13th Parliament · 1st Session
The President (Senator theHon. P. J. Lynch) took the chair at 11 a.m., and read prayers.
The following papers were presented:–
Representation Act -Notificationdated10th November, 1933, setting forth the number of members of the House of Representatives to be chosen in the several States.
Representation Act - Certificate of the Acting Chief Electoral Officer, dated 10th November, 1933,ofthenumberof people of theCommonwealthandoftheseveral States as at30thJune,1933.
Customs Act and Commerce (Trade Descriptions ) Act- Regulations amendedStatutory Rules1933, No. 121.
Employees’Wages and Working Conditions.
SenatorDUNN. - In view of the statement by Mrs. Ryan, lessee of the Hotel Wellington, Canberra, that no industrial award applies to the employees in hotels leased by the Commonwealth Government to private enterprise,will the Minister representing the Minister for the Interior state whether Mrs. Ryan, and other lessees, are prepared to submit for inspection their time and wages books when asked so to do by officials of the trade union covering the calling of hotelworkers in Canberra?
Mrs. Ryan, he is now seeking a ruling from the chair to prevent me from following up the matter with a further inquiry of this lessee.
– Questions must relate to public matters, and a very liberal interpretation would be placed on the term “ public matter “ if the honorable senator’s question were allowed. The Minister is asked to inform the Senate of certain relations between employers and employees in Government-owned hotels, leased to private persons in Canberra. Common sense suggests that the allowance of questions such as that would impose a heavy, and perhaps impossible task upon responsible Ministers of the Crown, who, I have no doubt, have quite enough to do. in attending to the public matters that come within their purview. Unless the honorable senator is prepared to put his question in another form, more consistent with the rules, it cannot be allowed.
– In view of the fact that a letter from the lessee of the Hotel Wellington was read in this chamber by the Leader of the Senate, I wish to protect employees in hotels leased from the Government, by getting through the responsible Minister certain assurances from Mrs. Ryan and other lessees.
– The honorable senator has ample opportunity to contest the statement made by the Minister without submitting questions which could bc allowed only by twisting to an absurd extent the rules governing questions.
Report of Committee of INQUIRY
– Yesterday, I asked a question regarding the report of the committee that recently investigated the tobacco industry at Mareeba. Is the Minister for Development (Senator McLachlan) aware that this report was freely quoted in the House of Representatives last night? In view of the fact that its contents have been partially divulged, will the whole of the report now be made available to honorable senators?
– I am not aware that any portions of the report were quoted by any Minister in the House of Representatives yesterday. The report has not been considered by Cabinet, and it is not customary to make such a report available until Cabinet has had an opportunity to examine it.
PRESS Criticism of Members of Parliament.
– I rise to make a personal explanation. .While I was discussing press criticism of members of Parliament on a matter raised by Senator Dunn on the motion for the adjournment of the Senate last night, the Leader of the Senate (Senator Pearce) interjected, “ Why worry ?”, as though I were labouring the subject. I thank you for your observations at the time, Mr. President, because you emphasized that members of Parliament have rendered great service to their country, and, as a body, deserve greater consideration from the press. It is of the utmost importance to me’ and other members of the Australian Journalists Association that we should know the qualifications of journalists who are allowed by certain newspapers to Write, under their own names, criticisms of members of this chamber. The view that I expressed yesterday was that the writer mentioned had exceeded the limit of decent criticism. That the concern shown by some honorable senators at the conduct of certain writers is shared by journalists generally is shown by an article* in the October issue of the Journalist, the official organ of the Australian Journalists Association and the New Zealand Journalists Association. It is headed, “ Plea for code of ethics to lift standard of journalism.” The writer, Mr. L. J. McBride, asks, “Why not a test for initiates?”, and goes on to say -
There is only one profession besides journalism to which entry may be gained without qualification or challenge, and that profession is leniently described as the most ancient of all.
– I rise to a point of order. A personal explanation must bo confined to the correction of some misrepresentation in respect of which a senator feels personally aggrieved. It would appear that, in this instance, Senator McDonald proposes to read a dissertation on the qualifications of journalists. I submit that such matter is not within the ambit of a personal explanation.
– Quotations from an article on the conduct and qualifications of journalists do not come within the scope of a personal explanation, and I therefore ask the honorable senator to keep within the Standing Orders.
– I am endeavouring to defend myself and other decent journalists, as well as members of the Senate generally, against misrepresentation by one pressman.
– Am I to understand that the honorable senator desires to refute a statement made concerning himself ?
– That is the position, and I wish to show that Australian journalists are concerned in the lifting up of the standard of their craft. The article continues -
We journalists, in that sense, have one standard in common with the immoral immortals.
Jim and Joe, Tom and Terry, all walk in our door unasked and unafraid. If the court won’t shut that door, we might at least insist that those who enter should conform to the prevailing prejudices, such as a shave a day, a clean collar, and a rudiment of grammar. lt is time, indeed, for the profession to he guarded by a code of ethics.
Newcomers should be obliged to pass an educational test and, with the rest of us, should be bound by a standard of conduct, and eventually attainment that would lift the profession to a position reached by some of the other professions.
The Australian Journalists Association could achieve this transformation without watching over us like Vesta over her virgins.
I know some journalists who have pestered public men for rewards in return for reporting their views, some who have accepted money in the courts.
Surely it is time the profession shook itself free of these nests.
asked the Leader of the Government in the Senate, upon notice -
Senator Sir GEORGE PEARCE.The answers to the honorable senator’s questions are as follow: - 1.I had not seen the press article referred to by the honorable senator. 2-11. The information sought by the honorable senator will be obtained as far as possible, and furnished to him at a later date.
asked the Minister representing the Treasurer, upon notice -
– The answers to the honorable senator’s questions are as follow: -
asked the Vice-President of the Executive Council, upon notice -
– The answers to the honorable senator’s questions are as follow: -
asked the Minister representing the Minister for Trade and Customs, upon notice -
– The answers to the honorable senator’s questions are as follow : -
2.The necessity tor the present embargo arises from the fact thatin September, 1932, the present Government reduced the duty on foreign glass on a recommendation fromthe Tariff Board from the equivalent of 112 per cent. up to 173 per cent. to 17½ per cent. up to 32 per cent. Immediately orders for a year’s supply of sheet glass amounting to over 4,000,000 square feet were placed overseas. This quantity has since been admitted at the low revenue rates referred to. Owing to the improved quality of Australian sheet-glass production and the impossibility of selling same in the face of the large orders which would have continued to be placed, it was essential that some action should be taken until the Tariff Board finally reviewedthe industry in Australia. The Tariff Board in its report of January.1933, recommended the retention of the embargo pending such reexamination of the position of the Australian industry. It will be observed that despite the embargo, importations from Belgium during the last financial year are six times greater than importations during the financial year 1931-32, and three times greater than during the financial year1930-31. 3, 4 and 5. The whole question regarding the duties on imported glass has recentlybeen inquired into by the Tariff Board. Onthe receiptof the board’s report which is expected at an early date the Government will take into consideration the interests of all sections which may be affected by the ultimate decision of the Government.
asked the Minister representing the Prime Minister, upon notice -
Senator Sir GEORGE PEARCE.The answers the the honorable senator’s questions are as follow : -
asked the Minister representing the Minister for Commerce, upon notice -
– The answers to the honorable senator’s questions are as follow : -
asked the Minister representing the Postmaster-General, upon notice -
When may it be expected that the promise made some months ago to provide telephonic communication with Cracow (Queensland) will be fulfilled?
– The work is now nearing completion, and it is expected that telephone service will be available about the 20th instant.
asked the Minister representing the Minister for Commerce, upon notice -
– The information is being obtained.
asked the Minister representing the Treasurer, upon notice -
– The answers to the honorable senator’s questions are as follow: -
asked the Leader of the Government in the Senate, upon notice -
In view of the motion recently moved for the adjournment of the Senate for the purpose of calling upon the Government to pay3s. per bushel at sidings for the wheat crop of 1933 (such motion having been defeated), what amount does the Government now intend to pay per bushel for wheat of the 1933 crop at railway sidings throughout Australia?
– A statement indicating the Government’s proposals for assistance to the wheat industry will be made by the Prime Minister next week.
asked the Minister representing the Postmaster-General, upon notice -
– The answersto the honorable senator’s questions are as follow: - 1 and 2. These are questions of Government policy, and it is not the practice to make announcements of- Government policy in reply to questions.
asked the Minister representing the Prime Minister, upon notice -
What further consideration, if any, was given by the Government to the question of providing special Christmas relief work on government buildings to unemployed coalmining workers in the coal centres of Cessnock, Newcastle, Lithgow, and the south-east districts of New South Wales, following the promise that the Government would call for a report on the nature of such relief work?
– Following upon the reply given to the honorable senator on the 20th October, a report was obtained from the Department of the Interior which advised that no provision had been made on the Estimates for expenditure on Commonwealth Government buildings in the centres mentioned.
A statement by the Prime. Minister dealing with unemployment relief generally was made in the House of Representatives on the 8th November, in reply to a question without notice by the honorable member for West Sydney.
asked the Minister representing the Minister for Trade and Customs, upon notice -
– The answer to the honorable member’s questions are as follow: -
asked the Minister representing the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follow: -
asked the Minister representing the Treasurer, upon notice -
With reference to my question relative to the salaries of Deputy Commissioners of Pensions and their officers, whichI asked on 14th June last-
Has the report of the Commissioner of Pensions yet been received?
What is the nature of such report?
What action docs the Minister contemplate in the matter?
Senator Sir GEORGE PEARCE.The answers to the honorable member’s questions are as follow: - 1, 2 and 3. The report of the Commissioner of Pensions, which deals with the increased responsibility imposed on the Deputy Commissioners of Pensions and other senior officers of the department by the recent amendments in the invalid and old-age pensions law, has been received. A copy of the report has been referred to the Public Service Board with the recommendation that the positions in question be re-classified.
Motion (by Senator E. B. Johnston) agreed to -
That leave of absence for one month be granted to Senator Hardy on the ground of ill-health.
Bill received from the . House of Representatives and (on motion by Senator McLachlan) read a first time.
Debate resumed from 9th November (vide page 4289), on motion by Senator McLachlan -
That the bill be now read a second time.
– I am gravely concerned at the proposals contained in this bill. The Government also seems to have been exercised in mind over the matter, and that is probably why the Tariff Board’s report dealing with the effect of exchange on the tariff, though eagerly sought for a long time by honorable senators, has only recently been placed in their hands. The settled policy of this country has, for many years, been one of protection, and anything which threatens to interfere with the prosperity and development of our secondary industries must receive the closest scrutiny. The Minister for Trade and Customs (Mr. White) when introducing this bill, stated -
The proposals of the Government to give effect to the recommendations of the Taritr Board are a further step in the direction of freer intra-Empire trade.
The development of intra-Empire trade is, no doubt, a laudable thing, hut it is important that, while doing what we can to increase trade between the various parts of the Empire, we shall do nothing which will injure the interests of our own people. The Minister continued -
The proposals in this measure, following upon the report, embody preferences to Great Britain, which should prove extremely valuable.
Honorable senators will remember an agreement which was made some time ago between Australia and another part of the Empire, and many of us believe that that agreement was not in the interests of the Australian people. The Minister added -
Possibly no single act on the part of the Commonwealth has conceded greater benefits to the United Kingdom than the one under review now.
We should pause before agreeing to a measure which would impose sacrifices on the Australian people for the benefit of others who, though also partners in the Empire, are not so much the object of our concern as are our own citizens. We must be careful when we enter into an agreement with the people of another part of the Empire, that we do not penalize ourselves. It seems to me that, in this measure, we are giving away more than is wise. The Government, which is sometimes supported in this chamber by members of the Country party, is inclined to allow itself to be too much influenced by the wishes of that party.
– Is the honorable senator forgetting that, unless the primary producers have a market for their products, the purchasing power of the people will not be restored, and there will be no market for the products of our secondary industries.
– At the present time, we can produce more of almost every kind of primary product thai) we can find a market for. Therefore, it is in the interests of the people of Australia that we should build up our home market, and that can be clone only by finding employment for those now out of work.
If tariffs are reduced, the volume of imports will increase, and Australian.made goods must be displaced. The result will be still further unemployment, in addition to the hundreds of thousands of men now out of work. Then the primary producers will clamour for assistance from the Govern ment by way of bounties and special legislation. According to a report issued by the Commonwealth Statistician, for the twelve months ended the 30th June, 1933, imports into Australia valued in sterling, were £57,985,000, of which merchandise represented £56,820,000, and bullion and specie £1,165,000. For the previous twelve months the total imports were valued at £44,713,000, of which merchandise represented £44,043,000, and bullion and specie £670,000. The importation of merchandise increased during last year by 29 per cent., and that increase can only result in the displacement of Australian labour.
The Tariff Board has prepared a voluminous report on the effect of exchange. I confess that I have not had the time to go through it as carefully as I should like. The board has gone to a great deal of trouble to work out a formula which, in its opinion, will enable Australian industry to be protected without allowing the burdon of exchange to press too heavily on the people. I am not sure, however, that the board is satisfied with its own formula, which. I feel sure, will be as inexplicable to other honorable senators as it is to me. The formula for the adjustment in duties of customs seems to be so intricate that I am afraid it will cause a great deal of trouble in administration. It would be much preferable to revert to the old method of customs administration, at all events, until such time as a simpler proposal can be devised. Many people cannot understand why the rate of exchange on London should be fixed at 25 per cent. Some, I imagine, believe that it is partly responsible for the in crease of imports, though, as a matter of fact, it is of distinct advantage in the exportation of our surplus products. It is regrettable that, because of the chaotic state of world affairs, due to a variety of causes, the financial relations between the various countries should lack stability. Expressed in Australian currency the adverse ratio of exchange necessitates, I understand^ the payment of an additional £20,000,000 or £22,000,000, in respect of our overseas trade and indebtedness-, so if relief could be given in this direction it would be very acceptable to the people.
As to the general provisions of the bill, honorable senators of the Opposition are whole-hearted supporters of Australian industries, and to ensure their development we favour proposals to prohibit the importation of those commodities which can be economically produced in this country. The exchange adjustment formula attached to this measure is, I believe, the result- of intensive study on the part of the customs authorities, but I doubt that many honorable senators really understand it. Believing that the Tariff Board’s recommendations, with reference to primage and exchange, an not supported by the facts, I intend to vote against the second reading of the bill in the hope that it may he possible to devise more effective machinery for the protection of Australian industries. .
– It is not my intention to discuss the bill at this stage. I merely intimate that I shall support the second reading, and I express the hope that the Government will extend the principles contained in the measure so as to ensure even wider trade preferences to Great Britain and other portions of the British Empire. 1 regard this bill as a first step in that direction, and a recognition by the Government of the need for developing Empire markets. «
– I am wondering if the silence of Government supporters is an indication that the bill does not meet with their approval, and if, when the motion for the second: reading is put, its fate will be the same as that which befell other items of the Government’s fiscal policy in this chamber yesterday. The Government is asking us to approve the formula to be employed in assessing the protective incidence of exchange, and because of its complicated nature, I think that the best thing we can do is to follow the advice given by my leader (Senator Barnes) a few minutes ago, namely, not to examine its intricacies too closely. The measure is of much greater importance than might be implied by the silence of Government supporters. We may, I think, quite reasonably assume that outside interests are watching very closely what is being done by the Senate, and endeavouring to measure the effect which these proposals will have upon Australian industries. A few months, ago, when we were discussing the tariff, Senator Johnston and other honorable senators who are nominally supporters of the Government, clamoured for the production of the board’s report, in order that they might have ample opportunity to discuss the protective incidence of exchange before approving the Government’s tariff policy. And, remembering their repeated demands for the report, I am at a loss to understand why they are now silent. May we take it that this exchange adjustment bill .does not go far enough, or, does it go too far? Are they silent because they are disgusted with the measure? In December last the Government asked the Tariff Board to report upon .the incidence of primage and exchange in relation to the customs tariff, and, in moving the second reading of the bill yesterday, the Minister (Senator McLachlan) gave us a lucid explanation of the various submissions that have been made by the board. After an inquiry lasting some months, the board’s report was presented to the Government, and portion of its recommendations with regard to exchange are em-, bodied in this bill. The board recommended that action should he taken on certain definite lines to adjust the protective tariff in respect of goods to which the British preferential tariff applies, and suggested also that similar treatment should be accorded goods from countries whose currencies are on the sterling basis. Another recommendation related to goods from countries’ that are still on the gold basis, and in yet another recommendation, which has been incorporated in a separate bill, the board suggested that increased protection be given to Australian industries against competition from countries with depreciated currencies. So far as I have been able to understand the basic principles upon which the board’s recommendations are founded, it seems to me that the Government is prepared to give Australian industries a stab in the dark. The report contains no data, and no specific principles were enunciated in the second-reading speech of the Minister, to justify acceptance of the formula which he has asked us to adopt. The Minister admitted, in the course of his speech, that Parliament was being asked to pass experimental legislation of a kind which, so far as I can gather, has not been even contemplated in any country whose- circumstances are substantially similar to those of Australia. Why should Australia be the pioneer in this legislation, instead of continuing to tread the well-known pathway of protection, regardless of currency changes and manipulation, which are due to various causes? Protection has been the established policy of Australia for over 30 years, and I see no reason why this country should explore the wilderness, in the hope of finding a path to the Promised Land. I fear that we shall find ourselves in an industrial desert, which may be strewn with the wreckage of Australian industries, and the unemployed will be left in their present desperate plight. Before we take this step we should have much more reliable information of the need for it.
To some features of the Tariff Board’s investigation, the attention of the Senate should be drawn. An examination of the list of witnesses shows that tho principal opinion expressed in the evidence was that of importers or their representatives. Most of the testimony came from those interested in the importation ‘of goods into Australia, and particularly British goods. I realize that the inquiry was of a public nature, and ,that manufacturers and their representatives had the same opportunity as importers had to present their views; yet I venture to say that an unbiased examination of the case submitted to the board on behalf of the
Australian manufacturing industries would lead to the conclusion that they furnished a strong case for the maintenance of adequate duties, and the exclusion of exchange considerations when determining the amount of protection to be given. I have no intention to reflect upon the board ; but, from hundreds of reports which have been received from it during the past eighteen months, the main fact that emerges is that the board is either consciously or unconsciously giving effect to the well known policy of the predominant party in this Parliament, whose desire is to reduce the protective tariff.
– The board is merely acting under instructions.
– I do not wish to be so unkind as to say that; but if the board had been so instructed, it could not have done its job more to the satisfaction of the Government than it. has up to the presenttime. It seems to me that the board has been made the stalking horse of the party in power. Is the fiscal policy now being pursued by the Government in conformity with the pledges given by the United Australia party when it sought the votes by which it was returned to office?
– The desire of the Government is to destroy the effectiveness of the protective policy.
– The board is certainly being used to that end.
– What nonsense!
– Let the honorable senator explain why, since the present Government began to tinker with the tariff of the Scullin Ministry, imports have increased to an alarming extent. Why has not the improvement in the position of Australian manufacturing industries which was noticeable a couple of years ago, despite the general depression, been maintained and accelerated under the generally improved conditions that obtain to-day?
I have said that the representatives of Australian manufacturing industries submitted a very strong case for the retention of the Scullin tariff, but the Tariff Board chose to accept the view of the importing interests. What reasons actuated thn board in coming to that conclusion? In the course of its report, the board stated -
It is recognized that in many efficient industries the price of the output is fixed on local consumption or on production costs, and is much below the price of imported duty-paid goods.
It was claimed that, in respect of these industries, nothing need be feared from the reduction of the protective duties as the result of the application of the formula which the board recommended; but it furnished no substantial evidence in support of its statement. In an effort to justify the rejection of the case submitted by the Australian manufacturers, the board stated that some industries, because they are greatly over-protected, use the protection afforded by the tariff, plus the protection afforded, if any, by exchange, to exploit the Australian people and make huge profits for themselves. If that be true, the board, with all the machinery for investigation which it has at its disposal, and with the complete knowledge of Australian industry which it claims to possess, and for which this Government gives it credit when that attitude suits its purpose, should be able to give at least one instance of an industry in which such conditions obtain. Not one instance is given to support the board’s general statement. That inconsistency is characteristic of the report. Recognizing that the Government desired to placate the Country party by making further reductions of the protective tariff of this country, the Tariff Board set out to find for the Government a means of doing that.
– We got only half what the board recommended, and we are not satisfied.
– The honorable senator will probably not be satisfied until the people of Western Australia have refused to re-elect him to this chamber.
– I shall not be satisfied until Western Australia has been removed from the jurisdiction of this Parliament.
– It is typical of the honorable senator that when he is defeated on one point he tries to divert the discussion into other channels, but I shall not so easily be diverted. It is significant that the Tariff Board’s report gives only a summary of the evidence of Professor Giblin, a gentleman for whom all of us have a high regard, whereas a copy of the full evidence of practically every other witness is attached to the report as an appendix. All that we know of Professor Giblin’s views is what the board has been pleased to permit us to know. Professor Giblin pointed out the difficulty of ascertaining whether the exchange rate gave to Australian industries a measurable amount of additional protection. 1 take the following extract from the summary of his evidence: -
J ‘or hups I might put thu position as I sue it. We have a movement in the exchange compared with two or three years ago. In general, in a perfectly free-moving economic system, which you never have in practice, you expect twu things to happen with a movement in the exchange. You expect the prices of imported goods to move up to the extent of tho movement in exchange. That, in fact, does generally happen. You also expect tho internal costs in the country to move up in the same direction, with more or less lag relatively to tho external country - how far and how long being, perhaps, a rather controversial question - but you do, in general, expect a very considerable, almost in the long run an equivalent, rise in costs.
If that statement is correct, there is, in the long run, no protective incidence of exchange so far as Australian manufacturing establishments are concerned. Immediately after the exchange has been increased, Australian industries may derive some benefit from it, but, eventually, the tendency is for local costs to rise. It is, so to speak, an instance of water finding its own level. Even admitting that the cost of imported goods is increased by 25 per cent, as the result of the exchange operating against importers, the cost of the locally manufactured article is eventually increased in the same ratio, first, because of the increased price of imported materials, which have to pay exchange; secondly, because the higher prices obtained, as a result of the exchange, for locally produced raw materials exported to the markets of the world automatically increase the local price to a corresponding extent; thirdly, because of the influence on wages of the higher prices obtaining in Australia for wool, meat and other commodities, as a result of the exchange premium on the exportable surplus of those commodities; and, last, but by no means least, because of between £20,000,000 and £22,000,000 which the exchange is computed to cost Australia annually, about £7,000,000 represents additional interest payments on the overseas indebtedness of Commonwealth and State Governments. These things add to the cost of all the public services which are supplied to industry, and to workers in industry, by the State Governments of Australia. About a fortnight ago the State Auditor-General presented to the South Australian Parliament a report showing how the cost of water, sewerage and railway services had been increased to every manufacturer as a result of the exchange. That is an important factor. The Tariff Board’s report contains no evidence that these things were taken into account; and, in the absence of that evidence, it is dangerous for us to pass this legislation.
The Government has frequently expressed the opinion that exchange should be free from political interference, and left to the control of thu Commonwealth Bank Board. Although in this legislation Parliament is not actually interfering with the control of exchange, it is deliberately interfering with the effect of exchange. I see no difference between interfering with the control of exchange and taking action to destroy its effect. Even if this bill does not reduce the protective incidence of exchange by practically 50 per cent., it certainly destroys the effect of exchange. That is an effective means of implementing the political control of exchange which the Government professes to dislike. Both in this chamber and in the House of Representatives this bill has been acclaimed as the greatest contribution to British trade since 1907. The Minister referred to it as constituting a substantial move towards freer intraEmpire trade. The primary object of this measure is to increase the preference to Empire goods.
– Is the honorable senator opposed to that?
– No. I have frequently expressed the opinion that, if Australia must trade with other countries, it should trade as far as possible with the other members of the British Commonwealth of Nations.
– Then I take it that the honorable senator will support this measure
– My holding, of that opinion imposes no obligation on me to support this measure. The duty of every Australian-
– Is to find markets for our primary products.
– The duty of every good Australian is to endeavour to establish conditions which will make for the prosperity of both primary and secondary industries. We have repeatedly discussed the point raised by Senator Elliott’s interjection, and members of the Labour party have proved that the best market for primary products is the home market. The farmers are better oft’ when they are selling their meat, eggs, butter and milk to the people who are employed by the secondary industries. The Government has said that it is not in favour of tariffmaking exclusively by Parliament. No protective duty should be raised or lowered, it states, until after inquiry into the specific matter by the Tariff Board. Now, however, the Government proposes to take action that certainly is based on a Tariff Board report, but a report following a general inquiry, which paid no regard to particular industries. Another measure is to be introduced shortly, to give special protection, as regards exchange, to those industries which have to face competition from countries with depreciated currencies, but under that measure no relief will be given until a specific inquiry has been made into the industry claiming assistance. The Tariff Board has made a general inquiry into the effect of exchange, &c, on protection, and has furnished some general recommendations, on the strength of which the Government has introduced a measure which will reduce the effective protection enjoyed under the British preferential tariff by industries which produce 839 tariff items. Of this total, 101 items will carry an increased preference of from 5 per cent, to 10 per cent. ; 213 will carry increased preference of over 10 per cent., and up to 15 per cent.; 83 will carry increased preference of over 15 per cent., and lip to 17-J per cent. ; one will carry a margin of 20 per cent.; while, on 441 items, under which specific rates operate, increased preferences, mainly of 17^ per cent., will operate. The list of items covers nearly nine foolscap pages, and on all of those items the effective protection is to be decreased- by amounts varying from 5 per cent, to 20 per cent. Most of the reductions are to he put into effect by the measure we are now discussing.
The Government has not made out a case for this proposed change. Professor Giblin, giving evidence before the Tariff Board, stated -
You have a presumption that the duty could bc reasonably lowered by the amount of exchange, with allowance for the proportion of raw material which is either imported or could be exported. That is an idea which I know is familiar to the board. That is a presumption which, I cannot see at present, you could apply safely to any industry automatically. My feeling is that you would have to make some kind of review of the general conditions of any industry before applying a reduction on those lines. In some industries it might be that the total costs have risen quite considerably relatively to those in England, and that a reduction of anything like the full amount of the exchange, even allowing for imported material, might not be fair to that industry.
Many new industries have been established in Australia during recent years, and those who put money into them were led, by official declarations, to believe that the advantage they enjoyed as a result of the exchange rate would continue for a considerable time. The Government stated that, as a matter of policy,’ the exchange rate was to be regarded as one of the factors in . the economic rehabilitation of the country, and it also stated that it was opposed to governmental interference in fixing the rate of exchange. In the circumstances, manufacturers were justified in believing that the protection, great or small, which they enjoyed as a result of the exchange, was likely to continue while the existing economic conditions remained unaltered. Now, however, without there being any discernible change in economic conditions, it is proposed in this measure to vary the protective incidence of exchange. Many of the industries which will be affected either did not have an opportunity to put their case before the Tariff Board, or did not seek to do so, because they were satisfied with the protection they were enjoying under the tariff, plus primage and exchange. The Government is asking Parliament, on the incomplete data which the Tariff Board has furnished, to take a most important step. The Minister, when introducing the bill-, made out a very weak case, and there does not seem to be any desire on the part of his supporters to attempt to fortify it. I trust that the Senate will reject the measure.
– I have carefully studied the Tariff Board’s report, and have been impressed by the conservative nature of its recommendation for relieving the Australian consuming public of the heavy burden imposed by primage and exchange.
Sitting suspended from 12.45 to 2.15 p.m.
– The Government is not implementing the Tariff Board’s recommendations with respect to Australia’s trade with British dominions and foreign countries. The main recommendation of the board, which is to be given effect only in relation to the United Kingdom, reads -
A deduction shall be made from the duty payable on one or other of the amounts calculated as hereunder set out, whichever is the smaller.
Why should the Tariff Board recommend whichever is the smaller “ ? Probably it would have recommended “whichever is the greater “ had it not been restricted to some extent by the act under which it was appointed. The recommendation continues -
A deduction of only12½ per cent. of the value for duty has been recommended, yet in respect of an article worth £100 in Great Britain, on which a customs duty of £25 is imposed, the exchange rate of 25 per cent. increases that duty by 100 per cent. The deduction recommended by the board should have been at least 25 per cent., or not less than 20 per cent. By the adoption of the12½ per cent. deduction an Australian importer of British goods will receive totally inadequate relief as compared with the burden placed upon his shoulders by the present high exchange rate. The recommendation of the board continues -
This recommendation shall apply to goods from any country the currency of which on the date of the shipment of the goods is -
Appreciated relative to sterling;
Nominally on a sterling basis.
In this case to allow for slight fluctuations due to clearing house reductions a margin of, say, 5 per cent., might be allowed.
I should like the Minister in charge of the bill to explain why the Government Las completely ignored this important portion of the board’s recommendation, which, if adopted,would also extend whatever benefits are provided to British dominions and to foreign countries. I appreciate the fact that the Government has applied the Tariff Board’s first recommendation to importations from Great Britain ; but it has not gone far enough. This measure will not be satisfactory to me unless the recommendation of the board which the Government has adopted is extended to those countries whose currencies are appreciated relative to sterling. This aspect of the matter was fully debated by the members of the Country party in the House of Representatives where an amendment was moved to extend the relief to the full extent recommended by the board. When the measure is in committee I propose to move a similar amendment. If such an alteration is agreed to the benefits to be conferred under this measure will apply, not only to Great Britain, but also to British dominions, and to foreign countries whose currencies are appreciated relative to sterling. In order to show the consideration given to Australian industries, I quote the following from the report of the board: -
It is important to remember -that the board in its calculations - the results of which are given above - has assumed that the local industries are protected by the minimum, or merely equalizing duties. In actual fact, there is almost invariably an additional protective or safety margin which, if included in the calculations, would show the local industries tobe in a much safer position than is indicated.
Although the board states that local industries have a much larger margin of protection than is assumed, the Government is adopting only one half of the meagre relief recommended in the board’s report. The report continues -
Furthermore, the duties recommended by the board on industries which have been reviewed since the exchange has been adverse to Australia have for the most part been based upon local costs, which already include the effect of exchange. Such industries are as a consequence practically in the same position as those using purely domestic raw materials.
Honorable senators will see that the arguments raised by the Deputy Leader of the Opposition (Senator O’Halloran), in an excellent speech from his viewpoint, but one with which I entirely disagree, are met by the board. I listened with interest to the honorable senator’s remarks, and I say, with due respect, that he was shedding crocodile tears for the protection of Australian industries when he said that they would not be protected under this measure. It is quite clear that even under this measure and. the Ottawa agreement, British manufacturers have little opportunity to compete in the Australian market. If we could read the thoughts of the Deputy Leader of the Opposition, and of the members of his party, we would find that they realize the futility of this measure as a means of relieving the primary producers of the fiscal burdens they are now carrying. It is serious to think that the great primary industries of Australia are receiving only one-half of the assistance recommended by the Tariff Board. Full relief could be given by adopting the whole of the recommendations of the hoard. We have asked why this form of relief has been confined’ only to Great Britain ; but we have not received a reply. The Prime Minister (Mr. Lyons) said in his policy speech, and on many occasions since, that the tariff policy of th« Government would be based on the recommendations of the Tariff Board. The failure to extend the proposed relief to the produce of sister dominions and foreign countries is a flagrant breach of that policy. The breach is more serious because the recommendation applies, not to one series of articles, but to all those covered by the tariff schedule, many of which are vital to our great primary industries. I intend to support the bill as far as it goes; but, when it is in committee, I shall move that its provisions be extended to cover the produce of all the countries recommended by the Tariff Board.
– Without inquiry by the Tariff Board?
– The board has already made a general inquiry. I trust that the Senate will keep the Government up to its pre-election policy of guidance by the Tariff Board, and see that* effect is given to the whole of the recommendations of the board.
. - I was hopeful that this measure would meet with a certain amount of support from the members of the Labour party in this chamber. I was surprised that Senator O’Halloran, who severely criticized th’e measure, overlooked the fact that our protective policy has not been built up upon a fluctuating exchange rate, and the Tariff Board has not taken into consideration the protective effect of a high exchange rate. The board has repeatedly declared that in considering the rates of duty that should be imposed, it has not taken into account the protective ‘ incidence of exchange. If it had done this, Senator O’Halloran’s criticism would have been justified to some extent.
I was interested in the honorable senator’s attempts to persuade the Senate that Professor Giblin, who for some time had acted as Commonwealth Statistician, had, in statements furnished to the board, advised against the principle embodied in this bill. But the honorable senator did not accurately state Professor Giblin’s views. Instead, he selected certain paragraphs which he read without regard to the context. I also intend to quote from a statement made by Professor Giblin in order to show that the honorable senator placed an entirely wrong construction on the witness’s considered opinion on this subject. On page 55 of the Tariff Board’s report, there appears a summary of the evidence given by Professor Giblin from which I take the following : -
It is impossible for any one to make any kind of judgment as to the exact correction to be applied, on account of exchange or anything else, to duties fixed on a survey of conditions two or three years ago. I should say that the present position made a scientific tariff - if that phrase is still allowed - a practical impossibility; that you would have to be examining every industry at intervals of about six months intensely before you could be sure of the proper correction to he applied to old duties. That is impossible, and practically you could only expect to make a rough shot. Certainly there is no kind of automatic adjustment or formula that would make at all exactly the proper correction. I think it is quite possible that the hoard, with its intimate knowledge of a great many industries, may bc able to make a fairly rapid judgment as to the proper correction in most cases. In others, closer investigation would be necessary. That may or may not be so, but I am sure that no one else - certainly not an economist by general reasoning - can safely attempt to specify the correct adjustment. A good number of Australian industries are not using anything like the full protection afforded by the old tariff, swollen by exchange and primage.
The products’ of these industries are now sold at a price with which imports could not compete, even with the lowered duties. There would, therefore, he no increase in imports of these goods, and the Australian price of these goods would not be altered. Other industries are using all, or nearly all, of the inflated protection now provided. The excess price must be duc either to unreasonable profits or unnecessary inefficiency. It is clearly in tho power of these industries to reduce prices to a. level at which imports cannot compete. There will, therefore, be no substantial lasting increase in imports of these goods, but in this class of goods the Australian price will be reduced. There would bo some temporary flurry of imports, but of no great importance. Where excessive prices were due to remediable inefficiency, a few months might bo required to get Australian costs down. The announcement of lower duties might stimulate oversea exporters to shipments not really justified by the new price condition; and on which they would suffer loss. These would not be repeated. I should not expect the temporary flurry to be more than £1,000,000 for the whole year, nor the permanent increase to be more than one-quarter of that value.
In a supplementary statement, Professor. Giblin expressed this opinion -
The previous discussion has, for simplicity and brevity, been confined to tho protection required against British imports. I have said that an all-round reduction of duty, either by 15 per cent, or by one-third, would amply preserve the protection given to Australian industry, and would result in no diminution of protected production in Australia. In other respects, it would have a number of beneficial effects, lt would reduce costs to the consumer and to other producers, not only by tho amount to which taxation would be reduced (estimated above at £1,500,000), but by the amount, probably a good deal greater, by which the excess cost of Australian protected production would be lowered. A great part of this relief will find its way to the export producer, who most needs it, and to the producers competing with imports. A lowering of the tariff is always partially offset by the lowered costs in protected industry itself. When it can lie done without impairing Australian protected industry, it is an unmixed good, except to Commonwealth revenue. But, when there is at present a strong case for decreased taxation and a practical possibility of making it, then even that exception does not count. Further, at tho present time, when the universal depression is closely linked with harriers to international trade, any lowering of those harriers is at least a hopeful gesture in tho direction of recovery. It is, perhaps, the one contribution that a country like Australia can make to the’ combined effort for international recovery. Its psychological effect will be considerable, particularly in Great Britain.
I have, I think, quoted sufficient to show that Professor Giblin’s opinion supports the policy of the Government, as expressed in this bill. I resent the statement made by Senator O’Halloran that the Government is using the Tariff Board to break down the protective policy, and that the high protective duties imposed a few years ago by the Scullin Government may be regarded as representing the accepted policy of this country. Those excessive duties were brought in by the Scullin Administration in defiance of the representatives of the people in this Parliament; we had no opportunity to discuss them in any way. By virtue of the power given to the Government under the Customs Tariff Act, they were imposed by resolution and without regard to their probable effect on industry generally. I have, on many occasions, advocated that tho protective incidence of exchange should be considered, in conjunction with other matters, when Parliament is imposing new or amended duties. For this reason, I welcome the bill, and will vote for its second reading, but I regret that the Government has not been able to go a little further in this direction. I accept is as a first instalment of a reform that is long overdue. I agree with Senator Johnston that the effect’ of exchange on imports from other countries besides Great Britain should be considered. We must, I think, admit that Australia cannot live to itself, and that unreasonable duties levied on commodities from countries that are good customers of ours will lead to reprisals. Recently the newspapers published cabled reports from London that the Government of /Belgium intended to place an embargo on the importation of certain Australian primary products, presumably in retaliation for the excessively high duties imposed on glass. In connexion with this matter, I have received the following letter from the Adelaide Corn and Produce Exchange, dated the 7th instant: -
I am instructed by my exchangeto bring under your notice the parlous condition to which the barley-growers of Australia and our localmarkets will be reduced should the present restrictions on the entry of our grain into Belgium remain as at present. Thu matter being extremely urgent, my exchange despatched to-day a telegram to the Prime Minister at Canberra as follows: - “The Adelaide Corn and Produce Exchange meeting to-day informs you that there will be a large surplus of barley for export the chief market being Belgium which usually takes 75 per cent. exported surplus.Harvesting already commenced, reaping general in fortnight. Urgently necessary your Government make representations secure lifting Belgian embargo. Lack of export markets would disastrously affect Australian prices entailing enormous losses several thousand Australian farmers. Present position prevents marketing arrangements being made. German Frenchmarkets already lost through tariffs. Urge immediate action to open Belgian market without restrictions ‘”.
I am glad that the Government was able to give the assurance to-day that negotiations are proceeding between the High Commissioner (Mr. Bruce) and the Belgian Government, and I hope that the result will be the re-opening, at no distant - date, of the Belgian markets to Australian products. Many honorable senators expressed that wish when deploring the imposition of the Australian embargo against Belgian goods.
– Did not the present Government impose that embargo?
– That is not the point at issue.
– What has the letter from the Adelaide Corn Exchange to do with the tariff and the exchange rate ?
– It is pertinent to the subject of international trade, and I referred to it because of Senator Johnston’s protest against the operation of the bill being confined to imports from Great Britain. Notwithstanding the opposition shown to the measure by honorable senators opposite, I hope that they will eventually recognize that the promotion of trade between Australia and other parts of the world will benefit, not only the primary producers, but also the industrial workers. I have always advocated a policy of sane protection. Every feature of the tariff that savours more of exclusion than of protection should bo eliminated.
– We are discussing one of the most important bills that have come under our notice for a considerable time. In discussing another matter yesterday I had something to say about Australian sentiment, and this afternoon I desire to lead honorable senators who intend to support this bill back to the only safe basis upon which we can deal with a measure of this kind - genuine Australianism. The short history of this country is an epic of remarkable fortitude, capacity and progress. Little more than a century and a half has elapsed since Captain Cook landed in Australia. Until about 75 years ago this continent was still a convict settlement of another country. Australia has enjoyed responsible Government for a comparatively brief period. This was granted to New South Wales in 1842; to Victoria in 1855 ; to South Australia and Tasmania in 1856; to Queensland in 1859; and to Western Australia in 1890, only 43 years ago. In 1901, federation was consumated; but up to that time the people had shown a determined and growing belief that, because of the problems that beset older countries, it was necessary to formulate a national policy to reserve Australia for our own kith and kin. In the late eighties, the white Australia principle was discussed and considered within the realm of practical politics, and in 1.901 it was embodied in the Immigration Restriction Act.
To-day our population is only 6,500,000, but in the development of this country we have done more ina little more than 100 years than any similar number of people elsewhere have accomplished in the world’s history. Australia has 27,667 miles of railways in operation.
– What a fine system of banking we must have !
– I shall deal with that matter later. The record of the pioneering work and the fortitude of the early settlers reads like a fairy tale. In proof of this I shall quote from the production statistics for 1931-32. I select that year in order not to over-colour the picture. These figures are very conservative, because at that period a serious slump occurred in the prices of our primary and manufactured products. The value of our dairy production in 1931-32 was £41,500,000; wool was worth £35,000,000, wheat £30,000,000, meat £22,000,000, sugar £10,000,000, and manufactures £281,500,000. I am reminded Qf Abraham Lincoln’s famous remark to the tariff slashers of his time, the equivalent of the Country party representatives in this Senate : “ Fill your factories and your farms will automatically fill themselves.” The remarkable achievement of Australia furnishes an example to the whole world. Our original stock largely consisted of people who were sent here because they had a little more courage and initiative and willingness to take risks than others, even though many of them wore the broad arrow on their clothing, and were described as convicts.
– Some, perhaps, were rather hard-up.
– Yes, poverty, the result of evil economic and social conditions, no doubt drove many of the early settlers to Australia. All through those earlier days in the development of Australia the people worked to set up a beacon light for the rest of the world. They have set for democracy a higher standard of living, and they have ensured for all a greater measure of decency, dignity, health, education, leisure, happiness, and equality of opportunity. Even to-day, despite all the difficulties that the serious- depression has brought in its train, the living conditions of our people are superior to those of any other. We have a more even distribution among all the people of the things which make for comfort and happiness than is to be found anywhere else on God’s earth. Why, at this stage in our history, is it proposed by means of measures of this kind to lay profane hands on the national policy of Australia, to which all political parties have agreed, and which no party claims as its own ?
I refer, of course, to the policy of developing this great continent for the white race. Why should we seek to destroy that splendid ideal?
What is proposed to be accomplished by this hill, and why is it submitted to us ? Let us endeavour to get down to bedrock, and understand what we are actually debating. This bill apparently means but little. It’ is, however, fraught with ‘ serious’ intent. The technical jargon in which the measure is couched has been prepared not by the Tariff Board, but by the permanent heads of the Customs Department. The bill is clothed in the technical language of departmental experts, and I venture to say that nobody in this” chamber understands this jargon, or is expected to do so. Practically the whole of the business submitted to this Parliament is determined by the requirements of political strategy, and that is certainly the reason for the presentation of this measure. The idea in the mind of the Government is that it should take no risk of defeat. It realizes the need for meeting the arrogant and truculent demands of members of the Country party in this chamber, while attempting at the same time to keep one foot in the camp of the manufacturers. With a pretence of seriousness and dignity, an attempt is made to cover up the real motive of the Ministry.
– We ought to consider every section of the community.
– I agree with the honorable senator, but I have never yet seen him, or any other supporters of this bill, make the slightest attempt to legislate in the interests of every section of the community. Yet they arrogantly and impudently claim the right to speak for the primary producers of this country.
We, in this chamber, use the word “ exchange “ as though we understood all about it, but do we really understand its meaning? The exchange problem is the basis of this bill. Because of the exchange situation, we are asked to lay profane hands on the fiscal policy of Australia. The Tariff Board has been asked to say to what degree the knife shall be thrust into the things which are necessary to the development of this country. In all financial gambles, everything depends on the accuracy of what is termed “inside information.” Two notable historic examples of this fact are mentioned in the following newspaper extract : -
The original founder of the great French banking house of the Rothschild family was a very enterprising person. He arranged a plan to get first-hand “ inside information “ -concerning the results of the Battle of Waterloo, by means of relays of mounted couriers. Thus he was able to get the news of Napoleon’s decisive defeat before that news was known in general European banking circles.
British £100 war bonds then stood at the very low figure of f 40, and . French bonds were correspondingly high. Rothschild sold out French securities in Paris and bought British bonds in London, making a colossal profit on these transactions.
Two other eminent pillars of private enterprise, Cecil Rhodes and Joseph Chamberlain, at a later period of our history had “ inside information “ concerning the certainty of war ‘ between the Boer Republic and Britain.
The Rhodes group netted over £6,000,000 “by securing forward options over Argentine meat supplies, buying in at 3d. per pound and selling out at lid. to the British War Office. Chamberlain, by means of an alliance with the German firm, Krupp and Schneider, secured a world monopoly of the manufacture of cordite. This product cost 4d. per pound to make, and was sold nt 3s. !)d. a pound to Britain during the Boer war.
– From what publication is the honorable senator quoting?
– I have just quoted from the last page of An Imperial Thieves’ Kitchen, written by a British general who was engaged in the Great War. The writer continues -
Exactly the same kind of thing was done just before the astounding news was made public that the rate of exchange between Australia and Britain had been raised to 33 per cent.
Yesterday I asked a question dealing with exchange, and in his reply the Leader of the Senate (Senator Pearce) Informed me that the exchange rate was arranged by the Commonwealth Bank, and that the Government did not interfere with it because it was pledged to non-political control. If we, in this Parliament, do not stand for political control, we are drawing salaries under false pretences, and should resign our seats. The reply of the Leader of the Senate means that this Parliament, which constituted the
Tariff Board, and also the Commonwealth Bank, has given to its own creatures the power to determine the fiscal policy of the Commonwealth. A pliant, if not a suppliant, Government, allows the created far greater powers than its creator. The newspaper extract proceeds -
A very small group of private financiers had “ inside information “ concerning this financial juggle, and they used that information to their great personal profit.
In these days of “ cable transfers “ any one knowing that this rise in exchange would happen could “.bet on a certainty” by transferring, say, £1,000 from Australia to England, and getting it back again next week at a profit of £300 on the transaction.
This sudden jump in exchange raised Australia’s overseas interest liabilities by about £12,000,000 ;per year, and it is quite probable that private debtors suffered a loss to somewhere about the same amount.
There have been three explanations furnished to the public as to the reason of this sudden change in exchange rate. The first was that it was a wise precaution adopted by our local banks to prevent an abnormal “flight of capital “ from this country.
The circulation of this statement was certainly not calculated to restore confidence, and, therefore, the actual promotors of the project devised a second explanation.
The bankers now said that they had nothing whatever to do with the rise of exchange,. and that they made no profit whatever out of it. They said that this change was wholly due to inexorable and unalterable economic laws. They explained that we had been importing too much and exporting too little, and that the ‘balance of trade” was against us, and it was that factor which automatically determined the exchange rate.
Later on it became evident that this explanation was not a satisfactory one. Imports fell very heavily, and exports rose until there was an absolutely embarrassing credit balance in our favour in Britain, yet the rate of exchange did not come down until very recently there was a leak in the artificial barriers somewhere, and there was a fall in the exchange down to 25 per cent.
Honorable senators are either not interested in who gets the benefit of the exchange rate, or they are ign*orant of this subject. I shall now quote from a journal which heads a short article “Australia plundered through the exchange rate” -
Various more or less vague and contradictory explanations of the exchange robbery, which has cost the Australian people at least twenty million pounds since it was perpetrated, have been put forward from time to time.
Now we are asked to aid and abet the robbers to kill Australian industries because of the original theft.
-From what publication is the honorable senator quoting?
– The honorable senator’s innocent desire for information amuses me; but I shall not satisfy his curiosity at the moment, for I hope to keep him on the tenterhooks of anticipation. In the Sydney Morning Herald there is a statement by Mr. A. C. Davidson, the general manager of the Bank of New South Wales, as follows : -
An Australian producer ships goods overseas which enablehim to receive one hundred British pounds. He sells this right to an Australian bank, which pays him one hundred and twenty-five Australian pounds.
Mr. Davidson knew that he was camouflaging the facts. A prominent financial writer commented on that statement in the following terms: -
Just imagine a small Australian primary producer, with only one hundred pounds’ worth of produce, “shipping it overseas.” The thing is preposterous, for overhead charges on so small a parcel would be ruinous.
What actually happens is that the small Australian primary producer - who is usually in debt - sells his produce here to an exporting corporation, and receives payment in Australian pounds. That ends the transaction as far as he is concerned.
The exporting middleman corporation buys up the produce of ten thousand primary producers, and ships the lot overseas, where it is disposed of for British pounds. Not being a charitable organization, the corporation exchanges this British credit for an Australian credit at a local financial institution, at an advance of twenty-five per cent., and this closes that transaction.
Every day we see in the commercial columns nf our daily newspapers records of local sales of wheat, wool, hides, skins, tallow, and all kinds of primary products, either by auction or by “ private arrangement.”
All these sales are local transactions. The proceeds are paid in Australian cheques, whose value is expressed in Australian pounds. Exchange plays no part whatever in such transactions.
The rise in exchange was a tax levied without the authority of Parliament, not only upon goods which in future would be imported into Australia, but on all goods previously imported, but not paid for at the date when the exchange toll was levied. It meant ruin to many people who had imported goods, sold them again, and then were suddenly confronted with a demand to pay thirty per cent. over the price stated on the original invoices.
If our Federal Parliament had imposed a retrospective tax of this sort there would have been a tremendous outcry against such a (flaring injustice, but because it was done by a secret junta of private financiers we took injustice lying down.
Further, this impost increased our overseas liabilities on overseas loans to such an extent that it increased the cost of the running of the New South Wales railways by £3,000 per day. All the proceeds of this absolutely illegal and unconstitutional tax went into private hands, and not one penny of it reached the public treasury.
Of all the disgraceful things which have been permitted in this country, the levying of the exchange rate stands preeminent. We are now asked not only to legalize that robbery, but also, because of it, to authorize the Government to lay profane hands on this country’s secondary industries. The difficulty confronting Australia is not different from that which confronts every other country. The Government lacks both the knowledge to understand, and the courage to face, the real issue, which is that the old order is passing, and a new order is emerging.
– That is always the case.
– That is so; but “ stand patters “ like the honorable senator, fail to realize that the world is moving on. They sit on the fence and wonder at the pace of the snail that passes by. The system of competitive commercialism conducted by private enterprise, which we know as capitalism, has failed, and is passing because it is no longer serving human needs. Like any agency that has ceased to perform its proper functions, it has become atrophied, and must be supplanted. I remind Senator Duncan-Hughes, and others who . think like him, that, at this moment, we, the people of the present, are standing between two epochs, the grave of one world and the cradle of another. What we have to do is to keep our eyes on the future, while we break the last links that bind us to the past and steadily to advance.
I have said that two acts of dishonesty have been perpetrated - first, the raising of the rate of exchange, and, secondly, the Government’s action in asking us to become accessories after the crime by passing this bill. We of the Labour party have clean hands. We pointed out that the Ottawa agreement would be a rod for the backs of the primary producers, and so it has become.
– Because it did not go far enough.
– Senator Johnston asked in the course of his speech why this measure should be confined to Great Britain. Why should it not be extended, he asked, to foreign countries, and to other British possessions? The honorable senator has, apparently, an insatiable appetite for fiscal infanticide. He wishes to kill the struggling but lusty infant of Australian nationalism. He is not satisfied that the Government has plunged one dagger into its entrails; he wishes to transfix it with a whole armoury of lethal weapons.
– It is a very slowgrowing infant.
– At least wo can claim that, if given a reasonable chance, Australian manufacturing industries will grow into something of which we can be proud.
I admit that, when thinking of the Ottawa agreement, I am filled with a certain unholy glee. I was sufficiently prophetic to tell Senator Carroll and other trusting innocents, when the agreement was under consideration in this Parliament, just how disaster would overtake the primary producers as a result of it. My prediction has been borne out by the facts. There is published in England, a journal called the News Letter, which is the official mouthpiece of Mr. Ramsay MacDonald, the man who deserted his life-long political faith in order to establish an administration grandiloquently called the National Government. This journal hails the Australian budget as a welcome sign of improvement in the Commonwealth, and emphasizes that the reduction of duties was due to the Ottawa pact. Therefore, the journal maintains, they were the result of British policy, and the hope is expressed that the further reductions promised at Ottawa would soon he effected, now that the Australian economic ‘position is improving. That passage which, having been published, in the journalistic mouthpiece of the British Prime Minister, must be accepted as authoritative, makes abundantly clear how Australia was betrayed by its Tory representatives! at Ottawa. It shows that the breaking down of the tariff walls, so disastrous to Australian industries enjoying protection under Labour’s beneficent regime, was dictated from Downing-street, and expresses the hope in terms which may be accepted as a mandatory declaration to Mr. Lyons and his team of antiAustralian Ministers, that further breaches are imminent. 1 desire now to quote an article published in that respectable and conservative organ, the Brisbane Courier Mail, referring to the iniquitous proposals that Australia, with its population of 6,500,000 people, should restrict its exports. Honorable senators opposite never tire of telling us that this country depends for its prosperity on its exportable surplus; yet the Mother Country now tells its innocent but trusting children that they must restrict their exports, although she knows that if they do the primary producers must suffer. The article to which I refer states -
If Australia and New Zealand agree not to increase their condensed milk exports beyond last year’s figures, Britain will cut the foreign imports by 20 per cent.
If Australia, New Zealand, and Canada reduce their cheese exports by 10 per cent. Britain will cut the foreign imports by 20 per cent.
Britain further requires Australia not to increase her egg exports, and also suggests adjustments of the apple marketing periods to prevent marketing clashes, involving complicated suggestions.
It is gathered that although the possibility of extending the voluntary meat quotas has been comprehensively discussed, Britain’s definite suggestions in regard to meat await the publication of the Fat Stock Commission’s report at the end of October.
The controversial butter problem has taken a new turn, because it is gathered that, in the event of the dominions co-operating in the foregoing restrictions, Britain is willing to waive her desire for the dominions to restrict their butter exports.
In referring to these matters I am not concerned with party politics, hut am moved by my life-long faith that competitive commercialism destroys all that is worth while in life. I believe that the economic system known as capitalism is passing, and we of the Labour party are doing our best to hasten its passing, and to establish in its place a more humane and workable system. Honorable senators opposite were anxious to know the sources from which I was quoting, and I hope they are now convinced that I have gone for my information only to the most conservative and reliable journals. In proof of this, I propose now to quote from the monthly summary issued by the National Bank of Australasia, in which publication reference is made to the World Economic Conference at London. We on this side of the Senate said before the conference opened, that it was foredoomed to failure, because every government of the 66 nations represented hoped to wring some advantage for itself from the conference at the expense of other countries. In a game of that kind, as in a game of poker, every one cannot win. The circular of the National Bank states -
The failure of the World Conference in London to achieve its main objectives is a matter ofhistory. Perhaps it was too much to expect that the great nations, and many of the smaller nations, would arrive at agreement, involving definite action, with regard to the extremely important and difficult subjects which were listed for consideration.
Not only would a common course of action with regard to any of those subjects appear to favour some nations and embarrass others in varying degree, but all kinds of difficulties involving groups, sections, and interests within the several nations would have to be overcome.
– Can the honorable senator give any reason why Australia and New Zealand should not have absolute freetrade between themselves ?
– I must not an ticipate a discussion on legislation which is to come before Parliament. When that legislation is brought down, I shall be able to furnish Senator Duncan-Hughes with some illuminating particulars regarding the trade negotiations with New Zealand. It is interesting at this time to pay attention to what other countries are attempting to do to meet the economic situation. As honorable senators know, a gigantic experiment is being made in the United States of America. That experiment, I make bold to say, will ultimately be a complete and dismal failure.
– The honorable senator is a courageous prophet.
– Anything which I say in this chamber goes into the official record, and may be quoted against me in the future. So far, none of my prophecies have been falsified. I make the present prophecy in regard to the American experiment, not because I possess more knowledge on the subject than is readily available to other honorable senators, but because I have the capacity - which they apparently have not - of making a world survey of events, and of recognizing essentials. The experiment in America will be a complete and dismal failure, because it is an attempt by their courageous President to save capitalism, which cannot be saved. If honorable senators had had the same extensive political education that I have had, they would know that the President of the United States of America would not be allowed to continue his experiment for one day more if it were really thought by those in control of affairs in that country that there was any prospect of his solving the existing economic problems. The fact is that capitalism is afraid of revolution, and is willing to submit to the President’s experiment in an attempt to stave it off. In this country, also, governments should beware of how far they go. They will not need to go much further in the direction of sacrificing Australian industries, which alone can keep our people employed - and even the primary industries, according to lugubrious senators of the Country party are doomed to extinction - before the crowd outside which, because of the bitter experience of hunger and unemployment, is thinking more deeply than it ever thought before, will take affairs into its own hands. When the crowd sickens of the tilings done in the name of democracy and constitutional government we shall see representative institutions supplanted by a dictatorship of either blood-hungry Communists or power-mad fascists.
Miss Perkins, the Minister for Labour in the Government of the United States of America, is reported to have spoken as follows on the social and economic problems now confronting the people of that country : -
Labour’s new status, meant that the worker would now have a voice in formulating policies for industry and would be permitted to make constructive contributions toward solving the nation’s economic and social problems. These problems included the balancing of production with consumption and the correlation of wage-earners consumption power in capital-goods industries with the same power of workers in consumption-goods industries. “ We cannot stop with the present minimum wages and maximum hours of labour “, said the speaker. “We must go with a unified purpose to an ever-improving standard of living and assurance of economic security for all our people and sufficient leisure to enable us to enjoy the blessings which our resources and our equipment can make available to all of us.”
I quote the following paragraph taken from a newspaper only this afternoon: -
Because of the tariff duties in England against foreign fruit thousands of cases of oranges from Spain have been dumped in the sea. In Liverpool alone in three weeks many hundreds of tons, representing thousands of cases, and enough fruit to keep a township supplied for weeks, has been dumped at the mouth of the Mersey.
Members of the medical profession tell us that oranges are rich in vitamins, and are a particularly valuable food. There are tens of thousands of children in Australia to-day, quite apart from those in Liverpool, to whom those oranges would have been a God-send.
– -Not if we had that new order of society which the Labour party desires to establish. I stated earlier that there is no difference between the problem which has impelled the Government to introduce this futile measure and that facing every other country to-day. What is that problem? We have to find a new method of distributing the wealth which the world produces. In the language of the political faith to which I subscribe, the production and distribution of wealth must be for the use and benefit of all the people, and not for the private use or profit of any individual or section of the people. This measure is simply a corollary of others of a similar nature which have preceded it. They are not even mentally decent attempts to come to grips with the real problem, and the Government is merely fiddling, as Nero is alleged to have fiddled while Rome burned. I plead with honorable senators who propose to support the bill to realize what its final application means. Senator Johnston admits that it does not go so far as he would like it to go, although it means a further reduction of customs duties, which he alleges will “be to the advantage of primary producers. If it means anything at all, it means a reduction of the protection afforded to the manufacturing industries of this nation, which, according to the figures I quoted earlier, were in 1931-32 responsible for the production of £281,500,000 worth of wealth. This is the source from which Australia derives its comparative greatness. It is into the vitals of the manufacturing industries of this nation that this Government proposes to thrust the knife. I can only trust that honorable senators who propose to support the bill will, even at this late hour, stay their hands.
– Senator Collings, in the oration to which we have just listened, has not, except in a few sentences, dealt with the measure now before the Senate. The honorable senator’s speech consisted largely of extracts which, like “ the flowers that bloom in the spring, have nothing to do with the case.”
– The Minister cannot dispose of my arguments in that way.
– The honorable senator did not tackle the problems which this bill is intended to solve. In his usual delightful way, and with the assistance of a good vocabulary, he voiced certain theories, but failed to come to grips with the purpose of the bill. If the Leader of the Opposition (Senator Barnes), who appears to be perturbed with the state of Australia’s trade balance, studies the latest return issued by the Commonwealth Statistician, only yesterday, he will see that our trade position overseas is particularly satisfactory. He also said that the enactment of this measure would lead to a further reduction of the protection afforded to Australian industries, and that, in turn, would inevitably result in increased unemployment. If the honorable senator studies the position he will find that, with one exception, there has been a continual decrease in the percentage of unemployed in Australia since this Government has been in office. The position to-day is better than it has been for a considerable time, and we believe that with the passage of legislation such as we are now considering it will steadily improve. The Leader of the Opposition also said that the formula which the
Tariff Board bad supplied for the assistance of Parliament and of the Government “was inconclusive. I have alreadyplaced concrete cases based on the formula at the disposal of honorable senators. Notwithstanding the suggestions’ of Senator O’Halloran that this measure is a blind stab in the dark, it will not have an adverse effect upon Australian industries. He contends that by adopting the recommendations of the Tariff Board the protective incidence of the tariff will be reduced. The protection of secondary industries is provided for in the tariff schedules which .embody the fiscal policy of the Government and which have been adopted by Parliament. When our credit overseas slumped this protection, was increased by the high rate of exchange. Does the honorable senator suggest that in addition to the protection already afforded to Australian industries a further 25 per cent, should be given ? I showed yesterday how the Tariff Board bus balanced the position between Australian industries purchasing raw materials overseas and those which are not compelled to do so. Senator O’Halloran suggested that tho enactment of this legislation will lead to an increase of imports and the destruction of Australian manufacturing industries. He also said that the object of the measure is to placate the members of the Country party and other supporters who do not approve of the Government’s fiscal policy in its entirety. The Tariff Board has indicated from time to time that in making recommendations to tho Government with respect to customs duties, it has been embarrassed by the high rate of exchange. > The Government considered for some time whether or not it should refer this intricate problem to economists, or remit it to the Tariff Board. Finally it decided to entrust the task to the board, and I am glad to know that Professor Giblin, whose opinion has been quoted by some honorable senators this afternoon, agrees with the Government that the board is the appropriate tribunal.
Senator O’Halloran claimed that there was no justification for the bill. If he will turn to page 56 of the board’s report, he will find that Professor Giblin recommended legislation on the lines of the measure now before the Senate as being in the best interests of Australia. The honorable senator also fell into at least one pitfall. He stated that the maximum reduction of the rate of duty under this proposal would be 20 per cent., whereas it cannot fall below 12£ per cent.
– I was referring to possible reductions on account of exchange and primage, and quoted the view expressed by the Minister for Trade and Customs.
– Then all I can say is that the honorable gentleman failed to express his meaning clearly. The bill is not, as Senator Collings suggested, the corollary of previous legislation. It is something entirely new, and its purpose is to ensure a better balance in the treatment accorded to imports from various countries.
– It is merely another implement in the kit of burglars’ tools in the hands of the Government.
– An interjection of that sort might be appropriate in an address at street corners, but in a chamber like this, where we are endeavouring to do serious work, it is, I suggest, out of place, if not offensive. Evidently the honorable senator does not like any proposal designed to deal justly with importing and exporting interests. Senator Johnston complained because the Tariff Board in its first recommendation suggested that a deduction should be made from the duty payable of one or other of the amounts mentioned in paragraphs a and h. “ whichever is the smaller.” This proposal, I assure the honorable, gentleman, is customary in legislation of this nature. He would prefer Parliament to have a free hand. Being a revenue tariffist the honorable senator is not satisfied with the present generous concession, but like Oliver Twist, is asking for more. He has had circulated an amendment which the Government cannot accept. He complains that the Government has not accepted the recommendations of the Tariff Board in their entirety. Yesterday I endeavoured to explain that, if the Government had done so, it would have been obliged to extend the formula to include the United States of America and Ger- many, countries whose currencies are on a sterling basis. The Government is resolved to stand by the principles of the British preferential tariff, and will not extend them. But the effect of the honorable senator’s amendment would bo more serious than would appear at first sight. It would cut across the Commonwealth’s obligations under the Ottawa agreement. This is best illustrated by quoting a specific example. On a protected line of goods, the duties on which are 40 per cent. British and 60 per cent, general, there is a margin of 20 per cent. in conformity with the formula adopted at the Ottawa Conference in respect of commodities in this range. If the amendment were passed, the result would be that one-quarter’ of the duty, oroneeighth of the value for duty, whichever is the less, would be deducted. This would mean that protected goods imported from theUnited Kingdom would be dutiable at 40 per cent., less exchange adjustment 10 per cent., making the net duty 30 per cent. Protected goods im- ported from the United States of America would be dutiable at 60 per cent., thus preserving the margin of 20 per cent., but after deducting12½ per cent. exchange adjustment, the net duty would be 47½ per cent., and the margin would be reduced to17½ per cent. As the margin under the Ottawa agreement in these duty ranges is 20 per cent., the amendment would be a breach of the agreement. If there are in the bill any other obscure points which I have not elucidated, 1 shall be glad to do so in committee.
Question - That the bill be now read a second time - put. The Senate divided. (President - Senator the Hon. P. J. Lynch.)
Question so resolved in the affirmative.
Bill read a second time.
In committee :
Clauses 1 and 2 agreed to.
Cite as: Australia, Senate, Debates, 10 November 1933, viewed 22 October 2017, <http://historichansard.net/senate/1933/19331110_senate_13_142/>.