate, Debates, 20 June 1933, viewed 22 October 2017, <http://historichansard.net/senate/1933/19330620_senate_13_140/>.

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