22nd Parliament · 2nd Session
The PRESIDENT (Senator the Hon. A. M. McMuIlin) took the chair at 1 1 a.m., and read prayers.
– I preface a question directed to the Minister representing the Minister for the Navy by reminding him that, during the second world war, the port of Hobart was frequently visited by American naval ships, and as a consequence the people of Tasmania learned to admire and like American service men. In view of the fact that it has now become a popular custom for units of the United States navy to visit Australian ports on each anniversary of the epic battle of the Coral Sea, and because the port of Hobart was frequently used by ships of the United States navy during the second world war, will the Minister urge his colleague to arrange that at least a unit of the American navy visiting Australian waters for Coral Sea week 1958 will visit the port of Hobart?
– I shall place the honorable senator’s request before the Minister for the Navy and urge him to give consideration to it. Bearing in mind that Tasmania has been a fruitful ground for recruitment for the Navy, and the interest that Tasmania has at all times taken in the navy, I am sure that I shall have no difficulty in persuading him to give the matter favorable consideration.
– I ask the Minister representing the Minister for External Affairs whether Mr. Casey has communicated with the Greek Government on behalf of Greek ex-servicemen now residing in Australia who were held as prisoners of war by the Italian Government during World War II. If so, is it a fact that the Greek Government has agreed to compensate such prisoners?
– I shall be very pleased to bring the honorable senator’s question to the notice of my colleague, the Minister for External Affairs, and to ask him whether he will let me have a reply as early as possible.
– I direct to the Minister for Civil Aviation a question regarding the delay in the opening of the West Beach airport. AH South Australian senators, including my colleague Senator Critchley, have been interested in this matter for some time. I understood that the new terminal building was to have been available at about this time, but it is now apparent that it will not be opened for some time yet. Can the Minister forecast when it will be opened, and can he inform the Senate of the reason for the delay? Can he say also whether there are any penal clauses in the contract between the Government and the contractors concerned which might apply? When the building is ready to be opened, will he visit Adelaide and perform the ceremony?
– Most of the matters that were referred to by the honorable senator come within the administration of my colleague, the Minister for Works. I cannot tell him offhand what are the reasons for the delay in the completion of the building or whether there are any penal clauses in the contract, but 1 shall ascertain the facts from the Minister for Works and let the honorable senator know. Regarding the date of completion, I happen to know that the Department of Works expects that all contractors will be out by 30th June, and I imagine that the building will come into operation soon after that date. I have not yet considered the possibility of my going to Adelaide to open it, but if the occasion to do so presents itself, I should be delighted to visit that very hospitable city.
– My question is addressed to the Minister representing the Minister for Social Services. Did the Minister for Social Services recently make a statement to the effect that a review of the pension system, is proposed by Professor R. I. Downing of the University of Melbourne, would be made at once by the Department of Social Services? If the Minister made such a statement and if immediate action is contemplated, in view of the fact that members of the Government parties have pressed for a pension review on lines similar to those contained in the Downing report, will the Minister assure the
Senate that consideration will be given also to suggestions that have been put forward by honorable senators during parliamentary debates and in personal representations to him?
– I feel sure that my colleague, the Minister for Social Services, will give careful consideration to suggestions that have been put forward by Government supporters in regard to social services. 1 shall bring to the Minister’s notice that part of the question which relates to Professor Downing, and ask him whether he will furnish me with a considered reply that I can place before the Senate.
– In order that the purport of my question, which is directed to the Minister for Repatriation, may be understood, I desire to make a brief statement. About a month ago the Minister told me, in reply to a question that I asked concerning the failure to proceed with the erection of a block at the Dawes-road Military Hospital, South Australia, for the treatment of neurosis cases, that he was sorry to inform the Senate that the Government had not proceeded with it. He failed to give any reason other than an indication that there were other jobs with a higher priority. I now ask him, because of the urgent need for this humanitarian work to be done, whether he will do all that he possibly can to induce the Government to have this job classified as being one of the highest priority, which it is. He might forestall me, but I ask him, too, whether he is now in a position to furnish the Senate with any further information along the lines that I sought recently.
– The position at the present time is the same as it was when I answered the honorable senator’s previous question. This work is not being proceeded with. It has not been abandoned altogether, but there are other government works and a certain priority list has been made out.
– Surely the Minister does not think that there is any job with a higher priority than looking after soldiers who fought for their country and offered their lives?
– Probably the position in South Australia is not as bad as the honorable senator would make out. Quite a lot has been done in regard to psychiatric treatment in that State. There was never any promise given in relation to this work. When I spoke in the Senate last year, I said that the work was on the designing list, which meant that it was very close to being gone on with. It has not been gone on with up to the present time, but it will be undertaken in its turn. At the present time, that is all the information that I can give to the honorable senator.
– In view of the fact that there are no broadcasts from northern Tasmania of Federal parliamentary proceedings, and that residents of Launceston and northern Tasmania generally have extreme difficulty in picking up Hobart stations, will the Minister representing the Postmaster-General ask his colleague to ascertain whether it is possible to broadcast question time, at least, from station 7 NT?
– I shall be very glad to bring the honorable senator’s question under the notice of my . colleague, the Postmaster-General, and I hope to get the honorable senator a reply at a later date.
– I preface a question to the Minister for Shipping and Transport by stating that I welcome the report of the speedy construction of a good road from Alice Springs south to the South Australian border. Will the Minister indicate whether the Commonwealth will play any part in assisting the South Australian Government to link its present northern road system with the proposed extension of the new Northern Territory road? Part of the proposed road in South Australia will pass through Commonwealth-occupied territory around the Woomera area.
– I have seen the press report of the proposed construction of a road from Alice Springs south to the South Australian border, but I am in some doubt as to whether the press report is accurate. The work is to be undertaken by the Department of Territories to which I have addressed a query as to the actual position. WhenI am informed of the nature of the work, and the length of the road and where it is to start and finish, I shall probably be in a better position to answer the second part of the honorable senator’s question.
– Will the Minister representing the Minister for Trade inform the Senate whether an appointment to the position of Chief Executive Officer to the Export PaymentsInsurance Corporation has yet been made? If so, who has been appointed and what is his salary?
– I cannot say exactly what the position is regarding the appointment to which the honorable senator has referred. I shall refer the question to the Minister for Trade and obtain a considered reply for the honorable senator as soon as possible.
– I preface a question to the Minister representing the Minister for Trade by stating that it has been brought to my notice that two ships are on the way from Japan to Australia with large quantities of men’s shirts which are to be sold in Australia. After duties have been paid, those shirts will be retailed in Australia for 13s. 3d. each. A similar shirt made in Australia cannot be retailed under 20s. Honorable senators who have shown some amusement at my question might not be so mirthful about that fact. Will the Minister take steps to determine whether the information I have received is correct? If it is correct, will he take steps to have any further consignments of shirts from Japan refused admission to Australia in the interests of Australian manufacturers?
– I shall be only too pleased to refer the honorable senator’s representations to the Minister for Trade, and will get a considered reply from him for the honorable senator.
– I direct a question to the Minister for Civil Aviation regarding the recent Qantas Empire Airways Limited air pilots dispute. I take the view that it is desirable that such matters as I shall raise, being of public import, should be raised after the dispute has been resolved, and not during or before it, because political reference is inclined to exacerbate a dispute. I should like to know what notice Qantas had of the possibility of a dispute. Will the Minister make a brief statement to the Senate on the circumstances by which the dispute was allowed to develop without an injunction being sought from a court for a cooling-off period before it developed causing such disaster to the travelling public, the company and the prestige and welfare of the pilots? May I just add that I am very interested to have the history of this matter because it might have a bearing upon our viewpoint as to the propriety of legislation in connexion with such essential services to the public as railways, shipping, airlines and health services to prevent dislocation without a cooling-off period before a strike becomes legal?
– The matters in dispute between Qantas and the pilots had been the subject of some examination before Mr. Commissioner Portus for some weeks before the actual strike occurred. Conciliation proceedings were in progress but a point was reached at which the pilots said they were not satisfied with an offer made by Qantas, and proceeded then to take direct action. Speaking from memory, I think the notice of intention to take direct action was very short - not more than 48 hours. The honorable senator will remember that proceedings were then taken before the court, and that after the strike had been current for some five days, an order to return to work was made to the pilots. The strike ended two days after that when the pilots resumed duty. This morning, Mr. Commissioner Portus commences to arbitrate on the question of the variations in rates of pay, flight pay and other matters.
– In directing a question to the Minister representing the Postmaster-General, I point out that reference has been made to the experimental frequency modulation transmissions carried out by the Postmaster-General’s Department on programmes of the Australian
Broadcasting Commission from Jolimont, Melbourne, and also from Sydney and Adelaide. Is it the department’s intention to continue and regularize these experimental transmissions which are widely appreciated? If so, is it intended to extend them to other cities?
– I shall bring the honorable senator’s question to the notice of my colleague, the Postmaster-General, and obtain a considered reply for him.
– As it is said that a red tinge exists amongst some of the Australian commercial airline pilots, I ask the Minister for Civil Aviation whether commercial airline pilots are accepted into the Royal Australian Air Force Reserve. If they are, what steps are taken to investigate Communist sympathies amongst any pilots entering the Royal Australian Air Force Reserve?
– I should like to say at once that I have never heard any suggestion that there is a red tinge amongst commercial airline pilots. As for their acceptance into the Royal Australian Air Force Reserve and conditions appertaining thereto, I have no knowledge of that matter, but I shall refer it to my colleague, the Minister for Air.
asked the Minister representing the Acting Minister for Health, upon notice -
– The Acting Minister for Health has now furnished the following reply: -
– I lay on the table of the Senate the following paper: -
Parliament House, Canberra - The case for a permanent building - Statement by the Presiding Officers and report by the Secretary, Joint House Department.
Motion (by Senator Cooper) proposed -
That the paper be printed.
Debate (on motion by Senator McKenna) adjourned.
Debate resumed from 1st May (vide page 514), on motion by Senator Henty -
That the bill now be read a second time.
– The measure now before the Senate is one introduced by the Minister for Customs and Excise (Senator Henty). It proposes a number of machinery alterations of the Customs Act. They are clearly set out in the bill and they were explained quite well in the secondreading speech of the Minister. I should like to thank him for his courtesy in letting me have access to his notes for the committee stage. My perusal of them both cleared my mind and speeded up my examination, of the bill. The Opposition sees nothing to criticize in relation to the various proposals, and offers no objection to the passage of the measure.
Question resolved in the affirmative.
Bill read a second time.
– I greatly regret that I was absent from the chamber when the second reading of this bill was moved yesterday. I have had a quite inadequate opportunity to consider it. I rise with some trepidation at this stage for the purpose of directing attention to clause 5. I regret that I have not had an opportunity to mention this matter to the Minister, as it occurred to me only as I read the bill. Proposed new section 35a provides - “ 35a. - (1.) Where a person who has, or has been entrusted with, the possession, custody or control of dutiable goods which are subject to the control of the Customs -
I am somewhat embarrassed in addressing the Senate on this matter and I shall submit to the judgment of the Senate because I have recently given professional advice upon a case that might come under this provision. It is a case that occurred before the commencement of this legislation and, consequently, would not be governed by this provision. I feel, therefore, that I am free to address the Senate on the subject but I want to make it known that 1 have had that professional interest in a similar case.
If, notwithstanding that, I have the approval of the Senate to address it - asI believe I have - I should like to point out that the provision seems to imply that the custodian of goods incurs an absolute liability if he fails to keep those goods safely. If, for example, goods are taken out of a ship to-night and put into store on the faith of a security or a bond, and if over the week-end the store is broken into by thieves and the goods are taken away, this clause seems - without giving the custodian any opportunity to explain that the disappearance of the goods was entirely beyond his control - to place upon him an absolute responsibility for the duty payable. I do not think that has been the intendment in arrangements that have existed in the past. I speak with great trepidation on this subject because I do not pretend to be anything like adequately advised, but I do believe that any securities or bonds in other legislation usually contain the words “ without just cause “ or “ save by unavoidable accident “. At any rate that was so in the case of Mills which is reported in 18 C.L.R. 189.
I urge the Minister to consider amending the provision by adding to proposed section 35a (1.) (a) the words “without just cause “. I think it is imperative to make the customs net strong and secure because we all know of the tremendous pressures that are exerted to make inroads into customs legislation. The pressures are heavy and widespread and we want to make the apparatus by which the revenue is guarded in this particular field quite secure and strong. Nevertheless, I submit we want to make it just, and if we are going to place an absolute liability on a custodian to keep goods safe, or otherwise pay the duty on the goods that have disappeared, I feel we are importing into the law an absolute liability which is not based on justice. I therefore urge that it would be proper to insert the words-
– Has duty ever been claimed in those circumstances?
– My information is that it has been claimed. Those who have either the means of resisting, or are inclined to resist, do resist. I know that it has been claimed, and that such claims are being actively urged. My reading suggests also that claims have been paid, and that other claims have been disputed, or abandoned. I imagine that it is to clarify and strengthen the legal position whereby the department, in such cases, will be entitled to claim duty, that this amendment is being made.
– Does the honorable senator think that paragraph (a) imposes an absolute liability?
– I do. The proposed new section provides -
Where a person who has, or has been entrusted with, the possession, custody or control of dutiable goods which are subject to the control of the Customs -
fails to keep those goods safely; or
when so requested by a Collector, does not account for those goods to the satisfaction of a Collector,
The requirement that he must satisfy the Collector is an alternative ground, but the liability attaches to the person if he fails in either of two respects, namely, to keep those goods safely, or to account for them to the satisfaction of a collector when so requested by a collector. That seems to me to impose an absolute liability, but I should be happy to listen to the views of the other honorable senators. 1 have not had time to give the proposed new section a great deal of consideration. The requirement of paragraph (b), that the person entrusted with the possession, custody or control of dutiable goods must account for them to the satisfaction of a collector makes the Collector’s decision not subject to examination by any court. Any court of justice is not entitled to substitute its opinion as to the satisfactory accounting for the goods for the decision of the Collector. Therefore, in respect of paragraph (b) I plead for consideration to be given to a proposal that the words when so requested by a collector does not account for those goods with a reasonable explanation “ should be substituted for the present wording.
– Will the honorable senator have a look at sub-section (2.) of the proposed new section? It provides that the amount of the claim is a debt due to the Commonwealth.
– In my opinion, that does not affect the position in the slightest degree. I venture that opinion with complete confidence. It has been decided on many occasions, in connexion with income tax legislation, that where this Parliament decides that a particular explanation is satisfactory or otherwise in the opinion of the Commissioner of Taxation, not even a court of appeal can examine it. That is why the legislature substituted boards of review as an alternative to the Commissioner. But here I submit there is no provision for accounting for those goods to the reasonable satisfaction of a collector. I trust that the Senate has the time to address its mind to these things, because they are most important. I draw the attention of Senator Byrne to the case Liveridge v. Anderson in which the House of Lords voted so dynamically on the question whether the House of Lords could examine a Minister’s grounds for his satisfaction. Lord Atkin’s famous dissenting decision during the war, in which he stood for right as against arbitrary control, has since found acceptance by the House of Lords. Here we have a situation that when a person at the request of a collector fails to account for the goods to the satisfaction of a collector, certain things shall happen. I ask the Minister to consider the insertion of words to allow the liability to depend on the reasonableness of his account. His explanation would be taken into account by a collector in the first place, and then, if the importer is dissatisfied, the importer should have the right to say to a court that the evidence shows that the Collector has been arbitrary in giving his decision, and also the right to produce evidence in support of that claim. The importer should have the right to ask the magistrate whether his explanation for failing to account for the goods is reasonable.
– I thank Senator Wright for bringing this matter forward, but the provision is not what he suggests it is. He has talked about- the act itself - an act which has been in operation for many years. The only difference the amendment makes is that previously we placed upon the custodian of these goods the full responsibility, and we took security. If the goods were not there, and the duty was not paid, the Government claimed upon that security. Now we propose to do something along the lines adopted in 1952, when the Excise Act and the Distillation Act were amended. The amendment of those acts has conferred great benefits on both the department and its customers. Here I emphasize that the department does not overlook its customers, but regards them as important people. Where the department considers the risk to be slight, or nonexistent, it does not bother about the securities. That is the only difference. I am advised that the act itself provides, and has so provided for many years, that the custodian shall be responsible, and the department takes security to see that he is responsible. The Collector is the judge.
– When the department takes security, the responsibility of the custodian of the goods is governed by the terms of the security.
– The department has dispensed with security in what are regarded as good risks, but in doubtful cases it takes security. That has been the position under the Excise Act and the Distillation Act since those measures were amended in 1952..
There has been no trouble in the meantime. The other point that has been raised is that the Collector must be satisfied. I am advised that that is interpreted to mean that the Collector must be satisfied that the explanation is reasonable.
– I recall that the Parliament made similar provision in 1952 in the Distillation Act and the Excise Act. Those amendments were not present in my mind when I addressed myself earlier to this provision. I agree with Senator Wright that there is an absolute liability upon the custodian of the goods pursuant to this provision, but I am not as alarmed about it as the honorable senator appears to be. It is essential that the Department of Customs and Excise should safeguard the revenue. Many of the goods that enter this country are highly valuable, and could readily be purloined and sold if the opportunity offered. I am thinking of consignments of such goods as whisky. If we are to excuse the custodian of such goods, say, the owner of a warehouse or establishment, on the ground that his claim that his stocks have been stolen is reasonable, we must remember that it is within his purview to arrange easily for their theft or their seeming theft.
– In his purview to do what?
– To arrange a theft of something. He is in charge of the goods in his own warehouse. It is an easy matter for an unprincipled custodian to stage a burglary. I should imagine that that is one reason why absolute liability is cast upon the custodian. Of course, he is not defenceless. In my view, a man who is handling that kind of thing, knowing the risks, would insure himself against loss, and the insurance premium that he pays would be part of the charges that he would make against whoever is responsible for the storage charges upon the goods.
I rather favour leaving the liability as an absolute one and letting the custodian insure himself against it, thus denying him the too ready opportunity to stage an imaginary theft and to get the whole benefit of the proceeds and relief from duty as well. They are factors which I think this chamber ought to have before its mind -when it thinks of these particular matters.
I recognize, as Senator Wright puts it, the absolute liability upon the custodian, and the absolute, unfettered freedom of the Collector to express his satisfaction or otherwise; but I do not feel particularly alarmed about that. However, I see a danger that needs to be provided against.
.- The viewpoint expressed by Senator McKenna deserves consideration. Let us examine it. It envisages only the criminal custodian, but protects not a whit the bona fide custodian. Is not our criminal law already adequate to deal with the criminal custodian who arranges an appearance of burglary? What about the 990 persons out of a thousand who are bona fide custodians and whose loss is due to an actual burglary and theft of whisky, tobacco and all those things that have an attractive sniff about them? I ask honorable senators not to dismiss the arguments that I have advanced simply because Senator McKenna presents to us the possibility that there will be criminal persons who will arrange the appearance of evidence which affords a just excuse. I am thinking of the bona fide trader who takes goods into his store and of the condition of security of stores on the waterfront to-day. I speak of the Port of Hobart, where the police force has even refused to give adequate protection to stores and they are almost made a special Alsatia. I repeat that I am speaking of the bona fide importer who loses goods and becomes liable for an absolute imposition of customs duty.
The reason why I do not move an amendment at this stage of the debate is that 1 realize that my experience in the practical application of this thing does not justify my obtruding upon the committee a judgment on whether the essential requirements of security for customs revenue should justly subjugate that argument. Let me say to the Minister for Customs and Excise (Senator Henty) through you, Mr. Chairman, that I feel very strongly about proposed sub-section (l.)(b), which provides that a satisfactory account is to be determined finally by the official concerned. I feel that we need to include in the proposed sub-section the word “ reasonable “ so that it will read “ does not account for those goods to the reasonable satisfaction of a Collector,”.
– If the word “ reasonable “ were inserted, would the account be subject then to oversight in any court of appeal?
– I have some doubt about the adequacy of even that addition. I was going to suggest the following alternative phrase: - “ does not account for those goods to the satisfaction of a Collector formed upon reasonable grounds “. Now I can speak with great heartiness to my Tasmanian colleague who I am delighted to see in charge of the bill and who, 1 hope, is bringing to the Senate a liberal outlook so that he is not obdurate but is demonstrating liberality of thought as the result of which the back-benchers’ views may, at some time, be bound to penetrate the chinks in the walls of advice by which Ministers are surrounded. I say to my colleague that his reply to me, which I shall accept as being bona fide, must be based upon the reasonable satisfaction of the Collector. With very great respect, I have the misfortune to differ humbly from the legal view that has been offered to the Minister and ‘ which he has expressed, but I differ firmly and confidently. To make it clear that the present position is understood by the Minister, as I wish it to be, will he agree to the addition to proposed subsection (l.)(b) of the words “formed upon reasonable grounds “?
– If the Collector acted without reasonable grounds, it would be a reflection upon him.
– I say to Senator Courtice very calmly and moderately that, when one differs with a collector’s decision on such a thing, he would be the first to say, “ Well, your view might be more reasonable than mine “. There are cases in which collectors feel the over-awing influence of the Central Office and take routine action which they conceive to be in pursuance of official policy. They do not give consideration to the particular circumstances, but accept individual responsibility for a just decision. So a mere difference of opinion does not mean any disrespect.
– I realize that.
– All I am suggesting is that there should be a right in the court before which a claim is made for a debt which proposed sub-section (2.) seeks to make actionable to give judgment in favour of the defendant if he can produce evidence to satisfy the judge that the Collector’s decision was not based upon reasonable grounds.
– Is the honorable senator suggesting that the present position of the law is that, when an administrative officer is entrusted with the exercise of discretion, the court will not overlook the manner in which he exercised it and whether it was reasonable or unreasonable?
– Once we make liability dependent-
– Is that the present position of the case law where discretion is vested in an administrative officer?
– It is a question of good faith.
– The honorable senator puts me in a difficult position. He will be the first to agree that a general reply to such a question would involve a discourse on the prerogative writs of mandamus and such things where decisions made capriciously or wholly unreasonably can be overruled. That is wholly inapplicable to this. The first reason why it is wholly inapplicable is that once you constitute a cause of action there is no need for a prerogative writ; you are making this suable in an action for debt. I am getting rather technical, but Senator Byrne is one of my learned friends, and I am just addressing myself more specifically to him. In that setting, and in that atmosphere, I re-present the plea to my Tasmanian colleague, the Minister in charge of the bill, to add to the proposed paragraph (b) the words “ formed on reasonable grounds “. I end on terms of sweet reasonableness.
– I am loth at any time to disappoint any honorable senator, and most of all one of my fellow Tasmanians, but in this instance I regret that I must do so. Much of the discussion on the legal interpretation was, I admit, quite beyond my ken, but I have a rather rough and ready practical experience of the world of importing as well as of the department and its officers. I know the way in which they have worked over the last 50 years. I am guided very much by the experience since 1952 of the alterations that have been made. This very alteration has been made to the Distillation Act and the Excise Act, and I know how well it has worked. I have knowledge of the procedure and of the people concerned. The importers themselves are the first to admit that a reasonable case is listened to properly by any officer of the Department of Customs and Excise, and that reasonable justice is administered in all cases. It is our duty to protect the revenues of the country.
No case of hardship has been placed before me. As in any other type of business, there are reliable firms and others who would get under the tent if they could. I am confident that any man, who has a just case and who puts it to an officer of the department, receives proper consideration and a fair decision. If the position were otherwise, I have no doubt that I would hear of it, but I have not heard of such a thing since I have been in my present position.I am very wary of my colleague from Tasmania. When he appeals to me so calmly, collectedly and reasonably, it makes me tremble a little, because I know that then he is at his most dangerous. I am sure that he will be the first to admit that my long association with him enables me to form a pretty sound judgment of him. I am sorry that we cannot accept this proposal. I do not think that such an amendment would be justified or warranted.
– Clause 5 reads in part - “35a. - (1.) Where a person who has, or has been entrusted with, the possession, custody or control of dutiable goods which are subject to the control of the Customs -
I move -
That, in clause 5, proposed section 35a, insert in paragraph (b) of sub-section (1.) after the word “ Collector “, second occurring, the words - “ based upon reasonable grounds,”.
I pass by the personal reference to the dangerousness of my advocacy. I fully respect the value of practical experience in these matters. A reputable importer might suffer one robbery in 40 years, but if he suffered 40 robberies he might receive 40 just decisions.. But there are others not so firmly established, whose credit is not axiomatic with the department, upon whom an officer might look with a suspicious eye. Instead of giving them the benefit of the doubt, he might decide against them. This is not a question of the integrity of the Administration. Our job here is to formulate laws that will be sound in the public interest and just to the individual. I am not prepared to agree that final judgment on whether or not a satisfactory account has been given for the disappearance of goods should be left to any official, whatever his department and whatever his experience.
– A decision of that kind would go to the Minister and the Government finally.
– No, I think not. In the great majority of cases, the matter would be dealt with administratively. If the importer pursued the matter, or had a friend at court, he might bring it before the Minister. But my view of the parliamentary and constitution set-up of this country is not such that I would commit the individual rights of the people finally to Ministers, however much I venerate and respect them. There is no substitute for courts of justice, which have been the protectors of individual rights for centuries and have made this British democracy what it is. It is to give a court of justice the right to pass judgment upon the reasonable basis of the collector’s opinion, that I put the amendment to the vote.
– I put a question to the Minister for Customs and Excise (Senator Henty) in relation to this matter. Let us assume that valuable goods are stored with absolute liability upon the owner of the premises, or the custodian, and a fire takes place without negligence on the part of anybody.
– In bond?
– These goods are in bond. Let us assume that they are destroyed by fire or inadvertence. Would it be possible for the Collector to say, “ You have not accounted for them to my satisfaction “, and insist perhaps upon two things, payment of duty and responsibility for the value of the goods.
– You mean that they were stolen before the fire?
– I am not suggesting theft in this matter; I am now dealing with fire only. I am sure that the Minister would be in complete sympathy with the nature and basis of the amendment from this viewpoint. He has indicated that the Collector will act reasonably and that the various business people are satisfied that he does so act reasonably. Senator Wright’s proposal does at least provide against some capricious or arbitrary behaviour on the part of the Collector. It is very difficult to get, at short notice, a form of words that carries out his purpose really well. I think that there is a slight awkwardness in the use of the words “ based on reasonable grounds “ after the word “ Collector “, as those words are thrown back to “satisfaction “. I am not suggesting that this would be a better alternative but it appeals to me more at the moment. I suggest that the paragraph should be made to read, “ to the reasonably based satisfaction of the Collector,”. I am not pretending that that is not clumsy; I would support the amendment because of the principle that it involves. It has the virtue of allowing a court to inquire into the reasonableness or otherwise of the attitude taken by a collector. I could have no possible objection to that course, and I do not think the Minister himself would have any objection. As he has indicated, there have been no queries on this matter. It might never arise, but the safeguard would be there against some arbitrary or capricious behaviour by a customs officer. I support the amendment.
– In reply to the Leader of the Opposition (Senator McKenna), I point out that if, in the case of a fire, goods concerned were destroyed, they would then have been reasonably accounted for and no claim could be made. That is the position as I see it, and that is the practice that has been followed.
.- The statement by the Minister for Customs and Excise (Senator Henty) is the oddest thing that could be suggested because burglars, if expert, usually burn the evidence.
Question put -
That the words proposed to be inserted (Senator Wright’s amendment) be inserted.
The committee divided. (The Chairman - Senator the Hon. A. D. Reid.)
Question so resolved in the affirmative.
Bill, as amended, agreed to.
Bill reported with an amendment; report adopted.
Bill read a third time.
Debate resumed from 1st May (vide page 516), on motion by Senator Paltridge -
That the bill be now read a second time.
– The bill now before the Senate amends the principal act passed in 1952. It proposes to amend section 6 of that act in two ways. It replaces paragraph (b) of sub-section (1.) in almost identical terms, but does make it clear that power to order that an explosives ship be berthed at a wharf or suitable loading place shall be effective. The second amendment is to insert a new provision - sub-section (1a.) - in section 6 to make it clear that if a suitable berth is not in fact provided, the provision of a truly suitable berth for the loading or the unloading of explosives may be ordered. They are matters of urgency. The bill itself is related solely to defence activities and has no relation to ordinary commercial activities. The Opposition offers no objection to the proposed amendments.
Question resolved in the affirmative. Bill read a second time. In commitee: The bill.
.- I rise to point out the trend that is becoming inveterate in Commonwealth legislation. I refer to the language used in proposed new sub-section 6 (1a.), as follows: -
The regulations may provide that, where a vessel specified in an order referred to in paragraph (b) of the last preceding sub-section is not provided with a berth in the port so specified or is provided with a berth in the port that, in the opinion of the person who made the order, is not suitable- 1 emphasize the words “ In the opinion of the person who made the order, is not suitable “.
We have the same thing as we had in the previous bill. We have a drafting device to give finality and conclusiveness to a particular individual’s opinion without the right of appeal to any one. I just rise to mention that it does not escape my notice, and I am bringing it to the attention of honorable senators because it is time that this drafting device, pursued inveterately in Commonwealth legislation, was abandoned.
Bill agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
Debate resumed from 1st May (vide page 512), on motion by Senator Paltridge: -
That this Senate approves the Trade Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Commonwealth of Australia signed at Canberra on 26th February, 1957.
– The motion before the Senate is to approve an agreement which replaces what is known as the Ottawa Agreement, made between the United Kingdom and Australia under the United Kingdom and Australia Trade Agreement
Act 1932, providing for reciprocal preferences between the United Kingdom and Australia. lt is interesting to glance for a moment at the history of that 1932 act. It was introduced by Mr. Gullett, as he then was, the Minister for Trade and Customs in the Lyons Government, on 13th October, 1932. The Labour party of the day, under Mr. Scullin, supported an amendment to the motion for the second reading, asking that the bill be withdrawn and negotiations opened for a new agreement embodying concessions to Australian producers and preference to Great Britain on specified terms without endangering our protective policy or depriving the Parliament of its power to give effect to the will of the people on general, tariff property. That amendment was debated at great length, and eventually was defeated.
Mr. Scullin then moved for the appointment of a select committee. That, too, was defeated. In committee, the Labour party contested the passage of the message at every stage. The bill was eventually declared an urgent measure. An amendment moved by Dr. Earle Page, as he then was, was defeated. The committee divided on the motion for the adoption of the report, and the House divided on the motion for the third reading of the bill.
In other words, the Labour party, under Mr. Scullin, opposed the Ottawa Agreement at every stage. Labour members saw a good many dangers in it. The bill, as Mr. Gullett indicated so plainly at the time, was, in the main, designed to assist the primary producers of Australia. They, of course, were the mainstay of Australia’s activities, particularly in the matter of exports, at about that period.
To-day, the Minister for Shipping and Transport (Senator Paltridge), who has submitted this motion, very properly points out that there have been many changes in the Australian scene in the intervening 25 years. He draws attention to the fact that in the meantime our population has been increased by 50 per cent., a most extraordinary increase, and that the work force in Australia has doubled, and he does point in some detail to the growth of manufacturing industries. Then he embarks upon a trenchant criticism of the Ottawa Agreement which, I should say, is complete justification of the stand that the Labour party took in this matter back in 1932.
– Circumstances had altered meanwhile.
– Circumstances had altered very substantially, but, by reason of the comments that I shall make, I shall show where some of the defects were inherent in the agreement itself. A notable instance is that our preferences were at fixed values and the United Kingdom’s preferences were fixed at percentages. The percentages were elastic, while ours were rigid, so that the value of ours ran out from the beginning.
– There was value in them at that time.
– Yes, there was value in them at that immediate time, but obviously the United Kingdom negotiators got by far the better of that particular deal. So, even though I concede that circumstances have changed in the meantime, I hope to demonstrate presently that there were inherent defects like that one in the base of the agreement.
The Minister directs his criticism to quite a number of matters, and I should like to review what he said. He pointed out that the United Kingdom got preference over 80 per cent, of its exports to Australia. Under this agreement, there was protection to an appreciable degree for 80 per cent, of the total exports of the United Kingdom to Australia, but Australia got preference for only 40 per cent, of its exports to the United Kingdom. The Minister points out that we got no preference on wool and wheat, our two main products. I rather question what he says about wheat because, when I refer to the schedule of the 1932 act, I see that wheat, in grain, was granted a marginal protection of 2s. per quarter. I just raise the question for the Minister to comment upon it and say whether he was right in stating that the Ottawa Agreement made no provision for wheat, because the marginal preference that I see in Schedule B to the Ottawa Agreement sets out, “ Wheat in grain, 2s. per quarter “. It would seem that the Minister was not accurate when he stated that no provision was made for wheat. I have no doubt that he was right in what was said about wool.
The next matter to which the Minister drew attention was the one that Senator Pearson provoked me into mentioning a minute ago - that United Kingdom preferences to us were in many cases fixed as money values. The illustrations were supplied by the Minister himself. In relation to butter, the then margin of preference represented 15 per cent, of the value of butter, but to-day that has dwindled - it has been a continuously dwindling factor - until the protection runs at the level of only 4i per cent. A similar thing happened with eggs. The original protection afforded by a fixed money value was 12 per cent. It has now fallen to 4i per cent. In contrast, our preferences to the United Kingdom were based almost wholly on percentages. They were elastic and flexible, and as prices rose or moved the value of the preference moved with them. The British, generally, got the advantage of increased protection as prices grew and were inflated. Their margins were preserved while ours dwindled, as the Minister himself indicated.
The third point that he made very effectively is that we shared our preferences with other competitors in the United Kingdom market, whereas the United Kingdom had a sole preference, in effect, in our market. It is no wonder that the Minister, in thecourse of his speech, said this -
So, on preferences, we were giving much more than we were getting.
In short, he acknowledged that it was a very bad deal for Australia. The final point that he made was that our importsfrom the United Kingdom have doubled in the intervening 25 years, while the United Kingdom imports from Australia have, in fact, actually declined. So the British got the better end of it not only in the matter of the margin of preference, but also on the swing and balance of trade. The volume of their trade has grown enormously, whilst our own exports to the United Kingdom have, in fact, declined. The Minister drew pointed attention to what had happened in relation to wheat. He pointed out that pre-war we were selling 52.000,000- bushels a year to the United Kingdom,, but that our average over the fifteen yearswas only 23,000,000 bushels, and that it fell as low as 13,000,000 bushels in 1954.
These are figures supplied by the Minister. 1 am not only not controverting them, but 1 am adopting them as part of the argument that I am addressing to the Senate. That is a startling and disadvantageous position for this country. The United Kingdom has been buying less and less from us, whilst it has been selling to us more and more. In addition, it has been erecting barriers to trade in the important field of primary produce. It has been entering the market itself, in quite a number of fields, and it has been accepting imports of goods competing with our primary produce from countries which have subsidized their exports. Of course, that makes for unfair competition against Australia in that market. Now, associated with the last point I made was the whole question of the balance of payments, which has operated adversely, and here the Minister - I accept his figures - presented his case in this way -
In the five years ended June, 1939, Australia enjoyed an average annual trade surplus with the United Kingdom of £24,000,000. In the rive years ended June, 19S6, we incurred an annual deficit of £67,000,000.
We all know the gravity of the balance of payments position, which has landed us in grave import restrictions in recent years. Altogether, there is as good a condemnation of the Ottawa Agreement as could be furnished, and it is little wonder that the Minister was active in endeavouring to get it changed.
When I come to the agreement which is presented pursuant to this motion, the first thing I notice is the clumsy way in which the Ottawa Agreement is set aside. I point out that the Ottawa Agreement was brought into effect under Act No. 57 of 1932. That measure had the fullest debate in the ordinary processes of legislation in this Parliament, but it is to be completely discarded, not even by a substantive provision in the new agreement, but by a passing reference in the recital agreement, which states -
The Government of the United Kingdom of Great Britain and Northern Ireland . . . and the Government of the Commonwealth of Australia . . . , having resolved to replace the Agreement between them signed at Ottawa on 20th August, 1932 . . . have agreed as follows: -
One would expect that an agreement of that type reached in 1932 in that formal way would not be so very lightly and summarily dismissed. After all is said and done, one day that act will have to be repealed. 1 should say that this is a most clumsy piece of drafting and a very bad form of presentation of this agreement to the Parliament, because when one picks it up and seeks tocover it in the course of one’s speech, one is forced to combine what would be a second-reading speech in normal circumstances with a whole series of committee stage speeches. I will be forced to swing from general comments to provisions of the agreement. It would have been very much better, I suggest, had the form adopted in 1932 been observed to-day, that is, the presentation of a bill to the Parliament. We would then have had an opportunity to deliver second-reading speeches, and we could, at the committee stage, have considered each clause in some detail. 1 invite the Minister to indicate just what is planned regarding the agreement which isdescribed in the act. The act still stands on the statute-book. If one looks to see what has happened to the agreement, one will find a mere passing reference to it in a recital in the preamble to this agreement. There is not a substantive clause which says that the Ottawa Agreement shall no longer have effect. I would invite the Minister to’ tell us what is going to happen to the act of Parliament that is still on the statute-book.
– The provision of Article 15 is clear.
– It provides that -
This Agreement . . . supersedes the Agreement between the two Governments signed at Ottawa on 20th August, 1932.
I had overlooked that. The Minister is quite right - there is a substantive clause there. But J shall repeat the substantive point I made, which was that, in effect, the new agreement purports to set aside an act of the Parliament, and I repeat my contention that there should be an act of Parliament to repeal one already on the statute-book.
The Minister indicated very plainly in hisstatement that he wanted a complete review of the whole of the trading relations between Australia and the United Kingdom. He was not merely concerned about correcting the imbalance between the immediate preferences. He said -
The Government wanted a new Agreement which met our economic circumstances and our policy requirement under to-day’s conditions.
In a subsequent paragraph, he said -
The old Ottawa Agreement was confined to tariff matters. The Government wanted the new Agreement to cover our total trade connexion with the United Kingdom and to provide remedies for such matters as imports of subsidized products from other countries, restrictive business practices, the disposal of surpluses, shipping and so on. All these other problems, as well as the question of preferences and the question of our diminished trade in wheat, we sought to bring within a new Agreement replacing the Ottawa Agreement.
He mentioned all these matters, and it was intended not only to deal with tariff matters but also to open up the whole question of full trade relationships including shipping, business practices and the rest. I should like the Senate to see just how far this agreement got in relation to these matters. First, I refer the Senate to article 14 which reads -
The United Kingdom Government and the Australian Government recognize that there are other matters, such as transport and communications, the disposal of surpluses and restrictive business practices, not otherwise dealt with in this agreement, which may have a material effect on the level of trade and commerce between the United. Kingdom and Australia. The two governments agree-
To do what?
What does the Minister claim has been achieved by that particular article? Whatever he may claim, I allege that it achieves absolutely nothing in the vastly important matters of transport, communications, the vital question of the disposal of surpluses, and restrictive business practices - all matters which the Minister set out to have resolved in the course of his negotiations. Here in article 14 is a frank confession of complete and utter failure.
– Oh, no!
– The most that the Minister can claim as coming out of this is an agreement to consult together if either party wishes to do so. If article 14 never existed, surely that position would obtain! Where is the prohibition against the two governments consulting about anything at any time? This article does not advance the matter one inch.
– Except that previously one government might refuse to consult.
– All it does is to give the opportunity to consult. All the Minister has been able to achieve in these matters is a form of words to put into an agreement. They mean absolutely nothing but they might mislead somebody into believing that something tangible has been achieved.
– Under this agreement the two governments have to consult whereas previously either government might have said, “ We are not interested “.
– The governments were free to consult at any time. There is an obligation to consult.
– They are bound to consult now.
– What is thai worth? Compliance with that could be a mere formality. The Minister surely does not claim that anything of any practical value in the nature of transport, disposal of surpluses, communications or restrictive business practices is implicit in Article 14.
– Does the Leader of the Opposition read that article to mean international transport and communications as between the two countries only?
– I was thinking of several matters. 1 have in mind the fact that when Australia sought to sell cars of Australian manufacture in New Zealand, the English shipping freight charges from Australia to New Zealand were lifted in a most discriminatory fashion on those vehicles. Exactly the same thing happened when it was sought to send Australianmade cars into South-East Asia.
– Would not that indicate that the consultation in that case was very effective to enable our exports to get a cheaper transport outlet?
– Is the honorable senator still confining his attention to Article 14?
– What has been achieved from a practical viewpoint? What I have mentioned shows the type of thing that happened when we sought to compete with English cars on the New Zealand and South-East Asian markets.
– Is the Leader of the Opposition basing his statement that there was a discriminatory increase in connexion with the Australia-New Zealand trade in cars on a newspaper article, or has he any knowledge of the matter?
– I am not prepared to indicate to the Minister at the moment upon what I base my statement.
– Will the Leader of the Opposition give me an undertaking to have a look at the matter?
– I will let the Minister know the source of my information. I do not hesitate to do that, but I am not prepared to do so at this minute. The Minister will at least concede that there has been a substantial increase in freight rates on Australian produce between the United Kingdom and Australia.
– Did I understand the Leader of the Opposition to say that the freight rates on our cars to New Zealand had been reduced?
– No, 1 said they had been vastly increased, and in a most discriminatory way.
– I misunderstood the honorable senator.
– I - said that the freights had been increased in a discriminatory way. As all honorable senators know, shipping charges have increased throughout the whole world. Where, pursuant to Article 14, is there anything to indicate that any practical action is to be taken? The most that the Minister can show from Article 14 is that the two governments can consult about the matter. That may be a consultation of the most perfunctory and formal type.
– Do they not need to have legislation which they can invoke?
– That is contained in Article 12 in relation to the handling of subsidies. I will deal with that now. Article 12 reads -
The United Kingdom Government and the Australian Government recognize that industries in each country engaged in trade with the other may be materially injured by the competition of dumped or subsidized exports from third countries. They declare their intention to introduce legislation at . the earliest possible opportunity which will enable them, consistently with their international obligations, to impose anti-dumping or countervailing duties where such material injury is caused or threatened.
Now we are coming to what is agreed. The article continues -
They agree, if after consultation it is established! that such injury is caused or threatened-
To take action? No. The words are - to consider taking action-
Listen to this further qualification - consistent with their own legislation and with their international obligations to remedy the injury or prevent the threatened injury.
Does the Minister claim that that article: advances the present-day position? The article says that each government will legislate to put itself in a position to deal with these adverse trade practices, but just when one expects that agreement has been reached between the two contracting parties to do something about it, one comes to the anti-climax. The article says they will consider doing something about it. Again it boils down to a mere form of words - an empty frame of words - to mislead the unwary.
Let us now consider to what extent thisnew agreement varies the Ottawa Agreement and how far it improves on it. I return immediately to Article 1, which’ reads -
The United Kingdom Government and the Australian Government reaffirm the principle of maintaining mutually advantageous tariff preferences, and declare their resolve to facilitate and extend commercial relations between their respective countries.
That is a complete generality and is of nopractical value at all. It has no practical basis. One cannot pinpoint one penny advantage, but it may deceive the unwary. It affirms a broad general principle of the extension of mutually advantageous tariff preferences. Article 2 reads -
The United Kingdom Government undertake that Australian goods which at the date of thisAgreement were free of duties (other than revenue duties) on importation into the United Kingdomshall continue to be free of such duties.
I pause there for a moment to ask: How does that alter the Ottawa Agreement in the slightest degree? It merely repeats the Ottawa Agreement. It says that those articles that are admitted free at the present time will continue to be admitted free. Neither the Minister nor any honorablesenator on the Government side can rightly contend that that is an improvement on the
Ottawa Agreement; it is only a repetition of Ottawa. The final sentence of that particular article states -
This undertaking shall not apply to goods in which there is no active Australian trade interest.
That expression appears again and again in this agreement. Frankly, I do not understand just what it means and I should like the Minister in due course to indicate to us what is meant by “ no active Australian trade interest “.
Sitting suspended from 12.45 to 2.15 p.m.
– Before the suspension for luncheon I was, as it were, at the committee stage of my address. 1 was dealing with the detailed articles of the agreement. I pointed out that Article 1 merely confirmed the general principle which had no merit at all until we proceeded to consider its application. I pointed out also that Article 2, which retained the preferences in favour of Australian goods where entry was free and no duty at all was payable, merely preserves the position under the Ottawa Agreement. It effects no improvement and merely retains the status quo. I then went on to deal with Article 3, which reads -
The United Kingdom Government undertake to accord to the Australian goods listed in Schedule A margins of preference not lower than those specified in that Schedule.
As the Minister indicated, that does two things. First, it merely repeats the Ottawa preferences at the depreciated values that obtain to-day, and as the Minister also indicated on page 9 of the roneoed copy of his speech, it puts on a contractual basis the preferences in relation to certain other items which have been the subject of preference, but not as a matter of contract hitherto.
– Are they not expressed in percentages?
– Some of the new ones, such as those relating to currants and egg powder, are on a percentage basis.
– Are not the Ottawa preferences expressed in percentages?
– Most of them are not so expressed. They are, for the most part, expressed in money values, but some of them are expressed as ad valorem. If we refer to Schedule B we shall find that many of them are fixed value items.
I return to Article 3, and I repeat that it does two things. First, it repeats the Ottawa preferences that have hitherto obtained, and, as the Minister pointed out in his speech, it puts them on a completely contractual basis. The preferences relate to currants, egg powder, jam, rice, tomato juice, pineapples and coco-nut oil. It adds nothing to the trade relations in this matter of preference because preferences were granted on all these extra items, but not as a matter of contract until now. Accordingly, we do not advance in the slightest degree.
I ask the Minister to take special notice of what I am about to say now. It would appear that there is some lowering of preferences on a comparison with the Ottawa Agreement. I shall mention a few examples. If we refer to Schedule A of the new agreement we shall find that cheese is divided into two categories, (a) blue-veined, and (b) other cheese. The first category has a margin of preference of 10 per cent, ad valorem, whilst the margin of preference in the second category is 15 per cent, ad valorem. If we refer to the Ottawa Agreement to see how cheese is treated, we shall find that cheese is not subdivided, but bears a duty of 15 per cent, ad valorem. It would appear, therefore, that there has been a drop of 5 per cent, in relation to blueveined cheese. 1 draw the Minister’s attention to this instance so that he may comment on it when he replies.
– Was it made in Australia in 1932?
– I cannot say, but cheese generically had a margin of preference of 15 per cent, ad valorem. Now there are two categories, one bearing 10 per cent, and the other 15 per cent, ad valorem preference. An examination of Schedule A shows that in some respects there has been a lowering of the preferences, and not merely a holding of the position that obtained under the Ottawa Agreement.
– Would not blueveined cheese be a small category?
– I cannot say. I have mentioned cheese to emphasize the point I am making, and I ask the Minister, when he replies, to say whether this is in fact a lowering of protection, and, if not, what are the facts. The duties applicable to pears afford another illustration of the point I am making. Under the Ottawa Agreement pears were an individual item - the fifth or sixth item in Schedule B of that agreement. The preference on pears, raw, was 4s. 6d. per cwt. Under this agreement raw pears are divided into two categories. From 1st August to 31st January of each year the margin of preference is 3s. per cwt., whilst from 1st February to 31st July the preference is 4s. 6d. per cwt., which is the figure fixed under the Ottawa Agreement, so that 3s. per cwt. is obviously a lowering of the preference conceded at Ottawa.
– To what schedule is the honorable senator referring?
– I am referring to Schedule A of the agreement before the Senate. The item “ Pears “, under the heading “ Fresh or raw fruits “, has been subdivided into periods which I take it relate to periods of delivery. In Schedule B of the Ottawa Agreement there is only one category for pears, and the margin of preference is 4s. 6d. per cwt.
– Since 1947 they have appeared in the 3s. 6d. category. A Labour government reduced the preference under the General Agreement for Tariffs and Trade.
– I am asking for information on the points that I have raised because the Minister has claimed that there is a complete preservation of the preferences granted under the Ottawa Agreement. That is not so.
– There have been amendments of the Ottawa Agreement. Is the copy in the hands of the Leader of the Opposition up to date?
– I am quoting the original Ottawa Agreement, which is the one at issue at the moment, subject to certain changes. I am seeking information.
I refer now to dried fruits, which appear about the middle of Schedule A of the new agreement. Dried fruits are subdivided into a number of categories - currants, figs, raisins, apricots (but not including apricot pulp), pineapples, and other dried fruits, with certain exceptions. The rates vary from 2s. a cwt. to 8s. 6d. a cwt. If we refer to Schedule B of the Ottawa Agreement we shall find that there was only one rate in respect of all dried fruits - those dutiable at 7s. a cwt. A preference of 10s. 6d. a cwt. was accorded. I give these instances to indicate that the position as regards actual rates is sometimes not so favorable as under the Ottawa Agreement. I believe that it is right to draw attention to these points.
Article 3 does not advance the Ottawa position at all; it merely preserves the existing preferences. Indeed, as I have indicated, that is not always so, because in some instances the preferences are lower than those negotiated originally at Ottawa.
J come now to Article 4, which reads -
The United Kingdom Government undertake to consult the Australian Government before reducing margins of preference which exceed the margins specified in Schedule A or which are accorded to Australian goods not listed in that Schedule. . .
That means plainly that there are some items in the schedule at the present time which are operating at higher rates than those now set out in the schedule but in respect of which there can be a reduction. This article envisages some reduction in the rates of preferences now operating in favour of Australian goods. It obviously means that. I point out to the Senate, therefore, that it must be a disadvantage and not an advantage. I ask the Minister to indicate, when he replies, the kind of goods generally for which the rate exceeds the rate that is now set out in the schedule, and to furnish a list of goods in which Australia might be interested, which are not at present listed in the schedule and which might be subject to a reduction. The point about which I am concerned is this: who is going to lose if rates that are now operative can be reduced, the only safeguard being prior consultation with the United Kingdom? I conclude my reference to this article with the comment that somebody obviously is going to lose an advantage, and that this article is of no benefit.
Now I refer to Article 6, which deals with a matter that the Minister highlighted very particularly in his speech when he was dealing with wheat. I direct attention to the following statement made by the Minister -
On the immediate trade problem, the important agreement on wheat that was secured assures-
I emphasize the word “ assures “ - a market in the United Kingdom over the next five years of at least 750,000 tons f.a.q. wheat or Sour equivalent annually.
So the Minister has committed himself to a statement that the agreement assures for five years a market of at least 750,000 tons of wheat per annum. Let us examine the agreement to see whether that statement was justified. The first paragraph of Article 6 reads -
The United Kingdom Government, noting that the traditional share of Australian wheat in the United Kingdom market has declined in consequence of changes in world wheat marketing and the increase in the level of wheat production in the United Kingdom, will consider sympathetically any measures which may be found practicable from time to time, having due regard to their domestic policies and international obligations, to improve the opportunities for the sale of Australian wheat in the United Kingdom.
What does that mean to Australia in hard practical terms? lt means absolutely nothing. It is completely vague, and even its vagueness is hedged around with every possible qualification. One would think that it would have been enough to say that the United Kingdom would consider sympathetically any measure which would have the effect of improving the opportunity for sales of Australian wheat; but, having said that, the article states that it will be only in relation to such measures as may be found to be practicable from time to time, having due regard to the United Kingdom’s own domestic policies, which are not to be disturbed, and to her international obligations. Even the offer to consider sympathetically is surrounded by all the escape clauses that could possibly be devised. Paragraph 2 reads -
The United Kingdom Government and the Australian Government welcome arrangements for periodical discussions between the representatives of the United Kingdom flour millers and the Australian Wheat Board regarding sales of Australian wheat.
That is very nice, but what does it mean in practical terms? It means exactly nothing. The paragraph continues -
That is, the United Kingdom - affirm that it is their desire and expectation thai sales on commercial terms of Australian wheat and flour in the United Kingdom will amount to nol less than 750,000 tons per annum of wheat, inclusive of the wheat equivalent of Australian flour imported into the Unite’d Kingdom each year.
Let us examine what that means. First, they are going to welcome arrangements for discussions. That is a very laudable sentiment, but What does it mean in terms of trade? They cheer about the opportunity for discussions, and we cheer, too; but it does not put money into anybody’s pocket. On the question of a firm sale of 750,000 tons of wheat per annum, the most they will do is to affirm that it is their desire and expectation. But there is a further qualification. The sales are to be on commercial terms. I invite the Minister to say what that means. Who is to determine that the terms are commercial terms - Australia or the United Kingdom? Of course, it is the United Kingdom.
– Why “ of course “7
– They are the buyers.
– The seller has an interest, has he not?
– The seller has an interest, but it will be the buyer who will determine whether the terms are commercial. It is a matter in which the buyer has a very large say. If there is any doubt about how vague this arrangement regarding the 750,000 tons of wheat is, let us turn to the next paragraph of Article 6. which reads -
The two Governments agree that if in any year the quantity of Australian wheat and flour imported into the United Kingdom should fall short of 750,000 tons (wheat equivalent) or such smaller quantity as may be offered by the Australian Wheat Board on commercial terms, they will consult together at the request of either Government. In the event that such consultation is requested the two Governments will for this purpose establish an inter-Governmental Committee to meet in London to consider the reasons for the shortfall and possible solutions. The two Governments further agree that if such consultations should not lead to an outcome satisfactory to both Governments either Government may call for a renegotiation of the terms of this Agreement.
All of that adds up to exactly nothing. Could anything be more futile? The end result of it all is that, if Australia is unhappy about the situation, it may ask for a conference, and if it does not get its way it can ask that the whole agreement can be renegotiated. It adds up to nothing in the end result. I direct the attention of the Senate to paragraph 2 of Article 15, which reads -
The operation of this Agreement shall be reviewed from time to time at the request of either Government.
The end result of these lengthy paragraphs is this: “ We will consider sympathetically, and we hope and expect that we can take 750,000 tons. If we do not, you can have a meeting and you can exercise the right you have elsewhere to ask for a review of the whole agreement “. Now, I ask the Minister whether he still adheres to the statement that the agreement assures a market of 750.000 tons for five years to the Australian producer. Of course, it does not! If it were possible to move an amendment to the speech delivered by the Minister in support of the motion, I would suggest that there should be added to the words “ the important agreement on wheat that was secured assures a market “, the words “ I hope “. There is no assurance about it whatever, and I should say that it is a complete misrepresentation of the position for the Minister to state that such a market is, in fact, assured. 1 pass to Article 7. This is the article under which Australia .grants preference to imports of United Kingdom goods, and which makes provision for a reduction of rates. The Minister directed attention to it, and said -
In general, the Ottawa Agreement provided for minimum preferences of 12i per cent., 15 per cent., or 17£ per cent, according to the level of the British preferential duty. There were, however, goods on which the Ottawa Agreement required us to maintain preferences in favour of the United Kingdom of 20 per cent, and 25 per cent., or in .a few cases, even more.
There are several aspects of that matter which concern me. The Minister gave no indication of the kind of goods that were subject to a preference of 20 per cent., 25 per cent., or even more. I think he should inform the Senate what kind of goods were in that category of preference, and how much was involved.
– Does not the honorable senator know?
– They are not set out in either the Minister’s speech or the agreement. As he states that the margin runs from 12i per cent, to 17i per cent., that would appear to be the general run, and the higher rates would be really exceptions. Am I right in that assumption?
– Yes, there are just rare exceptions.
– Under paragraph 1 of Article 7, the ad valorem duty is to run from 7£ per cent, to 10 per cent, instead of from 12± per cent, to 17± per cent., so there is a reduction overall of from 5 per cent, to 7± per cent., and that is to the good. This is the first emergence of any substantial benefit under this agreement. The Minister claims that it should ease costs. So far as the reduced preference in favour of raw materials that are required for Australian industry is concerned, it could certainly ease costs, but it will ease costs only if, in addition to reducing the cost to the manufacturer, prices in turn are reduced - and they may not be. The Minister’s expectation of reduced prices in Australia may not be realized by this relatively small concession. In relation to the manufactured goods that may be imported subject to a reduced preference, I point out that there may be an adverse consequence, and that competition with Australian production may increase dangerously. That is a possibility that has to be considered.
– A very serious one, too.
– It is undoubtedly quite a serious one. The Minister makes the point that this reduced preference to United Kingdom goods will give Australia more flexibility for the negotiation .of agreements with other countries. The 5 per cent, to li per cent, reduction will undoubtedly give a little more elbow room. Again on the question of costs, insofar as those preferences are on goods imported in the form of raw material required by Australian industry, that will be to the good. It will tend to reduce costs, or it is capable of doing that, but again it may open the door to imports of manufactured goods which could cut seriously into the status of Australian industry. Both those aspects, in relation to British and other imports that may be encouraged, must be weighed very carefully from the viewpoint of the development of Australian industry.
Sub-paragraph (a) of paragraph 1 provides that there will be a minimum margin of preference of 7± per cent, ad valorem on United Kingdom goods specified in Schedule B. When we turn to Schedule B, we find nothing in a form that will give us a picture of the type of goods affected, because it consists almost entirely of .a list of tariff item numbers. There is scarcely a reference to an individual item or commodity, and the Minister has not been good enough to put before the chamber any kind of statement as to the type of goods that are there concerned. It is exact information, and it is in condensed form, but the Senate is left without any kind of information enabling it to get a picture of what is really involved here, and 1 think that is a defect in the presentation of this matter 10 the Parliament.
Now let me pass to Article 8, which deals with by-laws. I can find nothing in the Ottawa Agreement that permitted the Australian Government to admit duty free, by by-law, goods not readily and reasonably obtainable in the United Kingdom. The fact in relation to that is that Australia asserted the right to operate by by-law, and has, in fact, been doing it. This clause that we are now considering does no more than give contractual form to what Australia has, in fact, been doing. It is an advantage to get it on a contractual basis, and probably the net effect will be to eliminate some friction between the United Kingdom and Australia, but that is all the benefit that comes out of th :t. The by-law procedure which the Commonwealth adopts will now be formally ratified as between the two governments instead of being a right asserted unilaterally by Australia. There is very little advantage to come out of that.
Article 9 merely repeats the provisions of the Ottawa Agreement in relation to the Tariff Board. I have dealt with Article 12 already in another context. Article 13 is very interesting. It provides -
The United Kingdom Government and the Australian Government agree that opportunity will be afforded for full consultation between them in respect of their agricultural production and marketing policies and in respect of their food and feeding stuffs import policy of the United Kingdom Government. In particular, the two Governments will each year exchange statements of agricultural production trends; and each Government will give full weight to the views of the other in the formulation of their agricultural production marketing and import policies.
That exchange of information is to the good, but I invite the Minister to say what power, apart from in the territories, has the Commonwealth over production. I am submitting to the Minister that there is no power at all over production, apart from such power as it can exercise in its own terri tories. The general provision of that clause for the exchange of information, policies and trends is, of course, all to the good.
I have broadly reviewed the details of the agreement, and I find myself in considerable difficulty, as I think every other honorable senator will, by reason of the fact that the Minister has made no attempt to evaluate the aggregate effect of the benefits that he claims are conceded under this particular agreement. He gave us an estimate of how Australia fared under the old agreement. He has made not the slightest attempt to tell us how he thinks these benefits will work out, and I think he must admit that it was quite competent for the Department of Trade and the Department of Customs and Excise, knowing the general level of imports and the likely trends, to have prepared an evaluation of the effect of these lower duties on British imports. Again the Senate lacks adequate information and a reasonable picture. It is rather interesting - and I offer the comment now - that many of these points were raised in another place, and I think the Minister for Trade must have been ashamed of his agreement, because he did not even take an opportunity to reply to a very extensive debate there. One cannot imagine that he would wish to treat that chamber with discourtesy, and i come to the conclusion, on my look at this agreement, that, listening to the criticism of it that is possible - some of which I have voiced - he is ashamed of the agreement he has put before this Parliament. He makes a grand claim for it, but when one analyses it, as I have done, I hope, quietly and objectively here to-day-
– With great temperance.
– With great temperance - Senator Wright having set the model for that earlier to-day - one finds that there is very little change from the existing practice. The Minister has talked about costs and the possible effect that some features of the agreement may have on getting costs down. I remind him that probably the worst feature in our overseas trade position is our own high costs of production, which have risen out of sight year by year under this Government. This is the Government which came to office on a pledge to put value back into the £1 and to get costs down.
The primary producers who are mainly concerned with this agreement have been sitting shots for every price rise in the Australian economy. They have been utterly helpless. They have had to sustain those rises and compete in markets over which they have had no control and in which they have been faced with international control and other factors. I repeat what I have said frequently in this chamber: This Government missed the most marvellous opportunity Australia has ever had. It has had the most bountiful seasons year by year. For most of the time, prices overseas have been soaring to record heights. Had this Government made a determined effort to help the price structure in Australia, this could have been the wealthiest country in the world.
It is idle for the Minister for Tradeto point to relatively tin-pot things, such as preferences, as affecting the cost structure in Australia when the real trouble with our export industries is the enormous cost of production affecting them. That, more than anything else, has priced them out of the markets of the world. On that ground, this Government stands condemned completely, both on its pledge and the results that have been shown.
– The rise of 10s. in the basic wage will help the honorable senator’s argument.
– The 10s. rise is quite another matter.I acknowledge that it will not help the primary producers. It will not help any exporter. No cost rise does that. But we have to face the fact that rises in wages throughout Australia in recent years have come about mainly because of rises in prices despite what the Commonwealth Court of Conciliation and Arbitration or the new Conciliation and Arbitration Commission might say about basing increases on the capacity of industry to pay. Year by year, major rises in the basic wage have been due to the rise in prices. One has only to examine the C series index to grasp that fact.
– To what have rises in prices been due?
– Oh, well, they have been due to excessive profits and undue charges. This Government took the brakes off the economy at a time when, if it had continued to apply them-
– It took off controls you mean.
– That is right. The Opposition will not oppose this agreement. We have no enthusiasm for it.I make no secret of that as is apparent from what I have said during the debate. It seems to me, in the light of the review I have made of the agreement, that the Minister for Trade finally could get nowhere with the United Kingdom negotiators. I agree that they are tough negotiators. He could not get very far with them, and he begged from them a form of words. That is what he has got. He has a form of words! He sought it as a front for failure - a general front!
I am not blaming him for having failed. I know how difficult the United Kingdom negotiators can be.I know they could not meet him on raising preferences, and I concede the Minister a measure of success in getting United Kingdom preferences down in favour of Australia, but let us have a look at the good features of this agreement on the analysis I have put to the Senate. They boil down to three; and apart from one they are not very significant. One is the confirmation of the by-law practice. It does not add anything to our advantage except to give us a contractual basis where we lacked before.
– Every country has that.
– The point I am making is that it adds nothing to what we have enjoyed before. The second feature is the reduction of the United Kingdom preferences. That is a good thing and it is important.It is the main reason why we are not opposing the agreement. The third feature is the general confirmation of such preferences as we do enjoy.
The DEPUTY PRESIDENT (Senator the Hon. A. D. Reid). - Order! The honorable senator’s time has expired.
– I have listened with great interest to the analysis of the trade agreement between the United Kingdom and Australia by the Leader of the Opposition (Senator McKenna). I think the honorable senator is always worth listening to when he makes a critical analysis. He made several points to which I wish to reply while I have them fresh in my memory. First, he referred to a reduction in the preferences compared with the original Ottawa Agreement. I take this opportunity to remind the Leader of the Opposition that all those reductions were the subject- of his own Government’s action at the conference which framed the General Agreement on Tariffs and Trade in .1947.
– We did not give much away.
– Well, all the reductions that the Leader of the Opposition has mentioned are, in fact, those which were sponsored by the Labour government in 1 947 in Gatt. That answers the statement, by the Opposition that some of the duties are lower than they were in the original Ottawa Agreement. Senator McKenna charged this Government with having been unable to grasp its opportunities during the past few years. I have always felt that if any government failed to grasp an opportunity, it was the Labour government which was in office between 1945 and 1950 when the world was starving and customers everywhere were begging to buy our products. That- government completely failed to grasp the opportunities that were offered to us. if ever a government failed to grasp the opportunity of selling to customers who were already established, it was the Labour government of that day. 1 turn now to Article 1 of the agreement. The Leader of the Opposition referred to its provisions as mere platitudes. Article 1 emphasizes government policy. That is all’ that it is intended to do, and- that is al! it does. Every agreement starts off with an expression of government policy. Article 2 contains a proviso which reads: -
This undertaking shall not apply to goods in which there is no active Australian trade interest.
He said there should be a definition of what t’he words “ no active Australian trade interest “ meant. The definition to which 1 lean myself is that active trade interest means where there has been any trade whatever in recent years or where there is evidence that traders are going to expense to promote trade. That is the explanation that 1 have had given to me on that point.
F was interested to hear the criticism by Senator McKenna of the wheat’ agreement. He said that there was a 2s. preference in the original Gatt and that the Minister for
Trade (Mr. McEwen) had stated in his speech on the agreement that there had’ never been protection. The 2s. preference to which Senator McKenna referred was surrendered in 1938 to enable an agreement to be made between the United Kingdom’ and the United States of America. It wasone of the points for which the United Kingdom pressed very hard to enable an agreement to be made between those twocountries and, as I have said, it wai surrendered in 1938. Therefore, what Senator McKenna said, in effect, was thai after 1938, there was no preference ir» connexion with wheat.
As to sales of wheat, I think the Australian Wheat Growers Federation is onebody that would be interested in this wheat agreement and I should like to read a lette’ that has been received from the genera); secretary of the federation, Mr. T. C. Stott He stated -
At the annual conference of the Australian Wheat Growers’ Federation held in Melbourne recently, the following resolution was carried - 1 remind honorable senators that this resolution comes from the Australian Wheat Growers Federation which knows something about wheat and the sale of wheat. The letter goes on to state the resolution whichreads -
That the Federation expresses its appreciation, of the extra sales of wheat that may be gained by the recent trade agreement between the UnitedKingdom and Australia, and urges the Commonwealth Government to institute a more vigorousmarketing campaign for the sale of Australian primary products overseas, and to endeavour to make similar trade agreements with other countries, particularly with those that are our good customers
That is quite recent. It is dated 9th April, 1957. There was an instance the other day when an attempt was made to evade reading the whole of a letter to the Senate, but I do not go to those lengths.
– The Minister should keep that one. It might be the only one that he will get.
– One never can tell, but it is a good recommendation from those who are vitally concerned. If the wheat-growers do not know more about wheat than the Opposition does, I give them away.
– Wheat board representatives Were present at the negotiations.
– They were sitting alongside us when the agreement was made, lt is the normal practice of this Government, when we are negotiating agreements, to have with us representatives of those who know something about the business.
– And that tonnage does not include the high protein wheat, either?
– That is so. We can sell as much high proetin wheat as we can produce. I have stated many times in this chamber that we should even go to the extent of paying a premium to the growers of high protein wheat so that they may rake advantage of the premium market that is offering. That is not a new suggestion so far as T am concerned, and T am all for it.
These are matters which I noted when they were raised by Senator McKenna. No doubt the Minister will deal with other points raised by him when he replies. But I was interested to note Senator McKenna’s preference for a percentage as against a fixed margin. I always held the same view in connexion with prices legislation, but I could not shift Senator McKenna away from the fixed margins then in favour of percentages. Of course, at that time, we were in opposite schools. I was a trader, and [ always admired the way he clung to fixed margins in those days. Now, he has turned a complete circle, and, in this case, is all for percentages. However, I must be fair and admit that I agree with him.
That was one weakness of the Ottawa Agreement, but it was a good agreement at that time. After all, we can only judge these things on the circumstances existing at the time. That agreement was made when we were just emerging from a world depression, when we were selling primary products only, and when the market was traditionally one which took almost the total surplus of Australia’s primary products. We were in a shocking bargaining position in those circumstances. After all, when one is bargaining with one’s best customer, who is taking the whole of one’s surpluses at a time when one is desperately eager to sell them and when that customer has the whole of the world’s markets from which to draw, one is certainly in the worst possible position to bargain or negotiate a trade agreement. The Ottawa Agreement did help, but it is true as was pointed out by Senator McKenna and others - and the Minister for Trade himself has conceded the point - the benefits almost disappeared in an expanding world inflationary economy. When analysing these things, one must be fair again and admit that that particular weakness is continued under this agreement in connexion with certain of our primary products, not because we did not try to have the position altered, but because we were unable to get the United Kingdom to move from that position in relation to them. After all, it takes two sides to make an agreement, and again, we are not in a strong bargaining position because the United Kingdom is still our largest customer.
It is interesting, of course, to review these matters, as Senator McKenna has done, after on effluxion of time. I admit that had there been any further recession from 1932 values, the advantage would have been all our way; but at that time wheat was about 3s. 4d. or 3s. 6d. a bushel and it did seem that there could not have been any further recession of price.
– It was ls. 8d. a bushel.
– Yes, it was ls. 6d. or ls. 8d. a bushel at the siding. It was certainly very low.
I do not criticize Great Britain’s attitude in connexion with this matter. In making a deal, the British have to protect their own interests, and, as has been said here, they are tough traders. I have always held the view that the two peoples of the world who really know commerce, who really understand trade and who really understand monetary values in trade are the British and the Chinese. They are the two toughest trading nations to make a deal with, and I admire them for their knowledge and their toughness.
If I were to criticize Great Britain at all, it would be because of her failure to avail herself of the opportunity for investment in Australia which has been so readily available to her over the last few years. In the past, she has .invested in Russia, China, Argentina, the Middle East, and indeed, in many countries, only to see those investments disappear completely. But in the one country where the people are her own kith and kin, she has not availed herself of the opportunities which have been available to invest safely and soundly. I repeat that if I were to offer any criticism at all of her trading, it is on that point. But others have come here and seized the opportunities available. There is a gradual realization of the fact that Australia is placed in a splendid strategic position for developing trade with Asia. We are virtually a central distributing depot for that area from India round through Malaya, Japan, and the Philippines to New Zealand. We are gradually developing as a central manufacturing and distributing point for that area. The opportunity to invest here has been well taken by other countries. I see a welcome stirring of interest in Great Britain in our potentialities. As I have said before, 1 was most heartened to read the speech delivered by Lord Cruikshank, in the House of Lords, upon his return from Australia, when he took the opportunity of chiding British investors for having overlooked the opportunities available here.
– The Menzies Government has destroyed incentive.
– That is not so. Others have taken the opportunity.
– The present Government ruined it in 1954.
– If there is one nation in the world that believes in incentive and private enterprise, it is America. I invite the honorable senator to examine American investment in Australia and ask himself whether incentive has been destroyed. He will find the complete answer to his interjection there.
In Australia to-day, we have a changing pattern of trade which is interesting and well worth studying. We are gradually moving from the position of being solely an exporter of primary products to that of an exporter of the products of secondary industry.
– It is certainly gradual.
– It is gradual because, without question, we have depended entirely upon primary production to earn us enough money overseas to pay for the goods we have bought from overseas. Our imports have been paid for almost entirely from the sale of primary products, mainly wool and wheat. It is not healthy to rely entirely upon only two commodities. It is far healthier and far sounder economically not to have all our eggs in one basket. That is why we are gradually - I admit it is gradual - expanding in the field of secondary industry. There is a vast market to the north of Australia in great countries with large accumulations of people. I am one of those who believe that, as their standard of living improves - and it will - these people will provide bigger and bigger markets for Australian secondary industries.
– Senator Gorton said last night that they are better off than we are.
– Senator Hendrickson may have interpreted Senator Gorton’s remarks in that way, but I am not bound to accept his interpretation, thank goodness!
Article 7 of the agreement is of tremendous interest to Australia. It means that as raw materials and machinery used by our factories come within Schedule B, we can reduce preferences on them. This is a further attack on the high cost, structure in Australia, which is still a problem as Senator McKenna has reminded us. If we can engender by this means competition in the supply of heavy machinery and raw materials in Australia, it will be all the better.
I am personally interested in Article 8, which deals with the by-law provisions. Prior to this agreement, the machinery was very cumbersome. Somebody would purchase a machine in a foreign country and ask for it to be admitted under a customs by-law. If machines of a like kind were not being manufactured commercially in Australia, by-law entry could be granted up to the British preferential rate, but then we had to refer the matter to the British Board of Trade for a decision on whether we could take the next step and grant bylaw entry at beyond the British preferential rates. In turn, the Board of Trade would make inquiries in Great Britain to find out whether such a machine was being manufactured commercially there. If it was, the board would not be prepared to accept any further concession in the tariff. At that stage, the importer would come back to us and say, “ I contest the contention that the British manufacturers mentioned in the list supplied by the Board of Trade are making machines of a like kind commercially. That is why 1 purchased this machine elsewhere “. We would go through the whole process again, and eventually, perhaps after some months had elapsed, a decision would be reached. This article gives the right to the Minister to be the final arbiter on whether an article is comparable with articles manufactured in Great Britain.
Of course, we have a responsibility in the matter. It is to treat such applications in the same way as we treat applications which may affect Australian industry. I think that a responsible Minister would decline to permit goods to be brought into Australia under by-law if comparable articles are made in Australia, and we must treat in the same way applications of the kind I have described. Article 7 shortens the previous long process. It is, therefore, an important step forward.
Into all those matters come other considerations, such as the length of time required for delivery. Let us assume that a machine cannot be delivered by, say, Great Britain, for eighteen months, but that a machine of like kind can be delivered by another country within three months. We have to consider whether the machine is commercially manufactured in Great Britain and whether the two products are comparable. If a manufacturer wants to get the machinery installed in his factory in Australia quickly, then, in view of the disparity between the delivery periods, he will say that he does not consider the two machines are comparable. From time to time, as these problems arise, they are decided on their merits. The final decision now lies with the Australian Government. I believe that that is an immense step forward.
I do not agree with Senator McKenna’s contention that the degree of manoeuvrability that we have under this new agreement is relatively small and not worth while. Some goods referred to in this agreement bore preferences beyond 25 per cent, and 30 per cent. The preferences will come down to 10 per cent. The schedule gives us manoeuvrability and enables us to spread our risks. I am personally very keen on that. There is an old axiom in business. The more customers you have, the better it is, because they are not all likely to go “ bung “ at the one time. Even if one or two go to the wall, there will be enough left to enable you to carry on. 1 think it is a grand thing to spread risks. Under this agreement, we shall have more power to make agreements with other countries. We must never lose sight of the fact that valuable potential markets exist to the north of Australia.
– Under what article is manoeuvrability covered?
– It comes within the general provisions of Article 7. Some duties will be reduced. There will be a maximum rate of 10 per cent., compared with previous duties of 17i per cent., generally, but 20 per cent., 25 per cent, and even more in some cases. That will give us an opportunity to make small trade agreements which, I believe, will be most valuable to Australian trade.
– And valuable to United Kingdom trade also?
– Yes, that is so. That is what we would desire. There is one thing that has developed over the last few years. If honorable senators look at the trade figures, they will see that our sales to Great Britain have been steadily coming down.
– Why is that?
– Because Great Britain is a good trader.
– Was the position forced on Great Britain?
– The British production of wheat is one factor. Great Britain now produces one-half of her requirements of wheat. In addition, she takes subsidized goods from other nations shipping to her markets. What many people, and particularly members of the Opposition, do not realize is that Great Britain is a tremendous primary producer, considering the relative smallness of the area available. She has stepped up her production of many primary commodities purposely in order to become self-sufficient in time of trouble.
– And because, under the administration of this Government, our costs of production have risen tremendously.
– I dare say that if Senator Hendrickson were to make a speech on this subject, that would be his theme. it might be worth listening to, but personally I do not think that it would be. We must take into account the fact that we are selling less and less to Great Britain, and I am happy that we have such manoeuvrability now as will enable us to obtain markets in other countries. la conclusion, I should like to say that I do not think that the Minister for Trade (Mr. McEwen) begged anything. I believe that this agreement is a great achievement by him and the departmental officers who accompanied him and advised him. He was not in a strong bargaining position, its we all are agreed, and this agreement springs from the great bond that exists between us as British people. Two tough fellows got together and made an agreement of which they and we can well be proud.
– The agreement we are discussing is, without doubt, very important. I greatly regret that the Minister for Shipping and Transport (Senator Paltridge) did not give the Senate very much information about the actual agreement, although he delivered a very long speech. I have gone to the trouble to read his speech more than once, and I analyse it in the following way. His speech covered in all 30i typewritten pages, two and a half of which consisted of introductory remarks. He told us what the population of Australia is to-day as against the population in 1932, and the extent of our steel production now compared with 1932. He went so far as to tell us the number of tractors we have in the country to-day compared with what we had prior to the Ottawa Agreement. Then he told us that in 1932 a trade agreement known as the Ottawa Agreement was signed.
Another two and a half pages explained the causes of our trade imbalance - the result of the old Ottawa Agreement, under which greater preference was given to United Kingdom goods than to Australian. lt is true, as the Minister for Customs and Excise (Senator Henty) said, that when that agreement was signed in 1932 we were not in as good a position as we are to-day. However, I am not saying that we are in the best of positions to-day for the making of a trade agreement.
In the next one and a half typewritten pages, the Minister explained the objectives of the new agreement. He also explained that at the General Agreement on Tariffs and Trade conference in 1954, the Government members invited our foreign competitors to vote for a situation that would have given Australia an advantage over them. Hesaid that those efforts failed. One page dealt with the course of the negotiations which, no doubt, as he said, took much time. He told us that a comprehensive review of the importance and of the issues of the agreement was made and he said there were frank exchanges.
Five pages of his speech was devoted to the advantages that he alleged have been gained. They were (a) that for the most part the provisions of the old agreement were repealed, (b) the important easing of the cost load of Australian industry, (c) the right of the United Kingdom and Australia not to agree on vital matters and (d) the agreement to consult with each other when either party has something to say. The last matter was a word of praise - no doubt well deserved - to the Secretary of the Department of Trade for the work he had done in. the negotiations.
I mention that to show that little spacewas devoted to an explanation of this important agreement. I say that with the greatest of respect, but I believe that this agreement should have been explained to us article by article. Had that been done, we would now have a greater knowledge of it than we can have by constant reading of the agreement itself. It also would have been of great benefit to the people of Australia who are extremely interested in an agreement reached between the United Kingdom Government and the Australian Government on the matter of trade between the two countries. I trust the Minister will not take my criticism as personal, but, as I say, had that procedure been adopted, we would have found it much easier to reply than is the case when we have to read article after article all couched, I say with respect, in hard legal language and terms. It is quite all right for the learned legal members of the chamber but it is extremely difficult for the majority of us who are lay members.
This agreement, in effect, takes the place of the Ottawa Agreement. That agreement was extremely unfavorable to Australia: and I can at least say that, although one may believe that Australia will gain little from this agreement, it is much better than the old agreement, which all members of this chamber, irrespective of party, will admit was in no way to the benefit of Australia.
Article 1 of the agreement confirms the principle of a mutually advantageous tariff preference and a desire to facilitate and extend trade between the two countries. No one with any imagination should have any fault to find with Article 1. It certainly does not give us anything in hard cash but it at least lays down a principle that should be advantageous to both countries. However, I ask: Was not that principle always in existence? Would not it be in existence whether we have this agreement or not? Surely any government of this country, irrespective of political outlook, would have as its first thought trade that would be advantageous to this nation, particularly if it be with the United Kingdom! I submit that article 1 contains a lot of pious words but does not obtain for us much that we have not had. To my mind, it is nothing new.
Article 2 re-affirms the principle of free duties which were already in operation on Australian exports to the United Kingdom. We again have nothing fresh. The article re-affirms a position that was in existence prior to the signing of this agreement. Article 3 states -
The United Kingdom Government undertakes to accord to the Australian goods listed in Schedule A margins of preference not lower than those specified in that Schedule. lt may include primary products that were not covered by any previous agreement, such as rice and frozen or dried goods, coco-nut oil, millet and sorghum, and tomato juice. If these and other products are included for the first time - I do not think that is so - it is a good thing. If certain goods which were not previously granted margins of preference are now, under this agreement, given such margins, one can only admit freely that that is an advantage.
I was interested in that part of the Minister’s speech in which he said that our percentage advantages under the Ottawa Agreemnt on butter and eggs had fallen from 15 per cent, to about 4i per cent. I ask him whether the rates will revert to 15 per cent, under this agreement. So far as I have, been able to study the agreement, I do not think that will be so, but I should like to know.
Article 4 reads -
The United Kingdom Government undertake toconsult the Australian Government before reducing margins of preference which exceed the margins specified in Schedule A or which are accorded to Australian goods not listed in that Schedule. This undertaking shall not apply to goods in which there is no active Australian trade interest.
One would expect that there would be at least some conference before any alteration of the percentages takes place, and therefore I cannot see that this article confers any great benefit on Australia.
Article 5 provides that this agreement shall not affect Australia’s export of meat to the United Kingdom. I understand that there is in existence an agreement covering meat exports to the United Kingdom which has a term of fifteen years, and 1 should like to know from the Minister whether under that agreement Australia can export only a certain quantity of frozen meat. I ask that question mainly because I have been informed that the Philippines is desirous of buying more meat from Australia, chiefly because it would be cheaper to do so than to get the meat from the United States of America. The lower price is possible because Australia is about 1,000 miles nearer to the Philippines than is the United States of America.
I agree with the Minister that it is good business at any time to spread our trade, while not forgetting that we have ties with our kith and kin in Great Britain which, although very deep, are hard to explain.
– We do not want to get out of a good market just because there is a prospect of another market somewhere else.
– I should not expect the Department of Trade, or the secretary of that department, after the wellmerited commendation of that officer by the Minister, to grasp at the shadow and lose the substance, but we must recognize that in matters of trade and business there is danger in relying too much on sentiment. If there is one field of activity above another in which there is no sentiment, it is the business world. I do know of another sphere to which that remark applies, but I shall not refer to it now. I repeat that there is no sentiment in the business world. Australia’s main exportable goods are its primary products, and if we can expand our trade in those products, so much the better. I understand that Australia’s exports of meat in 1955-56 were valued at approximately £60,000,000. If we study the figures, we shall see that meat comes next to wool and wheat in the value of our exports. The monthly value of our exports of wheat and flour exceeds by from £1,000,000 to £1,500,000 the value of our exports of meat. If we have meat available for export I am content to leave it to those whose job it is to expand our export trade to do what they can in that field, because I am confident that they will do their best.
Article 6 deals with Australia’s second largest exportable product, namely, wheat. This article states that the United Kingdom Government has noted that Australia’s traditional share of the United Kingdom market for wheat has declined. In the present state of world affairs one is almost afraid to look a week ahead. That is true particularly when we reflect on the position in the Middle East, because we cannot be certain whether there will or will not be a blow-up there. If one thing more than another has been brought home to us, and particularly to the military leaders of the nation, it is that a nation which has to obtain its food supplies from other countries has not much chance in a world conflict. I can never lose sight of the unfortunate plight of Britain resulting from her participation in two world wars. As a result of those wars, Britain lost £1,200,000,000 in investments abroad. That loss reduced Britain’s ability to purchase food and raw products, so that its manufacturers were placed at a disadvantage in world trade. What does this agreement provide in relation to wheat? It provides that Britain may buy 28,000,000 bushels of our wheat annually; but there is nothing to say that she will. The term “ competitive prices “ enters into the consideration. If Britain can buy our wheat at a price which is as good as the price of wheat produced in Canada or any other country, I believe that the agreement will be kept.
That brings us back to the very vexed question of Australia’s cost structure. When my leader was speaking, I heard somebody refer, by way of interjection, to controls.
The majority of us are rugged individualists, and none of us accepts controls gladly, but I doubt whether any honorable senator would suggest that the position should be allowed to remain as it is rather than have controls. Australian eggs, when they can be sold, are being sold on the British market for about 2s. 8d. a dozen, while our wives are paying 6s. 6d. Speaking from memory, I think that butter is being sold in Britain at about 2s. 7d. per lb., and we all know what it costs here. We all know, too, the situation regarding dried fruits. It is not a question of our not being able to produce these commodities, because in recent years we have been blessed with what I suppose have been the eleven most wonderful seasons that this country has ever experienced. Let us hope that we continue to enjoy good seasons. In the main, in recent years we have been paid prices that formerly were unheard of, yet to-day we are no better off. To win elections is not a bad thing, but the nation is greater than that. Whilst the introduction of controls might have been distasteful and impolitic, if I may use that word, I think we have sown the wind and are now reaping the whirlwind.
I believe that the people who signed this agreement on behalf of the United Kingdom desire to buy 28,000,000 bushels of our wheat annually, but we cannot be certain that they will. All I am hoping is that the price will be such that we will be able to sell the wheat. I am informed that the value of additional commodities that we shall be able to sell under the agreement is approximately £10,000,000 a year, but we know that, in the past, freight rates have been raised by 14 per cent, overnight.
I recently directed a question to the Minister on this subject, and he rightly stated that it was not within his province to say whether overseas shippers should talk about another freight rise of 5 per cent. Although the overseas price of wheat might be 16s. or 17s. a bushel, between 6s. 6d. and 7s. of that amount goes in freight costs. It might be said that we have a grower’s price or a cost-of-production price, to use the correct term, of 13s. a bushel; but some one has to provide the difference between the 10s. that the Australian Wheat Board receives and that price of 13s. I suppose that by the time the grower receives his payment, he gets about 9s. a bushel.
If everything proceeds as we want it to proceed, we will have a market for 28,000,000 bushels of our wheat annually; but there is nothing in the agreement which binds the United Kingdom Government to buy that quantity. Most people honour their word, but we must remember that sometimes new circumstances arise. I repeat that there is nothing which binds the United Kingdom to buying that quantity of wheat. lt is true, as the agreement states, that Britain can impose duties on wheat that it buys from elsewhere, but it must take into account obligations that it might have towards those countries. I believe that the food position in Britain, because of the large quantity that must be imported, has an effect on the political outlook of the people which is probably more marked than we think. We know about the surplus of wheat in the world, particularly in the North American continent, and if duties were imposed on, say, Canadian wheat, no doubt Canada would have something to say about the goods she buys. Although I hope the commercial price of wheat will be such that we will be able to sell our product, I remind the Minister that there is no guarantee in black and white.
A lot of words appear in black and white in the agreement, and I spent a lot of time trying to understand them. It is for that reason that I have devoted some time to the subject of wheat. In 1955-56, Australia sold 28,000,000 bushels of wheat to Great Britain, and I understand that in the preceding five years between 22,000,000 and 23,000,000 bushels were sold annually to that country. So it seems that if we can keep the sales up to 28,000,000 bushels we will be making a gain of 5,000,000 bushels over the average for the five preceding years and we will be equalling what was sold last year.
As 1 have said before, the whole trouble lies in the cost structure. My research into the figures reveals that our costs are the third highest in the world. Since the war, there has been a rise of 43 per cent, in costs in New Zealand, which I mention because it is one of our very successful competitors in the marketing of primary products. When 1 was fortunate enough to be in Britain, I saw advertisements for Canterbury lamb, lt was well advertised, and the salesmanship was good. I stood outside a butcher’s shop, and waited till the butcher had a free moment and I asked him whether he had ever heard of Victorian or Australian lamb. If I may use the vernacular, he “ would not have any of it “. That attitude was apparent in quite a number of shops.
Since the war, our costs have risen by 75 per cent., and costs in Denmark have risen by 32 per cent. Is it any wonder that we are having trouble with the sale of our butter? We have to sell it for, I think, 2s. 9d. per lb. in London, when in Australia it is about 4s. 7d. or 4s. 8d. per lb. It seems remarkable that we are pricing butter off the table of the average person in this country. To appreciate the position, one has only to compare the quantity of butter that is consumed locally with what was formerly consumed. Since the war, costs in Canada have risen by only 17 per cent. How are we to sell 28,000,000 bushels of wheat to Britain? I agree with what Senator Henty says about British traders. Britain would never have held its place in the world’s markets if the British had not been hard and good dealers. They are hard dealers, because they know what they are entitled to get. They are good dealers because their goods are up to sample, and the correct numbers are in the cases. How far will we be able to go, in view of our unfortunate cost structure?
I have mentioned costs only in those countries that are our competitors. I have not mentioned the Argentine, which is a strong competitor in the sale of meat. When the cost of getting our goods to the British market is taken into consideration, the outlook becomes even more gloomy. With all respect to those who signed the agreement, I should like the inclusion of a. specific provision that we will sell 28,000,000 bushels of wheat a year at a price, because, sooner or later, in view of the state of wheat production in the world now, we may have to consider what Sir John Teasdale said. I am not speaking, of this matter as a wheat-grower. 1 am only one who has attempted to take a normal interest in politics. When I read that France and other European countries are exporting wheat, 1 want to know whether our growing the present quantity of wheat is worthwhile. I would agree with the honorable senator who considers that we should grow the best quality wheat, for which we can get a good price, rather than grow an excessive quantity of wheat which has not the highest protein content, and brings a lower price. I remember being in Nhill, Victoria, which, I say with respect, is the best wheat-growing area in this country.
– Oh, no!
– I know that South Australians say otherwise. Noske Flour Mills Proprietary Limited in Nhill attempted to get the farmers to grow a better class of wheat. The manager of that firm spoke to me about the wet and dry gluten content of wheat. I may have known the figures then but I do not recall them now. An extra price was being paid for better quality wheat, but the manager told me that, unfortunately the wheat supplied to the mill was not up to sample. Half of the contents of a bag might have been of the quality for which the excess price was being paid, and the other half might have been of a poorer quality. I am not entering into an argument between Noske Flour Mills Proprietary Limited and the farmers. I know that in my own State it is a work of art to get a loaf of bread.
– That is not the fault of the wheat.
– 1 do not know Whether it is the fault of the wheat, or of the hours at which the bakers commence. It may be that the bread is being put into the delivery vans immediately after it has come out of the ovens. I can understand why people put on excessive weight. The reason is to be found in the quality of bread.
– It is said that the best bread is baked in gaol.
– I do not know about that.
– The best bread in Australia is baked in Western Australia.
– Some of us may be in Western Australia pretty soon, and my friend, Senator Wright, and I will look especially at the bread position when we are there.
The Melbourne “Herald” of 16th November . published an article dealing <more or less with this agreement, and the subject of wheat was discussed. For once I agreed with the Melbourne “ Herald “ - to be quite candid, I do not often agree with it - when it said, in effect, that price was the key. When all is said and done, every one in this chamber will agree that the British are hard and good traders. Irrespective of what is written in this agreement, prices will be the deciding factor.
– After all, that is only an Index of exchange for each man’s labour.
– I agree. Money is just a token of exchange. I do not want the wheat-growers to give away their cost of production basis of price fixation any more than I want those who are working under federal awards to fail to accept the recent increase of 10s. a week. I will deal with the latter, if necessary, because 1 believe I have a case to put.
I wish to refer now to Article 7 because, in my opinion, it affects secondary industries. When we examine employment in Australia, it is evident that the largest number of workers is employed in secondary industries. Although primary production has grown enormously, the application of scientific methods to primary industry in recent years .has removed the need for a great deal of labour. If Australia is to progress, and if we are to find work for the thousands of persons we are bringing into this country, we must expand our secondary industries. Article 7 provides minimum margins of preference in certain cases equal to 7i per per cent, ad valorem on United Kingdom goods specified in Schedule B. I should have been delighted if the Minister for Trade (Mr. McEwen) had given details of the items affected. This would have saved us considerable time in research. I am worried about Article 7 because it is vital to one industry with which I am directly concerned - the textile industry. 1 know that we trade with Japan and that the balance of trade is overwhelmingly our way. If I remember correctly, last year we sold goods worth about £50,000,000 to Japan, and bought goods worth between £3,000,000 and £5,000,000 from the Japanese. Although it is not essential for each country to balance its trade against another, the balance overall must be on our side. Otherwise we have such measures as import restrictions, and they cannot please any of us. This Government puts them on and off, but they are applied more rapidly than they are removed.
Article 7 proposes a preference of Ti per cent, on certain United Kingdom goods. Previously, in some cases, the preference was 10, .15 or 20 per cent. Does this mean that duties on goods from other countries might be reduced? Possibly there may be a 50 per cent, duty on textiles coming into Australia, with a preferential rate of 17± per cent, or 20 per cent, on British textiles. I remember that in 1928-29 the Australian textile industry was ruined by excessive imports from Japan, and I am worried whether this agreement will adversely affect Australian production again. I am deeply concerned. I am not worried so much about a reduction of duties on British goods to 7i or 10 per cent., because I think the Australian industry has been sufficiently established to compete, and British manufactures will be only 7i per cent, better off than exporters from other countries. I hope, however, that nothing will be done because of this agreement that will affect the production of Australian factories.
I appreciate the explanation that has been given by the Minister for Customs and Excise (Senator Henty) of the effect of Article 8. If his statement is correct - and [ have no reason to doubt it - we shall have an opportunity to obtain certain imports which are essential to the welfare of Australia by more direct methods than those from which we have suffered in the past. ] should like to analyse each article of the agreement, but time will not permit me to do so.
I sum up by stating that the agreement contains a great number of words. It is written in legal jargon to which I always object. No doubt it is correct, but I wish such documents were written in normal language so that he who runs may read and, not only read, but understand. I am concerned, as all of us are, with Australia’s trade position. The nation is like a small shopkeeper, if nobody buys its goods it must go out of business. If Australia cannot sell its products, its industries cannot keep people in employment.
Supporters of this Government have said frequently, with some pleasure, that its policy favours free enterprise. Unless it does something about overseas shipping, none of the agreements it makes will work out as it intends. Unless the Government controls shipping and freights, it has no control over one of the main ingredients of a successful export trade. Freight charges on Australian goods and produce total about £170,000,000 a year. I am fearful of the implications of a statement I read recently that there is likely to be another increase of 5 per cent, in freights. When one considers an expenditure of £170,000,000 on freights in total overseas payments of £1,000,000,000, it is evident that freight costs are getting out of proportion to the value of goods carried. I repeat that in the main I cannot see much hope of our exporting the products of secondary industry unless some form of subsidy is paid. Just as we are subsidizing wheat-
– That is not so.
– If the honorable senator will allow me to explain the matter in my own way, he will see that we are subsidizing wheat. I remind him that wheat is being sold overseas for 16s. or 17s. a bushel and, as the freight amounts to 6s. 6d. or 7s. a bushel, the balance is between 9s. and 10s. That being so, from what source is the farmer paid 13s. a bushel - cost of production?
– I shall let the honorable senator know later.
– He is guaranteed at least the cost of production. He must get the price from the Australian consumer or be given a subsidy. Despite all the nice words surrounding the provision, the actual fact is that he gets his cost of production. I do not argue against that, but I do point out that he does not get that cost of production from the sale of wheat overseas by the time freight and other charges are deducted. I am informed that the net return is about 10s. a bushel.
Let us see what secondary industry products we can export now that the cost structure has been allowed to run riot. Are the products of all secondary industries to be in the same position as Holden motor cars, for instance? We do know that in Australia we are charged excessive prices for these cars, and that they are sold in Hong Kong and other places cheaper than we can buy them here. If the Government is satisfied with a cost structure such as that, then the inevitable result must be that costs and prices here will jump, and we must automatically ask for higher wages in order that we may enjoy a decent standard of living.
I cannot see much ground for optimism about the export of products from secondary industry. 1 am certainly not as optimistic about results as the Minister seems to be. I do not blame him for his optimism, but I do blame both him, and the Government, for allowing the cost structure to rise to such a degree that it is now almost impossible for any government, irrespective of its political colour, to sell goods overseas.
Debate (on motion by Senator Seward) adjourned.
– As Chairman, I bring up and lay on the table of the Senate the eleventh report of the Regulations and Ordinances Committee, together with minutes of evidence, and move -
That the report be printed.
Debate (on motion by Senator McKenna) adjourned.
Motion (by Senator Cooper) agreed to -
That the Senate, at its rising, adjourn til) Wednesday next at 3 p.m.
Senate adjourned at 4.10 p.m.
Cite as: Australia, Senate, Debates, 2 May 1957, viewed 22 October 2017, <http://historichansard.net/senate/1957/19570502_senate_22_s10/>.