Senate
6 July 1933

13th Parliament · 1st Session

  1. Senate
  2. 13th Parliament
  3. 1933

The President (Senator the Hon. P. J. lynch) took the chair at 11 a.m., and read prayers.

page 2877

QUESTION

TASMANIAN OSMIRIDIUM

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

– On the 4th

July, Senator J. B. Hayes asked the Minister representing the Minister for Commerce, upon notice -

Will the Minister obtain from London the price that Tasmanian osmiridium is bringing in that market?

The honorable the Minister for Commerce has now advised, that the price of Tasmanian osmiridium in London on the. 4th instant was £9 per ounce.

page 2877

QUESTION

COLLIER CHRISTINA FRASER

Need for Wireless Installation:

Senator McLACHLAN:
SOUTH AUSTRALIA · NAT

– On the 5th July, Senator Dooley asked the Minister representing the Minister for Commerce the following question, upon notice : -

As a result of the appalling disaster to the collier ChristinaFraser, whereby seventeen valuable lives have apparently been lost, and great grief and anxiety caused thereby, will the Government make the necessary provision in the Navigation Act to compel such sea-going vessels to be equipped with wireless, and provide that such vessels shall undergo periodical overhauls to ensure their seaworthiness ?

The honorable the Minister for Commerce has furnished the following reply : -

The question of compulsory installation of wireless equipment on sea-going vessels has been considered on a number of occasions, and was discussed by the recent International Convention for the Safety ofLife at Sea. Article 26 of that convention provides that cargo ships of 1,600 tons gross tonnage and upwards must be equipped with wireless. The Commonwealth Navigation Act anticipated this convention, and has since the 1st October, 1 921 ; included an identical provision. The question of extending this provision to cargo vessels of smaller tonnage was some timea go investigated by an Australian expert committee, but having regard to the development in radio science since that investigation, the Minister for Commerce has already arranged for the appointment of a committee of experts to review the position, so far as Australian shipping is concerned, in the light of the latest developments.

page 2877

QUESTION

GOLD AND STERLING RESERVE

Senator DUNN:
NEW SOUTH WALES

asked the Minister representing the Treasurer, upon notice -

  1. What was the amount of gold in the Commonwealth Bank of issue on the 30th June, 1932, and on the 30th June, 1933, apart from sterling?
  2. What was the amount of gold exported during the year ended the 30th’ June, 1933, and to what countries was it exported?
Senator Sir WALTER MASSY GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– The Treasurer has supplied the following reply: -

  1. As the published returns of the Koto issue Department of the Commonwealth Bank give in one sum the total amount of the reserve in gold and sterling held under section 60k of the Commonwealth Bank Act, it is not proposed to furnish any further details. At the 30th June, 1932, the total amount of the reserve was £10,500,455, and at the end of, June, 1933, the amount was £11,506,950.
  2. The information is not yet available.

page 2877

QUESTION

AUSTRALIAN FISHING GROUNDS

Senator DUNN:

asked the Minister administering the Development Branch, upon notice -

  1. What assistance, if any, is being afforded by the Federal Government to research work in the fishing grounds in and about the Australian, and Tasmanian, and Lord Howe and Norfolk Islands coast lines? 2.Does the Government intend to proceed with its intention, us repeatedly stated in the press, to build an up-to-date steam trawler for the research fishing work mentioned above?
Senator McLACHLAN:
UAP

– The answers to the honorable senator’s questions are as follow: -

  1. No assistance is at present being rendered by the Commonwealth Government in connexion with fisheries research.
  2. In order to enable the Government to give consideration to the question of future policy in regard to the fisheries industry, it has been necessary to obtain certain information from abroad in regard to practices in other countries, and in connexion with by-products industries, such as fish meal andfish oil. It is anticipated that this information will be available, and will hare been scrutinized by export officers in time for the subject to be considered in conjunction with the budget-

page 2878

PUBLIC SERVICE

Female Machinists

Senator McLACHLAN:
UAP

– The PostmasterGeneral states that inquiries are being made, and a reply will be furnished to Senator Dunn as soon as possible, with reference to certain female officers who passed a machinists’ examination for promotion, and their appointment to positions for which they had qualified.

page 2878

QUESTION

OTTAWA CONFERENCE AGREEMENT

Senator E B JOHNSTON:
WESTERN AUSTRALIA

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

Has the attention of the Government been drawn to a statement made by the Secretary for the Dominions at the Empire Chamber of Commerce Congress luncheon, inLondon, on the 3rd . instant, that Britain had observed the spirit and the letter of the Ottawa agreement, by giving free entry to every Empire product; but he appealed to every dominion business man to recognize that no bargain should be one-sided and that British business men thought there could be no -greater blunder than to lose the spirit of Ottawa?

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

– The Minister for Trade and Customs has furnished the following reply : -

A press report of the statement made by the Secretary of State for the Dominions has been seen. Itis an appeal to dominion business men not to lose thespirit of Ottawa. Australia is implementing the Ottawa agreement in the spirit and the letter.

Senator E B JOHNSTON:

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

  1. Has the attention’ of the Government been drawn to reports of the proceedings at the conference of Empire Chambers’ of Commerce concerning the Ottawa agreement, and particularly to -

    1. Mr. Harry Dawson’s (of Bradford) complaint that the British textile trade felt resentment against the failure of Borne dominions to give effect to the agreement;
    2. The statement of Mr. C. D. Gibson, M.P., that Australia and Canada unfairly closed their markets to British manufacturers;
    3. Mr. A. E. Heath’s (of Sydney) statement that Mr. Gibson’s complaint was partly justified;
    4. Mr. J. A. Boyd’s (of Melbourne) statement that he represented “ the bad boy of the Empire” in this respect ?

  2. What reply has the Government to the above ?

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

– The Minister for Trade and Customs has furnished the following reply : -

  1. Report of the proceedings at the Conference of Empire Chambers of Commerce has not been brought under the notice of the Government. The Government is not responsible for the opinions of private individuals.
  2. See answer to No. 1.

page 2878

SEAT OP GOVERNMENT SUPREME COURT BILL

Motion (by Senator McLachlan) agreed to -

That leave be given to introduce a bill for an act to establish a Supreme Court of the Territory for the Seat of Government, and for other purposes.

page 2878

CUSTOMS TARIFF 1933

In committee: Consideration resumed from the 5th July (vide page 2876). Schedule.

Group 5. - Amendments made by the present Government which are supported by Tariff Board reports.

Division 6. - Metals and Machinery

Item 176, sub-item (f1, 2) - (f2) Refrigerators and refrigerator parts, ad val., British, 65 per cent.; general, 75 per cent., upon which Senator Hardyhad moved -

That the House of Representatives be requested to amend sub-item (f2) by inserting after the word “ refrigerators “, the words “ for household use, not exceeding 14 feet cubic capacity “.

Senator HARDY:
New South Wales

– Last night I explained that refrigerators for commercial use and refrigerators for household use were so fundamentally different in constructional principles that it was commercially impossible to manufacture both types with the same plant, and that as the latter are . a necessary adjunct of households, a reduction of the duty on them would bring their price within the means of the average householder. The use of these machines has a very big bearing on the health of the community. Food costs are reduced, and such foodstuffs as milt, meat, butter, &c, are kept in excellent condition throughout the hot weather. Moreover, the machines are very economical to run. In the United States of America a mechanical refrigerator of 4 feet cubic capacity can be bought for £23, whereas in Australia a machine of similar type and capacity cannot be bought for less than £70.

Senator McLachlan:

– To what kind of machine is the honorable senator referring ?

Senator HARDY:

– To the ordinary, machines of 4 feet cubic capacity for household purposes. They are operated by a thermostat, which automatically cuts off the electric motor when the tempera- .ture has been reduced to a certain point, and puts it into operation again when the temperature rises. The Australian manufacturers can make satisfactory refrigerators for use iu . butcher shops, hotels, soft drink shops, &c, because the unit, has to be specially designed for the premises. Ordinary household refrigerators, however, are of standard design and sizes, and in this field the Australian manufacturers are unable to compete. The American manufacturers of “ Frigidaires “ and other machines of the kind give a three years’ guarantee with each unit, but I do not think that any Australian manufacturer gives such a guarantee. On the household units, which should be part of the equipment of every home, even the British duty is 55 per cent. If we add exchange - which, by the way, the Tariff Board is taking into consideration in spite of the Government’s recommendation - the duty comes to approximately 85 per cent. Then, of course, there are transport and insurance charges on top of that. I want to see the price of these refrigerators so reduced that the ordinary householder with limited means will be able to possess one. At present they are within the reach only of comparatively rich people. The man on £4, £5, or £6 a week has no chance of owning one. We have in this chamber honorable senators who constantly proclaim that they are fighting for the interests of what they call the labour class. Here is an opportunity to enable the man with moderate means to possess something which is necessary to’ the healtharid comfort of every home. The total production of household refrigerating units in Australia does not exceed in value £400,000 a year, even under a protective duty of more than 80 per cent. Surely honorable senators can see that, by maintaining these high duties, we are’ penalizing the great mass of the people, and preventing them from possessing what is practically a necessary.

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

– I am not sure that the object which Senator Hardy has in mind would be achieved even if his request were agreed- to, but we can discuss that later. The honorable senator’s contention is that household refrigerators are something altogether apart from commercial refrigerators. That is true up to a point, because there is no association between large refrigerating plants employing ammonia, and used in butcher shops, fishmonger shops, &c, and the ordinaryhousehold unit. The refrigerators used in cool-drink shops, however, are, I understand, exactly similar in construction to the ordinary household article. Moreover, I am informed that one of the most successful manufacturers of household refrigerators in Australia, a firm operating in South Australia, has for some time past been giving a three years’ guarantee in respect of all the machines he makes.

Senator Hardy:

– Is that in respect of automatic machines?

Senator McLACHLAN:

– I am not informed concerning the technicalities of the matter. The Tariff Board report on this item was made t on the 4th September, 1931, before the decision not to take exchange into consideration had been come to: This is an important industry, and has won the confidence, not only of the Tariff Board, but of the departmental officers who have been policing the tariff. Notwithstanding the fact that the local manufacturers practically have the market t’J themselves, they have consistently reduced their prices until the machine, which formerly sold at £69, is now on the market at about £56.

Senator Hardy:

– What is the cubic capacity of the household machines which are being sold at £56, and are they entirely automatic?

Senator MCLACHLAN:

– I cannot say at the moment, but I shall try to furnish the honorable senator with the information as I go along. In order to show how reasonable are the prices charged by the Australian manufacturers, I quote the following table of prices for electric refrigerators in Austrafia and in England, the prices in both cases being given in Australian currency: -

The Australian prices include- sales tax at the rate of 6 per cent., and a threeyear guarantee is given with the Australian machines, whereas, with the English refrigerators, a guarantee of one year only is given.

This item was referred to the Tariff Board by the Scullin Administration. Very heavy imposts were placed on the machine, the specific duty ranging from 100 to 130 per cent. The present proposal increased the rates of duty which operated under the 1921-30 tariff by 10 per cent. British, and 15 per cent, general. As compared with the proposals of the previous Government, it reduces the ad valorem duty under the British preferential tariff by 5 per cent., and eliminates all the fixed rates of duty imposed on the component parts. The practical effect of the present resolution is to reduce the rates from an ad valorem equivalent under the last Government’s proposals of general average of 130 per cent., to 55 per cent, and 75 per cent. The British preferential rate contained in the present proposals is the same as that recommended by the Tariff Board, but the general rate is 10 per cent, higher. The Government’s reasons for departing from the recommendation of the Tariff Board are: -

  1. The adoption of the board’s recommendation would result in a reduction of the margin of preference enjoyed by British manufacturers under both the 1921-30 Tariff and the last Government’s proposals. The Government has, by the retention of the 75 per cent, under the general tariff and -a reduction to 55 per cent, under the British preferential tariff, actually increased the margin of preference by 5 per cent., making a total margin of 20 per cent., which is in accordance with the Ottawa agreement formula.
  2. The ever present danger to Australian manufacturers of dumping of surplus and end-of-season stocks from the United States of America.

The Tariff Board’s reasons for recommending increased rates of duty were: -

  1. There are fourteen firms engaged in the manufacture of these goods in Australia, and the intense nature of internal competition keeps prices to the public low.
  2. Approximately 2,000 mcn are engaged in the manufacture, sale, and maintenance of these goods.
  3. Expressed in the terms of retail prices in normal times a market varying between £500,000 and £600,000 exists, consequently there is adequate scope for economic manufacture.

A remarkable feature of the development of this industry is the consistent reductions in selling prices which have been effected with the growth of manufacture. The Tariff Board states that the duties operating in the past had no relation to the selling price, as the refrigerators were sold in direct relation to production costs. A recent development is the manufacture in Australia of non-mechanical refrigerators which can be operated without electricity. These are manufactured to meet the needs of the country communities which have no electric current supply. Regrigerators of this type are selling at very moderate prices. The present duties represent a tremendous reduction as compared with’ those under the Scullin tariff, but the industry has demonstrated that it is still capable of carrying on, and of reducing its prices. The Tariff Board in its report speaks of the efficiency of. the industry in Australia. There -is room for it to expand, as the demand for refrigerators is steadily growing. Whether the use of these machines is, or is not, good for the health of the community, there is no doubt that they increase the general level of comfort, and help to preserve food. The board, in its conclusions, states -

There is little doubt as to the ability of Australian manufacturers to meet the requirements of the Commonwealth in both household and commercial types of mechanical refrigerators. As ii matter of fact, fears were expressed at the inquiry that the number of manufacturers engaged in or contemplating the production of refrigerators in Australia is greater than is justified by the likely demand. Mr. J. Bryden Brown, representing the Electricity Meter Manufacturing Company Limited, after expressing the view that the manufacture of refrigerators is an industry for concerns with substantial resources, stated that his company alone could supply all the Australian requirements.

Dealing with the efficiency of the local production of these machines the board says -

As a result of the evidence tendered at the inquiry, and of independent investigation made, the board is satisfied that the quality and efficiency of locally-manufactured units are good . . .

As already stated, the board is satisfied as to the quality and efficiency of locallymanufactured refrigerator units. The board also recognizes, however, that with an industry such as that under consideration where development is proceeding, and changes of design are likely, a manufacturer with a small output and limited resources is at a disadvantage.

Referring to the effect of these duties on employment, the board continues -

The firms engaged prior to the imposition of the proposed duties in the manufacture of cabinets for use in conjunction with imported units complained at the public inquiry that the loss of employment in their industry consequent upon the operation of the rates had been very serious. It is obvious that a considerable decrease in the cabinet-making business would have eventuated apart altogether from the alteration of the duties. Furthermore, some of the work lost to firms previously engaged in the manufacture of cabinets for imported models has now gone to local concerns manufacturing refrigerators, and who are making their own cabinets.

The board opposed the imposition of exceedingly high rates of duty, and dealt with the extent of protection that it considered necessary for this industry. Its report further states -

Reference has already been made herein to the non-mechanical type of refrigerator. The hoard recognizes that this type of refrigerator could, under the duties now being recommended, be sold at prices lower than those at which the mechanical type produced locally: could be sold.

The board dealt at some length with, machines of a non-mechanical type. It made a thorough investigation of the whole position.

Senator Hardy:

– Is a unit being manufactured in Australia possessing dehydrating chambers?

Senator McLACHLAN:

– I am not familiar with all the technical details, but I do not imagine that such a machine would be required for ordinary household use. The board considers that the industry is being efficiently conducted in the large capital cities. Brisbane has a most efficient factory for the manufacture of refrigerators, and these are being sold there at prices that are rather astounding when compared with the prices charged in some of the other States. Adelaide has two of these factories. A large company is operating in Melbourne, and another well-known company is manufacturing these machines in Sydney. The local industry, probably, has to pay more than overseas manufac- ‘turers for some of its raw material, but that is- incidental to the protectionist policy. 1 understand that some expansion of the industry is taking place in Great Britain. Refrigerators were the subject of discussion at the Ottawa. Conference, but the expectations in regard to certain improvements were not realized for a year after the Tariff Board furnished, its report, the bulk of the refrigerators used in Australia being then imported from the United States of America. As a result of a departmental inquiry, it has been ascertained that the following mechanical and non-mechanical types of refrigerators are made in Australia : -

Mechanical Type. “ Gulbransen “, manufactured in Adelaide. “ Bedell “, manufactured by Bedell Engineering Company, Sydney. “ Serve. “, manufactured by Metters Limited, Sydney. “ Kelvinator manufactured by Clyde Engineering Company Limited, Sydney. “ Amatice manufactured by Mauri Brothers and Thomson Limited, Sydney. “ Electrice “, manufactured by Electricity Meter Manufacturing Company Limited, Sydney.

Non-Mechanical. “ Penguin “, manufactured by Richard Foreman and Son Limited.

Hallstrom’s Chemical Refrigerators, Willoughby, New South Wales

Beaumont and Company Limited, Paddington, New South Wales

In addition to the brands that I have mentioned are a number of others that departmental officers have reported on from time to time. Those that I have already mentioned are all designed for household purposes. They vary in capacity from 4 cubic feet to 12.7 cubic feet. I am not able to speak on the subject of dehydration in relation to refrigerators; but, if the suggestion be that the chambers are wet, I can assure Senator Hardy that that is not so. They are all dry, and I know of no local manufacturer of refrigerators for dehydrating purposes, which, I understand, is a commercial activity.

Senator COLLINGS:
Queensland

– Brisbane has a most efficient refrigerator-making factory, and I have had the interesting experience of closely inspecting its work. There is no doubt that it turns out excellent machines suitable for household requirements.

Senator Hardy:

– Are they fitted with the dehydration, process?

Senator COLLINGS:

– I shall get complete information later on technical points of that kind. I can say from personal knowledge that the industry is being efficiently conducted in Brisbane, and every part of the refrigerator, except the. motor, is made locally. Under the protective tariff, the factory has extended its plant, and the only reason for not making the motor in Australia is that this branch of the work is more or less in the experimental stage. The factory has installed complicated machinery for the express purpose of carrying out all the other operations in the manufacture of refrigerators. It is making, not only the requisite metal parts, but also cabinets of excellent designs; in fact, the “workmanship is so good that the Brisbane factory is producing a better article than, the “ Frigidaire “ machine. I have seen the various parts of this imported machine, and, having compared them with the corresponding parts which are embodied in the refrigerator made in Brisbane, I consider that the comparison is all in favour of the locally-made machine. Like all things made in the United States of America, shoddy material is used wherever it can be covered up so that the uninitiated will be deceived.

Senator Crawford:

– Every engineer knows that American-made machinery lacks finish.

Senator COLLINGS:

– That is so. I am not an engineer; but I have at least ordinary Australian intelligence, and a capacity to compare two articles when the defects of one are pointed out tome. The Australian-made machine indicates honest workmanship from start to finish. In his opening remarks, Senator Hardy was more than usually astute. As he unfolded his tale,, he explained the need for a machine of a certain cubic capacity, having this and that attachment. All the time he was setting out to make it impossible for any one to champion the Australian-made article. Speaking of the Australian-made machine, he asked : Is it so and so ; is it of this or that capacity ; is it automatic; is it operated by electricity? I can tell the honorable senator that the machine of which I speak will do all that any other machine will do.

Senator Hardy:

– Is it electrically operated ?

Senator COLLINGS:

– I shall describe the machine later.

Senator Hardy:

– What is its trade name?

Senator COLLINGS:

– I shall satisfy the honorable senator’s curiosity before I sit down. I have seen this machine at every stage of its manufacture, and, what is better, I have seen it in the homes of my friends, where it has given complete satisfaction. I do not possess a refrigerator, for there being only two in my family there is no great need for one. Moreover, I am not yet convinced that these machines are really hygienic. In the matter of price, the Australian machine can hold its own with the best imported refrigerator. Householders who use the Australian machine have found it entirely satisfactory. American refrigerators are extensively advertised in this country; our cities contain hundreds of hoardings on which are advertisements of the “Frigidaire”, and, naturally, people who purpose installing refrigerators in their homes are predisposed to buy one of that make. The machine mentioned by Senator McLachlan - the “Electrice” - is now being more extensively advertised, and householders scarcely know whether it is this make of refrigerator or the “Frigidaire”, which i3 locally made. The Australian-made machine compares more than, favorably with the imported refrigerator, both in quality and price.

Senator DUNN:
New South Wales

– I thought that this item would have been passed after the Minister had given his explanation, but since some honorable senators still seem not satisfied, I feel impelled to speak. Senator Hardy put forward the case for the refrigerator known as the “ Frigidaire,” manufactured in the United States of America, His remarks make me think that there is a nigger in the woodpile. I agree with the honorable senator that all these refrigerators are too costly. The majority of the workers of this country are in receipt of the basic wage or thereabouts, and cannot afford to buy refrigerators. Their knowledge of them is, for the most part, gained from the picture screen on Saturday nights where they see them depicted in the homes of the American people. If the poorer people of Australia have any cooling system at all in their homes, it is some kind of ice chest into which a 6d. block of ice is placed from time to time. The inability of the lower-paid workers to purchase this means of keeping their food fresh for an extended period, should not, however, prevent others from obtaining refrigerators made in Australia. At different times, I have seen various makes of refrigerators demonstrat’ed by their selling agents. I have also visited the up-to-date factory at Mascot, Sydney, where the “ Electrice “ and “ N.S.T. “ refrigerators are made. The Minister for Trade and Customs would do well to arrange a conference of Australian re”frigerator manufacturers, with a view to having these necessary articles manufactured under mass-production methods, and sold to Australian householders at reduced prices. The process of dehydration, as used in household refrigerators, is merely the extraction of moisture and heat from the air in the cooling chamber. The extraction of sugar from the sugar cane juices is the result of the operation of this process. ‘ Evaporated apples are obtained by the same process, and if Senator Payne were here he could describe the process in detail. In Australia, other systems of cooling are more common than the dehydration process. In some instances cold air currents are used; in others, the Tange process; while many people prefer the Argentine chilling process, or that of circulating brine through pipes. Senator Hardy caused me to wonder whether the honorable senator is an agent for the particular kind of refrigerator which he advocated.

Senator Hardy:

– I do not handle anything in connexion with the “ Frigidaire “.

Senator DUNN:

– The “ Electrolux “ is made by a Swedish firm, better known as the makers of the “ Electrolux “ vacuum cleaner. When the British manufacturers of refrigerators made oUt a strong case for British goods in the House of Commons, this Swedish firm established branch factories in Britain. This firm employs the dehydration process, by which ice is obtained through the use of heated gas.

Senator Hardy:

– Will the honorable senator explain to the committee the nature of the dehydration chamber in the ordinary household refrigerator?

Senator DUNN:

– As I have said, the “ Electrolux “ people have adopted the dehydration process, which is merely the separation of the various elements by the utilization of mechanically generated currents which are either extremely hot or intensely cold. Any honorable senator who wishes to know more of this process has only to consult one of the salesmen employed by the firms which sell refrigerators. It may be that Senator Hardy would give a different description of the process of dehydration from that which I. have given, but, however the system may be described, one of two methods must be used - the application of either extreme heat or intense cold. In addition to the refrigerator made by the “Electrolux” people, there is the General Electric system of the United States of America, which has its motor outside the cool chamber. That make of refrigerator is sold in Sydney by Warburton, Franki Limited. The component parts are imported unassembled from the United States of America, and later are assembled in the vicinity of Sussex and Erskine-streets, Sydney. Is it a fact that some manufacturers of radio receivers - for instance, the concern which markets Gulbransen products - also manufacture refrigerators ? In all friendliness, I ask Senator Hardy whether the enterprise is radio and refrigerators or refrigerators and radio? Admittedly, the price of these articles is too high, and the people of Australia should be given an opportunity to purchase them on a more reasonable basis. I have indicated u method by which that can be done.

Senator HARDY:
New South Wales

– I regret that Senator Collings is temporarily absent from the chamber, as I should like to congratulate him on his enthusiasm. But I cannot compliment him on his logic, for, despite his claim that he had visited the Brisbane factory of a firm which is manufacturing refrigerators, had spent some time analysing the component parts of the Australian and imported articles, and had seen thousands of these articles being sent out for distribution, he was unable to give the trade name of the local refrigerator to which he referred. With great assurance, the honorable senator said that the Australian units are infinitely superior to the foreign ones. With all humility, I suggest that only an engineer could make such a pronouncement, after having conducted exhaustive chemical and other tests of the respective units.

Let me analyse the statement that thousands of refrigerators are being made in Brisbane and sent out for sale. At a most optimistic estimate, the number of household refrigerators sold in the whole of the Commonwealth could not be placed at higher than 2,000 per annum.

The same illogical attitude has been adopted by members of the Lang group in this chamber, for, while they supported a reduction of the duty on films, claiming that that would benefit the interests of the class they represent-

The CHAIRMAN:

– Order ! ‘

Senator HARDY:

– I am merely demonstrating the illogical attitude of certain honorable senators who voted for a reduction of the duty on films, but now refuse to support a reduction of the duty on a household necessity - refrigerators.

With all due deference to the Tariff Board, I submit that its report is not based on fact. Take for instance, its reference to that most vital matter, the use of refrigerators in Australia - the existing sales market. Obviously, no one would begin to manufacture an article until he had analysed the prospective market - which, by the bye, is the greatest problem confronting Australia to-day - and ascertained whether saturation point would be reached before production efficiency was achieved. Yet the following statement appears at page 10 of the Tariff Board’s report: -

page 2884

QUESTION

AUSTRALIAN REQUIREMENTS AND PRODUCTION

Estimates of Australia’s requirements of the refrigerators under consideration were tendered in evidence and these ranged from £350.000 to £500,000 per annum.

As already stated herein, official statistics do not’ record importations of refrigerators separately. Further, much of the cabinet work for imported units is constructed locally. It is, therefore, impossible to arrive at any exact figure of Australian requirements by taking importations in conjunction with the output of local refrigerator manufacturers. ,

Senator HARDY:

– I know that it was done by the application of a formula j but not even the most optimistic manufacturer would admit the soundness of the basis employed.

Do honorable senators honestly think that it is necessary to have such a tremendously high fiscal wall to enable a unit such as this to be produced in Australia? I confess that I entertain doubt as to whether refrigerators can be manufactured economically in this country; because of the limited demand. Why should we not allow people to avail themselves of the products of plants in other countries, which have reached such a high standard of efficiency through having to supply a world-wide market, that the price of their refrigerators is within the reach of the average householder? So that I may substitute a more suitable amendment, I ask leave to withdraw my request.

Bequest, by leave, withdrawn..

Request (by Senator Hardy) proposed -

That the House of Representatives be requested to amend the item by adding to subitem (f) the following paragraph: -

Refrigerator units for household purposes, but not including cabinets for same, ad’ valorem British, 20 per cent. ; general, 374 per cent.

Senator COLLINGS:
Queensland

– When I was speaking on this subject a few minutes ago, although 1 was practically certain as to the correctness of the information that I was giving to honorable senators, I was not able, at the moment, to substantiate it, or to give the details required by Senator Hardy. When I visited the Brisbane factory to which I have referred, I did not contemplate that I should be engaged in a discussion such -as this, and, consequently, did not commit to memory the particulars that have been asked for. The firm in question is Waugh and Josephson Limited, which also has a big branch in New South Wales, and I have’ just been in telephonic communication with the general manager and technical manager of the company, and am able to give the

Particulars sought by Senator Hardy, ho. name of the refrigerator that is manufactured by the company is the “ W. & J. “.

Senator Crawford:

– Does not that firm manufacture other articles besides refrigerators?

Senator COLLINGS:

– Yes, but it has a department which is exclusively used for the manufacture of refrigerators, and the Brisbane branch also builds cabinets for these units. The machine made by this company is being sold in open competition with the imported article. In the same department in which it makes its household refrigerators, the firm also manufactures commercial machines, which are used by butchers and cold stores, and for other purposes. They are operated by electricity and automatic. The technical manager informed me that he did not know what Senator Hardy meant by a dehydration process-

Senator Hardy:

– That does not surprise me.

Senator COLLINGS:

– It certainly surprises me that Waugh and Josephson should continue to employ that technical manager when a gentle man, with the transcendent genius of Senator Hardy is available. That man was previously employed for. ten years by this firm which at present commands the greater part of the. Australian refrigerator trade, and he says that if the imported machines have what Senator Hardy calls a dehydration process, his firm’s machines have it also. He states that he does not know of any such process as dehydration by that name in connexion with the trade.

Senator Hardy:

– What is the price of the unit to which the honorable senator is referring’?

Senator COLLINGS:

– It is being sold to the householder, including service, for £62 10s.

Senator Hardy:

– Does the honorable senator suggest that a man with an income of £6 a week could purchase such a machine?

Senator COLLINGS:

– I know that these machines have been installed in middle-class homes.

Senator Hardy:

– The machine should be sold at from £38 to £40.

Senator COLLINGS:

– The American machines are being sold at considerably more than that price.

Senator Hardy:

– In America they are not.

Senator COLLINGS:

– I am referring to prices in Australia. There is no appreciable difference between the “ Frigidaire “ and the Waugh and Josephson machine, and there is no guarantee for three years with, the American- refrigerator.

Senator Hardy:

– That statement is entirely wrong.

Senator COLLINGS:

– It is..the. statement made to me’ by a man. who has been working in the industry for the last -ten years. The Australian manufacturers give a guarantee of three years with their machines; but, to be perfectly fair, let me say that my information is that by mutual arrangement the Australian manufacturers are ‘ not giving that guarantee unless it is demanded, although they are prepared to give the service, because they know that their machines are reliable.

Senator BRENNAN:
VICTORIA · UAP

– Are we not considering the necessity for these extremely high duties, and not whether the machines are made here?

Senator COLLINGS:

– I am glad that the honorable senator has reminded me of that, phase of the question, but before I deal with it let me say that Senator Hardy’s remarks respecting the superiority of the imported machine, the inferiority of the Australian machine, and their relative prices, are not in accordance with fact. In reply to Senator Brennan, I may say that there is little difference, if any, between the price of the Australian household refrigerator and that of the imported machine. The Minister in charge of the bill has given figures showing the number of factories operating in Australia, and the number of operatives employed in them. Thousands of these machines are being manufactured in Australia, and hundreds of men are employed in the industry.

Senator Hardy:

– How many of these machines are being sold in Australia today?

Senator COLLINGS:

– I do not know, but I shall ascertain that information for the honorable senator. The local industry is efficient, and is not exploiting the people. The gentleman with whom I have recently been in conversation - the technical expert of Messrs. Waugh and Josephson - says that the local machine is a. better and more reliable article than the imported machine.

Senator Hardy:

– Does the honorable senator know how many Waugh and Josephson units have been installed in Australian homes?

Senator COLLINGS:

– The honorable senator, in his opening remarks, said that his only concern was to make refrigerators available to the working class households. Let me inform him that I am a better authority than he is on the contents of a working man’s home.

Senator Hardy:

– I dispute that assertion.

Senator COLLINGS:

– Every one of the honorable- senator’s statements in respect of this industry has been incorrect. The average household cannot afford to install a refrigerating machine, and most of the- working class people have to be satisfied with ice chests, but I do know of working men who have, at considerable sacrifice, installed refrigerators in their homes. . Senator Hardy has asked how many “ W. & J. “ machines have been installed in Australian homes. How many honorable senators have refrigerators in their homes? We must not forget that this industry has been established only during recent years. A factory cannot, be built and equipped in a day, and before there can be any considerable sale of local refrigerators, the prejudice against an Australian-made article must be broken down. This industry is employing several hundred operatives, and is working efficiently without making undue profits. We on this side of the chamber stand, and have always stood, for Australian-made articles, the Australian workmen, and Australia as a nation.

Senator HARDY:
New South Wales

– Senator Collings has stated that there are at least 200 operatives engaged in the manufacture- of refrigerators. Let me refer the honorable senator to the Tariff Board report, in which it is shown that J. Bryden Brown, representing the biggest manufacturer of Australian machines, made a statement on behalf of his own and the following firms : - Waugh and Josephson Limited, James Budge, K.F.B. Foundry, Darlington Engineering Company Limited, and Purcell Engineering Company Limited; and in it he said that the total number of employees engaged by those companies in the manufacture of refrigerators was 120.

Senator McLachlan:

– What is the date of that report?

Senator HARDY:

– It was made by the Tariff Board in 1931.

Senator McLachlan:

– The honorable senator’s statement is scarcely fair.

Senator HARDY:

– My statement is as fair as those of Senator Collings. That honorable senator seems to think that he is the only senator who is interested in working men’s homes, but I seem to be considerably more interested than he is in ensuring that these machines . are made available to workers at a reasonable price. I first asked the honorable senator to supply the name of the machine to which he referred, because I knew that he did not know it, otherwise he would have stated it. I subsequently asked him how many “ W. and J.” machines had been installed in Australian homes, because I knew that not many of them had been installed owing to the fact that the manufacture of the household unit had been begun by the firm in question only during the last twelve months. Senator Collings wi’l ascertain from the Tariff Board’s report that the cost of a commercial refrigerator, which is much more costly than a household machine, is from £300 to £400, while that of a household machine is about £65, and the value of the total output in Australia is from £350,000 to £400,000. A simple calculation will show that the number of household units sold in Australia is more like hundreds, and not thousands, as stated by Senator Collings. A man with a medium income cannot afford to purchase these machines when the duties are 55 per cent’. British preferential and 75 per cent, general. That is a prohibitive tariff, particularly when taken in conjunction with exchange and primage. There cannot be any great demand for refrigerators until the duties have been considerably reduced.

Senator O’HALLORAN:
South Australia

– It seems that the discussion of this innocent subject of refrigerators and parts has provoked much warmth in this chamber, and I desire to pour a little oil on the troubled waters, and to state calmly and dispassionately the experience of South Australia respecting the manufacture of refrigerators. The only manufacturer in South Australia is David Garvie, of Unley. He makes a well known refrigerating unit for household and other purposes, which has a wide sale in that State, and, as a result of the establishment of that ‘business, the cost of these units, both household and commercial, to the users in Australia has been materially reduced. I have not had an opportunity to ascertain* what their cost has been during the last twelve months; but I do know that in the early stages the competition of the local with the imported article resulted in very substantial reductions of the cost, and refrigerators were brought within the reach of many people who formerly could not afford them. I know also, despite the confident assertion of Senator Hardy to the contrary, that in South Australia, at all events, this type of refrigerating unit is to be found in many of what he would term the ordinary working-class homes. Senator Hardy quoted from the Tariff Board’s report, and said that Mr. J. Bryden Brown, Director of Electricity. Meter Manufacturing Company Limited, had stated in evidence that only 170 men were engaged in the manufacture of these units. If the honorable senator will turn to page 5 of the report, he will there. see set out the main points of evidence tendered at the public inquiry held by the board. The board ha3 extracted the following points from the evidence of Mr. Brown : -

He estimates the value of refrigerators consumed in Australia per annum as £500,000, based on retail selling prices.

Mechanical refrigerators are being manufactured in Australia by about twelve firms which, in the busy season, employ approximately 2,000 men in their manufacture and distribution. This employment is in addition to that involved in the production of the raw materials used.

So much for Senator Hardy’s confident assertion, based on an alleged quotation from evidence tendered to the board. Mine is an exact quotation. If some honorable senators seek to further their arguments by misquoting evidence published in reliable documents, and others are obliged to expose and refute the misrepresentation, where shall we end? The summary of Mr. Brown’s evidence also contains the following: -

Manufacture by his company, even under the rates of duty ruling prior to the tariff proposals under consideration, resulted in the price of imported machines being reduced. There is every prospect of the selling price of the small Australian household machine being still lower than that at the time of the inquiry.

That bears out my contention in regard to the position in South Australia - that competition by the local manufacturers of these machines has had the effect of reducing materially the price of the imported article. Mr. Brown also said -

His company is constantly experimenting and improving its products, and keeping in close touch with the latest developments in the United States of America. It has spent £40,000 in pioneering the industry in Australia.

I know a little in a general way of what is being done by the Electricity Meter Manufacturing Company Limited, because, in 1931, in company with a number of other honorable senators, some of whom are in the chamber at the moment,

I visited its works at Mascot, New South. Wales. In the course of a fairly extensive inspection, we were shown the different methods of manufacture adopted, and the types of machine made by the company. At that time, it turned out five machines that were sold under different names. The manager informed us that, as the result of the displacement of the imported article, many firms, which had formerly imported and sold machines under their own trade names, had sought and obtained like facilities from his company. We were shown machines that were made for distributors in Sydney and Melbourne, which bore the name, not of the manufacturer, but of the distributor. Senator Johnston, who ordinarily is inclined to regard the protectionist policy with a certain degree of suspicion, took part in that inspection, and I feel sure that he will agree that the methods of the company disclosed efficiency and a genuine desire to serve the public at the lowest possible cost.

Senator E B Johnston:

– That is so; but I do not think that it needs as high a duty as is here provided.

Senator O’HALLORAN:

– Senator Hardy made the further confident assertion that the Tariff Board had fixed the value of the Australian output of this type of machine at from £350,000 to £400,000 per annum.

Senator Hardy:

– No; I said that the Tariff Board had mentioned a different figure.

Senator O’HALLORAN:

– I submit that, in his reply to Senator Collings a few moments ago, Senator Hardy stated that the Tariff Board had quoted the value at from £350,000 to £400,000 per annum. The comment of the board on this aspect of the matter reads as follows : -

On this basis the board has arrived at a figure of between £500,000 and £600,000 per annum in terms of retail price as an estimate of the requirements under normal conditions. In the opinion of the board this estimate is not likely to be realized for some years, due, amongst other causes, to depression prevailing in trade generally.

I presume that this tariff is designed to operate not only for to-day or to-morrow. We were informed in the early stages of its implementation that it was a scientific tariff so iron-bound that it would be incapable of being shot to pieces. I admit that many of the items in it have not been reported upon by the Tariff Board in accordance with the formula laid down by the Government. In this case, however, that formula has been applied, and a full report has been furnished by the board after an exhaustive investigation. Thus, all the requirements of the Government’s tariff-making machinery have been observed. The point stressed, very strongly by the manager of the Electricity Meter Manufacturing Company Limited when the inspection to which I have referred was made, as well as by Mr. Garvie, and others who have interviewed me on the matter, is that there is a grave danger of out-of-date and off-season machines being dumped in Australia by manufacturers in the United States of America, on account of the fact that their seasons do not coincide with ours. The surplus product of their big works which remains unsold at the end of the summer is available for disposal in Australia during our summer, and it pays many of them to sell those surplus stocks at any old price, rather than carry them over into the succeeding year, when they may have to break them up and reassemble them, in order to conform to some new fashion or design which is ‘a special feature of the new season’s product. That is exactly what is happening. Consequently, this industry, like many other industries that handle goods, the demand for which is seasonal, is entitled to the rates of duty recommended by the Tariff Board. It is a comparatively large industry, employing in manufacturing and distributing operations approximately 2,000 men. That figure makes no allowance for the number of employees in the cabinetmaking and other subsidiary industries, and in the production of the raw material which it requires. Senator Hardy professes a desire to protect the Australiancabinetmaking industry, and on that account has specifically excluded the’ cabinets from his proposal.

The CHAIRMAN:

– The honorable senator has exhausted his time.

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

– It is not necessary to include in the request the reference to cabinets,, because they are covered in another way, and I suggest that those words he left out.

Senator Hardy:

– I included them so as to make it clear that I desired to reduce the duty only on the compressor unit and, the refrigerating equipment. I accept the Minister’s suggestion.

Request - by leave - amended to read - (3.) Refrigerator units for household purposes, British, 20 per cent.; general, 37i per cent.

Sitting suspended from 12.^5 to 2.15 p.m.

Senator DUNN:
New South Wales

– Since I have been a member of the Senate, I have witnessed a number of cover-ups. [Quorum formed.] I congratulate Senator Hardy on his cover-up in attempting to convince the committee that he is anxious to assist the working man. When Australian manufacturers commenced to make refrigerators under the protection the tariff afforded, the refrigerator cabinets were made of wood; but to-day the makers have adopted the General Electric Company’s principle, and are using pressed steel. It is interesting to note that the motor, magneto, brine system, fly wheel, belt, and the circulating pipe worm are now made in Australia. Senator Collings, who visited a refrigerator plant in Brisbane, will realize that the main essentials of a refrigerator are the compression unit and the pipe worm. Can Senator Collings explain exactly what occurs when the motor is set in . motion which causes refrigeration? Senator Hardy tried to convince us that the parts of a refrigerator cannot be economically manufactured in Australia; but, if the committee desires, it would be easy to arrange for a practical demonstration by an Australianmade refrigerator within 48 hours. If honorable senators were able to inspect the Australian machine they would see that its construction is simple, and that all the parts can be economically made in this country.

Senator Hardy:

– Why are they so high in price?

Senator DUNN:

– They are too costly to be used by those with whom I associate. I was reared in Balmain, one of the principal industrial centres in Australia, and the only time that the people in that locality can obtain anything approaching the product of a refrigerator is on a Saturday night when they attend a picture show, and get a 6d. block of ice cream. Unfortunately, many Australian manufacturers are of the “ Get-rich-quick Wallingford “ type, who wish to be semi-millionaires at 50 or 55 years of age. That is not easy in this country. The Minister for Trade and Customs (Mr. White) should arrange a conference between the Australian manufacturers of refrigerators to see if the prices cannot be reduced. In a country where an- artificial cooling unit is needed for at least eight months of the year, a cheaper type of machine would be welcome. The average price of the Australian product is about £60, while the’ American machine is sold at from £78 to £100. I advise Senator Hardy to visit some of the warehouses in Kingstreet or York-street, Sydney, and arrange for a practical demonstration of the Australian machine. I believe that the machine manufactured by the Electrolux Company is the only one in which the dehydration process, which is brought about by gas heating and chemical action, is installed. I trust that the committee will reject the request proposed by Senator Hardy.

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

– Senator Hardy contends that a lower duty would reduce the price of refrigerators to such an extent that they would be in practically every home. Even if the duty were reduced to. the extent suggested, the machines would still cost over £50. Where is the working man who can afford luxuries of this sort? In the average worker’s home the Coolgardie safe is used. Those in a better position use an ice-chest, which is far cheaper to install and less costly to use. Refrigerators can be purchased only by those who have a fairly good income. The suggestion of the honorable senator that a reduction “of duty will be of benefit to the working man is so much eye-wash. The whole position is being carefully watched. I have already stated that in April the investigation officers of the Trade and Customs .Department reported on the efficiency of the industry, and said that prices have been reduced. Such investigations are being made with respect to a number of other industries which have a good hold on the Australian market.

Senator Elliott:

– Are the importations principally from the United States of America?

Senator McLACHLAN:

– In the last year for which I have the figures, 3,000 were imported from the United States of America and 727 from the United Kingdom. The production of the United Kingdom, however, has been extended slightly during the last two years. Another reason why the committee should reject the request is that if the schedule were amended as proposed, administrative difficulties would be greatly increased. How would the department be able to distinguish between refrigerators used for commercial purposes, and those for household use? A trader might buy a refrigerator for household use, secure its admission at the lower rate of duty, and then install it in his place of business. The adoption of the request would involve the department in a tremendous amount of policing.

Senator Dunn:

– Could not the Australian refrigerator for general household use be sold for about’ £30?

Senator McLACHLAN:

– Perhaps it could be sold for a little over £30, but only if the manufacturers obtained control of the market. But what working man would be able to afford even that sum for a refrigerator ?

Senator RAE:
New South Wales

– I am convinced by experience in other directions that a tremendous profit is made on new electrical machines. The “ Electrolux “ vacuum cleaner is now sold at one-third of its former price. The prices of other electrical appliances, through the expiry of patents, or because of competition, have dropped similarly. With anything like mass production, a frigidaire should be sold profitably at from £25 to £30, and it would then be within the reach of many people who cannot afford refrigerators at present. The best way to secure a reduction of the prices is to encourage local manufacturers, so that they will be able to produce in quantity.

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

AYES: 14

NOES: 20

Majority . . . . 6

AYES

NOES

Question so resolved in the negative.

Request negatived.

Sub-item agreed to.

Item 177 (a2) agreed to.

Item 178, sub-items (dI, 2, 3) (e) -

Motive Power Machinery and Appliances (except electric), namely -

  1. Crude Oil Engines . . .
  2. N.E.I., ad val., British, 45 per cent.; general, 65 per cent.
Senator MCLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

– When sub-item d was under consideration in the House of Representatives, the Minister for Trade and Customs, in response to certain representations, undertook that the sub-item would be referred back to the Tariff Board for review. As the board has not yet furnished its review of these further representations, I move -

That sub-item (d) be postponed. v

Motion agreed to.

Senator E B JOHNSTON:
Western Australia

– I move -

That the House of Representatives be requested to make the duties, sub-item (e), British, 20 per cent.; general, 40 per cent.

Although the sub-item looks innocent, it covers cylinder blocks, cylinder heads, connecting rods, crank shafts, cam shafts, sumps and oil cans, composition timingwheels of texolite, fabroil, celeron, &c. ; carburettor assemblies, fly wheels, valve inspection cover plates, vacuum tank assemblies, vacuum tank parts, and oil pump assemblies. Although it is possible for certain manufacturers in Australia to produce cylinder blocks and cylinder heads at an extremely high cost, the sale of- such parts is limited. This applies also to connecting rods, crank shafts and cam shafts. In regard to these, high production costs - owing to the large variety oi patterns and the small demand, coupled with limited sales - entirely preclude Australian manufacture. The die costs alone, spread over the few parts that would be needed for, say, twelve months’ requirements, would be so enormous as to place the purchase of the parts beyond the reach of the average machinery owner. The manufacture of cast and pressed steel oil pans or sumps, oil pump assemblies, oil pump housings, fly -wheels, and valve inspection covers, the sales of all of which are extremely small, requires dies and moulds, the cost of which spread over a very limited demand, completely prohibits local production. The vacuum tank assemblies, and the parts of chassis imported from overseas carry patent rights throughout the world, and for this reason manufacture in this country is problematic. Fabric timing wheels, suitable for motor vehicles, cannot be produced economically in Australia. In regard to carburettor assemblies and most of their component parts, the fact must be appreciated that the various makes of motor vehicles imported from British and foreign countries, use carburettors specially designed to conform to the requirements of the individual engines. It is impossible to have a standard type of carburettor for the multitudinous makes of vehicles, and as the makers of carburettors used in general equipment on imported vehicles protect themselves by patent rights, the production of these assemblies in this country appears to be precluded. I am assured by persons engaged in the automobile and engineering industries that most of these parts are only occasionally wanted, and almost in-* variably a particular imported article is required. Consequently, these high duties place a heavy burden on users. This remark applies also to the parts of stationary engines used on farms and irrigation plots. Little trouble is experienced with thesis engines, but if a part has to be replaced, the user has to pay an excessive price for it on account of the high duties.

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

– The recommendations of the Tariff Board in respect to this item are contained in its ‘ report of the 11th October, 1932. The only alteration, as compared with the 1921-30 tariff, is an increase of the general tariff by 5 per cent, to conform to the Ottawa agreement formula. The previous Government’s proposed rates were 10 per cent, higher than those now operating. The sub-item covers a1 large number of machines, and the number of employees engaged in their manufacture cannot be ascertained, the reason being that local engineers are also manufacturing other classes of machinery. The number engaged would, however, be considerable, and as most of the raw materials used are of Australian origin, the resultant employment in other Australian industries would be considerable. The Tarin* Board was satisfied that, where the demand justifies local manufacture, the proposed duties are adequate. Higher duties would be necessary only in cases where full advantage had to be taken of such duties, which would result in higher prices for the engines concerned, and it is considered that any increase over the 45 per cent. British preferential tariff would prove too burdensome upon other industries. The Australian manufacturers have attained to a high standard of efficiency, and their engines compare very favorably with those imported. Bylaw admission is granted on the machines coming within this item when they are not commercially manufactured in Australia. During 1930-31, under the previous Administration, goods to the value of £319,224 were admitted under by-law, out of a total of £614,645, and during the last financial year goods to the value of £133,075 were admitted under by-law out of a total of £242,754. Honorable senators will note that, in the concluding portion of group 7 of the tariff memorandum, the Government has given legislative effect, to a number of by-law admissions which had been previously granted under this sub-item. I appeal to Senator Johnston not to press his request. As I have explained, the sub-item covers a considerable number of’ machines. Some cannot be made in Australia, some, admitted under by-law, are duty free, while on others duty is chargeable. The departmental officers are at present preparing what they term a refinement of this sub-item. The long list of goods covered by it is being closely scrutinized, the object being to embody certain specific items in the tariff so as to avoid the delay, of which some honorable senator.? hare complained, in regard to by-law admissions.

Senator LYNCH:
“Western Australia

, - I understand. that previous occupants of the presidential chair did not make it a practice actively to engage in committee discussion of legislative proposals, but I am unaware that tradition makes that rule so sacrosanct as to prevent me from expressing my opinion upon matters which affect vitally the State which I assist to represent in this chamber.

Senator Sir Walter Kingsmill:

– Every President, in the last ten years, has spoken in committee when’ he considered it’ desirable to do so.

Senator LYNCH:

– If I followed what is regarded in some quarters as the traditional conduct of occupants of the presidential chair, I should be disfranchizing the people who sent me to the Senate. For that reason, I do not intend always to be silent when proposals in which the people of Western Australia are deeply interested are under discussion. Senator Johnston’s intention, I take it, is to get a clear definition of the goods dutiable under this generic sub-item which, in its present form, covers a considerable number of unmentioned machinery parts. All those who have had any experience of farm work know that’ motive power of some description is essential, and that the first cost of a machine by no means represents the total expenditure of the primary producer who purchases it.

Regard must be paid to the COSt of spare parts. If these are not obtainable at a reasonable price the cost of the machine itself may be very considerably increased to the farmer. The machines or parts which in this sub-item are not specified, are dutiable at 45 per cent. British, and 65 per cent, general. A previous government, holding the view that the farmers of this “ country were deserving of special treatment, exempted crude oil engines and parts required for farm work. By contrast, this Government, though doubtless’ it has every sympathy with our farmers, has imposed just about the highest duty it could think of.

Senator McLachlan:

– Which government exempted goods under this sub-item 1

Senator E B Johnston:

– Under the Pratten tariff the British duty on crude oil engines for farm work was 5 per cent.

Senator LYNCH:

– If the position of our farmers several years ago justified exemption from duty of crude oil engines required for farming purposes, the same consideration is doubly necessary to-day, because wheat, which, a few years ago, realized from 4s. to 5s. a bushel, is now quoted at about 2s. 8d. a bushel at railway sidings. Yet this Government imposes a duty in the general tariff, which is the effective rate, of 65 per cent. The present economic circumstances of our farmers justify very much lower duties than are imposed under this sub-item, so as to reduce production costs to the lowest limit possible. That their position is serious is clearly demonstrated in the fact that eighteen months ago over 400 farmers in Western Australia had abandoned their holdings. “I have seen some of those farms. I have seen what were once the habitations of farmers and their wives and children. The drift of population from the countryside to the cities has not yet ceased. Since I made an inquiry eighteen months ago, many more farms have been deserted, and it would not be wide of the truth to say that, in my State, 600 persons who, a year or two ago, were engaged in farming pursuits, have given up the struggle-to produce, under the stress of a policy of which this tariff is part .and parcel, Is it any. wonder that we hear complaints of congestion in our capital cities, and acute unemployment on every hand ? The duty in the general tariff on crude oil engines and parts is 65 per cent. As only one type of crude oil engine used in Australia is manufactured in Great Britain, the bulk of our importations come from the United States of America, and are therefore dutiable at the higher rate. This means an added burden on thepioneer land- worker. On the lighter soils of Western Australia, and in other parts of the Commonwealth, the use of horses for rolling down scrub is out of the question, because a decent farm horse costs about £40, and a team of eight is required. If, however, a farmer decided to use crude oil engines for motive-power, he is required, under this sub-item, to pay approximately £200 in duty before he can’ get on with the business of clearing his land. If this is the Government’s idea of encouraging land settlement, all I can say is that it does not appeal to my intelligence. I am the more puzzled at these higher rates on crude oil engines when I notice that some types of excavating machinery are dutiable at only 27 i per cent. British and 47^ per cent, general tariff. Why this unfair discrimination? Why should this additional penalty be imposed upon a mau who has sufficient courage to get away from the cities to carve a home for himself in the bush, and do his share in producing real wealth? On a modest computation, each person engaged in a basic industry supports at least five other adults. This can be seer in any mining district. Where 500 men are actually working in a mine, a settlement of anything up to 2,000 to 3,000 adults will be supported. Therefore, the 600 vacant farms of which I spoke mean that there are 3,000 more unemployed in the congested areas of Australia. Of course, if we wish to make it harder for our people to find employment, let us continue our present policy. The area under cultivation in Australia to-day is definitely less than it was a few years ago, and this is due to the fact that high costs are making it impossible for the farmers to carry on. In order to clear the land in outback areas, oil engines are essential. It is too expensive to use horses at up to £45 a head. It is time we got back to the state of mind when it was fashion able to ‘encourage settlement rather than to discourage it. There is only one English oil engine on the market that I know, but there are a dozen or more American machines, because in America they have specialized in their production. After the first eighteen months or so, when an engine begins to wear out, the user is faced with the problem of providing spare parts, and the usual experience is that before very long the cost of spare parts amounts to double, if not treble the cost of the original machine. A struggling pioneer cannot afford to pay 65 per cent, duty on spare parts necessary for keeping his engine in repair. In any case, why should this sacrifice be demanded of the man on the land, when those in morefavoured areas can import their requirements after paying ‘on them a duty of only 27 i per cent.? In regard to these matters, the Tariff Board seems tq make no pretence of intelligence. It does not hold the scales fairly, or encourage the more worthy sections of our population, by whom I mean the men who blaze their own track, and get away from the verandah posts, ‘ the electric lights, and from picture shows and other forms of unprofitable distraction. Upon them depends the security of those who live in the more-favoured areas. There are few enough to speak in this Parliament for the men of the outback, but plenty to represent those who live in- the more congested areas. If we continue our present insane policy, the worm will turn eventually.

The CHAIRMAN:

– The honorable senator’s time has expired.

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

– The second-reading speech delivered by the honorable senator who has just resumed his seat makes it necessary for me to elaborate my previous remarks. This item is at present- being reviewed by the Tariff Board. It is with the object of holding the scales fairly between those whom we have induced to embark in this industry, and the primary producers whom the board had firmly in mind when making its report, that we are delaying the imposition of these duties. Honorable senators may think that the present duties are in excess of those of the 1921-30 tariff. It is true that there were free admissions at one time, but that was permitted by Mr. Pratten in order to meet special circumstances. Before the term of the Bruce-Page Government came to an end, it was found that oil engines up to and including 100 horsepower were being’ manufactured in Australia of good quality, and were selling at satisfactory prices. Therefore, duties of 45 and 55 per cent, were imposed. The honorable senator seems to have forgotten that the Senate has already agreed to duties of 45 and 65 per cent, on machinery, n.e.i. The following is a list of the machinery which was admitted free under by-law in 1928-29 : -

Senator Guthrie:

– Are those machines still admitted free?

Senator McLACHLAN:

– Honorable senators, and members of another place, have made frequent representations to the Government that thereis undue delay by the department when application is made for the free admission of goods under by-law. The Government, therefore, is determined to amend the schedule to show clearly what items will be admitted free, and on what items duties of 45 per cent, and 65 per cent, will have to be paid, while the rest will be included at the end under an item n.e.i. I appeal to the honorable senator not to persist with his request, but to allow the Government to proceed with the arrangement of a scien tific tariff. Our desire is that all duties on these articles should bear a proper relation one to the other. It may be that eventually there will be some reductions, but it is necessary to see that no injustice is done to. the local industry. As I have said, complaints have been received that there has been too much delay when applications are made for the admission of goods free under by-law. It is necessary for the department to send an officer to inquire in every likely place whether the particular article is manufactured in Australia, and that takes time. However, when all items are properly classified in the schedule, there will be no uncertainty, and the prospective importer will be able to find out at once whether the article will be admitted free or not.

Senator Lynch:

– In the meantime, these high duties have been clapped on to spare parts.

Senator McLACHLAN:

– If the spare parts are not made in Australia, they should be admitted free, because that is the law.

Senator Brennan:

– Where is that provided for in the law?

Senator McLACHLAN:

– It is a bylaw under the Customs Tariff Act. Everything will be done by the department to minimize delay, and I ask honorable senators to support the Government’s proposals. .

Senator DUNN:
New South Wales

– The party to which I belong believes in developing the best market for the’ primary producers, and that is the home market. The Minister has replied to what he termed the secondreading speech of Senator Lynch, who suggested that Western Australia was the only State that has mallee scrub; but there are vast areas of mallee scrub in South Australia, Victoria and New South Wales. I am not familiar with the methods adopted for the rolling of this scrub in other States, but in New South Wales, a fly-wheel attached to a tractor is employed. The owners of tractors receive contracts for this work. I understand that a similar method is adopted in parts of Victoria and Western Australia; but it is wrong to assume that the inability of farmers in Western Australia to purchase oil engines for scrub- . rolling is due to the tariff. Senators

Guthrie and Lynch must know that engines suitable for that purpose would, probably, need to be 100 horse-power. The oil engines ordinarily used on farms are of a much lower horse-power than that. The Minister has pointed out that in one year over £70,000 worth of engines of kinds that are not manufactured in Australia were admitted free of duty. The corrugated furnaces to which reference has been made, and which are used in conjunction with boilers of the Lancashire and Cornish type, are mostly seen in country districts, where long wood is available and where coal is not so easily procurable as near the coast. High pressure steam boilers of the Thornycroft and Babcock type are not largely used in the country. The facts mentioned by the Minister dispose completely of the arguments advanced by Senator Lynch, who knows well that the kind of roller used largely in the mallee scrub consists of a hardwood log, or a concrete drum that has a spindle through it. In many parts of New South Wales, in districts in Victoria, and possibly in Western Australia, bullock teams are employed to draw these rollers. Senator Lynch must admit that bullock teams would be more serviceable in Western Australia than any

Other kind of traction. He said that he knew of 600 farms in that State which had been deserted. There are deserted farms in New South Wales also, yet will any honorable senator say that that is due to the tariff imposed by this or any other government?

Senator E B Johnston:

– Yes, absolutely.

Senator DUNN:

– How many oil engines are used on farms of 300 acres? Are farms of that size likely to be deserted because of the cost of oil engines? Senators Lynch and Johnston should be candid enough to say that men are walking off farms in Australia to-day because of the ramifications of high finance. I have always admitted that high tariffs are but a palliative in the economic warfare between the different classes that constitute a nation, and can take us only a certain distance along the road; but they constitute the only palliative that I know of to help the class which I represent in this chamber. I am not so much concerned about Senator Johnston as I am about Senator Lynch, who knows his working-class economics from the basis of production to the basis of profits, and is aware that the financial practices of th’e banks and the major oil companies are responsible for the desertion of farms in Western Australia..

The CHAIRMAN:

– The honorable senator must discuss the matter before the committee.

Senator DUNN:

– I resent Senator Lynch’s suggestion that the members of my party have no sympathy with the farmers. The following table shows the rates of duty imposed on “ motive power machinery, n.e.i.”, under which oil engines using kerosene, petrol, and other light spirit are classified : -

The following are the values of the import^ of these engines : -

All I ask for is fair play and just criticism, irrespective of the .political views that honorable senators may hold.

The CHAIRMAN:

– The honorable senator has exhausted his time.

Senator BRENNAN:
Victoria

– This is one of those items on which, in my opinion, the Government had an excellent opportunity to implement the Ottawa agreement in the terms in which I and others believe that it should have been operated. Although that agreement might not have been given effect by a general reduction of the British duties, that could have been done in exceptional instances. In considering this sub-item, we go back to the 1921-30 tariff, under which the duties were; British, 45 per cent., and general, 60 per cent. Under the Scullin validated tariff, the respective rates were 55 per cent, and 75 per cent., while the rates in operation immediately prior to the tabling of the tariff resolution of October, 1932, were, British, 45 per cent., and general, 60 per cent. The present proposals provide for duties of 45 per cent, and 65 per cent, respectively. Honorable senators will see that in no case since the 1921-30 tariff have we imposed a duty of less than 45 per cent, against Great Britain. Although a certain margin had to be preserved in accordance with the Ottawa agreement formula, it appears to me that this item provided an admirable opportunity to preserve that margin, not by raising the general tariff to a prohibitive rate, but by reducing the tariff against Great Britain to the extent necessary. The Minister said that the representatives of the Imperial Government at the Ottawa Conference knew what Australia was doing; but those of us who know what was doing at the conference only by what was done there, as revealed in the agreement, feel that an opportunity to make a friendly gesture to the Mother Country was not availed of. Instead, the general tariff has been raised to 65 per’ cent., and Senator Lynch has told us that the general tariff is the important one, because most of these goods come from the United States of America. This is a sub-item in which it is clear that the industrialists of Australia have prevailed against the primary producers.

A good deal has been said of the connexion between high tariffs and the antifederal feeling which exists in those States with comparatively small populations. These duties are particularly oppressive on a primary-producing State like “Western Australia. One would have thought that, in regard to those things which affect the means of livelihood of the man on the land, that sense of fair play which Senator Dunn has asked for would have been exhibited, and more consideration given to the rural workers, and, perhaps, less consideration to those belonging to the bigger voting battalions. Senator Lynch told us what has happened in “Western Australia ; he referred to the 600 or more primary producers who have been driven off their holdings, reminding me of the lines -

Near yonder copse, where once the garden smil’d,

And still where many a garden-flower grows wild -

Goldsmith also wrote -

A bold peasantry, their country’s pride, When once destroy’d, can never be supplied.

Senator Dunn said that the farmers referred to by Senator Lynch were driven off the land, not by the tariff, but by the ramifications of ‘ high finance in Australia. Yet the fact is that they were kept on their holdings much longer than otherwise they could have stayed there, because of the operation of what the honorable senator is pleased to call high finance. So long as these men were able to sell their wheat at from 4s. to 5s. a bushel, they were able to bear these imposts, but when the price of wheat fell to 2s. 8d. a bushel, their profits went, and now every penny that they can save is of importance to them. A’ prohibitive tariff on the means of production might drive a man from his holding when under a reasonable tariff he could continue on it. The Minister said that the most of these matters could be provided for under by-law. The operation of the by-law provisions of the tariff has caused many long delays, and has often failed to accomplish what was expected of it. I regard the by-law provisions as one of the most objectionable features of our tariff system. The power.’ conferred on Ministers and departmental officers to admit goods under by-law, robs this Parliament of its control over vital things.

Senator Duncan-Hughes:

– It is unfair to the Minister.

Senator BRENNAN:
VICTORIA · UAP

– Yes, and also to his staff. It is, moreover, extremely dangerous. Unless public life in Australia remains on a higher plane than in any other country in the world, I fear what this system may lead to.

I was impressed by the Minister’s statement that it is the intention of the Tariff Board to set out in more detail the item covered by the letters “ n.e.i. “. Senators Johnston and Lynch may have a fairly good idea of the machines covered by these letters, but I imagine that most other honorable senators do not know how comprehensive the sub-item is. If the Minister will give us his assurance that the Tariff Board will set out the articles covered by the letters “ n.e.i.”, with a view to. making them conform more nearly to the Ottawa agreement, I shall be content, for I have no wish to embarrass the Government. As the sub-item stands, I feel that the views expressed by Senators Johnston and Lynch are right, and must therefore appeal to honorable senators.

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

– Apparently, I did not make my meaning clear to all honorable senators, and so I desire to give the reason for the postponement of the immediately preceding sub-item. It-em 178 covers “ Motor power machinery and appliances (except electric) Sub-item d deals with crude oil engines, and then follows sub-item b - “N.E.I.”. On its own initiative, the Tariff Board has. sought to apply the principle underlying the Ottawa agreement to these items. It would be impossible to enumerate in a tariff schedule all the goods included under the heading “ N.E.I.”. Most honorable senators will give the Government credit for honesty of purpose in this matter. If they will turn to pages 110 to 124 of the memorandum accompanying this bill, they will see that a number of items which previously were admitted under by-law have now been embodied in the schedule. An exactly similar principle will apply in respect of this subitem. But these things cannot be done in a moment; we must accept the existing duties until the Tariff Board has reported on them. Honorable senators will recognize that it would be wrong to apply the Ottawa principle in one way to one group of items and in another way to others. Whether the existing duty was high or low, the Government accepted it for the time being, realizing that the Tariff Board is the proper tribunal to apply the Ottawa principle to the tariff. When the proper time arrives, the whole schedule will appear in a somewhat different form. There seems to be no end to this business.

Senator CRAWFORD:

– And, continually, something new is arising.

Senator McLACHLAN:

– That explains the position admirably, for daily the position has to be adapted ‘to changing conditions. I assure Senator Brennan, with regard to the discretion that is vested in the Minister, that my opinion, and, I am sure, that of this Government, is that we should narrow it down as much as possible. At the same time, it is requisite to have some elasticity in the administration of a customs tariff.

Senator MILLEN:
Tasmania

– The difficulty that I am experiencing is that sub-item 178 d2 relates to “crude oil engines exceeding 100 horse-power “, which are admitted free, yet sub-item covering unspecified articles under the term “ n.e.i.”, provides for an ad valorem duty of 45 per cent. Does that mean that spare parts which are imported for an engine exceeding 100 horse-power will have to bear that high rate of duty?

Senator McLachlan:

– No. Such spare parts are not manufactured in Australia, and, therefore, would come under the same classification as the engine, and be admitted free.

Senator DUNN:
New South, Wales

. - Honorable senators have attended agricultural shows and exhibitions at different State capitals, where they must have seen “wonderful displays of motive power machinery which has been manufactured in Australia, and is used for general farming purposes. Is that industry not worthy of protection?

Senator Brennan, who revels in references to Shakespeare, Goldsmith, and other immortals, could not restrain himself during this debate, and quoted from The Deserted Tillage. Perhaps Goldsmith could be aptly modernized by my paraphrase - 111 fares our land, Australia fair,

When senators their Goldsmith dirges air.

Senator Lynch painted a woeful picture of the position of farmers in Western Australia who, he claims, are not in a position to buy Australian-made engines to assist them in rolling down mallee scrub and other pioneering endeavours. I shall explain the reason a little later. The cost of these engines is computed on a horse-power basis, from the time that the blue prints leave the draughtsmen, and go to the pattern shop; while the material takes shape in the moulding stop; in the fitting and testing departments, and in the painting shop, until they are placed in the warehouse for sale. A Euston 2 horse-power engine costs- £20, so that, worked out on a horse-power basis, a 100 horse-power engine would cost £1,000, and a. 200 horse-power engine £2,000.- Even if those figures were reduced by 50 per cent., what farmer in Western Australia’ or elsewhere can afford to pay £500 or £1,000 for an engine? In the main, these farmers are financed by the rural credit sections of government banks, or by financial institutions, and, because of the prevailing depression in the world’s markets, many of them are going to the wall. That is attributable, not to any protective tariff, but to the operation of our capitalistic monetary system. It is recognized by all the leading economists of the world that the salvation of every country lies in the development of its home market, and what we now have to consider is whether we shall provide employment for our own engineers and farmers, or displace and put them on the dole, merely to assist persons on the other side of the world. It is generally admitted that the present system of production, distribution, and exchange has broken down. Even Senator Sampson, representative of the United Australia party, has admitted’ during the last twelve hours that the Ottawa Conference was a failure. I do not censure Senator Lynch for his opinions, to which he is entitled, but it is essential that honorable senators should understand the position so that they may record their votes intelligently.

Senator LYNCH:
Western Australia

– Senator Dunn has completely misunderstood the position, and I desire to put him right. In the first place, he says that the’ position of the farmers in Western Australia is due to the machinations of private financial institutions. But’ the farmers obtain their monetary assistance from the State bank, which is a government institution, and, therefore, free from the machinations or selfish designs of private money powers. Since the figures which I previously quoted were issued, the position in Western Australia has become worse, and I am quite safe in .saying that at least 600 farms have been abandoned in my State. That should dispose of the fallacious reasoning of Senator Dunn ; but if any further explanation is needed, I add that I am a member of the Western Australia Farmers Association, which buys the requirements of its members direct from the manufacturers, on the open markets of the world. Yet that organization has not been able to show a profit or produce a balance-sheet better than those disclosed by private enterprises.

Senator Rae:

– Which indicates that your organization is of no use.

Senator LYNCH:

– I will not admit that. By its very existence, it helps to keep private institutions in check. I claim that the tariff is in great measure responsible for the position of the farmers to whom I have referred. It has been admitted by the 67 representatives gathered at the World Economic Conference that the cost of producing wheat is unbearable, and that the disposal of surplus wheat is one of the cardinal difficulties of to-day. To prove that that is so in Australia, I have only to remind honorable senators that the chairman of the Agricultural Bank has said that the wheat farmers of Western Australia are £30.000,000 in debt. The position of New South Wales, Victoria, and South Australia is somewhat similar to that of Western Australia. We must therefore conclude that wheat production in this country, based on the present market price, is a hopelessly losing business. Yet a duty of 65 per cent, is being imposed on machines required by the farmers, despite the fact that exchange and primage are alrea’dy operating against them. These factors mitigate against the development of the country outback. Only by giving the farmers an opportunity to obtain a decent living shall we be able to make the homes of the city people more cosy. When a man inspects a house with a view to buying it, he first examines the foundation, and if he sees a crack in one of the wall’s he naturally concludes that the foundation is faulty. By means of the tariff, we can provide at least a sound foundation for our primary industries; but by imposing duties such as these we are laying the wrong foundation, and discouraging the man outback, which is the first step towards that fatal position which. Senator Dunn and his colleagues are in the habit of painting for us. We should do everything in- our power to encourage the man outback. There is an old saying that there is no schoolmaster like experience. When I began farming 25 years ago, I bought a 5-ft. harvester on time-payment for £75.

Senator Mclachlan:

– Has the price of a harvester anything to do with the item before the Chair?

Senator LYNCH:

– I quite realize that we are dealing with the duty on crude oil engines. The imposition of these high duties, instead of encouraging those engaged in our primary industries, must eventually force them off the land. The primary producer will refuse to continue to turn his cheek backwards and forwards to be slapped at every turn, and will leave the country for the city. The foreign duty on crude oil engines should bo, not 65 per cent., but 30 per cent, or even less, if the man on the land is to be given an opportunity to make a profitable living. The primary producer is receiving no sympathy from this Government. When the price of wheat was 3s. a bushel, an axe handle could be purchased for ls., and a binder for £32. To-day, when wheat is 2s. 8d. a bushel, the price of agricultural implements and other requirements has practically doubled. How can the farmer succeed when everything is against him? Under the conditions existing at’ present, our production, instead of expanding, must decrease, to Australia’s ultimate loss and ruin.

Senator CRAWFORD:
Queensland

– I may be mistaken, but I think that the importance of this item, from the point of view of the agriculturist, is somewhat exaggerated “in the minds of some honorable senators. This item applies only to motive power machinery and appliances,, which would include stationary .engines.

Senator Lynch:

– Not necessarily. The item applies to crude oil engines.

Senator CRAWFORD:

– The most costly appliance of production - and I have reason to know it - is a tractor, and there has been no duty upon tractors for many years.

Senator Guthrie:

– What about spare parts ?

Senator CRAWFORD:

– I am dealing with stationary engines. If a stationary engine is Australian made, there is little need for spare ‘parts. It has often occurred to me that certain parts of tractors have been made only to wear out, and I am looking forward hopefully to the day when Australian tractors will be available to the primary producers at a price lower than that now being charged for imported machines. A few years ago tractors which now enter .this country free of duty were sold here at a much higher price than that charged for the same class of machines imported into Great Britain under a tariff of 25 per cent. After all, there are not many makes of tractors on the market, and the few firms manufacturing them have arranged among themselves to keep prices at a fairly high level. No one regrets more- than I do the unfortunate position of the people on the land; but that ha3 not been due to our policy of protection. It is only within the last twelve months that the protection policy ha3 been adopted by the British Government, yet within a comparatively few years the area under cultivation in England has been reduced by 3,000,000 acres. The number of those engaged on the land in Australia has decreased considerably during the last few years, and that has been due entirely to the fact that modern machinery has enabled a few people to produce more than was produced by a large number of people a few years ago.

Senator Duncan-Hughes:

– It must be remembered that Great Britain still has a freetrade policy in respect of foodstuffs, and that, of course, affects the English agriculturist.

Senator CRAWFORD:

– That is so, but Great Britain also has a freetrade policy in respect of many other importations. What operated most adversely against the English agriculturist was that foodstuffs could be produced much more cheaply in other countries, but last year the British authorities imposed somewhat substantial rates for the purpose of protecting their own agriculturists. I know that some of the duties - I do not say on agricultural products - were as high as 93 1 per cent., and, on commodities like green peas, beans and vegetables generally duties of 2d. per lb. were imposed. It is quite a mistake to imagine that the duties under this schedule are excessively high compared with those of other countries. Sub-item e “n.e.i.” covers internal combustion engines, and any other new appliances placed on the market during recent years. It is necessary to have this sort of dragnet sub-item to prevent commodities intended to be dutiable from entering this country duty-free, as a result of manufacturers overseas, in order to avoid payment of duty, producing an appliance a little different from that set out in the tariff. I fail to see how we can employ our people unless we impose substantial duties upon a number of imported products. I should be sorry to place any unnecessary burden” upon the agriculturists of this country, but we must admit that there has been a substantial increase in the volume of production during recent years. 9 Senator GUTHRIE - We cannot stand still.

Senator CRAWFORD:

– We shall have to stand still in respect of some of our products. Only a little while ago some people used to talk about Australia becoming the granary of the world. I remember reading a somewhat astonishing statement by Sir James Mitchell, in which he said that Western Australia, instead of producing 50,000,000 bushels of wheat, should be producing 200,000,000 bushels. Yet, within twelve months of that statement being made, the largest wheat-producing countries .have met at a world conference, and proposed a restriction upon the production of wheat. If we are prevented from expanding our production of wheat, then we must endeavour to produce something else. A considerable number of idle men and women in the community is a menace to the public safety.

Senator Sampson:

– The devil always finds work for idle hands to do.

Senator CRAWFORD:

– The honorable senator is quite right. As a result of unemployment, there is growing in this country a feeling which bodes ill for our future. Unless a better case can be presented than has already been made out for the reduction of these duties, I must vote for their retention, notwithstanding .that ‘my sympathies are with those upon whom they are said to press heavily.

Senator E B JOHNSTON:
Western Australia

– The Minister rather led the committee to believe that if it would await the reference of sub-items d and e to the Tariff Board, it could be sure that considerable relief would be afforded, especially in regard to the n.e.i. items. I recall, however, that when the matter was being discussed in another place, the Minister for Trade and Customs (Mr. White) secured its postponement, so that the Prime Minister might meet representatives from Walker’s Limited, Queensland, who were journeying to Canberra to request that the duties be increased. Therefore, I am not at all sanguine that if we fail to avail ourselves of this opportunity there would subsequently be a reduction of the duties.

Senator Crawford suggested that this is not a very big item. The Tariff Board has pointed out, however, that the range of machinery appliances and parts involved in it is very extensive, and that that range is increasing with the progress of invention. The report of the board goes on to state - .

The following grounds will serve to show some ‘ of the commercial and manufacturing considerations governing costs as well as to indicate some of the more important lines under the item: -

  1. Machinery and appliances made to a manufacturer’s standard design, built Tegularly in numbers, great enough to make* mass production methods economical, and of value low enough to warrant firms carrying stocks. Examples arc small steam boilers; oil, petrol or steam engines; spare parts for engines and appliances; windmills, and small fittings, valves, &c.
  2. Machinery and appliances made to a manufacturer’s standard design, but in demand sporadically, but usually built only in receipt of a firm order, which in many cases is placed after obtaining competitive tenders. Examples are large boilers: power operated stokers; mill engines; winding engines; turbines; power station plant; and larger sized fittings.
  3. Machinery and appliances designed and built for a specific purpose with little likelihood of repetition. . Examples are large mill engines; special winding engines; turbines; large pump drives; ships’ engines; and large power station plant.
  4. Machinery parts for repairs or replacements made to order.

Nearly all of the machines that are now owned and operated by farmers are under 100 horse-power, and are thus dutiable at 45 per cent. British. I applaud the

Government for having placed on the free list crude oil engines of above 100 horsepower. That action has given much gratification and relief. But the small man. who uses an oil engine of under 100 horse-power for any purpose has still to pay a duty of 45 per cent. It is against that duty that I protest. It is perfectly clear, on the Minister’s own statement, that spare and duplicate parts for all of these engines are subject to the same duty as the machine itself. I warmly appreciate the assistance that Senator Lynch has given in placing the facts before the committee. Senator Dunn was quite wrong when he said that the bankers were responsible for the fact that there are 600 abandoned farms in “Western Australia. The banks generally, but particularly the agricultural bank, carried for years the men who held those farms, many of whom, I regret to say, paid no interest during the whole of the period that they were on the land the cause of their difficulties being the tremendous cost of their plant and improvements, due entirely to the exactions of the Australian tariff, to which the item that we are now debating contributed.

SenatorRAE (New South Wales) [4.23]. - Senator Lynch impressed very ardently upon us the desirability of dealing with first principles. It appears to me that the appropriate time for the laying down of the principles upon which the tariff should be moulded was at the second-reading stage of the measure. It is both unscientific and futile to spend day after day attempting to alter one or two items. To my mind, some principle should guide the party that frames the tariff, and we should endeavour to make the burdens that are to be borne or the exactions that are to be imposed conform to it. The members of the Country party profess to believe that we should be guided by the Tariff Board. “Why apply that principle to some items and not to others? Even though some of the duties press hardly on certain sections of the people, no great relief could be afforded by the alteration of particular items, because it is generally supposed that when one section is benefited another is injured. Therefore, I impress upon the committee the desirability of making each item con form to a common policy. If the tariff is founded on right principles, let us carry it into effect in detail.

Senator GUTHRIE:
Victoria

– I was almost caught in this drag-net “ n.e.i. “, as the unfortunate farmers have been for years, with the result that they have been forced off the land into the cities. I thought that not many important items came under it, but I now find that it covers a number of the necessaries of all clases of producers, including duplicate parts. One of the most difficult problems of the primary producer . to-day - it might, indeed, be described as a scandal - is caused by the fact that the price of duplicate parts for farming machinery, and presumably other machinery,’ is about double that of such parts in the machine intact. To build a tractor consisting of parts purchased separately would cost practically double- the cost of a complete tractor. The duties of British, 45 per cent., and general, 65 per cent, under this sub-item, place a very heavy burden on primary producers. Senator Lynch has shown how farmers in the outback portions of Western Australia are handicapped; but those in other States are bearing a similar burden. The men in Australia who produce the essential commodities of life do not receive any consideration, while those living in the cities and sucking the life blood out of the country derive all the benefit. What is the position of the settlers in the Mallee district of Victoria ? I know that district from end to end. I remember it when it was a wilderness, and I have seen it developed from the Wimmera fringe. I remember when the scrub was so dense that one could not ride through it on horseback ; but in good seasons it is now a waving wheat-field. During doubtful seasons the pioneers in that and other districts have carried the excessive burden of high protective duties, which have increased the cost of everything they require., The most economical way to settle people on the land is under the share-farming system.

The CHAIRMAN:

– The honorable senator must connect his remarks with the sub-item under discussion.

Senator GUTHRIE:

– I was about to show that the duties imposed in this instance have a prejudicial effect upon share-farmers. The best way to increase development is by encouraging large land-owners to make their land available for closer settlement. Under the sharefarming system the owner provides the land and clears it, and the share-farmer puts in the crop and reaps it. In the majority of cases a share-farmer has to purchase plant to carry out bis part of the contract, and, under present conditions, is crippled with the cost of duplicate parts. I have a letter asking me to guarantee payment of an amount of £40 for duplicate parts required by a share-farmer working in the Riverina district. If that guarantee is not forthcoming this man will be unable to put in the balance of his crop. Most of these duplicate parts are dutiable at 65 per cent. If share-farmers cannot carry on their operations, they are driven off the land, and help to swell the ranks of the unemployed in the cities. J have done my best to assist in settling men on the land in the richest part of the Ravenna, which is particularly suitable for share-farming purposes; but 50 per cent. of these men have been compelled to walk off the land and take the dole at Corowa, Albury, and other places. Owing to the high cost of cultivation, and the low price of wheat, they have been unable to purchase the duplicate parts they require. Some of them invested in tractors, but the cost of the parts was even greater than that, of the original machine.

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

– Is the honorable senator aware that tractor parts are admitted free of duty? Engines required by farmers are not included in this item.

Senator GUTHRIE:

– That was not explained by the Minister in charge of the bill. Centralization is the curse of Australia. Yesterday I was reported as saying that I was in favour of closing down the iron and steel industry. I did not say anything of the kind.

The CHAIRMAN:

– The honorable senator must avail himself of some other opportunity to correct any misrepresentation.

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

[4.37] -Generally speaking, the articles included in this sub- item are not used by primary producers. First- of all, there are watertube boilers. How -many of such boilers are used by farmers? There are also corrugated cylinders for boilers. How many of those do farmers use? Aeroplane engines are also included; but I have heard of only one or two pastoralists who use aeroplanes. The subitem also includes gas engines, diesel engines, motor-car engines, motor cycles, steam turbines, and steam engines. There are, of course, a few farmers who use steam engines. It also covers other engines not included in item 178 e, which embraces engines used by farmers. There are also furnaces for boilers, gas producers, ships’ propellers, super heaters, and other motive-power machinery. I can assure honorable senators that only a few of these appliances are used by primary producers, and then, not to any extent. To speak to these duties as . being a burden upon primary producers is pure rubbish.

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

AYES: 14

NOES: 20

Majority . . . . 6

AYES

NOES

Question so resolved in the negative.

Request negatived.

Sub-item agreed to.

Item 179, sub-items (a 1 to 5) (b 1 to 7) and (c) agreed to.

Item 179, sub-item (d1 a to d).

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

– I move -

That the House of Representatives be requested to amend the sub-item by making paragraph ( 1 ) read - “ (] ) Dynamo electric machines, viz.: - (a) Alternating current machines -

1 ) Induction type -

Up to and including 150 horse-power, ad valorem, British, 45 per cent,; general,65 per cent.;

Exceeding 150 horse-power, the rate of duty shall be the percentage rate under sub-clause (a) reduced by 1. for each horse-power above 150 horse-power with minimum of, ad valorem, British, free; general, 15 per cent.

Variable speed commutator type, 2 horse-power and over, with speed variation between maximum and minimum speeds having ratio at least two to one, ad valorem, British, free; general, 15 per cent.

Alternators (including exciters, if any, imported’ with and for use therewith) imported for use with steam or water-driven turbines, ad valorem, British, free; general, 15 per cent.

Other (including exciters, if any, imported with and for use therewith)

2 horse-power up to 125 horse-power both inclusive, ad valorem, British, 20 per cent.; general, 40 per cent. ;

Exceeding 125 horse-power, ad valorem, British, free; general, 15 per cent.

Converters, motor or synchronous rotary -

1 ) Up to and including 10 k.w., ad valorem, British, 45 per cent.; general, 65 per cent.;

Exceeding 10 k.w., ad valorem, British, free; general, 15 per cent,

Direct current and universal machines -

1 ) Traction motors, ad valorem, British, 45 per cent.; general, 65 per cent;

Motors, up to and including 50 horsepower, suitable for use with gearless lifts, ad valorem, British, 45 per cent.; general, 65 per cent.;

Generators imported for use with steam or water-driven turbines, ad valorem, British, free; general, 15 per cent.

Other-

Up to and including 20 k.w., ad valorem, British, 45 per cent.; general, 65 per cent. ;

Exceeding 20 k.w., ad valorem, British, free; general, 15 per cent.

N.E.I., ad valorem, British, 45 per cent.; general, 65 per cent.

For the (purposes of paragraph (1) of this sub-item, horse-power shall be determined as prescribed by departmental by-law. In converting horse-power into kilowatts, 1 horsepower shall be taken as equal to 0.746 k.w.”.

This request is made in order to give ‘ effect to the Tariff Board’s- recommendation on turbo-generators. Its purpose is to provide for the electrical end of the turbo-generator or turbo-alternator to be admitted free under the British preferential tariff, and at 15 per cent, under the general tariff. Alternators and generators for turbo-generators are not manufactured in Australia. Alternators from 25 k.w. up to 1,000 k.w., and generators from 75 k.w. up to 1,000 k.w. are at present being admitted at these rates under departmental by-laws, whilst those over 1,000 k.w., with the exception of a few parts, are admitted under by-law if they are imported for use in the manufacture of Australian-made turbo-generators. The effect of the by-laws at present covering turbo-generators over 1,000 k.w. is that unless a certain portion of the turbine is manufactured in Australia, duty is charged on the whole machine, including the electrical end, which is not made locally. Consequently, Australian manufacturers are not only protected on the parts produced by them, but the high duties are imposed on all the parts not made locally if the Australian manufacturer does not get the order for the parts he makes. The present method of charging duty on the whole turbo-generator if certain parts are not manufactured locally gives a protection on the parts made locally far in excess of that which would be reasonable ; it ranges up to 300 per cent. The board’s recommendation changes this practice, and provides protection on the parts manufactured in Australia, and admits from the United Kingdom parts not produced in Australia, free of duty. In order to ascertain the effect which the adoption of the recommendation might have on employment, the Tariff Board was asked to comment on this aspect, and has stated -

  1. There is no prospect at present or in the near future of any orders being placed for large steam turbo-generating plants.
  2. The adoption of the report will have no immediate effect on employment.
  3. Employment has been given to approximately 100 employees in the past. For some time there have not been any of these big electrical plants manufactured in Australia.
  4. Manufacture in Australia is at present uneconomical.
  5. The adoption of the board’s report is calculated to reduce initial cost of steam turbogenerating plants.
  6. Reduced capital expenditure will allow of reduction in charges by electricity undertakings or release of capital for purchase of other equipment.
  7. Should reductions in price of electricity be made, production costs in all industries will be lowered with consequent increased sales and employment generally.
  8. The loss of employment in the manufacture in Australia of generating units would be off-set by an increase in employment in other industries brought about by lower production costs.

Honorable senators will appreciate that the Tariff Board intends to provide reasonable protection on the parts manufactured in Australia, and, at the same time, to permit free entry of parts not made here. The board has very exhaustively explored this highly protected field of Australian industry, and where it has ascertained that manufacturers are not utilizing such protection, and are not making certain types of goods, it has recommended a further refinement of the tariff with a view to freeing from duty those goods which are not being made locally. It is to the advantage of the whole country that refinement of the tariff should proceed along these lines, as, generally speaking, high duties on important key industry goods that are not made in Australia only retard the development of the country, and prevent national progress. I have, covered the main points in connexion with turbo-generators, although this item refers only to the electrical end which is not manufactured in Australia. My reason for doing so was that honorable senators may be aware of the effect of this amendment and other amendments which I propose to move on items 176 and 178.

Senator BARNES:
Victoria

.- The Minister has assured the committee that the Tariff Board has exhaustively in quired into this item, but I have been much impressed by information supplied to me by a firm that is interested in the manufacture of turbo-generators. Apparently, after the war the Commonwealth and State Governments, finding that Australian industries were labouring under great disabilities, invited certain firms of engineers to interest themselves in the manufacture of turbo-generators. I am not aware of the reason for that request, but as a result of it Thompson’s Engineering and Pipe Company Limited, of Castlemaine, Victoria, started to produce this machinery, and I quote from a letter written by a director of the firm -

Since 1921 when we made an arrangement with Metropolitan-Vickers Electrical Company Limited, of Manchester, England, to manufacture turbines and accessory plant in Australia, we have carried out work of this class to the value of £630,000.

As showing the importance of this industry to our Castlemaine works, we would point out that in 1928 half of the staff and men at Castlemaine were employed on this class of work.

A Tariff Board inquiry in 1928, held at the request of the power producers of Australia, apparently, decided that the industry was important to Australia, and, therefore, a special by-law was passed which gave us the adequate protection required.

The present Tariff Board were not asked to inquire into this by-law. The terms of reference were only to inquire into “ the question of necessity for the increased rates of duty,” that is, the increase of duty from 45 per cent, to 55 per cent.

It is clear from the latest Tariff Board report that they view this matter from a purely academic efficiency stand-point. The board knows perfectly well that, if their proposals were carried out, it would mean the end to manufacture of turbo-alternator work in Australia.

It is apparent that the board has informed the Minister that there will not be much of this class of work to be carried out in the near future, and, therefore, their decision cannot affect employment. It is true that it is not likely there will he any very large turboalternator propositions in the near future, but, on the other hand, there will .be probably a number of small propositions, and, in fact, we had hoped to obtain an order in connexion with a turbo-alternator of 2,500 kilowatts, but, of course, if the board’s recommendation is accepted by the Government, then it is useless for us to tender on the business.

We would impress upon you that we merely want the Government to confirm the tariff on turbo-alternators as it obtained when the Bruce-Page Government was in power. We are not asking the Government to confirm some alteration in the tariff made by the Scullin Government.

We realize that you are seised with the importance of this class of work being carried out in Australia from a defence stand-point. If the Commonwealth Government are not going to assist in having such work done in Australia, then we cannot see where the highclass mechanics, moulders, &c, which they will require in time of war, are to be trained.

We hope there will not be another war, but war is a possibility which must be borne in mind.

Senator Elliott:

– The honorable senator mentioned that no turbo-generator, work is in hand at present. What are those mechanics and moulders doing now ?

Senator BARNES:

– Presumably their employment is being rationed, but they are not engaged on large turbo-generator work. The firm indicate that they were hoping to get a- contract for at least one large machine, and that it might be followed by a number of other similar contracts provided the tariff was suitable. I admit that the resolutions of the Ottawa Conference, to some extent, influence these rates of duties, because at Ottawa our representatives entered into an arrangement with British delegates for tariff concessions which, it was’ hoped, would be to the mutual advantage of both countries. I understand also that Thompson Brothers had contracts with Vickers-Maxim, England, for the importation of the larger machinery parts, and were doing the finishing work at Castlemaine. That arrangement, I am informed, was quite acceptable to the British company, and, apparently, it proved satisfactory also to Thompson Brothers. It is important to remember that the Commonwealth and State Governments appealed to Australian engineering firms to engage in this class of work, and in order to equip themselves the better for it, several firms sent a number of operatives to England for special training. Mort’s Dock, and the Clyde Engineering Works, in New South Wales, are also interested in this matter.

Senator Elliott:

– Is not the Castlemaine firm one of the best examples of decentralization of secondary industries in Victoria?

Senator BARNES:

– It is a splendid firm, and I hope that this Parliament will safeguard its interests, because, for one reason, it is training Australian engineers in a class of work which is of the highest importance to the safety of this country. Thompson Brothers go on to say -

The position will be certainly very grave for a company such as ourselves in these difficult times, if we have to inform the people who are financially interested in our company that, owing to a Tariff Board report, we have been prevented from continuing further manufacture of one of the most important lines in which we have been engaged, and which has at times given employment to half of our employees.

That is a very important statement. I have no personal knowledge of this firm, but, as an Australian, I am interested in the development of all Australian industries. The request submitted by the Minister is to add certain machines to the free list. My fear is that,, if agreed to, the alteration will check the development of this branch of the Australian manufacturing industry. One or two engineering experts whom I have consulted informed me that this section of the tariff, at all events, is so complicated that even experts are unable to comprehend precisely what is meant by it, and it has been suggested that the Government would bewell advised to refer thewhole of these items back to the Tariff Board for review. Apparently that body has not given them sufficient consideration, otherwise we should not have heard these grave complaints about the present grouping under the various sub-headings. I offer no objection to the free importation of certain classes of British machinery, provided such importations do not. injure the interests of Australian manufacturers, who have first claim on my sympathy because they provide work for Australian citizens. Thompson Brothers have been doing this class of work quite satisfactorily, and they are anxious to continue doing it; but they definitely state that if the various subitems are passed in their present form, their business will be seriously affected. Senator Lawson, I know, is interested in these duties, because the firm, -whose letter I have just read, is in the heart of his. electorate. I am, therefore, hoping that he will support my appeal to’ the Government to alter these duties so as to safeguard the interests of Australian manufacturers of this class of machinery.

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

– The Government has received the representations to which the Leader of the Opposition (Senator Barnes) has referred and, as I have already indicated, the Tariff Board’s report was referred back to that body for further consideration, particularly regarding the employment side of the industry. I direct the attention of honorable senators to the following comments, which are to be found on page 10 of the board’s report, presented in October last after a most exhaustive inquiry -

The machines under these sub-items of the tariff are, undoubtedly, the most important affecting modern urban economics. They include generators, steam and hydro-electric, for power stations supplying current for transport, industry, communications, lighting, &c, and also include the motors that ultimately convert the current into mechanical work for driving mill and factory machinery and equipment, for propelling trains and trams, and performing a multitude of other functions requiring power. The cost of electric machines, therefore; enters largely into all modern urban costs, firstly, as a result of its effect on the. cost of electric current, and, secondly, as an important item in the capital charges for factories, electric railways, tramways, &c.

We are not aware that, representations of the nature mentioned by the Leader of the Opposition were made to any Australian company, but we know that a certain amount of this class of work has been done in Australia under the conditions which I have already outlined. I should add that it has been done quite efficiently where there has been a demand for it, and the Government considers that the protection afforded in this schedule is reasonable. With regard to that class of work which, in the opinion of the board, cannot be carried out economically in Australia, it is proposed, in the interests of urban authorities, electric light companies, municipal tramways, government railways, and other governmental activities, to give relief from as much as possible of the overhead charges by allowing the free importation of essential machinery, the cost of which checks urban and rural municipal development. The firm mentioned by the honorable senator is highly efficient, but the Government is advised that this particular branch of engineering work cannot be economically carried on in Australia.

During the régime of the Bruce-Page Government a great deal of difficulty was experienced in securing the admission of certain types ‘ of generators and similar plant which are not being manufactured in Australia. Eventually, they (were admitted under the by-law provisions of the Customs Act, and we are now giving legislative effect to a number of those by-law admissions. On page 11 of its report the board states -

The inquiry showed that local manufacture covers the whole range of electric machines that could be economically produced in Australia at present, and for a long time to come; it also indicated the need for total revision of the tariff sub-items so that machines might be grouped generically in a manner that would enable the provision of adequate protection to the local makers for all of their range, cither directly or by providing for a sufficient duty on lines that might be substituted.

The board then goes on to deal with the present extent of the industry and mentions that the range of manufacture has been confined to the partial manufacture of alternators of large size, induction motors up to 125 horse-power, certain small rotary converters, traction motors, certain d.c. machines, including gearless lift motors and fractional horse-power motors. It states -

Electric motors were first produced in the Commonwealth in 1922, and are now manufactured by at least five concerns, viz.: -

Crompton Parkinson (Australia) Limited, Five Dock, New South Wales;

Associated General Electric Industries

Limited, Sydney, New South Wales;

McColl Electric Works Proprietary Limited, Fitzroy, Victoria;

Standard Waygood Limited, Sydney, New

South Wales; and

Clayton Joel and Company, West Melbourne, Victoria

These concerns employ approximately £180,000 of capital in the manufacture of the motors under consideration, and in direct manufacture engage approximately 130 employees with an annual wages bill in the vicinity of £22,500. Besides such direct employees many hands are, of course, engaged indirectly in the production and distribution of electric motors in Australia.

About 35,000 motors have been produced with a total output of 300,000 horse-power. Most of the motors have been for use with alternating current.

The Australian manufacturers- claim that their manufacture is economical and efficient, and that, by reason of connexion with overseas producers, can be kept up to date. They also point out out that they are in a position to give prompt delivery. Evidence tendered at the inquiry showed that the quality of motors manufactured in Australia is satisfactory.

I mention this because it has been urged that the item should be sent back to the board for further consideration. I can see no reason why it should be. The board has made a most searching examination of the matter : it has given creditwhere credit is due to the local industry, and has recommended the necessary measure of protection. Discussing alternating current machines and induction motors, the board says -

Australian manufacturers are producing induction motors of both the squirrel cage and slip ring (or wound rotor) types, but do not claim to be manufacturing such motors beyond 125 horsepower at 1,500 r.p.m. on a commercial basis. The representative of Crompton Parkinson (Australia) Limited states that his company could supply all the present Australian requirements in these motors up to the size mentioned, and could almost supply all the requirements in normal times. He also states that his company has sufficient space in its factory for further development. When the other Australian manufacturers are taken into consideration, it will be seen that the capacity of Australian factories is greater than the. normal Australian demand warrants.

On page 13 of the report, the board discusses the manner in which the duty should be levied. It states -

In the opinion of the board, ad valorem rates of duty without any alternative fixed rates are desirable in respect of electric motors, as the value of the motors takes into consideration such varying factors as type, size, weight and speed, and also any variations in the cost of raw materials, particularly copper, which bulks largely in the construction of these machines.

The Australian manufacturers claimed that fixed rate duties as an alternative to ad valorem rates were necessary to prevent dumping. The provisions of the Customs Tariff (Industries Preservation) Act 1921-1922, are, however, available for the protection of Australian manufacturers in this respect, and induction motors originated in or exported from Sweden are already gazetted under section 4 of that act, while induction motors originated in or exported from the United Kingdom are gazetted under both sections 4 and 6 of the act named.

The information shows that over the whole range of motors the Australian manufacturers’ selling price to retailers varies from approximately one and a half times to little over twice the f.o.b. price of British motors, and up to two and a half times the f.o.b. cost of Swedish motors.

The retail prices for induction motors made by both the large local makers are the same for similar machines. The margin between these prices and the cost price to retailers is regarded as unduly great in view of the claims made at the inquiry to the effect that one of the great advantages of the existence of the local industry was associated with the quick delivery that can be given of any motor within the manufacturer’s range.

After careful consideration of the evidence, and particularly the costs and conditions of obtaining raw and semi-raw materials, the board has arrived at the conclusion that the rates of duty provided under the Customs Tariff 1921-1930, viz., 45 . per cent. (British Preferential Tariff), 55 per cent. (Intermediate Tariff) and60 per cent. (General Tariff) should provide adequate protection to efficient producers of the motors in question, and should allow of a satisfactory return on capita] invested when the load factor is reasonable.

A duty of 45 per cent, represents on the cheapest British motors, in addition to other natural protection such as shipping charges, 12½ per cent, more than the total direct wages cost on a small locally-made motor, and 25 per cent, more than the total direct wages cost on the largest Australian-made motor. In order to prevent motors larger than necessary being landed duty free at less than the duty paid costs for motors of sizes made in Australia, a graduated scale is included.

The local manufacturers, of course, submitted their case, but the board disposes of the matter as follows: -

In view -of the evidence tendered in connexion with the present inquiry the Tariff Board is of the opinion that variable speed commutator motors, two horse-power and over built for a speed variation between maximum and minimum speeds, having a ratio of at least two to one, should be admitted under the following rates: -

Alternating current motors -

Variable speed commutator type two horsepower and over with speed variation between maximum and minimum speeds having ratio at least two to one, ad val., British, free; intermediate, 10 per cent.; general, 15 per cent.

In regard to alternating motors, the opinion of the board was that the duties imposed in the schedule should be given effect. Dealing with local production it states -

The most important group covered by this heading are the power factor correction motors such as those of the synchronous, autosynchronous and “no-lag” types. Australian manufacturers state that the local production of these would not be a commercial proposition owing to the small demand. Some of these types are manufactured overseas in sizes small enough to enable them to be offered for applications where induction motors would be used, the only restraining factor being price. If, however, these motors were all admitted free of duty, the landed cost would, in many cases, be low enough for them to be competitive with induction motors manufactured in Australia.

There again, the board kept in mind the interests of the local manufacturers.

The CHAIRMAN:

– The honorable senator’s time has expired.

Senator Sir HARRY LAWSON (Victoria) [5.25]. - In spite of the two statements which the Minister has made, and the copious extracts he has read from the report of the Tariff Board, I still remain completely unconvinced of the need for the motion submitted by him. It is true that the Minister is armed with a report of the Tariff Board, but honorable senators who read the report will observe how academic and technical’ it is. Not many honorable senators, I think, who have studied the report, really understand it’s implications. The board itself says that the new proposals will not affect employment, and that statement is confirmed by the Minister. The board also says that there is no immediate prospect of any importations, or of these machines being manufactured in Australia. Therefore, why not leave well alone? The prospect of immediate employment is not affected, because present economic conditions do not permit of the manufacture of these machines, or of the importation of machines from overseas. The effect, therefore, would be, if - this request were carried by the Senate, and complied ‘with by the House of Representatives, that all hope of a revival in the engineering industry, so far as this work is concerned, will be destroyed. I do not wish to boast of the .town in which I live, nor of the engineering establishment which is its pride, but it is well-known that Thompson’s Engineering Works represent, perhaps, the best example of engineering enterprise in Victoria. This firm has been prepared to undertake all manner of work, and to enter new fields of manufacture. The local product, so far as efficiency is concerned, compares most favorably with the imported article, as the Minister himself has admitted. Why, then, does he wish to destroy all hope of a trade revival? We all know that engineering works everywhere are suffering most severely because of the depression. The Castlemaine Foundry, which, in times of prosperity, when loan money was flowing freely, employed 600 men, now employs scarcely 100. The firm is making a mighty effort to keep going.

Thompson’s Engineering Works represent one of the finest examples of decentralization that I know of. All honorable senators deplore the congestion of population in capital cities, and the drawing of population from provincial centres and rural areas to the metropolitan districts. They believe that governmental policy should be directed towards ensuring the dispersal of population in inland towns. We have here an instance of a fine industry situated in an inland town, but it is suffering severely from the effects of the depression. The verdict of all expert and impartial investigators is that the products turned out by this foundry are up to sample, and according to contract. So far as I know, all those with whom the firm has entered into contracts have been satisfied with the work done. It requires a great deal of courage, and a good deal of confidence, to keep the works going at the present time. Even if these duties are allowed to remain as they are, there will be no immediate increase in employment; but there will be hope for the future. It will give this firm, which, on the strength of. the protective duties imposed, entered upon the construction of these machines, some prospect of returning to profitable trading. I remind the Minister that the Ottawa agreement is not involved in this. The present duties do not disregard the spirit of the Ottawa agreement in any way; I venture to suggest that no representative of British manufacturers has given evidence before the Tariff Board in support of the proposed reductions. No claim has been put forward by any one representing British interests. As a matter of actual fact, these contracts, which are nearly all executed at Thompson’s Engineering Works, have been carried out in conjunction with Metropolitan Vickers, and turbo-alternators have been manufactured in Victoria by arrangement with that firm.

Senator Elliott:

– Why should this be the only item on which the Government proposes to vary the rates shown in the schedule ?

Senator Sir HARRY LAWSON:

– I cannot understand the anxiety of the Government to push this matter through. The proposal was not submitted to the House of Representatives. There is a report from the Tariff Board on the subject as late as February last, which honorable senators have not yet had . an opportunity to study. As the decisions of this committee are not the final word on the revision of the tarin, no harm would be done to anybody if we deferred the consideration of this matter, and obtained more information upon it. To refer it back to the board on the question of employment, could only bring ohe answer - that that question is not immediately affected. I urge the Minister not to press the request, and I ask honorable senators who believe in decentralization not to destroy the hope of reviving an industry which was encouraged to undertake this branch of manufacture by duties which were imposed, not by ministerial decree, or at the whim of the Executive, but after full inquiry by a former Tariff Board. Now we have a Tariff Board with a different personnel, and it is investigating this matter.

We have before us a report of a highly technical nature, which it is most difficult to understand. I do not say that the board may not be right in many of its conclusions, particularly on the technical side; but I stress the fact that no harm will be done by withdrawing the request, seeing that there is no immediate prospect of either the manufacture of these goods in Australia, or their importation from overseas. We should, therefore, allow the duties to remain as they are, and encourage the local firms to carry on their industries, despite the present anxious conditions. We should not deal an important engineering firm a blow that would knock the heart out of it, and prove staggering to the residents of the provincial centre in which it is situated.

Senator Elliott:

– Is it possible that foreign interests have been exercising influence with the Government?

Senator Sir HARRY LAWSON:

– I am not suggesting anything of that kind. The Minister said, that he would submit a request in accordance (with- the report of the Tariff Board; but I hope that he will reconsider his attitude, and that the committee will support the Leader of the Opposition.

Senator O’HALLORAN:
South Australia

– I join with the Leader of the Opposition (Senator Barnes) and

Senator Lawson in their strong appeal to the Minister not to insist on the adoption of the course which he now proposes to take. It is most difficult for us to appreciate the full significance of the Minister’s proposal in the limited time at our disposal.

Senator McLACHLAN:
SOUTH AUSTRALIA · NAT

– The opportunity for its consideration . is unlimited.

Senator O’HALLORAN:

– It is true that the Tariff Board’ presented its report last year ; but the Government evidently took a considerable time to make up its mind on this matter, because if it had done so prior to these duties being considered in the House of Representatives, we might reasonably assume that the rates now suggested by the Minister would have been incorporated in the tariff schedule in the other chamber. In connexion with this and kindred items, we have a number of comprehensive and highly technical reports by the Tariff Board, and, as most of us are not experts in electrical matters, we had to wait until the Minister had submitted his request this afternoon before we knew which items were affected by the reports of the board. The Minister has said that the time available for discussion is not limited; yet if honorable senators are to take an intelligent interest in this discussion, they need an opportunity to make themselves familiar with the subject before being called upon to cast their votes.

Senator Lawson has informed us that the duties which the Minister now proposes to have reduced, and, so far as the British preferential rate is concerned, abolished, were imposed by the BrucePage Government in 1928, or prior to that date, after an inquiry by the Tariff Board. I presume that the board made the same exhaustive investigation then that has characterized its inquiry regarding the present proposal for the alteration of these duties, and honorable senators should have an opportunity to consult the earlier report of the board, to see what factors operated at that time to induce it to recommend the imposition of duties to which the Minister now objects. I am not familiar ,with the details of the Minister’s proposal in so far as it affects the firm engaged in the manufacture of the particular types of electrical appliances covered by this item, but we have it ‘on the authority of Senator Barnes and Senator Lawson that Thompson’s, of Castlemaine, are vitally affected. It is said that, in an effort to continue their operations, they have developed the electrical branch of their industry, because of the falling off in the demand for the kind of machinery for the manufacture of which their industry was chiefly founded. According to the evidence submitted to the board, other firms were at least sufficiently concerned in this matter to induce them to place their case before the board. The witnesses in support of the duties included the following: -

Harry Hall, manager,- Crompton Parkinson (Australia) Limited, manufacturers of- alternating current motors and static transformers, 349 Lyons-road, Five Dock, New South Wales.

Thomas Malcolm Ritchie, works director ot Associated General Electric Industries Limited, manufacturers of dynamo electric machinery, transformers, &c, 93-95 Clarencestreet, Sydney (works at Auburn, New South Wales, and Richmond, Victoria).

George Brownlow Clerk, managing director of Standard Waygood Limited, manufacturers of dynamo electric machinery, 16 Barrackstreet, Sydney.

William Clayton Joel, proprietor of Clayton Joel a-nd Company, manufacturers of electric appliances, .17 Jeffcott-street, West Melbourne.

Ernest Herbert Wyndham Westwood, managing director, McColl Electric Works Proprietary Limited, manufacturers of electric motors, 1 10 Moore-street, Fitzroy, Victoria.

Those men represent important engineering works that give employment to a large number of men, and to whatever extent the reduction of the duties would affect their chance of securing contracts in the future, their capacity to employ labour in Australia would be reduced. The Minister has indicated that, according to the conclusions of the Tariff Board, there is no immediate prospect of either the importation, or the letting of contracts for the manufacture, of machinery of this type. Why was it considered necessary, in order to make two alterations which will probably have a very serious effect on the local industries concerned, for the whole of the sub-items to be re-drafted, and submitted on a type-written slip handed to each member of the committee? I have gone through the relevant items ‘ in the schedule, and I can find only two alterations on this typewritten document. Why was it thought necessary further to confuse us with this mass of material, when a small slip showing that it is proposed to alter the numbering of two paragraphs is all that is required? It has been said by Senator Lawson that the firm which will be most prejudicially affected by the proposed alteration of the duties, affords one of the best illustrations of the value of decentralization of industry to be found in Australia. This firm has carried on its operations for many years at Castlemaine, and it is the backbone of that town. That fact alone merits the fullest consideration before the committee accepts the Minister’s proposal. Seeing that neither good nor harm can be done by leaving the duties as they are, I hope that the committee will not agree to the request.

Senator DUNN:
New South Wales

, - I confess that I join in this debate with a suspicious mind, but I make no apology for that. Parliament, in its wisdom, decided to set up a tribunal known as the Tariff Board, and to confer wide powers on it. Among other things, the board may summon witnesses and call for papers. I am somewhat of a “ sticky beak “, and so, when in the capital cities, I occasionally watch the Tariff Board at work. My suspicious mind causes me to believe that behind the sheaf of amendments to which the Minister referred are influences emanating either from Australia House or Ottawa. The duties imposed in 1928 had the approval of the Tariff Board; two of its members - The chairman, Mr. McConachy and Mr. H. E. Guy - signed the board’s 192S report. Why have those gentlemen now back-pedalled, and made possible this sheaf of amendments? Day after day, and night after night, I have been here in my place in the interests of the people of Australia; to protect them, I have not hesitated to support the present Government. It was held by the High Court - the highest legal authority in the land, as my dear friend, Senator Brennan, a doctor of law and of British jurisprudence will agree - when, some time ago, the Cockatoo Island Dockyard authorities were the successful tenderers for the supply of some turbo-alternators to the Sydney City Council, that the dockyard authorities could not constitutionally undertake the work. Thereupon, a number of other

Australian engineering firms, backed by Metropolitan Vickers, set to work, and, to-day, the Bunnerong power station, on the shores of Botany Bay, stands as a splendid monument to the capacity of Australian and British engineering firms.

It has been said that there is no scope in Australia for the manufacture of turbo-alternators and generators, but I remind the committee of some of the big hydro-electrical schemes already established in this country. The hydro-electric scheme of Tasmania, which uses water from the Great Lake in the centre of’ the island, is known throughout the world, as is also that at Burrinjuck on the Murrumbidgee. The light used to illumine this chamber is derived from that hydro-electric scheme at Burrinjuck. The Wyangala power scheme on the river Lachlan as well as the Clarence River scheme are also well known. Victoria has its wonderful brown coal deposits at Yallourn, from which centre high tension cables conduct power throughout the greater portion of Victoria and also into New South Wales. That great scheme is indissolubly associated with the late Sir John Monash, who was not only a wonderful soldier and scholar, but was also one of the finest consulting electrical engineers that Australia has ever known. The Tariff Board ha3 admitted that Metropolitan Vickers Limited was connected with the Bunnerong contract only through its Australian co-operators, among whom were Morts Dock Limited, the Clyde Engineering Works, and the Australian Electrical Company, all of New South Wales; Walkers Brothers Limited, of Maryborough, Queensland, and Thompson’s Engineering and Pipe Company, of “Castlemaine, Victoria. As I have 3aid, Metropolitan Vickers Limited has been associated with a number of Australian engineering undertakings; it also played its part in connexion with the Assouan Dam in Egypt, and similar works in India and other part’s of the British Empire. More recently, its operations in Soviet Russia received great publicity through the trial of some of its employees there. This great engineering company has shown its ability to work amicably with Australian engineering firms. On the 27 th June, the following urgent telegram was sent by the Metal Trade Em ployers Association to the Minister for Trade and Customs (Mr. White) : -

In view of new principle of tariff incidence on imported turbo-generators embodied in Tariff Board’s recommendation it is earnestly requested on behalf of the Clyde Engineering Company, Standard Waygood, and Morts Dock Engineering Company that no steps be taken in connexion with same until probable effect on other industries of precedent thus proposed together with difficulty of allocating values of components of completed machinery have been reviewed.

M. MCDONALD, Acting Secretary. Metal Trades Employers Association.

There is a clear request by the Metal Trades Employers Association for the protection of their industry and the workers in it. As I have said, I am suspicious of the Government’s proposals in connexion with these duties, and I shall vote accordingly. I fear that the Government is hiding- something.

The CHAIRMAN:

– The honorable senator has exhausted his time.

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

– As honorable senators had devoted so much time to this matter, I did not take the trouble to refer them to a further report by the Tariff Board on turbo-generators, dated the 3rd February, 1933, the other report, of course, being that of the 20th October, 1932. Both reports disclose that these duties have been exhaustively examined by the board. It is probably in respect of the second report that Thompson’s Engineering and Pipe Company Limited are agitating. The board has heard extensive evidence from technicians and business men representing the Castlemaine and all other companies, Mr. Aird, the competent manager of Thompson’s Engineering and Pipe Company Limited, having been heard at considerable length. The case affords a striking commentary upon the attitude of those honorable senators who oppose the proposals of the Government and the recommendations of the board, because this is one of those cases in which the indirect protection, that is given to the industry is tremendous, under the rates provided by the Bruce-Page Government. The board states, at page 10 of its 1933 report- it is important to recognize that the value of the Australian-made . portion would represent a much lower proportion of the whole measured in terms of overseas costs, and the following examples show how the practice of charging duty at 45 per cent, ad valorem on a complete steam turbine, but allowing free entry .of a substantial proportion of the machine, may cloak unduly high protective incidence of the tariff on the parts that may be made locally. Assumed that in Australia GO per cent, of the value of a turbine is locally mode, and 40 per cent, imported duty free, and that the landed duty-paid cost of an imported machine is the same total amount^-

As the ‘imported parts value 40 is common to both cases, it will be seen that the ci.f. value of the parts, corresponding to the locally-made parts of- value 60 is 29 (69 minus 40), showing^ that the protective incidence in this case is equivalent to a duty of 31 (60 minus 29) on 29, or 107 per cent, ad valorem on the parts made in Australia,

That is one of the features of the tariff that I thought honorable senators were desirous of striking out. Another illustration is given, with which I do. not propose to weary the Senate, which shows that a protection of 163 per cent, ad valorem is given on parts that are made locally. This is part of the Government’s scheme to bring about a reasonable degree of protection, and to eliminate such inordinate rates of duty as 107 and 163 ner cent. The report states, at page 11 -

The c.i’.f.- value of the local parts if imported would, therefore, be 10 (70 minus 60), but as they are charged at 40, the protective incidence is equal to a duty rate of 300 per cent, ad valorem.

The municipalities and other bodies which use these generators already have a heavy enough burden imposed upon them, and the Government submits the proposed rates to honorable senators in the hope that relief will be given which, by the by, will not drive one single, person out pf employment, but will enable these big organizations to install generators at a reasonable cost. I recollect the time when the late Sir John Monash and some of his associates on the Victorian Electricity

Commission pointed out to me that the duty charges that were incurred in importing some of these articles ran into thousands and thousands of pounds - and that was in the time of the Bruce-Page Government. ‘ The report quotes Mr. Aird as having said -

In 1928, the Tariff Board conducted a very thorough investigation into the manufacture in Australia of turbo-alternators and turbogenerators. As a result, a by-law was gazetted which gave Australian manufacturers reasonable protection. Due to the operation of this by-law, large contracts for turbo-alternators and accessory equipment have been carried out by Thompson’s Engineering and Pipe Company Limited, and other Australian manufacturers of a total value estimated at £230,000.

But under what conditions ? A protection of 300 per cent, and, in other instances, of 107 and 163 per cent.! Honorable senators have had the February, 1933, report in their possession since last May, while the October, 1932, report has been before them for a considerably longer time, so that they have had ample opportunity- to investigate the incidence of -these duties. Yet to-day telegrams were received from the managing director of Thompson’s Engineering’ and Pipe Company, urging the committee to disregard the recom’mendations of the Tariff Board and again have the matter investigated.

Senator O’halloran:

— The matter was previously referred back to the Tariff Board.

Senator MCLACHLAN:

– Only because the Government required to be informed concerning certain matters, particularly whether the duties would cause anybody to be thrown out of work. The board has indicated plainly in its report that not one man will lose his job as a result of these duties. Why, therefore, should the, committee at this eleventh hour be asked to judge a matter which has been so exhaustively investigated by the Tariff Board, assisted by technical experts and experienced business men ? This is one of the first instances of a downward revision of the tariff on the sound lines that I have indicated to honorable senators. The Government is providing for a sound measure of protection, that is, British 45 per cent., and general 65 per cent., and is arranging for the free admission of parts, not under by-law, but under the tariff itself. No one has any desire to curb the activities of these industries in Australia, and this committee cannot do better than act upon the sound advice tendered by the Tariff Board which, I believe, reflects the opinions of honorable senators.

Sitting suspended from 6.1J). to 8 p.m.

Senator ELLIOTT:
Victoria

– I am personally and vitally interested in the prosperity of the people and township of Castlemaine, and, therefore, I shall say very little on this subject. Apart from all other considerations, I feel that honorable senators are duly impressed by the fact that this is the first sub-item of the schedule on which the Minister has recommended the Senate to submit a request to the House of Representatives, .and, naturally, we are deeply interested in the reasons given for this action. Judging by the attitude of the Minister, he is obviously seised of the great importance of this sub-item. I listened attentively to all the extracts which he read from the report of the Tariff Board, but, notwithstanding that, I could not follow his reasoning and arguments, because I was unable to catch the spoken word. The Minister appeared to be emphasizing . the great importance of the Tariff Board’s report on this item, but he appeared also to be thoroughly unfamiliar with it, and that perhaps was quite natural when we consider the great number of matters that have been brought before his notice. The Leader of the Opposition (Senator Barnes) was, obviously, at a disadvantage in following the remarks of the Minister and in discussing this sub-item. Although he apparently had all the documents before him, he was still unable to follow the extracts which the Minister read from the Tariff Board’s report. That, I think, can also be said of many other honorable senators, and I plead guilty to having been one of them. Senator Lawson reminded us that the great Thompson engineering establishment is the only surviving one of its kind outside the metropolitan area of Victoria. He told us also that this subitem waa vitally important to that rural industry, and he spoke of the serious consequences of any action of the Government which Would interfere with it. He reminded us also of the advantages of decentralization in a State in which 1,100,000 of its’ 1,900,000 inhabitants are centred in the metropolis. Taking all these elements into consideration, I appeal to the Minister to postpone this sub-item so as to give honorable senators before they vote on his request, an opportunity to make themselves familiar with it and to study the report of the Tariff Board, which has been quoted so freely this afternoon.

Senator BRENNAN:
Victoria

– I, too, have to admit to great difficulty in making up my mind on this subject, and if because of that I may be accused of vacillating, I can merely point to the very terms of the schedule itself to show how complicated the subject is and how almost impossible it is for any one except an expert engineer to follow, either the items in the group, or the explanation given by the Minister. Although I pay a willing tribute to the Minister for the’ help that he has given us, in respect of this extremely complicated schedule, I confess to some difficulty in following his arguments in the powerful speech that he made this afternoon. He spoke of some of the duties that are varied by this alternative schedule, as running up to 300 per cent., and that is the part which I have difficulty in following.

Senator McLachlan:

– It is fully ex plained on pages 10 and 11 of the board’s report.

Senator BRENNAN:

– I find, in respect of the first sub-item, duties of 45 per cent, and 65 per cent., and in respect of the remainder of the sub-items, with the single exception of one appearing on the first sheet, a long list of duty free. Turning to the second page, I find duty free and 45 per cent, alternating with each other. I ask, therefore, for some guidance as to which of the larger sub-items are subject to a duty of 300 per cent. If they are spare parts, they come under the ad valorem rate of 45 per cent. They cannot go above that. If they are spare parts which the company itself wishes to import, I cannot think that it should want a high duty. I should have thought that in that case the company would want as low a duty as possible. That is the difficulty with which I am faced. I am also in a difficulty because of the fact that almost consistently I have voted so far for lower duties. This, we are assured, is the first occasion upon which the Ministry itself has produced lower duties for 0Hr consideration. That being the position, I find great difficulty in ranging myself against the Government. The position seems to be that if these new proposals of the Government are adopted by us, they must then go back to the House of Representatives for further consideration. If we merely adopt the schedule, or that part of it which is before us, it can be reconsidered by this chamber only by way of recommittal, whereas new proposals agreed to by us will receive further consideration in another place, and, if not accepted, will come before us for further review.

Senator McLachlan:

– The new duties would have to run the gauntlet of the House of Representatives.

Senator BRENNAN:

– But the old duties, if adopted, would not come up for reconsideration unless by way of recommittal. One advantage of adopting these new duties and thus referring them back to the other House for consideration is that it will give honorable senators what they have been asking for, and that is additional time for the consideration of this sub-item, not merely by us, but also by the country and the House of Representatives, which, after all, in matters of taxation and finance, claims to have the first arid greater responsibility. If I can bo satisfied by any explanation of the Minister as to the nature of these subitems, which are subject to exorbitant rates of duty, then my difficulty may be removed to the extent that I shall’ vote with the Government in the knowledge that this new schedule, or portion of it, will have to receive. the further consideration of the House of Representatives.

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

– I have previously explained to honorable senators the position which the Tariff Board found to exist under the Bruce-Page and Scullin tariffs. The board made a comparison as to re sults that would follow if the duties under those tariffs were continued, and I do not think I oan do better than quote the remarks of the Tariff Board in respect of this sub-item. The board, on page 10 of its report, stated -

In n number of important cases covering at least two-thirds of the power listed above, tenders received for wholly-imported units duty paid have been below the prices for part locally-made units. It is important to recognize that the value of the Australian-made portion would represent a much lower proportion of the whole measured in terms of overseas costs, and the following examples show how the practice of charging duty at 45 per cent, ad valorem on a complete steam turbine, but allowing free entry of a substantial proportion of the machine, may cloak unduly high protective incidence of the tariff on the parts that may be made locally. Assumed that in Australia 60 per cent, of the value of a turbine is locally made, and 40 per cent, imported duty free, and that the landed duty paid cost of an imported machine is the same total amount -

As the imported parts value 40 are common to both cases, it will be seen that the c.i.f. value of the parts corresponding to the locallymade parts of value 00 is 29 (69 minus 40) showing that the protective incidence in this case is equivalent to a duty of 31 (60 minus 29) on 2D, or 107 per cent. ad valorem on the parts made in Australia.

The c.i.f. value of the local parts, if imported, would, therefore, be 10 (70 minus 60), but as they are charged at 40, the protective incidence ia equal to a duty rate of 300 per cent, ad valorem.

That problem has been explained to me by a series of tables showing that’ a small proportion of the parts are made locally, and that, the larger proportion are imported duty free. That enables the local manufacturer to assemble a machine only partly of local manufacture free of duty, whereas the duty on a machine wholly manufactured overseas would be £200. ,

Senator Brennan:

– A great portion, of the parts that go to the making of a machine must be made abroad.

Senator McLACHLAN:

– That is the point made by the Tariff Board.We were admitting parts of these machines under by-law duty free. The local manufacturers took advantage of that by making a small proportion of the parts of the machine here under the protective duty of 45 per cent., and importing the balance of the parts, really the greater proportion, duty free. By that means they obtained the machine duty free. Had they imported it complete they would have had to pay a high rate of duty. The Tariff ‘ Board has handled this matter scientifically. The old arrangement has been discontinued.

Senator Sir Walter Kingsmill:

– What was happening under the old arrangement was very evident in the Cockatoo Island case.

Senator McLACHLAN:

– Yes ; that happened in respect of the Bunnerong plant. I believe that it was after the illustration afforded by that case that the Tariff Board realized the position into which it had causedus to drift by the report that it made in 1928. On this occasion, it was determined to avoid a repetitionof that experience. As Senator Brennan has said, this will have to run the gauntlet of a further examination in another place. The matter has not been sprung on the committee. The earlier report of the board has been available to honorable senators since the beginning of the year, and the later report was published in April last. Every interested party was given the opportunity to make representations to the board. I repeat that the board, and not Parliament, is the proper authority to consider representations, because it is in a position to judge between the conflicting interests. The question has been before Cabinet on two or three occasions, and. the Government is seised of the importance of it from every point of view. I regret that I cannot consent to defer the consideration of the sub-item.

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

AYES: 17

NOES: 10

Majority . . . . 7

AYES

NOES

Question so resolved in the affirmative.

Request agreed to.

Sub-item agreed to, subject to a request.

Item 179, sub-item (d2 a1 2,b1 2, c1 2, d) (Static transformers n.e.i.).

Senator PAYNE:
Tasmania

.- I should like to learn why the British rate on static transformers, n.e.i., has been increased from 35 per cent, to 45 per cent, in four cases.

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

– The proposed rates are in accordance with a recommendation recently submitted by the Tariff Board, with the exception that the Ottawa agreement’ formula has been applied on those lines which are within the scope of Australian manufacturers. The rates on those transformers which can be manufactured locally, are 10 per cent, higher under the British preferential tariff, and 15 per. cent, higher under the general tariff, than the duties provided by the 1921-30 tariff. The previous Government proposed fixed rates according to the k.v.a. rating, with alternative rates of 60 per cent. British, and 75 per cunt, general.

This sub-item covers many types of transformers, which range from a few watts to 50,000 k.v.a., with voltages up to 200,000. The cost of these goods is an important item in the capital outlay of electricity supply authorities, and is reflected in municipal costs and most household accounts; consequently, it is necessary that they be available at as low a cost as possible.

There are five firms interested in the manufacture of static transformers in Australia, and the Tariff Board has recommended increased duties, compared with the 1921-30 tariff, on the types of transformers manufactured locally, with provision for the admission free of duty of those transformers which are outside the scope of Australian manufacturers. Provision is also made for tapering duties on those machines which might be substituted for the local article, with a view to ensuring that substitution does not take place. The board was satisfied that the local goods are of good quality, reliable, and up to date. From 15 per cent, to- 62 per cent, of the materials used, according to the type of transformer, are imported and admitted free of duty from the United Kingdom. The materials >are charged duty if imported in the complete machines, and, consequently, the ad valorem equivalent of the protection afforded on the work performed in Australia is in excess of that shown in the sub-item. The capital employed directly in the manufacture of these goods is approximately £125,000, and the number of employees engaged is 100. The previous Government proposed fixed rates of duty based on the k.v.a. rating. This, it is considered, is not the best method of charging duty, as the k.v.a. is not in- dicative of the value of the article. The fixed rates proposed by the previous administration ranged as high as 280 per cent., and exceeded the total factory cost, including overhead. In some cases, they exceeded, the selling price, including oil, of the Australian article. The local prices compared favorably with the United Kingdom prices when wage conditions were considered, but a comparison with the Swedish prices showed that such prices were unduly low. However, static transformers from Sweden have been gazetted under section 4 of the Customs Tariff Industries Preservation Act 1921-1922, and this ensures that such transformers are not dumped on the Australian market. The evidence tendered to the board shows that local manufacturers have not taken undue advantage of the tariff, and that the internal competition has kept prices at a minimum. The proposed rates should effectively protect efficient and economic manufacture of transformers in Australia, and at the same time impose no undue burden on the community. The rates are sufficient to return a fair margin of profit on necessary capital. If, however, special equipment is required, and cannot be manufactured in Australia, the by-law provisions of the tariff are available. The report of the board is a recent one, having been made in October, 1932. The board did not lose sight of the factors which are’ probably weighing on the honorable senator’s mind.

Senator PAYNE:
Tasmania

– I thank the Minister for the lucid explanation that he has given, and congratulate him and the Tariff Board on their recognition of the fact that fixed rates of duty are not in the best interests of either the importer or the consumer. I was pleased to hear the admission that, having’ ascertained that these fixed rates were equivalent’ to an ad valorem tariff of up to 200 per cent., the Government, in its wisdom, accepted the recommendation of the board that there should be an ad valorem rate. I hope that, in future, this practice will be adopted in regard to many items; because, after all, the ad valorem rate must be accepted as the fairest, as the duty is controlled entirely by the value of the article imported:

Sub-item agreed to.

Item 180, sub-items (bI, 2a, b) (c), agreed to.

Item 180, sub-item (e3, 5, 6, 17<i, b, 22, 23, 25, 26) (Wireless receivers, parts thereof, and accessories therefor).

Senator PAYNE:
Tasmania

– Honorable senators will notice that under the 1921-30 tariff, the fixed rate of 35 per cent. British and 50 per cent, general applied. Then, by resolutions of the previous Government, a fixed rate of 10s. and 15s. respectively became operative. Now, the fixed rate proposed is 5s. and 10s. respectively, the ad valorem principle having been discarded. In view of the explanation given on the previous item, I should like to hear what the. Minister has to say in justification of the fixed rate being retained in this case.

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

.- -The report of the Tariff Board on this matter was made on the 26th January, 1933. I believe that the board found that nothing but a’ fixed rate could be administered effectively.

The parts mentioned in the paragraphs under, discussion are not recorded separately. The importations of wireless receiving sets were as under: -

The importation of wireless receiving sets was prohibited from the 4th April, 1930, to the 3l8t August, 1932. Reductions on the previous Government’s rates have been made on each of these paragraphs. The Tariff Board’s report deals fully with the particular goods covered by each of these paragraphs, and the fixed rates have been carefully related with the duties on the complete receivers. Wireless receiving set manufacture in Australia has rapidly developed since the establishment of our national broadcasting stations, and right through the depression has consistently gone ahead, giving considerable employment to many persons, and rapidly improving the quality of the sets manufactured. Prices have been reduced, and are now only 50 per cent, of what they were prior to the. duties being first increased. On this aspect the board states that, although prices have fallen both in the United Kingdom and the United States of America, the Australian prices have fallen to a relatively greater extent. The duties on the complete receivers are the same as recommended by the Tariff Board in 1929; but, owing to the drop in prices since then, they are proportionately higher. The fixed rates have been applied in order to counteract any dumping of endofseas’on or out-of-date receivers on the Australian market. The Tariff Board stated that these duties would prove adequate for the protection of the local industry, and the fact that no complaint has been received from the Australian manufacturers indicates that they are satisfied’ with the protection now proposed. The scientific development of wireless transmission is so rapid that it may prove a menace to Australian manufacturers, who may not be quite up to date. The Australian market could be flooded with out-of-date equipment, which, for the reason previously given, cannot be effectively controlled under the Australian Industries Preservation Act. The provisions of that act cannot be applied to goods sold in Australia at current market prices in the United States of America.

Senator PAYNE:
Tasmania

– I am indebted- to the Minister for the information he has given on the points I raised, but I submit that he has not fully stated the position. Can the Minister say how the fixed rates compare with ad valorem rates, or what is the equivalent in the ad valorem rate? His suggestion that a lot of wireless equipment that is obsolete in the United States of America may be dumped in Australia to the detriment of Australian manufacturers does not appeal to me. Are those handling this equipment in Australia so behind the times that they cannot compete with out-of-date wireless equipment which may be dumped in Australia? Yet that is what the Minister suggests, and it does not reflect credit upon Australian manufacturers.

Senator Dooley:

– A wireless set may become obsolete within a few days owing to improvements in construction.

Senator PAYNE:

– If we are to keep pace with wireless development we should be able to manufacture the latest in wireless sets and accessories. If our. manufacturers are producing something which is out of date in other countries they are behind the times. It is difficult to discuss these duties intelligently in the absence of the prices of the accessories set out in the schedule. I should like to know how the fixed duties on different articles mentioned compare with ad valorem rates. All that we know is that on a loud speaker the rates are 1Os. and 12s. 6d., on condensers ls. and ls. 6d., and on choke coils 5s. and 10s. We have no idea of what these duties represent on an ad valorem basis.

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

.- With the assiduity which honorable senators have displayed in connexion with other tariff items, I had hoped that they had read the Tariff Board’s report on this subject. The board has taken into consideration all the factors mentioned by Senator Payne, with, I think, one exception. I do not think that wo are behind other countries in wireless development, and, in some instances, I am inclined to think that we are ahead of them ; but 6,500,000 brains cannot hope to keep pace with 120,000,000. brains. Our manufacturers may be lacking in some respects, but I am assured that they are keeping in close touch with the latest developments in other countries. The Tariff Board stated that-

The present position of the industry in relation to competition from overseas is very similar to that applying at the time of the board’s inquiry in 1928. On account of the possibility of the importation of large quantities of receivers from surplus stocks overseas, which may be invoiced at distress prices, ad valorem rates of duty are ineffective, and high specific rates are necessary to adequately protect Australian manufacturers. A large amount of capital has been invested in factories and employment is being given to a large number of operatives. Wireless broadcast receivers are not essential in other industries, and their production in Australia at costs in excess of world’s prices will not detrimentally affect the costs of the products of other industries. The industry is capable of further development, and adequate protection should ensure to Australian manufacturers greater outputs per factory, which should result in further reductions in prices.

After dealing with the quality of the Australian product, and the cost of distribution, it said -

The board is convinced that the rates of duty provided In the tariff proposals of 3rd May, 1932, are higher than necessary on broadcast receivers, and recommends the adoption of the rates previously recommended by the board in the report dated 23rd December, 1929. On account of the general reduction in prices throughout the world since that date, the rates now recommended are relatively higher than they wore in 1929.

Taking into consideration the capital already invested in the industry, the board realizes the necessity for maintaining rates of duty which will adequately protect efficient manufacturers selling at reasonable prices. The duties now operating, which represent ad valorem rates of 150 per cent. (British Preferential Tariff) and 455 per cent. (General Tariff) calculated on the basis of exchange at par, are, however, excessive. Their maintenance may tend to retard improvements in designs, and may also permit of unreasonably high prices being charged by Australian manufacturers.

To protect choke coils adequately the board recommends alternative ad valorem rates of British, 35 per cent. ; and general, 55 per cent. In dealing (with the specific duties, the board stated -

With specific rates of duty of 12s. 6d. (British Preferential Tariff) and 20s. (General Tariff) per valve socket on receivers, and rates of 40s. (British Preferential Tariff) and 60s. (General Tariff), each on BC and ABC battery eliminators and power packs, the board eaidilates that the proportionate rates of duty which should apply to choke coils used in battery eliminating devices should be 5s. (British Preferential Tariff) and 10s. (General Tariff) each. From advices received regarding f.o.b. prices overseas, the board is satisfied that these rates will constitute adequate protection against the importation of goods of the lowest quality, and price. To adequately protect higher priced choke coils, the board recommends alternative ad valorem rates of 35 per cent. (British Preferential Tariff)’ and 55 per cent. (General Tariff).

It is obvious that on the prices ruling at that time the rates were less than 35 per cent, and 55 per cent. As much depends upon the cost of the article overseas, the board has adopted the alternative of imposing a specific duty. The board indicated that the rates recommended are sufficiently high to ensure Australian manufacturers holding the market, provided that they do not increase their manufacturing costs or prices. It considers that on the low-priced goods ad valorem duties of 35 per cent, and 55 per cent, are sufficient.

Senator PAYNE:
Tasmania

.- I -was afraid, as I still am, that those who cannot afford to pay a high price for wireless receiving sets may be penalized. We need to popularize wireless transmission as much as possible. If the ad valorem rate on the lower-priced goods would be about 5s., whereas the flat rate is 12s. 6d., my inquiry is justified The ad valorem duty on higher-priced goods seems reasonable, but if the lowerpriced goods are not being manufactured in Australia a good many people will be prevented from purchasing because the cost is too high. I am not in a position to criticize this item in detail, because I do not know the value of the different accessories. I shall have to accept the statement made by the Minister that the Tariff Board has given this matter its close atttention.

Sub-item agreed to.

Item 180, sub-item (k) -

  1. Electrical fittings and accessories, viz. : - Flush plates, connectors, ceiling roses, moulded landholders with or without switches, adapters, wall sockets, wall plugs and wall plug tops, ad valorem, British, 35 per cent.; general, 55 per cent.
Senator Payne:

– I should like the Minister to explain why the British duty has been increased from 27½ per cent, in the 1921-30 tariff to 35 per cent.

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

– These duties agree with the Scullin Government’s rates with the exception that flush plates, connectors, and wall sockets, upon which no increase had been proposed by the previous Administration, have been added to the subitem. The Tariff Board recently recommended these rates in connexion with the duties on sub-items 179 b and c, which have already been passed. This subitem covers that portion of electrical equipment, with the exception of switches, which is used in the installation of electric light or power supply in buildings. These goods are extensively made in Australia, and the board stated that the introduction of manufacture from moulding powders has enabled the local makers to produce satisfactory goods much more easily than when metal and porcelain only were used. The board was satisfied from a perusal of production costs and selling prices that the proposed duties would be sufficient to protect local manufacturers.

Senator PAYNE:
Tasmania

.- I have not the slightest doubt that these rates will provide ample protection for the Australian industry, but was not the duty of 27½ per cent, under the 1921-30 tariff sufficiently protective? I am strongly opposed to raising the tariff unnecessarily. Whenever we can do so with safety to Australian industries, wo should lower the duties in order to reduce the cost of living. Instead, we seem to be forcing up the cost of nearly every item. I move -

That the House of Representatives he requested to make the duty, sub-item (k), ad valorem, British, 27½ per cent.

SenatorRAE (New South Wales) [8.55]. - I ask the committee not’ to entertain Senator Payne’s proposal. The subitem includes switches and some of those with which Japan is flooding the country are not only trashy, but positively dangerous.

Senator Payne:

– I am not suggesting any alteration in the general tariff.

SenatorRAE. - I should like to see the duties raised rather than lowered.

Request negatived.

Sub-item agreed to.

Item 184 -

Washers and rivets, copper, ad valorem, British, 35 per cent.; general, 55 per cent.

Senator PAYNE:
Tasmania

– In the 1921-30 tariff, copper washers and rivets from the United Kingdom were admitted free of duty, and the rate under the general tariff was only 10 per cent. What is the reason for the extraordinary increase to 35 per cent, and 55 per cent, respectively?

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

– The board reported on washers and rivet’s on the 19th January, 1933, and the rates now proposed represent reductions of 10 per cent, in the British tariff, and 5 per cent, in the general tariff in comparison with those in the Scullin schedule. The amount of direct employment in the manufacture of these goods is net great, representing only one-sixth of the total cost of production.

However, 90 per cent, of the material used is copper product from local sources, and employment in the production of copper is thus increased. The board was satisfied that the reduced duties are necessary, and afford sufficient protection for the industry. The importations,- principally from the United Kingdom, totalled, last’ year, 258 cwt., valued at £1,826. According to the board’s report, the average normal requirements in Australia of copper rivets and washers were estimated to be from 75 to’ 80 tons annually. In the production of this quantity in an up-to-date factory working continuously throughout the year, about twenty persons would be employed. The purchase of material represents approximately two-thirds of the total cost of production. After reviewing the prices of raw materials and selling prides, the board added -

In view of the figures submitted, the imposition of a” duty must inevitably lead to the Australian consumer paying higher prices than would be required if the goods were admitted free of duty. With the comparatively high price for raw material in Australia, there is no possibility of the Australian manufacturer reducing his price to the level of the landed cost to store in Australia of the imported article free of duty and primage.

The board considers that any excess cost to the Australian consumer should be limited to the lowest level essential to the protection of efficient local production. A duty of 35 per cent, under the British preferential tariff would afford sufficient protection during the operation of the existing exchange. Should the present adverse exchange rate be reduced there will also be a corresponding reduction in the price of the raw material in Australian currency, which should enable local production to be maintained without additional protection.

The claim was made at the inquiry that an ad valorem rate of duty of 45 per cent, applied under the British preferential tariff to iron rivets, and that it was, therefore, reasonable to apply a similar rate in respect of copper rivets. But the board pointed out that the actual protection in pounds sterling afforded by an ad valorem duty would be much less on a product of iron than on a similar product of copper, on account of the much higher value of the latter. Similarly, the labour involved, which is practically the same in both instances, represents a much higher percentage of the costof production in the case of the iron rivet than in the case of the copper.

The board, without praising the industry, recommended the duties imposed in the hope, doubtless, that the industry would develop, though possibly not to its full limit.

Senator PAYNE:
Tasmania

.- I am not at all satisfied with the Minister’s explanation. Although copper rivets and washers were free from Great Britain under the 1921-30 tariff, they were then being manufactured in Australia. The present duty, with exchange, primage and transport costs, is equivalent to a protection of about 85 per cent. I have no objection to reasonable protection, but I am opposed to a prohibitive duty being imposed against British goods. I, therefore, move -

That the House of Representatives be requested to make the duty, ad valorem, British, 20 per cent.

Question put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)

AYES: 11

NOES: 15

Majority . . . . 4

AYES

NOES

Question so resolved in the negative.

Request negatived.

Item agreed to.

Item 190, sub-items (b1, 2, 3) (c) (Smoothing irons).

Senator PAYNE:
Tasmania

.- Under sub-item b1, electric smoothing irons, there is a duty of 5s. British and 7s. 6d. general, or an ad valorem rate of 45 per cent. British and 65 per cent, general, whichever rate returns the higher duty. I should like the Minister to explain the reason for the increase of the duties.

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

– The alterations made in this sub-item affect electric irons and heating elements therefor, and smoothing irons n.e.i. A fixed rate of 5s. in the British tariff and 7s. 6d. in the general tariff is imposed, and the ad valorem rates are increased by 10 per cent, and 20 per cent, respectively. Fixed rates of 3d. British, and1s. general, are imposed on elements for such irons, with a similar increase in the ad valorem rates, as are provided in the case of electric irons. The duties on smoothing irons, n.e.i., are also increased by 10 per cent, and 20 per cent, respectively. The present rates conform to the recommendation submitted by the Tariff Board on the 16th June, 1930, with the exception that an increase of 5 per cent, has been made in the general tariff rates to conform to the Ottawa agreement formula. Prior to 1927, practically all these irons were imported, principally from the United States of America, but arrangements were made with certain American companies for their manufacture in Australia. Approximately £20,000 is now invested in this industry, the estimated value of the annual output is £42,000, and the number of employees engaged is approximately 60. The selling price of the well-known “ Hotpoint “ iron was reduced by 5s. within a few ‘months of the establishment of its manufacture in Australia. The fixed rates were recommended by the board in order to bring the price of the non-guaranteed cheaper imported iron into closer approximation to Australian manufacturers’ selling prices. “When the. board made its investigation these nonguaranteed irons were generally quoted at 5s. 6d. each f.o.b. Germany, and the board stated that they represented surplus production, which was being sold at bare cost. Even at these duties, under, normal conditions these irons could be landed at a lower figure than Australian manufacturers’ selling prices, so that the fixed rates are by no means prohibitive. The imported iron of the class referred to did not carry any guarantee as to quality, nor did the sellers assume any responsibility for subsequent servicing. As regards the better class of iron, the Australian manufacturer is now in a better position to compete. The fixed rates of duty imposed on elements were also recommended by the board, because these goods were being quoted at1s. each f.o.b. Germany, and the board took the view that the Australian manufacturer who was producing or purchasing locallymade elements for his electric irons should not be undersold by other competitors who were importing their elements, and only partly manufacturing irons. The board states that, in view of the high retail selling price of elements for replacement purposes, the public will not have to pay increased prices. As regards smoothing irons n.e.i., the board considers that an increase of the rates is justified by the difference between the landed cost of imported irons and manufacturing costs in Australia.

Sub-items agreed to.

Item 194, sub-items (a) (bI, 2) (c) -

Chain and chains of base metal, viz. : -

  1. Wrought iron and steel, composed of welded links manufactured from metal i inch in diameter and over, ad val., British, free; general, 15 per cent.
  2. N.E.I., not made up into serviceable articles, ad val., British 27½ per cent.; general, 45 per cent.
Senator E B JOHNSTON:
Western Australia

– Formerly plough and trace chains were included in sub-item a, which is now free British, and carries an ad valorem duty of 15 per cent, in the general tariff, compared with rates of 50 per cent. British and 60 per cent, general under the Scullin tariff ; butI have been informed that plough and trace chains are not now included in this sub-item. Will the Minister explain the reason for the alteration? I believe that the users of ordinary plough and trace chains should get the benefit of the reduced duties. I have been given to understand that since the duty was reduced, trace chains have been removed by the depart ment to item 325 a, which covers leather manufactures, leather harness, razor strops, &c. This, of course, may apply only to composite chains, made partly of leather and partly of metal; it seems almost incredible that it should apply to metal chains. In any case, it seems to be an attempt by means of tariff-juggling to extort the maximum in the way of duty from those who use these articles. I move -

That the House of Representatives be requested to add the following paragraph to sub-item (a) -

Plough and trace chains, ad valorem, British, free; general, 15 per cent.

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

– This is a complex item, which was reported upon by the Tariff Board on the 23rd December, 1931.In 1928-29, importations from the United Kingdom were valued at £16,602, but in the following year the value had fallen to £14,124. Importations from other sources were negligible. I propose dealing separately with each of these sub-items, which cover a particular class of chain. By doing so, honorable senators will, I have no doubt, better appreciate the position. Sub-item a covers wrought iron and steel chains composed of welded links manufactured from metal½ inch in diameter and over. Under the 1921-30 tariff, the rates of duty on these chains were - 30 per cent. British and 40 per cent, general. The last Administration increased the rates to 50 per cent. British and 60 per cent, general. The present proposals provide for their admission at free and 15 per cent., which rates agree with the Ottawa agreement, formula.

Despite the duty under the 1921-30 ta riff, most of our requirements of this class of chain were imported, the average importation being 500 tons per annum, mostly of United Kingdom origin. A small quantity was, however, manufactured in Australia by a company which went into liquidation, and was finally taken over by the Falkiner Machinery Company, of Brisbane. This latter company is now manufacturing similar chain.

At the time of the Tariff Board inquiry, ‘the Brisbane company was charging £2 14s. per cwt. for 1½in. chain, to £3 15s. 9d. per cwt. for½-in. chain. This chain is manufactured from imported English iron admitted free of duty under departmental by-law. Prices are 3s. -to 4s. lower when Australian iron is used. Of the total iron used by the company in the manufacture of wrought-iron chain, 75 per cent, is obtained from England, and the balance is of local origin. The Tariff Board ascertained that the demand for this type of chain was greatest in the smaller sizes, and, for the purpose of comparing overseas and local prices, adopted a size of5/8 inch. The prices charged ‘ by theFalkiner Machinery Company for this size are -

As no importations of “ BBB “ quality chain could be discovered, the board adopted the price of “ BB “ as a basis, and made an allowance to bring the price up to “ BBB “ quality. The f.o.b. price, of English chain of this quality was £1 7s. per cwt., and, landed duty free under normal conditions, the cost would be £1 12s. On this basis it would require a duty of £1 16s. 3d. per cwt., or an ad valorem duty of 122 per cent, under theBritish preferential tariff, to bring the lauded cost of the imported chain up to the f.o.b. price of Australian chain. As purchasers in other States of the Australian chain would require to pay interstate freight and landing charges on top of the f.o.b. price quoted, the imported chain could still be landed cheaper under such a high duty as that quoted. In making this price comparison, the board ignored recent importation of similar chain, which was invoiced at a price of £1 4s. 6d. per cwt. lower than the figure adopted for comparative purposes. Had the calculation been made on this later shipment, the ad valorem duty required to equalize prices would be 165 per cent, uuder the British preferential tariff.

Under normal conditions, the duty proposed by the last Government would have been useless to the industry, and would have served only as a revenue duty. The imposition of rates which would protect the local company would result in excess costs quite out of proportion to the value of this branch of the industry to Australia. The high duties I have quoted would be necessary, in addition to the free admission of the English wrought iron.

I cannot refrain from commenting that it would have been far wiser if the previous Government had allowed the company which was manufacturing this chain to withdraw from manufacturing activities so far as this particular type of chain is concerned. The company was bankrupt, and this state of affairs was occasioned by the company attempting the manufacture of an article which could not be produced without prohibitive duties. When the increased duty was imposed, the plant of the company was sold to the Falkiner Machinery Company. The previous proprietor certainly displayed business acumen in selling out after the increased duties were imposed, as his knowledge of the industry must have convinced him that, even under the higher duties, he could not have met the competition of English manufacturers.

Wrought iron and steel chain and chains composed of welded links manufactured from metal under half-inch in diameter are classifiable under sub-item c of the present proposals at rates of duty of 27½ per cent. British preferential tariff, and 45 per cent, general tariff. The rates provided for under the previous Government’s tariff were 50 per cent British preferential tariff, and 60 per cent, general tariff. The bulk of the business done in this type of chain covers the electrically welded chain as distinct from the hand forged type. One company manufactures the latter type whilst two companies manufacture the former. Australian requirements are stated to be from 350 to 400 tons per annum. It is interesting to note that the company which has been producing electrically welded chain for the longest period was not represented at the Tariff Board inquiry, but the board obtained particulars of its production costs and selling prices, and was satisfied that a duty of 27½ per cent. British preferential tariff, with normal conditions prevailing, was sufficient to protect the local manufacturer.

The following excerpts are taken from the Tariff Board’s report on the item: -

While an infinite variety of serviceable articles composed of welded chain manufactured from metal under half inch in diameter is used in Australia, most of such articles have in the past been manufactured in Australia from imported or locally manufactured coil chain. In many instances, such articles are not standard, and have to be manufactured for special purposes. Consequently, importations of serviceable articles have been confined to standard lines of which the most important were harness chains such as trace chains, plough chains, tug chains, back-band chains, and other smaller chains used as fittings on harness.

The Australian manufacturers of the chain dealt with in the preceding section of this report, also manufacture harness chains, and have been in production since early in 1930. As in the case of coil chain, the board obtained from the Bennett Chain Company Limited, Brisbane (which was not represented at the inquiry) all of the particulars it required in reference to the company’s operations and prices.

In the group of harness chains, the lines in greatest demand are plough chains and trace chains, which are sold by both Australian manufacturers at a wholesale price of 60s. per cwt., less 10 per cent, discount for large quantities. The Bennett Chain Company Limited quotes this price for deliveries f.o.b., Brisbane, and Pitt-Waddell Proprietary. Limited for deliveries f.o.b., Melbourne.

No evidence was tendered in opposition to the request for increased duty.

The board is, therefore, of the opinion that the Australian manufacturers will be . adequately protected by the imposition of the duties recommended in respect of coil chain of sizes under half inch, namely, 27½ per cent. British preferential tariff, 35 per cent, intermediate tariff, and 40 per cent, general tariff. Plough chains and trace chains have been specifically mentioned in this report, but the board is satisfied that the duties suggested would afford reasonable protection in respect of all other harness chains at present in use.

Senator Guthrie:

– Is it worth while bothering about this industry? I understand that a man in Brisbane was the only person in Australia who twas manufacturing these chains, and that as soon as he obtained this duty he sold out. How many men did he employ?

Senator McLACHLAN:
SOUTH AUSTRALIA · NAT

– I do not know.

Senator COLLINGS:
Queensland

.- When the Minister had made the first portion of his statement on this matter, it appeared to me that if the chains covered by sub-item 194 a are being admitted free under the British preferential tariff, there is no reason why plough and trace chains, and other harness chains, should not also be free of duty; but, from the latter portion of the Minister’s statement, I understood that the chains which Senator Johnston desires to be free are being manufactured in Australia. A most efficient chain-making factory was operating in Brisbane, and I have always been under the impression that it was capable of making any kind of chains required. If the Minister can assure me that protection should be given to enable harness chains to be made, in this country, I shall oppose placing them on the free list.

Senator McLachlan:

– As my colleague, Senator Massy Greene, wishes to make a statement to the Senate on an important matter, I shall have an opportunity, during the brief period that will elapse before the committee resumes its deliberations, to investigate the points that have been raised.

Progress reported.

page 2924

FINANCIAL STATEMENT

Revenue and Expenditure for 1932-33

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

[9.38]. - by leave - I desire to take this opportunity to inform honorable senators of the financial results disclosed by the accounts for the year just closed. There are still some entries to come to hand, but the approximate results disclose a surplus of £3,545,000. The budget estimates of revenue totalled £65,986j000, and the actual revenue Avas £73,512,000, or an increase of £7,526,000. This in crease was most gratifying, and was mainly due to the following : -

Decreases in land tax collections amounted to £150,000, and in estate duties to £173,000. When the budget was brought down, Australia had passed through a difficult year, its imports having fallen to £44,000,000 sterling. The imports for the two previous years, viz., 1929-30 and 1930-31, were valued at £131,000,000 and £60,000,000 sterling respectively. The outlook was uncertain, and the budget estimate was framed on a slight improvement. The year, however, has disclosed very marked improvement, and the increase of over £5,000,000 in customs and excise receipts has been the main factor in bringing about the surplus.

On the expenditure side the estimated expenditure for the year was £69,655,000, including the additional provision of £2,250,000 for the assistance of primary producers. The actual expenditure was £69,967,000, or an increase of £312,000. Interest, sinking fund and exchange amounted to £19,731,000, or a saving of £319,000, compared with the estimate. Old-age pensions cost £10,772,000, or an increase of £272,000 above the budget estimate. War pensions cost £6,954,000, or £4,000 above the estimate. Defence Department ordinary services cost’ £3,092,000, or £112,000 above the estimate. Miscellaneous expenditure was £1,115.000, or £167,000 above the estimate. This (was due to unavoidable expenditure, including payments in connexion with the census, £42,000; payments of contributions to the League of Nations, £30,000; liquidation of overdrafts under the Shipping Act, £51,000. - Federal Aid Roads cost £1,922,000, or £122,000 above the estimate. .This expenditure is met by a special petrol tax imposed for the purpose. The increase is, therefore, offset by a corresponding increase of customs revenue. On the whole the other items of expenditure conformed fairly closely to the Estimates.

The detailed statement of receipts and expenditure, compared with the Estimates, is as follows : -

page 2925

CUSTOMS TARIFF 3938

In committee : Consideration resumed.

Item 194 (Chain and chains of base metal).

Upon which Senator E. B. Johnston had moved a request (vide page 2922).

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

.- On page 10 of the Tariff Board’s report that body states -

The Australian manufacturers of the chain dealt with in the preceding section of this report also manufacture harness chains and havebeen in production since early in 1930. As in the ease of coil chain, the board obtained from the Bennett Chain Company Limited, Brisbane (which was not represented at the inquiry),all the particulars it required in reference to the company’s operations and prices.

Apparently none of these gentlemen seemed greatly concerned about the retention of the duties. Another paragraph on page 11 of the board’s report states-

The board is therefore of the opinion that the Australian manufacturers will be adequately protected by the imposition of the duties recommended in respect of coil chain of sizes under half-inch, namely, 27½ per cent. British preferential tariff, 36 per cent, intermediate tariff, and 40 per cent, general tariff. Plough chains and trace chains have been specifically mentioned in this report, but the board is satisfied that the duties suggested will afford reasonable protection in respect of all other harness chains at present in use.

Senator Collings:

– It is obvious that the board considers some protection to be necessary.

Senator McLACHLAN:

– That is the only deduction that I can draw from the board’s report.

Request agreed to.

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

– Obviously there is a mistake in sub-itemc, which reads - “ N.E.I., not made up into serviceable articles “. I therefore move -

That the House of Representatives be requested to amend sub-item (c) by leaving out the words “, not made up into serviceable articles “ .

This is a minor alteration which is proposed in order to give full effect to the Tariff Board’s recommendation in regard to chain and chains. The effect of the request, if agreed to, will be to admit such chains as harness chains and dog chains, under sub-item c, at British, 27½ per cent., and general, 45 per cent; instead of under the generic tariff items which bear duties of 45 per cent, and 65 per cent, respectively. Although the wording of the sub-item admits the chain from which harness and dog chains are manufactured under sub-item c, the articles made from such chain were by the addition of the words “ not being made up into serviceable articles “ made dutiable at higher rates under other items in the tariff. Such articles would represent trace, plough, tug, and smaller chains for fitting to harness, and dog chains. The Tariff Board specially stated that these articles should be dutiable at the same rates as the chain, and not at the higher rates provided for under other items. The object of this request is to carry out the specific recommendation of the Tariff Board. Theeffect of the request, if agreedto, would be to reduce the duties on harness chains such as trace, plough and tug chains, and dog and other chains made up into serviceable articles by British 17½ per cent, and general 20 per cent.

Request agreed to.

Sub-items agreed to subject to requests.

Items 204 (b), 206 (b), 208 (c), 209, and 211 agreed to.

Item 219, sub-items (a) (b) (c) -

Tools of trade for the use of artisans and mechanics and tools in general use -

  1. Screwing tools, viz.: - Dies taps and chasers for use in machines or by hand; screw plates, stocks - ad valorem, British, 45 per cent.; general, 65 per ‘cent.
  2. Hand tools, wholly or principally of metal, n.e.i. - ad valorem, British, 35 per cent.; general, 55 per cent.

SenatorRAE (New South Wales) [9.54]. - This item deals with tools of trade for the use of artisans and mechanics, and the duties are, British 45 per cent., and general 65 per cent. Few, if any, of the tools used by artisans and mechanics in this country are manufactured in Australia, and, therefore, there appears to be no need for such heavy duties on them.

Senator McLachlan:

– These tools

Gome in free under sub-itemc if from Britain.

Senator GUTHRIE:
Victoria

– The item refers to tools of trade for the use of artisans and mechanics and tools in general use, and the duties are British 45 per cent., and general 65 per cent.

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

.- Such tools, if of British manufacture, come in free under sub-item c I have with me by-law No. 2737 covering the items admitted under by-law. As they occupy thirteen pages of the book, I shall not enumerate all the items, but included in the list are adzes, blacksmiths’ anvils, brads, picks, surveyors’ bands, benders, bits and augers, blocks, bookbinders’ tools, bootmakers’ tools, including knives, but not lasts and jacks, bores, boxes, braces, burnishers, and calipers. These tools are admitted free. Sub-item a, to which Senator Guthrie referred, relates only to screwing tools. It must be remembered that “ tools of trade “, as covered by item 219, is a generic term, sub-item a reading -

Dies, taps and chasers for use in machines or by, hand; screw-plates, stops, ad valorem, British, 45 per cent., general, 65 per cent. while sub-item b, in respect of which Senator J. B. Hayes intends to move a request, reads -

Hand-tools, wholly or principally of metal, n.e.i., ad valorem, British, 35 per cent., general, 55 per cent.

Senator Rae may rest assured that the tools to which he has referred are covered by these by-laws, which he may peruse later if he wishes to do so, for his edification, and satisfaction.

Senator E B JOHNSTON:
Western Australia

– I have here the report of the Tariff Board dated the 11th of September, 1931, which deals with tools of trade, and it sots out -

Item 219. Tools of trade for the use of artisans and mechanics and tools in general use -

Morticing axes; crow drill, jumper, pinch and spud bars; blacksmiths’ tools; boilermakers’ tools; geologists’, mash, napping, spalling, plate-layers’ spiking, saw-makers, chipping, and scaling hammers; hoes; marling spikes; mattocks; masons’ tools; picks; plumb bobs; plumbers’ tools: quarry tools; scrapers ; snaps, for portable pneumatic hand tools ; stocks; dies, taps and chasers for hand tools; adjustable screw plates; tinsmiths’ tools; grooving trowels; woodsplitting wedges; bill, bush, fern, furze and slasher hooks; stevedores’, wool, bale or bug hooks, ad valorem, British, 55 per cent; general, 75 per cent.; (b)Garden trowels and garden handforks, per dozen, British, 3s. 6d. ; general6s. ; or ad valorem, British, 55 per cent.; general, 75 per cent.; whichever rate returns the higher duty.

The Minister has told us that those tools are covered by sub-items a,b, and c.

Senator McLachlan:

– Most of them are covered by sub-item b, picks and hooks being at present under reference to the Tariff Board. The balance of the tools, which the honorable senator does not find specified under the sub-items, are dealt with under c.

SenatorJ. B. HAYES (Tasmania) [10.5]. -As there seems to be some doubt, as to whether these tools are covered by these sub-items, I move -

That the House of Representatives be requested to make the duties, sub-items (a) (b), ad valorem, British, 10 per cent. ; general, 35 per cent.

The Minister read “out a list of tools which are exempt under departmental bylaws, but I understand that the following articles are not exempt: -

Crowbars, fernhooks, slash-hooks, mattocks, morticing axes, shovels, splitters, wedges, hammers and blacksmiths’, boilermakers’ and plumbers’ tools.

Just fancy a workman having to pay a duty of 35 per cent, on a crowbar, or 55 per cent, on a shovel, with which he has to earn his living, or a farmer paying that amount on a fernhook, which any blacksmith could make. As a matter of fact, most of these tools could be made by a skilful blacksmith, and, therefore, the duties are unnecessary. It is most unfair to impose such burdens on a most deserving class in the community merely to benefit manufacturers who have only to come cap in hand to the Government to obtain any protection they desire. As an example of the way in which persons who use tools of trade have been hit by the operation of heavy duties, I mention that six or seven years ago fernhooks cost from 3s. 6d. to 4s. 6d. each, while two years ago - and I obtained these prices front an ironmonger in Tasmania who deals both wholesale and retail - they were listed at 60s. a dozen, or 5s. 6d. each, the present-day price being 108s. a dozen, or 9s. 6d. each. I have even seen11s. charged for a fernhook in the country. It is ridiculous to ask for a duty of 35 per cent. British, and 55 per cent, general on a fernhook or a mattock, which can easily be made in Australia. The farmer obtains not a penny more today for his produce than he did twenty years ago, yet his tools of trade cost him three times as much as they then did. Spades, which used to cost from 4s. or 5s. each, now cost from11s. to 12s. These are articles which the workman and farmer use every day to make a living, and they should be admitted free.

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

.- This item was investigated by the Tariff Board, and its report was presented on the 11th September, 1931. Since then the item has again been referred to the board for inquiry. In 1931 the board took evidence from a wealth of witnesses, both in favour of, and in opposition to, an increased duty. One witness stated -

While it may be true that the Australian manufacturerhas the plant and operatives necessary to produce a fair proportion of the tools used in Australia, there is not sufficient demand, outside probably a few special lines, to warrant local manufacture.

The board, in its comments, stated -

The subject of the Minister’s reference is the question of the necessity for increased rates of duty on the goods covered by items 219 a, 219b, and 219c, in the Customs Tariff Proposals of 1930, which are quoted earlier in this report. At the outset the board desires to make a comparison between the proposed duties and the duties which previously operated. Under the Customs Tariff 1921-30 provision was made for the admission under Item 219 of such tools as were prescribed by departmental by-laws. . Otherwise the general classification was according to material. With the exception of hand taps, which were previously dutiable under Tariff Item 176 f as machinery n.e.i., the goods under review were previously classified under Tariff Item 208 a as manufactures of metal n.e.i. Therefore the duties under the proposed items 219 a, 219b, and 219c, may be compared with those previously charged under Items 208 a and 176 f. The rates under Tariff Item 208 a have already been increased by the resolution of 21st November, 1929, and this circumstance must be taken into consideration in reckoning the full effects of the proposed additional duties. Another fact in relation to previous duties is that in February and March of 1930, several important lines of tools of trade’ were withdrawn from the customs by-laws. It is apparent that the increase in the duties on these tools, under the proposals of 19th June, 1930, is considerably greater than in the case of tools not previously covered by by-law.

The following statement shows those tools which are now covered by the proposed Items 219, a 219b and 219 c, but which immediately previous to 22nd November, 1929, were charged duty -

At the end of each list is given a chart setting out the rates of duty applicable to the tools enumerated in such list up to 22nd November, 1929, and those applying on and from that date.

The board then set out tools of trade, such as morticing axes; bars, crow, drill, juniper, pinch and spud; blacksmiths’ tools, excluding . anvils; boilermakers’ tools, excluding chipping hammers, &c, which appear under tariff item 208 a. Mattocks were removed from by-law on the 3rd February, 1930, and were made subject to duties of 45 per cent. British preferential, and 60 per cent., general. The board, in its report, gave a list of tools prescribed by departmental by-law under the Customs Tariff 1921-30, and which have remained so prescribed. It then went on to say -

The employment provided in Australia in the manufacture of tools is small. These manufacturers on whose behalf evidence was tendered to the board were, at the date of the inquiry, employing about 60 persons in toolmaking. It is obvious, however, that the demand for tools, in common with the demand for most commodities, has become greatly lessened of late. W. A. Crick, the chief witness appearing in favour of the proposed duties, estimated that under normal conditions employment wouldbe provided , for from 200 to 250 persons in the manufacture of the Australian requirements of the tools on which increased duties were sought.

The evidence shows that a very large proportion of the raw material used in the toolmaking industry is of Australian origin.

The essential difficulty inarriving at adequate rates of duty in respect of the various tools of trade embodied in the proposed items lies in the great diversity of types and to the fact that costs of production vary considerably in the different types. Some of the tools in question can be made in Australia and sold profitably at prices that compare very favornbly with the prices overseas. Others, because of the smallness of the demand and consequent restricted output, or the nature of the article, can be manufactured in Australia only at a considerably added cost to the user.

From evidence given, it would appear that local manufacturers have been producing many tools under the duties operating under item 208 (a) of the Customs Tariff 1921-1930, namely, 35 per cent. (British preferential tariff) and 45 per cent, (general tariff). The following tools were stated by one manufacturer (W. H. Plumb (Australia) Limited) to bo its largest selling lines in 1927-28, namely : -

Wood-splitting wedges ;

Blacksmiths’ tools, such as tongs, flatters, hardies, heel cutters and swages;

Soldering irons;

Engineers’ cold chisels;

Crow, drill and spud bars;

Quarry gads;

Rabbiters’ hoes.

After dealing with the wholesale selling prices of the manufacturers, some of which, it stated, were not disclosed, it went on to say -

While the list submitted by Mr. Crick shows that in many cases the rates of duty under item 208 (a) of the Customs Tariff 1921-1930, namely, 35 per cent. (British -preferential tariff) and 45 per cent, (general tariff), would be adequate, it also shows in the case of other tools that a substantial increase in those rates would be required to enable the local manufacturer to compete successfully. For instance, the figures submitted by Mr. Crick show that the proposed rates of duty, namely, 55 per cent. (British preferential tariff) and 75 per cent, (general tariff), would not be effective in so far as picks are concerned.

The board then gave a typical example. Picks, mattocks, and hoes have been referred back to it for reconsideration. It next compared the price of locallymanufactured shovels with the landed cost of British shovels, and its report continues -

The foregoing clearly indicates how widely the position differs in respect of the various tools concerned. The Australian manufacturer appears to be at a greater disadvantage in respect of tools produced by overseas manufacturers who are catering for the world’s markets, and are consequently able to produce in enormous quantities. The Australian manufacturers’ selling prices are much more competitive in the case of tools which are more particularly designed to meet local conditions.

It goes on to point out that protection is absolutely necessary, and then says -

On the other hand, local manufacturers have been more successful in regard to certain other tools. Taking hoes, for instance, it is found that the price charged by Mintern and Brehaut Proprietary Limited for “ Swan Neck” hoes is actually lower than the c.i.f. and e. cost of the American product, under a normal rate of exchange. In the case of garden trowels and garden hand forks, the information submitted shows that the Australian manufacturers’ prices would be competitive with a normal exchange position, and duties of 35 per cent. British preferential tariff, and 45 per cent, general tariff. As has already been shown, the prices of the different Australian manufacturers vary considerably.

The reduction of the selling price is also dealt with. On the question of employment, the report states -

The board . . . realizes that quite a considerable amount of additional employment would be provided if it were possible to manufacture locally the whole, or a greater proportion of the Australian requirements, in the tools of trade now under notice. However, it is obvious that in the case of many of the tools, local production would result in substantial increases in the cost to users.

The board expressed its opinion in the following terms: -

For the reasons given, the board considers that as to tools which are not admissible under by-law, on the basis of the present rate of exchange, 30 per cent., and other charges, no justification can bo found for the imposition of duties in excess of those operating under the Customs Tariff, 1921-30.

Senator J. B. Hayes’ request is for a rate below the 1921-30 tariff, and I must perforce resist it, and rely on the Tariff Board. I do not say that the report of the board is in every respect satisfactory ; but the articles to which I have referred have been sent back for further dissection. In any event, I ask the honorable senator not to press his request for the reduction of the duties under sub-item a, because the whole of the tools about which he is concerned come under sub-item b.

Senator PAYNE:
Tasmania

– I endorse the remarks of Senator J. B. Hayes, in regard to the oppressive nature of the duties on articles which are absolutely essential to the ordinary pioneering work of Australia, especially for the clearing of forest lands, and the keeping of them in order once they have been cleared. I have taken the trouble to seek to-day a comparison, not with Europe or the United Kingdom, but with the sister dominion of New Zealand. The New Zealand customs tariff shows that the Parliament of that dominion recognizes that it is not only advisable, but also necessary, to remove duties from these tools, and thus make them as cheap as possible to those who are prepared to develop the country. The following are on the New Zealand free list : Axes, hatchets, spades, shovels, forks, picks, mattocks, hammers, scythes, sheep shears, reaping hooks, scissors, butchers’ and other cleavers and choppers, hand-saws and saw-blades, machine or hand. Senator J. B. Hayes gave one or two examples to show the enormous increase that has taken place in the cost of these goods. An imported potato fork of the right class could be purchased a few years ago for about 4s., while one of the same class to-day cannot be bought for under 8s. 6d. It may be suggested that potato forks, slashers, fern hooks, and bill hooks, can be made in Australia. I invite honorable senators to ask a bushman to do his work with an Australian-made axe, and see what reply they will be given. “We can make these tools, but are they of the grade, quality, weight, and ‘contour, which is essential if the best results are to be obtained?

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

– There is no duty on axes.

Senator PAYNE:

– I know that axes are on the free list. Evidence has been given to the Tariff Board that these tools can be manufactured in Australia with a duty of 35 per cent., and I am pointing out that an Australian bushman would not use a locally-made axe.

Senator Rae:

– I have not seen one.

Senator PAYNE:

– Nor have I.

Senator Sir George Pearce:

– Does the honorable senator want a duty of 35 per cent. on axes?

Senator PAYNE:

– I do not.

Senator Reid:

– Then why waste time discussing them?

Senator PAYNE:

– I object to being harassed and heckled by the Leader of the Government in the Senate, who has tried to misconstrue what I have said.

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

– The honorable senator has made a complaint regarding forks, onwhich there is no duty.

Senator PAYNE:

– Are potato forks free?

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

– Digging forks are the only kind described in the tariff, and they are free.

Senator PAYNE:

– I am very glad to hear that, because I was under the impression that they were not free. Senator J. B. Hayes, however, has mentioned a number of other tools, and I do not think that it is unreasonable to suggest that they be brought under sub-item b, at the rates which he has suggested; because, after all, we have to recognize that the cost of development in Australia must be cheapened. Plenty of land is available, provided that it can be brought into production at a reasonable cost; but that cannot be done if we impose heavy duties on the tools of trade necessary for the purpose. I hope that the request will be agreed to.

Senator E B JOHNSTON:
Western Australia

– How tools of trade are dutiable is shown by the following list published in the Tariff Board’s report : -

Under Item 208 (a) -

Morticing axes.

Bars, crow, drill, jumper, pinch and spud.

Blacksmiths’ tools, excluding anvils.

Boilermakers’ tools, excluding chipping hammers.

Hammers, napping, saw-makers, spalling.

Marling spikes.

Masons’ tools, not wholly of wood, viz., picks, bolsters, chisels, diamond point or chisel point wall drills, hammers, handles for bits, pitchers, star bit or cross bit drills.

Bitch picks and pups therefor.

Plumb bobs.

Plumbers’ tools, excluding scrapers and soldering irons.

Quarry tools.

Scrapers, except those prescribed by customs by-laws.

Snaps for portable pneumatic hand tools.

Stocks of the following types, namely, elastic stock pattern, lightning pattern, and similar types.

Dies and chasers for hand tools.

Stocks and dies insets (on cards or in cases), each set comprising stock, one set of dies, one set of taps and tap wrench.

Adjustable screwplates.

Tinsmiths’ tools.

Wood-splitting wedges.

Hooks, stevedores’.

Hooks, wool, bale or bag.

Garden trowels.

Garden hand forks.

Shovels, n.e.i.

Post-hole spades of shovel shape.

Shovel blanks, including ‘ grain shovel blanks.

Under item 176 (f) -

Taps for hand tools when imported separately.

Tools now covered by proposed item 219 (a) and removed from customs by-laws early in 1930-

Hammers, mash, chipping or scaling, platelayers’ spiking.

Hoes

Mattocks

Hooks, bill, bush, fern, furze, and slasher.

Picks, other than those previously excluded from by-law.

Scrapers, deck, engineers’ scraping tools, except engineers’ bearing scrapers, painters’, plumbers’, and tube.

Trowels, grooving.

The following tools were prescribed by departmental by-laws under the Customs Tariff 1921-1930, and have remained so prescribed. The rates of duty applying to these tools have not been varied by reason of the operation of proposed item 219 (b), the rates under such item, namely, free (British preferential tariff), 5 per cent, (intermediate tariff), and 10 per cent, (general tariff), being the same as those applying under item 219 of the Customs Tariff 1921-1930:-

Blacksmiths’ tools, viz., anvils.

Hammers, geologists’.

Masons’ tools, not wholly of wood, except ing picks, bolsters, chisels, diamondpoint or chisel-point wall drills, hammers, handles for bits, pitchers, star bit orcross bit drills.

Scrapers, viz., cabinet, case, dough, horse, Pig.

Stocks, other than the following type, viz., elastic spot pattern, lightning pattern, and similar types.

Most of these tools are subject to duties of 35 to 65 per cent. Bush-workers on contract have to purchase all their tools, and therefore the duty becomes a direct charge- upon them. The Tariff Board’s report shows that, at the time of the inquiry, only 60 people were employed in the production of these tools. To maintain these men in their employment 6,000,000 people are to be taxed.

Progress reported.

page 2931

ADJOURNMENT

Citrus Export Trade : Commonwealth Government Aid - Pair Arrangement - Customs By-laws.

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

[10.37]. - I move-

That the Senate do now adjourn.

The Government has considered the position of the’ Australian citrus industry, in consequence of the loss of the New Zealand market by the operation of the fruit embargo. The sudden loss of its most important export outlet has been a severe blow to the industry. The circumstances are quite beyond the control of citrus-growers, and considerable difficulty is being experienced in rapidly developing new markets, or increasing exports to existing markets apart from New Zealand. The Government also realizes the importance of stimulating the export of oranges to other countries, not only to compensate for the loss of the outlet in New Zealand, but also to prepare the way for the satisfactory disposal of the surplus of the future, which is estimated to be 1,000,000 bushels when all groves are in full bearing - about 1936. Last year orange exports amounted to 330,000 bushels, of which 260,000 bushels went to New Zealand.

In view of the circumstances, the Government has decided to guarantee to exporters of oranges, for the current season only, reimbursement of their outofpocket marketing expenses. This arrangement means that co-operation is established between the growers and the Government. The grower will provide the fruit, and meet the market: the Government will bear any loss of out-of-pocket expenses in the circumstances mentioned. If the amount realized in an export market equals or exceeds the amount of the guarantee, no liability will rest on the Government. In cases where the amount realized falls short of the guarantee, the Government’s liability will be to make up the amount of the shortage. The Minister for Commerce will immediately convene a conference of representatives of the industry, and Commonwealth and State departments, for the purpose of discussing the conditions under which fruit will be picked and packed, so as to ensure the greatest measure of protection to growers and the Government. The help thus afforded the industry will enable it to adjust itself to the loss of the New Zealand market, and will, the Government hopes, lay the foundations for an expanding export trade in oranges.

Senator J B HAYES:
Tasmania

– Can the right honorable gentleman indicate the stage at which the Government guarantee will operate, whether from the orchard or at the point of shipment; also if growers’ costs will include freight and other charges?

SenatorRAE (New South Wales) [10.41]. - I . am disappointed that the right honorable the Leader of the Senate (Senator Pearce) did not give us more information, and state the amount which it is estimated will’ be advanced to the growers. It seems to me that, if the Government has made up its mind to assist the growers, the proposal just outlined is by no means the most satisfactory way to do so. I should have preferred a government guarantee of so much- per case of export quality. As one who was directly interested in citrusgrowing many years ago, I regard the Government’s proposal as most ineffective. Of course, I qualify this statement by saying that the Leader of the Senate has not stated the precise terms upon which the assistance is to be given, or the estimated amount involved ; but without being in any way offensive, I consider the proposal rather a mean way of helping the growers. New South Wales is the largest producer of citrus fruits, and the manner in which growers have been treated in the past has certainly not been -conducive to the success of the industry. Earlier this evening the Assistant Treasurer (Senator Massy Greene), in an official statement, told us that the surplus for the financial year just closed would be approximately £3,500,000. Consequently, we were entitled to expect the Government to be more generous to our citrus fruit-growers.

Senator Guthrie:

– Can the Leader of the Senate state what precautions . are to be taken to ensure that only fruit of the ‘ highest quality will be exported ?

Senator BRENNAN:
Victoria

– In justice, alike to myself and to the Leader of the Opposition (Senator

Barnes), who, at the moment, is not in the chamber, I wish to make a personal explanation with regard to a division which took place earlier in the evening. Through the active agency of the Government Whip, it seems that I had been paired with Senator Barnes, and as I am not accustomed to pairing, the Whip, believing that he knew how I would vote on the item, informed me that my pair would not operate. However, it seems that he was wrong, and the result was that my pair should have operated. As Senator Barnes was not present when the division was taken, I should not have voted. I am sorry to say that, in a moment of forgetfulness, I did vote, and I make this explanation in justice to the Leader of the Opposition, because the division list will show that, although he led the opposition to the request for an amendment of the tariff schedule, he was not present to support his opposition by his vote.

There is one other matter, apropos the subject with which we have been dealing to-night, namely, the question of customs by-laws, which I think I should mention. I was astounded when the Minister in charge of the Customs Tariff (Senator McLachlan) informed us that something or another had been provided for under by-law No. 2700. I was so interested that I examined the by-law book for 1928, and was astonished to discover the tremendous growth of regulation-making power or powers allied to regulation making. The Minister stated that it was within the power of Parliament to annul these regulations ; but, as a matter of fact, although Parliament can repeal by-laws made under any act, Parliament has no voice in these things. The position is, therefore, that there is a great number of items which are dealt with under the customs’ by-laws in respect of which nobody knows what are the duties. I merely call attention to this matter as being apropos, at a time when there is a general feeling that the regulation-making powers of governments have grown out of all proportion. I protest against the wide use of these powers, and express the hope that they will not be carried any further.

Senator DUNN (New South Wales) by my colleague, SenatorRae, in relation to the statement of the right honorable the Leader of the Senate (Senator Pearce) regarding the Government’s proposal to assist Australian citrus-growers. Recently the Minister for Commerce (Mr. Stewart) at a conference of citrusgrowers in Sydney, stated that the Government would give sympathetic consideration to their appeal for assistance to find markets for their surplus . crop. Subsequently the representative for Macquarie in another place (Mr. John Lawson) told the delegates at the conference that if they made suitable representations to the Government they would receive assistance to the extent of 2s. 6d. a case of exportable fruit. It would now appear that the citrus-growers have been let down rather badly. This is the more extraordinary in view of the financial statement made by the Assistant Treasurer to-night, that the Commonwealth surplus for the year would he approximately £3,500,000. The Minister’s statement will be reported in the press to-morrow as an achievement to be credited to the present Administration. I, therefore, regret that the Government’s proposal to assist our citrusgrowers is confined, practically, to outofpocket expenses. As citrus fruit is now coming on to the market in increasing quantities, it is essential that the assistance to be given to our growers should be immediate and practical. Seeing that our delegates at the Ottawa Conference agreed to a formula for the encouragement of Empire trade, the Government should make immediate overtures to the British Government to offer facilities . for the marketing of the Australian surplus of citrus fruits in the Mother Country. I find on checking the fruit trade returns for Great Britain that the chief suppliers of winter fruits to that country are Portugal, and those parts of Spain bordering on the Mediterranean coast. Surely that spirit of Empire co-operation of which we have heard so much should induce Great Britain to come to our assistance in the diffculty in which we have been placed by the action of, a sister dominion. Upon further consulting the trade returns, I find that Spain and Portugal are not large buyers of Australian primary products. I suggest, therefore, to the Leader of the Government in the Senate, that, even at this late hour, an attempt should be made by the Government to induce the British authorities to provide a market for our citrus fruits. The Government, out of its surplus for the year, should compensate the citrus growers to the extent of 2s. a case for the fruit produced in the season which has just begun. We have heard a great deal about what should be done for the wheat and wool growers, and surely there are some champions of the primary producers who will now have something to say in defence of the interests of the citrus growers. An appeal should be made to the British Government to do something to help this deserving section of our primary producers.

Senator MacDONALD:
Queensland

.- On behalf of the Queensland citrus growers, I should like to say that the offer of the Government seems somewhat inadequate. It is a small thing for the Government to say that it will recompense the growers for the cost of finding a new market for their output, although, admittedly, it may be a costly matter to find a market for the 260,000 bushels of oranges formerly purchased by New Zealand. When we consider the assistance given to other industries, the Government’s offer to the citrus growers is not particularly (generous, in view of the large surplus which will be shown in the budget this year. Senator Dunn referred to Portugal supplying oranges to Great Britain. We know that British interests in that country are very extensive, and, indeed, Portugal has been spoken of as a vassal of Britain. It seems probable that she will continue to receive at least as favorable treatment from Great Britain as will be given to Australia. If all the oranges produced in Australia are thrown on -the local market, the Queensland growers will be faced with severe competition from New South Wales. In spite of all the talk of Empire trade and Empire unity, we find that, because Australia will not take potatoes and butter from New Zealand, that dominion will not take our oranges. Although we are first cousins and natural allies, these matters are still determined on the basis of trade advantage. It seems to me that the Queensland citrus growers should receive better treatment from the Commonwealth Government in this regard, seeing that they are suffering as a result of national policy in regard to the products of Victoria and Tasmania.

Senator HERBERT HAYS:
Tasmania

– I was interested to hear” the statement of Senator Pearce in regard to the assistance which it is proposed to give to the citrus fruit growers. While I commend the Government’s intention to give some assistance to a deserving section of our primary producers, this incident furnishes another example of the ill-effect of governmental policy on the primary industries of Australia. The Government is now compelled to come to the assistance of an industry which has been made unprofitable, largely as a result of our tariff policy.

Senator DUNCAN-HUGHES:
South Australia

– Such a step as “is proposed by the Government with regard to the citrus-growers can be justified only if some fault on the part of the Government has led to the unfortunate position which has arisen. I shall not be suspected of any lack of sympathywith the citrus-growers if I say that no government can, in its public capacity, accept responsibility for the private losses of various interests in the community. 1 make that as a general statement. Speaking offhand, I cannot see how, if a government guarantees one private industry against losses on overseas trade, it can logically refuse to do the same for any industry whatever, that finds itself in a similar difficulty.

Senator MacDonald:

– The wool producers have received government assistance by way of cheaper railway freights.

Senator DUNCAN-HUGHES:

– The wool industry has never asked for any assistance, nor received any consideration whatever from the Government. It is the one industry in Australia which can say that it has stood on its own feet, even though it has been nearly ruined as a result.

Senator Rae:

– I deny the accuracy of that. The industry has been helped to the extent of thousands of pounds in reduced railway freights on goods, and on the carriage of starving stock.

Senator DUNCAN:
NEW SOUTH WALES · NAT

-HUGHE S. - And thousands of pounds have been taken from the wool-growers by every form of taxation, and this has not been compensated for by a small remission of railway charges. I have no antagonism whatever to the citrus-growers; very much the reverse. I have a feeling that this situation has, to a great extent, been brought about by that unfortunate agitation which arose in regard to potatoes. If the action which was taken by the Government in regard to that matter has, in some way, brought about this difficulty, it is reasonable, I suppose, that the Government should attempt to remedy it; but if the trouble is simply due to a general breakdown of trade arrangements for which the Government is in no way to blame, I cannot see how the Government can accept responsibility for the private losses of the citrus-growers, or of those engagedin any other industry. I take this early opportunity to say that it occurs to me that the principle, which is being put into effect here, is a most dangerous one.

Senator Sir GEORGE PEARCE (Western Australia - Minister for Defence) [11.0]. - I have been rather interested in the discussion on the subject of assistance to the. ‘ citrus industry. I shall reply to the two last speakers first, because they dealt with an aspect that was not touched on by the honorable senators who preceded them. Senator Herbert Hays gave the Government a sort of lecture, and said that the predicament of the growers of oranges is the result of the Government’s policy. To what policy did he refer? There are some - and I think that we can number Senator Duncan-Hughes among them - who say that the prohibition of the importation of oranges into New Zealand was brought about by the action of Australia in preventing the entry of New Zealand potatoes into this country.

Senator Herbert Hays:

– I did not say that.

Senator Sir GEORGE PEARCE. - But Senator Duncan-Hughes hinted at that. Am I to understand that Senator Herbert Hays wishes us to remove the prohibition against New Zealand potatoes? Is that the Government’s policy to which he objects?

Senator Herbert Hays:

– No. The policy that I mentioned was that of protection.

Senator Sir GEORGE PEARCE:

– Some persons and Senator DuncanHughes allies himself with them - say that the loss of our best market for oranges is due to the action taken by the Government in the interests of Tasmanian potato-growers, to protect their crops from a disease which occurs in New Zealand by placing an embargo on the importation of potatoes from New Zealand. It is said that, because that was done, New Zealand retaliated by refusing to take Australian oranges, with the result that we lost a market which absorbed 300,000 cases a year. We have had prosperity in the orange industry, but when we are faced with an increasing crop, our best export market is closed to us.

Senator Duncan-Hughes:

– Does the Minister say that the Government’s action with regard to potatoes has had no effect on the attitude of New Zealand to Australian oranges?

Senator Sir GEORGE PEARCE:

– I am not prepared to say that it has not. The responsibility in this matter rests on the Government, not through any act of its own, but because of circumstances that have arisen suddenly. The orange-growers had been hoping against hope that the Commonwealth and New Zealand Governments would be able to reconcile their differences with regard to these prohibitions; but that cannot be done in time to provide a market for the present orange . crop. Therefore, the Government has had to. take some action to save the orangegrowers, who will have a surplus on their hands this year, and to enable them to tide over the present unfavorable situation.

There is a good market for Australian oranges, and I may inform Senator MacDonald that this market will be improved as a result of the Ottawa agreement. Australian oranges can be sold at payable prices in the United Kingdom. Every orange that we can land there in good condition will find a ready market, and, because of the Ottawa ‘agreement, our fruit will get a preference of 2s. 4d. a case. That is a very substantial concession. Demonstration shipments have been made, and while some have been successful, others have not. A system of processing oranges, which is adopted largely in California, is now being experimented with in Australia, and it shows that the fruit’ can be safely carried for great distances. Unfortunately, Australia has not enough of these processing plants at the present time to enable oranges to bo exported extensively by this . method ; . but, to the extent that these plants can be utilized, they will be pressed into service,so as to enable the best fruit to he landed on the British market in a really good condition. Payable prices are usually obtainable there for oranges at the time when the Australian crop can be landed in the Old Country. Yet we do not expect the growers to take the risk of launching out on a new system of export, which has not yet been demonstrated to be entirely successful. There is something in the physical structure of an orange that makes it more susceptible than any other fruit to the effects of refrigeration. Therefore, to a certain extent, this process is experimental.In order to enable an experiment to be made, and to ensure that the growers will not be taking too much risk, the Government has formulated the present proposal. It will operate for this season only-, because we believe that the result will be to establish an export trade of such dimensions that the growers will not need a further guarantee in the future.

Turning to the point raised by Senator J. B. Hayes and Senator Rae, the estimated expenses which the growers will be guaranteed will be the cost from the orchards until the , fruit is sold in England ; but, of course, there will have to be a flat rate. We could not work out the cost with respect to every orchard. Some orchards are located hundreds of miles from the seaboard, and others are situated, within a few miles, of the coastline. The Department of Commerce will determine what is a fair flat rate, having regard to the probable average shipments.

SenatorSampson. - If the scheme is a failure, the grower will still get something for his fruit?

Senator Sir GEORGE PEARCE.Yes. I am reminded of a generous suggestion recently made and supported by

Senator Dunn, that the growers should receive 2s. 6d. a case; but the amount of the guarantee will be nearer five times as much as that. The exact sum has not yet been decided upon ; but, subject to the decision of the conference, that is somewhere near the figure, and it will ensure that the exporter will run no risk. If the whole shipment fails, he will be recouped to the extent of his costs; and, if the fruit is landed successfully on the other side of the world, he will receive a profitable price.

Senator Guthrie:

asked what provision would be made to see that only fruit of good quality was marketed. I may say that the utmost care will be exercised in that regard. The Government hopes that this proposal will mark the commencement of a big export trade that will grow, and, benefiting by the mistakes that have been made in the past in the inspection of fruit intended for export, we are determined to see that a high standard of quality is maintained, and absolutely enforced.

Question resolved in the affirmative.

Senate adjourned at 11.8 p.m.

Cite as: Australia, Senate, Debates, 6 July 1933, viewed 22 October 2017, <http://historichansard.net/senate/1933/19330706_senate_13_140/>.

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