Senate
7 May 1936

14th Parliament · 1st Session

  1. Senate
  2. 14th Parliament
  3. 1936

The Senate met at 3 p.m.

The Clerk. - I have to inform the Senate that, owing to illness, the President will be absent from the sitting today. In accordance with the Standing Order, the Chairman of Committees will take the chair as Deputy President.

The DEPUTY PRESIDENT (Senator Sampson) took the chair and read prayers.

page 1338

SPECIAL ADJOURNMENT

Motion (by Senator SirGeorge Pearce) agreed to -

That the Senate, at its rising, adjourn till Wednesday next at 11 a.m.

page 1338

QUESTION

WAR PENSIONS APPEALS

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– On the 30th April, Senator Collett asked the Minister representing the Minister for Repatriation, upon notice -

  1. Has the additional War Pensions Entitlement Tribunal, appointed last year, been dissolved?
  2. What, at the present date, are the arrears of pension appeals?
  3. Is it not anticipated that there will be a considerable increase in the number of appeals as a result of the institution of the system of service pensions?

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

  1. Yes, as from the loth April, 1936.
  2. At the 1st May, 1930, there were 340 appeals listed for hearing by the Entitlement Appeal Tribunal in the States in which it will actually conduct sittings during the period from the 1st May, 1936, to the12th June, 1930, and 245 other appeals are ready to be listed in the various States to which the tribunal will subsequently proceed, while 93 appeals are waiting registration by the commission. This makes inall a total of678 appeals already listed or waiting listing or registration. The tribunal can hear 50 cases a week. It will, therefore, dispose of the 340 cases actually listed within the period from the 1st May, 1936, to the 12th June, 1936, and the remaining 338 cases in less than seven weeks from that date. The tribunal can hear 700 cases in fourteen weeks. This means that the average waiting period for each appeal is less than three months. Seven hundred cases are necessary to keep one tribunal constantly functioning. When the additional tribunal was appointed, there was an accumulation of 1,302 cases’. This was beyond the capacity of one tribunal. The accumulation having been disposed of, the position is now well within the capacity of the existing tribunal.

  3. No, as no right of appeal from service pension applications lies to the War Pensions Entitlement Appeal Tribunal. All service pension” appeals on the grounds that an exsoldier is -

    1. permanently unemployable; or
    2. suffering from pulmonary tuberculosis, lie to the War Pensions Assessment Appeal Tribunals.

page 1339

QUESTION

SERVICE PENSIONS

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– On the 30th April, Senator Collett asked the Minister representing the Minister for Repatriation, upon notice -

Concerning the benefits allowed by the Australian Soldiers’ Repatriation Act 1935 -

What number of service pensions in each State have been (a) applied for; (b) granted; (c) refused, since the act came into force?

Similarly, how many tubercular exsoldiers in each State have been granted pensions and treatment?

What is the approximate total annual financial commitment so far incurred?

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

  1. As at the 30th April, 1936, the figures showing the total annual financial commitment were -

but it is estimated that, when all applications at present on hand, and likely to be lodged, have been determined, the annual financial commitment will be -

page 1340

QUESTION

SALEOF CHEESE IN TASMANIA

Senator J B HAYES:
TASMANIA

asked the Minister representing the Acting Minister for Commerce, upon notice -

  1. Is it a fact that cheese is being sent from the mainland and sold in Tasmania at 5½d. per lb.?
  2. If so, are the shippers of such cheese getting any monetary assistance from any fund of any sort on account of cheese so shipped?
  3. Are Tasmanian dairymen ableto send to and sell cheese in Victoria or other States?
  4. Will the Minister make a statement setting out the reasons for the existing position?
Senator BRENNAN:
Minister without portfolio assisting the Minister for Commerce · VICTORIA · UAP

-The Acting Minister for Commerce has supplied the following answers: -

  1. The Acting Minister for Commerce is not in a position to furnish any information on this matter.
  2. See answer to No. 1.
  3. There is no objection, providing the terms of the Dairy Produce Act 1933 and Regulations are complied with.
  4. The Commonwealth Dairy Produce Act 1933 is still operative in Tasmania, and consequently no statement would appear to be necessary.

page 1340

QUESTION

TRADE WITH BELGIUM

Barley Exports : Glass Imports

Senator BADMAN:
SOUTH AUSTRALIA

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

  1. What was the total value of barley exported from Australia to Belgium during the year ending the30th June, 1935?
  2. What was the total value of glass imported from Belgium to Australia during the year ending the 30th June, 1935?
  3. What was the total value of goods exported to Belgium from Australia during the year 1934-35?
  4. What was the total value of imports from Belgium during theyear 1934-35?
  5. What proportion of the total exports of Australian barley was imported by Belgium during the year 1934-35?
  6. Has any firm agreement been made between Australia and Belgium with relation to the barley and glass industries?
  7. What is the total protection which Australian sheet glass enjoys at the present time, i.e., percentage including duty, primage duty and exchange, but excluding freight?
Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– The Minister for Trade and Customs has supplied the following answers: -

  1. £203,512 (Australian currency).
  1. £6,080,381 (Australian currency = £4,854,596 sterling).
  2. £477,864 (sterling).
  3. 51.6 per cent.
  4. The admission of Australian barley into Belgium and Belgian sheet glass into Australia is governed by a formal agreement concluded in November, 1934. The agreement is for an indefinite period, subject to termination at two months’ notice from either side.
  5. The rates of duty on imported plain clear sheet glass are 2s. a 100 square feet (British preferential tariff), 4s. a 100 square feet (general tariff), which are equivalent, on the 1934-35 import values, to 8.5 per cent. ad valorem (British preferential tariff), 24.1 per cent, ad valorem (general tariff). Primage duty rate is 10per cent. ad valorem (British preferential and general tariffs). Exchange varies according to the country from which the glass is imported.

page 1340

QUESTION

ASSISTANCE TO WHEAT-GROWERS

Senator E B JOHNSTON:
WESTERN AUSTRALIA

asked the Minister representing the Acting Minister for Commerce, upon notice -

  1. Has the Commonwealth Government approved of the basis of distribution in each State of the moneys granted to the States under the provisions of the Wheat Growers Relief Act1936?
  2. What are the details of the distribution approved in each State?
  3. How much is being paid in each State: (a) on an acreage basis, per acre; (b) otherwise; and (c) for drought relief ?
Senator BRENNAN:
UAP

– The Acting Minister for Commerce has supplied the following answers to the honorable senator’s questions : -

  1. Yes.
  2. Details of the methods adopted by each State have already been furnished in a reply to SenatorUppill given in the chamber on the 1st May.
  3. The information is being obtained, and will be furnished to the honorable senator later.

page 1341

QUESTION

TRADE WITH NEW ZEALAND

Senator HARDY:
NEW SOUTH WALES

asked the Minister representing the Acting Minister for Commerce, upon notice -

Is any information available as to the progress of trade negotiations between Australia and New Zealand, particularly on the question of the re-establishment of the Australian citrus export trade?

Senator BRENNAN:
UAP

– The following answer to the honorable senator’s questionhas been furnished by the Acting Minister for Commerce: -

An invitationhas been extended to the New Zealand Minister for Commerce to attend the forthcoming meeting of the Australian Agricultural Council, when it is hoped further progress on the question of the reestablishment of the Australian citrus trade will be made.

page 1341

QUESTION

AUSTRALIA HOUSE

Senator BROWN:
QUEENSLAND

asked the Leader of the Senate, upon notice -

  1. Has the attention of the Government been drawn to the constant adverse criticism of the publicity methods of Australia House and other Australian publicity?
  2. If so,has any effort been made to improve these publicity methods?

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

  1. The Government’s attention has not been drawn to the alleged constant adverse criticism of the publicity methods of Australia House, and is not aware that any such adverse criticism has been offered.
  2. See answer to 1. above.

page 1341

QUESTION

TRADE WITH ITALY

Senator J V MACDONALD:
QUEENSLAND · ALP; FLP from 1932

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

In view of statements in press cables as to the loss of Australian export trade with Italy during the operation of sanctions, will the Minister supply the official information available, as nearly to date as possible, regarding the loss in Australian export trade with Italy during the period mentioned?

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– The Minister for Trade and Customs has furnished the following information in reply to the honorable senator’s question : -

The following figures show the value of exports from Australia to Italy during the first four months subsequent to the imposition of sanctions against Italy as compared with the figures for the similar period of 1934-35:-

page 1341

QUESTION

CANBERRA: POSTAL LINESMEN’S WORKSHOP

Senator McLEAY:
SOUTH AUSTRALIA

asked the PostmasterGeneral, upon notice - 1: Is it a fact that tenders for anew workshop for the linesmen at the Causeway, Canberra, have been cancelled?

  1. If so, will the Government provide better temporary accommodation immediately to safeguard the health of its workmen during the coming winter?
Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– The answers to the honorable senator’s questions are as follows : - 1 and 2. Funds have now been provided for this work, and action will be taken with a view to the early erection of the proposed buildings.

page 1341

INCOME TAX ASSESSMENT BILL 1936

Bill received from the House of Representatives, and (on motion by Senator A. J.McLachlan) read a first time.

page 1341

QUESTION

CUSTOMS TARIFF 1936

In committee (Consideration resumed from the 6th May, vide page 1277) :

Item 176-

By omitting the whole of sub-item (d) and inserting in its stead the following sub-item: - “(d) (1) Cement-making machines,n.e.i.,; road-making machines, n.e.i. ; stone-crushing machines,n.e.i.; travelling and portable cranes, hand operated; coal conveyors and ash-handling plant exclusive of motive power equipment; aerial cableways exclusive of cable; aerial ropeways, exclusive of cable, cars and mechanical parts, ad valorem, British, 35 per cent; intermediate, 55 per cent.; general, 55 per cent.”

By adding a new sub-item (l) as follows: - “ (l) Machinery and equipment, n.e.i., of the type used exclusively for the extraction, manufacture or refining of sugar, ad valorem, British, 25 per cent.; intermediate, 42½ per cent.; general,53¾ per cent.”

Senator E B, JOHNSTON:
Western Australia

– I am astonished to find that cement-making machines are subject to the high duties of, British 35 per cent., and general and intermediate tariffs 55 per cent., especially when I reflect that yesterday the committee agreed to duties of British free, and general and intermediate tariffs 15 per cent., in respect of many different classes of machinery under item 174, including machines required for the making of macaroni! If the committee desires to protect secondary industries in this way, it should afford protection to those industries which have to meet the fiercest competition from abroad, and are of most value to this country. Should the Senate agree to request the House of Representatives to reduce the duties on cement, it should allow Australian manufacturers of cement to obtain their machinery requirements as cheaply as possible, particularly under the British preferential tariff. I therefore move -

That the House of Representatives be requested to make the duties, sub-item (d) (1) - British, free; intermediate, 15 per cent.; general, 15 per cent.

I have chosen those rates, not because of any report of the Tariff Board, but because the Senate has agreed to similar rates in respect of various classes of machines required by secondary industries which are of much less importance to Australia than is the cement-making industry.

Senator A J McLACHLAN:
Postmaster-General · SOUTH AUSTRALIA · NAT

– The Tariff Board’s report on this item, which was dated the 20th October, 1932, was reviewed by this chamber in connexion with the 1933 tariff and the duties shown here are exactly those recommended by the board in that report. The alterations in this item were made in consequence of the board’s report, dated the 31st May, 1935, on page 3, on which it dealt with aerial cableways and aerial ropeways. It came to the conclusion that those articles should be segregated and consequently the item was divided into 176 (d) (1) and 176 (d) (2), and mechanical cars, and parts thereof for use on aerial ropeways were taken out of the item. That is the only alteration made in respect of this item as compared with the 1933 schedule.

As to the reductions of duty on cementmaking machines, I refer honorable senators to the report of the Tariff Board on page 5, on which it states -

The various types of machinery included under the item may be divided into two main groups, the one comprising types in common demand such as road-making machines and the smaller stone-crushing machines and the other comprising types for which there is only an occasional demand consisting for the most part of more or less permanent equipment, such as ash handling plant, cement-making machines and large crushers. While Australian manufacturers have for many years been constructing machinery coming within both of the groups mentioned they have naturally been more successful as regards the types in greater demand. As a matter of fact, very few of the more commonly-used machines were being imported under the former rates of duty. A typical comparison given in evidence showed the landed cost of arock crusher - size of jaws 16 inches by9½ inches - to be £479 inclusive of the increased duty, against the local manufacturers price of £330. These figures indicate that Australian manufacturers could successfully compete under duties much lower than those operating at the date of the inquiry. It is significant also that some of the leading manufacturers of such machines did not tender evidence in support of the duties.

The board at that time recommended that the duty on this item be not varied; consequently it has not been altered. Of course, the Exchange Adjustment Actapplies to this item.

Request negatived.

Senator LECKIE:
Victoria

– In connexion with sub-item l, which covers sugar refining machinery, I point out that the old duties were British 45 per cent., and general 55 per cent., subject to exchange adjustments. The duties now proposed are, British 25 per cent., intermediate42½ per cent., and general 53¾ per cent. What is the reason for these reductions? Australian manufacturers are able to supply this class of machinery; as a matter of fact, during the last three years they made sugarrefining machinery valued at £261,000. Seeing that the sugar industry is already heavily protected, and in view of the report appearing in yesterday’s press that the Colonial Sugar Refining Company made a profit of nearly £500,000 during the last six months, it seems only right that this company, which derives much of its income from Australian sources, should, in return, be- prepared to place its orders for machinery with Australian firms.

Senator Hardy:

– The company claims that it derives the major portion of its revenue from sources outside Australia.

Senator LECKIE:

– Much of it comes from Australian sources. I ask the Minister to explain why these reductions have been made. They seem unnecessary. This is an item on which the Government could have leaned towards this Australian manufacturers.

Senator A. J. McLACHLAN (South Australia - Postmaster-General) [3.27 J . - The Tariff Board’s inquiry into the duty on sugar machinery originated in a request made by machinery manufacturers in the United Kingdom for a reduction of duties, in order that they might have “full opportunity of reasonable competition on the basis of article 10 of the Ottawa agreement.” The inquiry covered all the equipment for sugar mills and refineries, which, if imported under the 1933 tariff, would be classifiable under item 176 f 1 machines and machinery n.e.i., and item 208 a manufactures of metals n.e.i. Evidence submitted to the board indicated that machinery valued at £261,000 had been locally supplied by leading manufacturers during the previous three years, and that its production waa an important section of the general engineering industry. Moreover, as Australian engineering firms have .successfully produced sugar machinery under varying trade conditions and obtained a large proportion of the business offering, their efficiency, service, and method of production cannot be seriously challenged. The board considered that the rates now proposed should have the effect of keeping local prices at a reasonable level, and at the same time, permitting the importation of such equipment as cannot be commercially produced in Australia. The general tariff rate is slightly higher than that recommended by the board, a margin for treaty negotiation purposes having been provided.

Senator COLLINGS:
Queensland

– The Opposition protests against any reduction of the duties on this item. It is a matter upon which the Opposition is qualified in a special way to speak, because all three of us represent Queensland, which is the principal sugar producing State. Supplementing the remarks just made by Senator Leckie, in respect of Australian-made machinery, I point out that the sugar mill at Tully, Queensland, is the best equipped and most efficient mill in the southern hemisphere, and, I believe, that it compares more than favorably with any sugar mill in any part of the world. All the machinery in that mill was manufactured by Walkers Limited, of Maryborough.

Senator HARDY:

– Is any of the machinery used in the sugar industry manufactured under .patent rights?

Senator COLLINGS:

– <No. It can be, and is being, made in Australia. I am conversant with the development of the sugar industry, from the time when indentured Kanakas were employed. I know what the Queensland Government has done in connexion with the particular mill mentioned. I have inspected the machinery it uses, which was all manufactured by Walkers Limited, who depend largely upon the orders for sugar machinery to keep their men employed. Have the representatives of overseas manufacturers appeared before the Tariff Board to protest against high duties ?

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– The report of the Tariff Board shows that S4 per cent, of the machinery used by the Colonial Sugar Refining Company is manufactured in Australia.

Senator COLLINGS:

– It would appear from the interjection of the Minister that it is a crime to make a success of an Australian manufacturing concern. His interjection is eloquent evidence of the fact that those producing the machinery used in the sugar industry are doing their work efficiently.

That being so, it seems that their only crime is that they are making a success of their job. We wish to know why the Colonial Sugar Refining Company purchases only 84 per cent. of its machinery in Australia, when all it requires can be manufactured efficiently in this country. Our fiscal policy is framed with the object of developing Australian industries, and all the mechanical plant used in the production and refining of sugar should be manufactured locally. It cannot be said that the sugar industry is not conducted efficiently, that it is incapable of supplying the whole of our requirements, or that it is making excessive profits, but it can be shown, as the Minister has indicated, that the machinery used in the industry can be produced in Australia at prices which compare more than favorably with those prevailing elsewhere. I am conversant with the efficient manner in which the works of Walkers Limited, of Maryborough, are conducted. I know the city and its people. I know many of the men engaged in the industry, and I realize how they will be affected if, in consequence of importations, Walkers Limited have to reduce the number of hands employed. I appeal to the Minister to reconsider the duties imposed under this item.

Senator BROWN:
Queensland

– I support the remarks of the Leader of the Opposition (Senator Collings), because, as representatives of Queensland and as good Australians, we consider that the machinery required by the Colonial Sugar Refining Company should be manufactured in Australia. I am sure that the employees of Walkers Limited, will regret to learn that their position may be jeopardized by the action of British manufacturers, and that the Government is adopting a recommendation of the Tariff Board, providing for reduced duties on imported machinery. We contend emphatically that, when the machinery can be manufactured in Australia, the Government should not, by decreasing the protective duty, destroy an industry that is producing machinery of the highest possible quality.

Senator Hardy:

– Even if the price is high.

Senator BROWN:

– Yes. In order to assist the Australian dairying industry, the home price of butter is higher than world’s parity; but the Opposition does not contend that that price should be reduced. It desires that the dairymen shall receive a fair price for their product; our manufacturers of machinery also should enjoy the same consideration. With the competition which occurs between the various firms in the Commonwealth, the Labour party considers that a fair price is maintained for machinery of this class.

Senator Hardy:

-And themanufacturers are making a fair profit.

Senator BROWN:

– The honorable senator believes in the capitalistic system, which enables profits to be made ; it is my hope that we shall ultimately be able to depart from it. I point out, however, that Walkers Limited, of Maryborough, have made no unfair profits by exploiting the consumers of their product. Does Senator Hardy make any assertion to the contrary ?

Senator Guthrie:

– The Colonial Sugar Refining Company is making excessive profits.

Senator BROWN:

– The Colonial Sugar Refining Company admittedlyhas made large profits; but this Government or any other government, if it exercised its powers, could relieve that firm of a portion of those profits. But because the Colonial Sugar Refining Company has made huge profits, why should the tariff be reduced in order to permit the entry of sugar-refining machinery from Great Britain? The contention that because a refining company is making allegedly excessive profits we must attack the manufacture of sugar-refining machinery - an industry which has been built up by industrial pioneers - is, in my opinion, puerile. Reference has been made to the volume of business transacted by British manufacturers of this class of machinery. From remarks that have been uttered, one would conclude that they do not export large quantities to Australia andthat, therefore, they should be given a reasonable opportunity to increase their sales in the Commonwealth, although it would be to the detriment of Australian industry. I quote the following extract from the Tariff Board’s report of the 17th December, 1934 : -

Exports of sugar-making and refining machinery other than centrifugals, from the United Kingdom for the calendar years since 1930 are as follow: -

!From that information, I conclude that the manufacturers of the United Kingdom are enjoying a particularly busy time and that they are competing successfully on the Australian market. The Government should heed the protest of the Opposition; instead of blindly following the recommendations of the Tariff Board on almost every occasion, it should recognize the wisdom of adequately safeguarding Australian industries. The Labour party contends that the Australian people pay a reasonable price for their sugar. The industry has been organized thoroughly and efficiently from base to apex, and the agreement between the Government and the sugar interests for the sale of sugar within the Commonwealth at a satisfactory price has been renewed for a further period of five years.

Senator Guthrie:

– The price is not satisfactory to Victorian consumers.

Senator BROWN:

– It is satisfactory to the Australian public generally. The only protest made has emanated from a few dowagers who constitute the Housewives’ Association - a few individuals who are probably paid to carry on propaganda against the sugar industry. In my opinion, they have no considerable following.

Senator Guthrie:

– The sugar industry costs the Australian consumers millions of pounds a year.

Senator BROWN:

– That contention has been so often refuted that I shall not bother now to expose how fallacious it is. Senator Guthrie can only submit a set of figures; he is blinded by cyphers, and is unable to view the industry in proper perspective. There are considerations other than price. If all Australian industries were organized on the same efficient basis as the sugar industry, less difficulty in preserving their existence would be experienced.

Senator Guthrie:

– The profits, of the Colonial Sugar Refining . Company amounted to £500,000 during the last six months.

Senator BROWN:

– The honorable senator is obsessed with the operations of the Colonial Sugar Refining Company. The profits made by that concern are not relevant to the present discussion.

Senator Abbott:

– If those profits were distributed over the entire Australian population, the amount that each person would receive would be equivalent to onefourteenth of a penny.

Senator BROWN:

– I realize that the Colonial Sugar Refining Company takes its profits from the pockets of the workers. On a previous occasion the Opposition showed what percentage of the company’s profits -was made in Australia and what percentage in other parts of the world. Senator Guthrie interjected that, during the last six months, this company has made a profit of £500,000. If’ that is so, why should the honorable senator, and the Government, make an effort to obtain from the United Kingdom cheaper machinery for the use of the company?

Senator Guthrie:

– I did not advocate that.

Senator BROWN:

– If the Colonial Sugar Refining Company is receiving a fair price for its commodity it should be made to pay a fair price for its machinery.

Senator Guthrie:

– I agree.

Senator BROWN:

– When Senator Guthrie quoted the profits of that concern, I understood him to use those figures as a reason for cheapening the price of machinery. Surely that would enable ‘ the enterprise to increase its profits !

Senator Guthrie:

– I should like to see the company purchase all its requirements of machinery within the Commonwealth.

Senator BROWN:

– That being so, the honorable senator should support the request of the Opposition that the industry be safeguarded against any “ sop “ to the British manufacturers through the Ottawa agreement.

Senator Hardy:

– How much machinery was imported from Great Britain last year?

Senator BROWN:

– I have already stated the value of exports from the Old Country.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– But not all of those exports came to Australia.

Senator BROWN:

– I pointed out that Great Britain enjoys a large business in the sale of machinery of this class. In order to survive, the British manufacturers do not need to launch an attack upon Australian industry. Some honorable senators have conveyed the impression that the industry in Great Britain “ is going to the dogs “ ; therefore Australia must extend some assistance to it. The Leader of the Opposition pointed out the admirable work that has been done in the production of this machinery in the Commonwealth. Some splendidly equipped mills are operating in Queensland. Mr. Goldsmith, general manager and director of Walkers Limited, Maryborough, stated before the Tariff Board -

Walkers Limited was originally established in Ballarat, Victoria, in the year 1864, and at Maryborough, Queensland, in 1868. The manufacture of sugar machinery, which was first undertaken by Walkers Limited in the seventies of last century, has been carried on continuously from then to the present time, and it can bc safely stated that during that period there is no part of a. sugar mill which has not been manufactured or supplied from their works.

Senator Herbert Hays:

– Then what is all the fuss about?

Senator BROWN:

– The necessary machinery can be manufactured in Australia-

Senator Herbert Hays:

– It is being manufactured in Australia.

Senator BROWN:

– And it is being sold under fair conditions. For those reasons there is no necessity for altering the tariff to enable the British manufacturers to compete in supplying this type of machinery. Unfortunately, the tariff has been reduced.

Senator Hardy:

– But there have been no importations.

Senator BROWN:

– In my opinion the tariff has been reduced for a purpose. The Minister in charge of the bill (Senator A. J. McLachlan) has stated that the British manufacturers made application for the position to be reviewed.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– That is correct.

Senator BROWN:

– The intention behind the reduction of the tariff is to allow those manufacturers to compete with the Australian industry. If a demand for machinery of this class is created, the British manufacturers will have an opportunity to supply it.

Senator Hardy:

– Has any of this machinery been imported?

Senator BROWN:

– The fact that no machinery has been imported does not destroy my argument. Australian manufacturers have protested against any reduction of the duty. Obviously, if the British manufacturers are unable to compete under the lowered duties, it will be competent for them to make a further application. Then if the principle upon which the Government is acting is sound, the request will be referred to the Tariff Board, which must take cognizance of evidence furnished by the British manufacturers, and might recommend a further reduction of the duties.

Senator Hardy:

– If under these duties there are no imports of British machinery, will the honorable senator be converted to a lower duty?

Senator BROWN:

– I object to this constant tinkering with the tariff under the terms of the Ottawa agreement.

Senator Leckie:

– Who said that no sugar-making machinery had been imported ?

Senator BROWN:

– The PostmasterGeneral (Senator A. J. McLachlan) has informed the Senate that there have been no importations of that class of machinery.

Senator Leckie:

– British manufacturers would not be exporting to Australia every year.

Senator BROWN:

– If under the lower duties British machinery is imported harm will be done to an important industry, and good Australian workers will lose employment.

Senator A J McLACHLAN:
Postmaster-General · SOUTH AUSTRALIA · NAT

– I am rather pleased that Senator Brown has brought into such bold relief the fact that these duties, which were recommended by the Tariff Board, are the result of an. application by the British manufacturers of sugar-refining machinery. His complaint, apparently, is that the board made its recommendation under the terms of article 10 of the Ottawa agreement. The board stated -

The relative costs of economical and efficient production in the engineering industry, as between the United Kingdom and Australia, have already been exhaustively investigated by the board, with the result that a duty of 45 per cent, was deemed to be the appropriate margin of protection necessary to .adjust such relationship of costs.

What would Senator Brown say if we did not honour our obligation under the Ottawa agreement?

Senator Brown:

– These reduced duties are no part of our obligation.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Will the honorable senator deny that there is an obligation on the part of the British Government to grant preference to Queensland sugar in the British market? What would Senator Brown say if Great 1314 tain-

Senator Brown:

– On a point of order, I protest that the Minister is misinterpreting what I said. My point is that it is not mandatory on this Government to accept the recommendation of the Tariff Board. The Minister is misleading the committee when he says that it is obligatory to do so.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I said nothing of the sort. The honorable gentleman has no right to assert that I am misleading the committee. His trouble is that he and his Queensland Labour friends are getting what they have been looking for as regards the relationship of British preference to Queensland sugar and our obligations under the Ottawa agreement. They cannot have it both ways. They cannot, on behalf of Walkers Limited, object to the lower tariff rates on sugar machinery, and, at the same time, expect preference for Queensland sugar in the British market. “Under the agreement with South Africa, they now have a market in Britain, which, in other circumstances, would probably be closed against them. It was only natural that British manufacturers of sugar machinery should expect something from us in return for concessions which Britain is giving to our sugar producers in its market. We have made a bargain with Great Britain, and have certain obligations, which, in the interests of Australian sugar-growers, should be honoured.

Senator Collings:

– We had British preference for our sugar long before the Ottawa agreement was made.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Its continuance has been secured to our growers under the agreement with South Africa, and although it is not mentioned specifically in the Ottawa agreement, its bearing upon our obligations under that contract cannot be overlooked. The honorable gentleman knows this very well, and I am surprised that he and his Queensland colleagues should continue their attack on the Ottawa agreement.

Senator LECKIE:
Victoria

.- Australian engineering firms have been manufacturing sugar machinery for years, and owners of mills who purchased their machinery are in a better position ns regards replacements than are mill owners who are using British machinery. The point which the Minister missed is this: Unless these lower duties encourage competition by British manufacturers, they are of no avail. Can the Minister give the committee an assurance that no British machinery will be imported under this item?

Senator Hardy:

– Why should hot British manufacturers have a reasonable opportunity to compete in the Australian market ?

Senator LECKIE:

– If British machinery is imported, orders will be lost by Australian manufacturers, and Australian engineers and workmen will lose employment.

Senator Collings:

– Of course they will.

Senator LECKIE:

– On the other hand, if the duties have not been reduced sufficiently to encourage competition from British manufacturers, this Government is, to use a colloquialism, “selling them a pup “.

Senator A. J. McLACHLAN (South Australia - Postmaster-General [4.2] . - One Queensland senator expressed some doubt as to the value of the concessions secured to the Queensland sugar industry in the British market.

Senator Brown:

– ‘What has British preference in regard to sugar to do with this item?

Senator Gibson:

– It may have a lot to do with it.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Great Britain finds a market for 84 per cent, of the surplus Australian sugar production. In the statistical year 1933-34, the United Kingdom market took 283,358 tons of Australian sugar, valued at over £2,000,000. Of the total exports of Australian sugar, New South Wales provided 723 tons, Victoria 189 tons and Queensland 307,020 tons, valued at £2,275,609.

Senator Collings:

– What has that to do with this item? Because one industry is flourishing that is not a reason why the Government should “ knock “ another.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Surely it is not necessary to remind the honorable gentleman that it is part of the bond that preference should be given by Britain to the Australian sugar industry?

Senator Collings:

– It is not part of the bond that we should so reduce the tariff as to allow British machinery to injure an important Australian industry.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– The honorable gentleman must be aware that this matter was discussed when the Ottawa agreement was under consideration, and that this item was referred to the Tariff Board. Senator Brown would now advocate the dishonouring of that compact, notwithstanding that Queensland sugar-growers enjoy such important concessions in the British market. I am reminded that at this present moment, when the honorable gentleman is so vigorously protesting against the small modicum of business which British manufacturers may obtain in our market, the Premier of his State is in London endeavouring to induce the British Government to continue its preference to Australian sugar.

Senator Collings:

– Some Federal Ministers are in London, too, on Commonwealth business.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I tell the honorable senator that if, as the result of the attacks upon it, the Ottawa agreement is jettisoned, the sugar industry of Queensland will suffer seriously. I ask them, as reasonable men, to consider the possibility of the sugar, which is now disposed of in England, having to be sold elsewhere.

Senator Collings:

– Surely the Minister does not believe that?

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I am sure that the Leader of the Opposition would not intentionally be offensive. If I did not believe it, I would not say it.

Senator Collings:

– Has the PostmasterGeneral ever heard of selfhypnotism ?

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Evidently the honorable senator is smarting under logic from which he cannot escape. When he claims increased protection for Walkers Limited, of Maryborough - a firm which has not itself complained of the duties - he knows that he is imperilling an industry upon which a large portion of the people of Queensland depend.

Senator Collings:

– Did Walkers Limited protest before the Tariff Board ?

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– No ; nor have they protested since then. Surely the company is a better judge of its own business than is the honorable senator. I suggest that the Leader of the Opposition should read the Tariff Board’s report, from which I have already quoted a number of extracts.

Senator Collings:

– The Minister has not yet quoted the best parts of it.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– We should not deal lightly with a subject of such importance. The Tariff Board’s report has been framed in the light of the Ottawa agreement. The board recommended certain duties on the basis of the existing exchange. That may be, as Senator Brown stated, only a small part of our obligations; but it serves to illustrate what I am tempted to describe as the utter lack of morality of those who say that the Government should not give effect to the findings of the board, but who support the Premier of Queensland in his attempts to maintain preference in Britain for Queensland sugar.

Senator J V MACDONALD:
QUEENSLAND · ALP; FLP from 1932

– I was astonished to hear the Minister say that no’ protest had been received from Walkers Limited.

Senator Hardy:

– A submission of evidence is not necessarily a protest.

Senator J V MACDONALD:
QUEENSLAND · ALP; FLP from 1932

– The evidence submitted by Walkers Limited represents the views of a company whose very existence depends on the sugar industry. Mr. H. S. Goldsmith, the general manager and director of Walkers

Limited, was born in Australia, and is a good citizen. When I met him in 1930 he told me that the company then had only about 200 employees, whereas before the depression it had800 men on its pay-roll.

Senator Hardy:

– Was the company then engaged solely in the production of machinery for processing sugar-cane?

Senator J V MACDONALD:
QUEENSLAND · ALP; FLP from 1932

– No. It also made Diesel engines in order to keep its men employed. Maryborough is not so large a town that it can lightly see the number of employees of one of its manufacturing establishments drop from 800 to 200. Walkers Limited, like many other firms in Australia, first commenced the manufacture of machinery in Ballarat in 1864. Their Queensland factory was established in 18C8. Those who gave evidence before the Tariff Board in support of the then existing duties of British 45 per cent. and general 65 per cent., were - Mr. W. C. Myhill, secretary of the Metal Trades Employers Association, Sydney; Mr. H. S. Goldsmith, general manager and director of Walkers Limited, Maryborough, Queensland ; Mr. W. R. Adams, general manager of the Bundaberg Foundry Company Limited, Queensland; Mr. F. D. Taylor, secretary of A. Sargeant & Company Proprietary Limited, of Brisbane; Mr. R. Burton, representing Roy Burton & Company Proprietary Limited, Little Bourke Street, Melbourne; Mr. A. Aird, chairman of the engineering section of the Victorian Chamber of Manufactures, Melbourne, on behalf of the following Victorian engineering companies, namely, George W. Kelly & Lewis Proprietary Limited ; Robison Brothers & Company Proprietary Limited, Steel Company of Australia Proprietary Limited, and Thompson’s Engineering and Pipe Company Limited. That list of companies which favoured the existing duties is evidence that a number of Australian manufacturers receive some advantage from the Australian sugar industry. A reduction of duty in relation to one industry may vitally affect a number of other industries.

Senator Hardy:

– Were an English manufacturer to make a machine which would perfect the refining of sugar, would the honorable senator advocate its use in Australia?

Senator J V MACDONALD:
QUEENSLAND · ALP; FLP from 1932

– The invention of such a machine might hit Australian manufacturers very hard. A good deal would depend on the patent rights. The honorable senator’s question might also be adapted to the wheatfarming industry. In the event of another country developing a cereal far superior to wheat, rice or corn, would Senator Hardy advocate the discontinuance of wheat-growing in Australia? Walkers Limited are not the only company in Queensland manufacturing machinery for refining sugar, because at Bundaberg there is an establishment which makes this class of machinery. On one occasion, Mr. Goldsmith, of Walkers Limited, told me that were it not for the manufacture of sugar-mill machinery, the firm would probably have had to close its doors. The manufacture of Diesel engines assisted it tokeep going. I admit that we must keep in mind that the Ottawa agreement calls for reasonable competition, but, on the facts before me, the position is so serious that were Walkers Limited again to get into the position in which they were in 1930, a reduction of the duties on the class of machinery covered by this item would practically wipe them out of existence. We on this side do not say that every reduction of duty is wrong; but, in this instance, the evidence is clear that a reduction would endanger a valuable Australian industry. I rose particularly to inform the committee that the Minister was wrong in saying that there was no opposition to a reduction of the duties. The Minister is generally fair in the presentation of his case, but, in this instance, he, unintentionally, misled the committee. I trust that the committee will not take any action which might injure Australian manufacturers of machinery used in the processing of sugar.

Senator BROWN:
Queensland

– From the tearfully tragic cry of the Minister one would gather that it is necessary to have bilateral trade agreements, not only between countries, but also between industries. He suggested that, if we sell sugar to Britain,we must buy sugar-refining machinery from that country. Such an argument is false and futile and, tested by sound principles of international trade, is utterly stupid. The Minister endeavoured to put the Labour party in a false position. Eight from the beginning, we opposed the Ottawa agreement, because we did not believe it would prove of any real service to Australia. Admittedly, in respect of it, those controlling industry to-day are placed in an invidious position. But we do not want the Government to make further mistakes which will react on the general body of workmen, whether or not they are employed in the industries concerned. One-way trade is advocated only by people with one-track minds.

Senator Duncan-Hughes:

– Yes.

Senator BROWN:

– The honorable senator apparently admits that he, as well as the Minister, has a one-track mind. The Labour party realizes that Britain gives Australian sugar a preferential share of its market, but we say that Great Britain can be compensated by supplying to us millions of pounds’ worth of .articles of a type not manufactured in Australia. This is the difference between our view on this matter, and the view of those mental troglydytes who contend that we must import certain commodities which are being, or can be, produced in Australia. We do not want to prejudice international trade; but we say that industries which have been established in. Australia must be protected. We require certain goods from Great Britain and other parts of the Empire, but we should encourage only importations of those classes of goods which are not produced in the Commonwealth.

Senator Hardy:

– Suppose Great Britain used that argument in defence of its own primary industries.

Senator BROWN:

– In a White Paper published about a year ago, and also through its emissary, Mr. Malcolm MacDonald. who visited Australia recently, Britain has given us clearly to understand that it intends to place its primary industries on a sound footing. Every effort has been made by the British Minister for Agriculture (Major Elliott) to improve the position of those industries. Major Elliott, who I consider to be one of the most advanced thinkers among modern politicians, sees clearly the trend of events and he has moulded his policy along lines which will give an impetus to British primary industries. He, for one, is desirous of raising international trade to a higher level. But honorable senators with whom the Ottawa agreement is an obsession, and who have only one-track minds on trade matters, are constantly endeavouring to find a solution of our international trade problem by dividing our home market for basic goods, which are produced in superabundance. They reveal a false conception of the position. The Opposition constantly tries to impress upon honorable senators that a solution is not to be found merely by sharing the Australian home market for machinery, butter, meat, or any other commodity which we are able to produce, with producers overseas. The problem goes deeper than that; international trade must be raised to a higher level iri order that we may be enabled to dispose of our exportable commodities in Britain and, in return, purchase from the Motherland goods of a class not manufactured in this country. This is a fair and plain statement of the Labour party’s policy on this matter.

Senator Hardy:

– I do not agree with it.

Senator BROWN:

– I do not expect the honorable senator to do so, because his mind is cast in a certain mould; he is influenced by certain ambitions. Neither do I expect the Minister to agree with this policy, because, no doubt, certain of his individual interests conflict with what we conceive to be national interests.

Senator Herbert Hays:

– “ They are all out of step except my son John.”

Senator BROWN:

– That quotation does not apply in this instance, because, in step with the policy of the Labour party policy on this matter are millions of people in every part of the world. It is a policy supported by thinking people who desire to march gradually along the road of evolution to better times, and to a higher system of economy. But honorable senators opposite are stuck in an intellectual morass; for them progress is impossible.

Senator COLLINGS (Queensland) 1 4.28]. - In view of the discussion which has taken place on this item-

Senator Herbert Hays:

– So far only three honorable senators have taken part in it.

Senator COLLINGS:

– I ask the honorable senator who has just interjected to imagine what debates in this chamber would be like if the three honorable senators to whom he has derisively referred were absent. I suggest that except for the speeches of two or three senators, the debates would be very poor indeed. The difference between our proposals and those which emanate from honorable senators opposite is that all ours are serious.

Senator Brennan:

– The honorable senator will recollect that one of “ the three who kept the bridge “ was Spurius Lartius !

Senator COLLINGS:

– We three represent 46 per cent, of the people of Australia, and we shall continue attacking the bridge; which we shall eventually capture. I move -

That the House of Representatives bo requested to make the duties, sub-item (l), ad valorem British, 33) per cent, net; general, 65 per cent.

I ask honorable senators to visualize the need for proper protection of the industry concerned, particularly in view of the very pertinent remarks made by Senator Leckie. The proposed reductions will either result in increased importations or they will not. The Minister reproved the Opposition for lacking in honour; he alleges that we are prepared to break an agreement while, at the same time, expecting the other party to honour it. Nothing is further from the minds of members of the Opposition. Dishonour, if any, will be incurred through the actions of the Government. We refuse to make overtures to the manufacturers of sugar refining machinery in the United Kingdom, because if we did so we would be selling them a gold brick; we do not propose to do anything so immoral. These reductions will, or will not, facilitate the entry of this class of machinery into Australia. In the former event we shall, according to the Government’s arguments, be keeping faith under the Ottawa agreement with the manufacturers of the United Kingdom; but if, as the Minister says, these reductions will not facilitate the entry of this machinery into Australia, we shall merely be giving lip service to the Ottawa agreement, and deceiving overseas manufacturers. I believe that the Government realizes that the Ottawa agreement will have to be revised. The Opposition refuses to admit that the Government, either legally, or iri any other way, is bound to follow slavishly the findings of the Tariff Board. This item provides an opportunity to reveal that a reasonable number of honorable senators realize the necessity for encouraging efficient Australian industries. Two firms which have proved that they are efficient, are Walkers Limited, Maryborough, and another in Bundaberg. Each of these towns has a population of 11,000. In Maryborough, the two chief industries are engineering and timber. If the engineering works, through lack of orders, are forced to sack 400 men, the effect on the town as a whole will be disastrous. Senator J. V. MacDonald pointed out that the general manager of this company recently toured the world to discover additional articles in the production of which the company’s plant could be operated to greater capacity.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– What would they do if the sugar industry went out altogether?

Senator COLLINGS:

– The Minister knows very well that the sugar industry is not going out, and that his Government dare not destroy it; he realizes that such a step would be bad electioneering tactics.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– If the British market for our sugar, now valued at over £2,000,000, were’ lost, what would become of the -sugar industry?

Senator COLLINGS:

– The Minister is fairly well-known in Queensland. I invite him during the recess to tour the sugar districts in that State in company with me, and I predict that if he declares that this Government intends to adopt a policy which will injure the sugar industry, he will find it prudent to place a safe distance between himself . and the infuriated populace. The Tariff Board’s report states that the firms engaged in the manufacture of machinery used in the sugar industry are unusually proficient, and- that up to the present they have supplied over 80 per’ cent, of its requirements. Under reduced duties .. machinery manufactured in the United Kingdom, and other countries will be able to enter into competition with that made in Australia. It was not my intention to move a request on this item ; but I am so incensed at the tactics adopted to defeat our modest suggestion, that these duties should be reconsidered, that I have moved a request, which, I trust, will have the support of a majority of the committee.

Senator BROWN:
Queensland

– I understood the Minister (Senator A. J. McLachlan) and Senator Hardy to say that machinery used in the production and refining of sugar is not imported.

Senator Hardy:

– I did not say that.

Senator BROWN:

– In 1933-34, the importations were valued at £188, and in 1934-35 at £6,376, of which the United Kingdom supplied £4,353, and the United States of America £2,043. If those figures are correct, machinery used in the sugar industry has been imported, and, under lower duties, the importations will increase.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I am informed that 33 per cent, of the £6,376 worth of machinery imported in 1934-35 could not be manufactured in the Commonwealth, and was admitted under by-law.

Senator Foll:

– The Australian manufacturers must have been satisfied that it could not be manufactured here, otherwise it would not have been admitted in that way.

Senator ARKINS:
New South Wales

.- ‘The Minister (Senator A. J. McLachlan) said that over 80 per cent, of the machinery used in the production and refining of sugar is manufactured in Australia ; but can he .give the value of mechanical plant, which has to be imported owing to the existence of patent rights, and the value of that manufactured in Australia under licence from patentees in other parts of the world? During the last 25 years the methods adopted in producing and refining sugar have been revolutionized by inventors, who, naturally, have to protect their interests. “If the holders of patent rights do not grant local manufacturers a licence to manufacture, the machinery has to be imported from the countries in which the patentee is operating. I believe that a good deal of the locallymade machinery used in the sugar industry is manufactured under licence. One member of the Opposition said that it would be unwise to reduce the price of sugar ; but, if the producers are receiving a fair return, why should not the price be reduced to enable the consumers to obtain some benefit?

Senator Brown:

– I did not say that it would be unwise to reduce the price.

Senator ARKINS:

– It would be an advantage if the price of sugar, and many other commodities, were reduced. The remarks of the members of the Opposition suggest that sugar is produced only in Queensland.

Senator Collings:

– Engineering shops throughout Australia supply machinery used in the sugar industry.

Senator ARKINS:

– The representatives of New South Wales also are interested in the sugar industry, and do nor. wish anything to be done to jeopardize it-

Senator J V MACDONALD:
QUEENSLAND · ALP; FLP from 1932

– There are sub-tropical areas in New South Wales where sugar is produced, and in which sugar mills are operating. Mr. Myers, a representative of New South Wales manufacturers, and two representatives of Victorian engineering firms, are strongly opposed to a reduction of the duties on machinery used in the sugar industry. I shall not read in toto the statement of Mr. H. S. Goldsmith, general manager and director of Walkers Limited, Maryborough, but I consider that honorable senators should be apprised of the following facts -

United Kingdom manufacturers have, in the past, supplied a large quantity of sugar machinery in direct competition with Australian manufacturers, and, at the present time, a complete new crushing plant consisting of four 36-in. x 78-in. roller mills have just been imported into Cairns for the Colonial Sugar Refining Company’s Hambledon Mill, the reported weight being 400 tons.

Walkers Limited, is at the present time constructing two mills of a similar type and capacity, and, given the opportunity, would have been quite competent to manufacture the mills imported from the United Kingdom.

The weight of a mill is about 170 or 180 tons, and the value in the region of £10,000. The number of mills in a factory ranges from three to five.

There are 32 sugar factories, or approximately 100 mills situated in Queensland and New South Wales. As the Colonial Sugar

Refining Company owns six of these factories, it would be operating about twenty mills.

I remind honorable senators that Australian manufacturers supply only fourfifths of the machinery required by the industry. The remainder, which is imported, represents a considerable proportion, and Australian manufacturers should be making it. Mr. Goldsmith proceeded -

Generally speaking, Australian engineers have had very little of the big equipment business from the Colonial Sugar Refining Company, but have more than held their own with overseas competitors in supplying new and replacement machinery and equipment to the balance of the factories.

Sugar-growing is an asset of immense advantage to Australia as a whole, although the Minister in charge of the bill (Senator A. J. McLachlan) would apparently have the Senate believe otherwise; Queensland is not the only State to benefit by it. Some of the southern States have areas under sugar cultivation.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I did not notice any sugar growing in Tasmania.

Senator J V MACDONALD:
QUEENSLAND · ALP; FLP from 1932

– No, but Tasmania produces potatoes, hops and carbide, in addition to other com:modities to which protection is granted.

The DEPUTY CHAIRMAN (Senator J. B. Hayes). - I remind the honorable senator that the committee is dealing with machinery for the refining of sugar, not hops and carbide. I ask him to confine his remarks to the item.

Senator J. V. MacDONALD.Because centres such as Maryborough and Bundaberg, which are vitally concerned in this matter, are located in Queensland, honorable senators representing -other States are apt to think that this matter is relatively insignificant. Although I represent Queensland I take a deep interest in the tariff as affecting the industrial welfare of all States; it matters not to me whether an industry is situated in Warrnambool, Port Pirie, or Bunbury. Honorable senators should not confine their interests to industries in the particular centres with which they are familiar; they should adopt an Australia-wide outlook. Apparently the existing duty was deemed to be quite ample in 1933, when it was framed under the Ottawa agreement. If the initial protests of British manufac turers against the tariff are successful, we may expect every month to receive requests from them for the downward revision of duties, on the pretence that we are not observing the spirit of Ottawa. In connexion with the manufacture of machinery required in the sugar industry, a representative of the British manufacturers went so far as to say that the number of years which Walkers Limited have been established should safeguard their industry from possible ill-effects from the overseas competition. I have previously pointed out that five years ago this enterprise was on the point of going out of existence. The number of employees had been reduced to a mere 200 and the general manager was obliged to travel extensively abroad to obtain some new commodity to manufacture in order to keep that once great concern alive. I hope that the request moved by the Leader of the Opposition (Senator Collings) will be carried. The Minister asked what Queensland would do if the British preference to Australian sugar were reduced ; I might retort : “ How would the Commonwealth itself regard such an occurrence?” The sale of the surplus production of Australian sugar in Great Britain increases the London funds, with which we meet out overseas commitments, by an average amount of £2,000,000 a year. In view of the facts I have given, particularly in regard to the general Australian interest in the sugar industry, honorable senators should shed their prejudices. The representatives of other States should realize that the Australian manufacturers of machinery of this class are vitally concerned, and any action taken which is detrimental to Bundaberg and Maryborough will have repercussions among manufacturers in Sydney and Melbourne.

Senator HARDY:
New South Wales

– As the Leader of the Opposition (Senator Collings) has submitted a request to increase the duty on machinery required for the refining of sugar, I desire to define my attitude on this point. In the early stages of the discussion of the schedule he said that it was not the intention of the Opposition to move for increased duties, when it considered that it had no prospects of success. The present request can be cited as an entire contradiction of the honorable senator’s statement because, as the division will show, it has no prospects of success. It is not my intention to support the request. Evidence submitted to the Tariff Board cannot always be interpreted as a protest. Members of the Labour party have quoted the evidence given by Australian manufacturers in regard to this item and have contended that it represented a protest against a reduction of duties. I consider that that is not a natural or inevitable conclusion. Have the Australian manufacturers protested against the recommendation of the Tariff Board ?

Senator Collings:

– Yes.

Senator HARDY:

– Have any protests been made by the sugar-growers of Queensland ? Surelyif this duty was calculated to be disadvantageous to the industry they would quickly realize it and protest.

SenatorCollings. -The Opposition does not assert that it would be disadvantageous to the sugar-growers.

Senator HARDY:

– I am glad of that ; but the action advocated by the Leader of the Opposition will prove disadvantageous to the sugar-cane industry because the prohibitive tariff which he proposes must necessarily increase the cost of production. If a prohibitive tariff is imposed certain machinery, which may be an improvement upon that now in operation in Australia, will be debarred from entering this country. Does the honorable senator suggest for one moment that if an improved machine is made in England, the Australian sugar-growing industry should be denied the advantage of it unless they pay excessive duties on it? If these machines are subjected to high duties new machines must represent a higher capital value than the machines previously in use. Therefore, the cost of production of sugar must consequently be increased. In my opinion, by submitting this request the honorable senator is not acting in the best interests of the sugar industry. In my opinion he is doing it the greatest conceivable disservice. The actual cost of sugar refining will be increased and the logicalconclusion is that, if the honorable senator is going to allow a margin of profit to the producers, the selling price must be raised. In that event the United Kingdom will, of necessity, be asked to grant a greater degree of preference to Australian sugar. If the honorable senator is sincerely desirous of assisting the sugargrowers, he should endeavour to reduce the refining costs to the lowest possible level. To ensure this he should consent to the manufacturers of machinery meeting a reasonable amount of external competition, particularly in capital good’s. The Government does not ask the committee to agree to duties which will enable British machinery to compete on an unreasonable or preferential basis. For those reasons I shall vote against the request.

Question - That the request (Senator Collings) be agreed to - put. The committee divided. (The Temporary Chairman - Senator J. B. Hayes.)

AYES: 5

NOES: 24

Majority . . . . 19

AYES

NOES

Question so resolvedin the negative.

Request negatived.

Senator LECKIE:
Victoria

.- Sub-item (n) fixes the rates on air compressors of the reciprocating and rotary types, and introduces two new principles, one very vicious and one rather foolish. I realize that the Postmaster-General is, in this matter, a political Shylock; that is to say, he has been instructed to press for the bond and nothing but the bond. Nevertheless, I hope to persuade the honorable gentleman to meet my objections to this sub-item. In the 1933 tariff air compressors were dutiable at 33£ per cent. British, and 65 per cent, general. The duties have now been reduced to 20 per cent. British, and_40£ per cent, general, with an intermediate tariff of 37£ per cent. The reduction is substantial. Moreover, the sub-item now is divided into portable compressors and other types, whereas in the 1933 tariff all types were included in one sub-item. I’ do not know why this has been done. As it does not seem to serve any definite purpose, I hope the Minister will request the House of Representatives to make a slight alteration. On principle I take the strongest objection to the little “ fish “ being left to local manufacturers, while the big fish “ are secured by outside competitors. In the 1933 tariff the duty was on compressors of a capacity of 2,320 cubic feet per minute. The capacity has now been reduced to 1,750 cubic feet, and the duty is progressively lowered on the heavier types of machines until at a capacity of 2,250 cubic feet the British compressor is admitted free. What is the reason for this . progressive reduction according to the size of the machines? Australian manufacturers have made large and small compressors for many years with complete satisfaction to their users.

Senator Hardy:

– Does not the honorable senator think that production of the smallest unit would be more efficient?

Senator LECKIE:

– More of them would be manufactured, but Australian manufacturers have made small and large compressors of all types successfully. If the figures “ 1,750 “ were altered to “ 2,250 “, no damage would be done to the Government’s schedule and relief would be given to Australian manufacturers. I am not asking that the duty should be returned to the 1933 standard, although I consider that the reduction is very drastic.

Senator Hardy:

– Would this sub-item fi fleet compressors used for road making?

Senator LECKIE:

– It affects principally compressors used in air conditioning plants for buildings. In 1933-34, imports were valued at £9,131, and in 1934- 35 when, for some portion of the time, at, all events, these duties operated, they rose to £37,518.

Senator Hardy:

– Would not that be due to a revival of the mining industry?

Senator LECKIE:

– I do not think that is the explanation. The increase may have been due to a revival of industry generally. I have no personal knowledge of the manufacture of these machines, but the figures suggest that machines of this type are coming more largely into use in Australia, and the interests of local makers should be considered. I hope that the Minister will accept my suggestion and submit a request to the House of Representatives to make the alteration.

Senator A J McLACHLAN:
Postmaster-General · SOUTH AUSTRALIA · NAT

– In 1929-30, the total imports of compressors were valued at £116,953. In that year imports from the United States of America reached £91,301, and from the United Kingdom £21,992. In 1930-31 they were £24,138; in 1931-32, £2,694; in 1932-33, £5,750. ; in 1933-34, £9,131; and last year £37,494. The figures for the six months of the present financial year are £35,960. Admissions under departmental by-law have been negligible.

The rates of duty are based on the recommendations of the Tariff Board, but the recommended general tariff rate has been increased by 6^ per cent, in the case of the portable compressors, and by 8f per cent, for other compressors of a capacity not exceeding 1,750 cubic feet, to provide for treaty negotiation. Increased rates are provided when Australian currency is at par with sterling.

This sub-item covers compressors of the reciprocating and rotary types, of which the board estimated the present annual consumption at approximately £80,000, of which 85 per cent, is supplied from local sources. Compressors up to 500 cubic feet are regularly manufactured locally, and carried in stock, and manufacturers are prepared to produce compressors of greater capacity. The demand is small for compressors above the range of 1,500 cubic feet, and the board considers that those of a capacity of 2,250 cubic feet and over should be admissible free British, and 15 per cent, general. Relative costs both for wages and material show a trend more favorable to the Australian manufacturer than prior to the depression. He is, therefore, in a better competitive position with a duty of 25 per cent. and the present rate of exchange than he was when 45 per cent. was operating with exchange at par. The board considers, however, that this improved position is justified, and should enable the local manufacturer to extend his range of production.

The protective effect of the gradually reducing duty must be stressed. Over the range of compressors having a capacity exceeding 1,750 and up to 2,250 cubic feet, the duties are proportionately decreased down to the minimum duty on the compressor of a capacity of 2,250 cubic feet and over. Air compressors are largely used in mining, an industry giving employment and meriting the fullest consideration. Portable compressors consist of a self-contained assembly of compressor, prime mover and auxiliary equipment mounted on a wheeled chassis, the prime mover being a high speed petrol or fuel oil engine.

In connexion with the local manufacture of portable air compressors in which the engine is directly coupled to the plant, by-law admission under item 404 is allowed in respect of petrol engines, and crude oil engines up to and including 100 horse-power. The board considered that, as the engines are not manufactured in Australia, lower duties over the whole equipment are required, and recommended that the duty in the case of such portable compressors be 5 per cent. lower than on other types of compressors. A further amendment to the item was made on the 27th March last. The words “ including air blowers “ have now been included in the item. Air blowers and air compressors are machines of a similar type, being practically the same in mechanical construction. The principal difference is in the pressure at which these machines deliver air, the compressor delivering at a high pressure, and the blower delivering at a low pressure. The effect of the amendment is to ensure that air compressors and air blowers of the reciprocating and rotary types will be treated similarly for tariff purposes. The amendment has the concurrence of the Tariff Board.

On page 5 of its report, the Tariff Board stated -

In documents submitted confidentially the representative of the local manufacturers of by far the greatest number of compressors during the past ten years showed that they regularly manufacture and carry in stock compressors of various types up to a capacity of 500 cubic feet. They also have a range of what may be called “ standard “ machines to a much higher capacity in which the turnover is too small to warrant the carrying of stocks, but for which they possess complete designs, patterns and other essentials of manufacture. . In addition, they are prepared to quote for other compressors to purchasers’ specifications up to the limit of 2,500 cubic feet capacity. The evidence indicated that the number of compressors required in the range above 1,500 cubic feet is very small.

A few compressors above this limit are at times required by large undertakings such as the largest mining companies. It is clear that no good purpose is served by the imposition of a duty on the largest compressors, and the board considers that the position will be adequately met by providing that compressors of a capacity of 2,250 cubic feet and over be admitted free of duty under the British Preferential Tariff, with a gradual increase of duty on smaller compressors up to the full rate at a capacity of 1,750 cubic feet.

The board is satisfied that the duties recommended will adequately protect the “ stock “ range of compressors which covers much the greatest part of the business and also will permit reasonable opportunities of expansion in the “ standard “ range.

Outside these ranges, in most cases even the higher rates of duty requested by the local manufacturers would not prove effective, but would simply increase the cost of the compressor to the user without any compensating benefit to local industry.

Those extracts from the board’s report are, I submit, a complete answer to the contention of Senator Leckie. But, as the honorable senator is familiar with this type of machinery, I undertake to bring his representations under the notice of the Minister for Trade, and Customs, with a view to having a departmental examination of the situation, in order to ascertain if any injury is likely to be done to the Australian industry.

Senator LECKIE:
Victoria

.- The information supplied to the committee by the Minister does not get us any further forward. The drastic reduction of duties proposed by the Government will, if agreed to, force local engineering firms to cease the manufacture of air compressors with a capacity of more than 1,750 cubic feet a minute, notwithstanding that the Tariff Board admits that such machines have been made in Australia, and that local manufacturers have all the patterns necessary for making them. It would appear, from the Tariff Board’sreport, that Australian manufacturers are failing in their duty, because they do not keep in stock numbers of machines of big capacity, each valued at many thousands of pounds. Can any one reasonably expect a manufacturer to keep in stock air compressors with a capacity of 2,250 cubic feet a minute, awaiting orders which might never arrive? I assume that the reduction of the duty has been recommended in order that overseas firms may have a reasonable chance to compete with local manufacturers and, therefore, it is clear that the lower duties would not only shut Australian manufacturers out of the market for machines of large capacity, hut would also subject them to greater competition in respect of the smaller machines, which represent a considerable proportion of the output of Australian factories. I have no objection to the entry under by-law of air compressors which cannot be manufactured in Australia, but I submit that local engineering firms which are capable of making the machines are entitled to consideration. As the application of lower duties to air compressors of a larger capacity than was previously specified would ruin some local manufacturers, I appeal to the Government notto persist in its drastic proposal.I know something about these machines, because I use them inmy own business. I know, also, that the Castlemaine factory has spent thousands of pounds in equipping itself with the patterns necessary for the making of air compressors. Those pa Herns will be useless if the reduced duties are agreed to. I feel confident that the Government does not realize the gravity of its action, and I again appeal to the Minister either to agree to my proposal, or to postpone the item for further consideration.

Item agreed to.

Progress reported.

Senate adjourned at 5.32 p.m.

Cite as: Australia, Senate, Debates, 7 May 1936, viewed 22 October 2017, <http://historichansard.net/senate/1936/19360507_senate_14_150/>.

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