House of Representatives
3 March 1926

10th Parliament · 1st Session

  1. House of Representatives
  2. 10th Parliament
  3. 1926

Mr.speaker (Hon. Sir Littleton Groom) took the chairat 3 p.m., and read prayers.

page 1223

NAVIGATION BILL

Royal Assent.

Mr. SPEAKER announced the receipt of a message from the Governor-General informing the House that the proposed law, which was reserved for the signification of His Majesty’s pleasure, had been laid before His Majesty in Council, and that His Majesty had by an Order in Council, dated the 25th day of February, One thousand nine hundred and twenty six, confirmed, approved, and declaredhis assent to it.

The Governor-General had caused the King’s assent to be proclaimed in tho Commonwealth of Australia Gazette, No. 18, dated 1st March, 1926.

page 1224

QUESTION

LEAGUE OF NATIONS

Admission of Germany - International, Labourconference.

Mr HUGHES:
NORTH SYDNEY, NEW SOUTH WALES

– On several occasions it has been stated in the press that it is the intention of France, and possibly of other powers, to take steps to enlarge the Council of the League of Nations by the appointment of representatives of Poland, Brazil, and Spain to permanent seuts on it. I ask the Prime Minister, therefore, whether he is in a position to say that this information, or any part of it, is true, and what representations, if any, he has made to the British Government in relation to this proposal, which would effect a radical change in the Council, andmight be pregnant with serious consequences to the League, to the Empire, and to the Commonwealth?

Mr BRUCE:
Minister for External Affairs · FLINDERS, VICTORIA · NAT

– As a result of the treaties which were signed at Locarno, Germany is applying for admission to the League of Nations. One of theterms of her application is that sheshall have a representative sitting as a permanent member of the Council. A meeting of the League is to be held shortly to consider this matter. Certain other countries have for some time past been putting forward claims to permanent seats on the Council of the League, and they are taking advantage of the present occasion to press those claims. These are the claims of individual countries, and the position is not, as has been suggested, that France is proposing that any country should be given n permanent seat upon the Council. The Government has been in communication with the British Government on the whole subject. The Prime Minister of Great Britain will probably to-morrow, or possibly to-day, make a statement on the matter,’ and until that statement has been made, I think it advisable not to say anything about it. But I assure the right honorable gentleman that the Government has represented to the British Government its views on the proposal, and in this matter it is confident that they are the views held by the whole of the people of Australia.

Mr MAKIN:
HINDMARSH, SOUTH AUSTRALIA

– I should like to know from the Prime Minister the reason why the Government has departed from the usual practice of asking the Trade and Labour Councils of Australia to make choice of a Labour representative at the Geneva Conference. On this occasion the Government has made representations to the Council of the Federated Unions, inviting them to make the selection.

Mr BRUCE:

– Under the Covenant of the League of Nations the delegates to be sent to any Conference of International Labour must be selected in consultation with the representatives of employees generally in the community. The Government this year addressed the Council of the Federated Unions in the belief that they represented generally the unions throughout Australia, but I have since had it represented to me that that is not exactly the position, and that the Trade and Labour Councils should have a voice in the matter. Consequently, the Government has now invited the Trade and Labour Councils to send in any names they desire for selection. I remind the honorable member that these bodies are not entitled to nominate a definite representative, but to submit names to the Government for its consideration.

page 1224

PUBLIC ACCOUNTS COMMITTEE

Oil Exploration Expenditure

Ma-. PROWSE. - On behalf of the Chairman, I present the report of the Joint Committee of Public Accounts upon: Part I. - Expenditure on oil exploration, development, refining, &c., in the Commonwealth and Papua; and Part II.- Comprising shale oil, power alcohol, liquid fuels, &c. Part III., which is in course of preparation, deals with the operations of the Commonwealth Oil Refineries Limited.

Ordered to be printed.

page 1224

QUESTION

MIGRATION AGREEMENT

Mr MACKAY:
LILLEY, QUEENSLAND

– Is there any truth in the report that the Queensland Government has signed the Imperial Migration Agreement, and, if so, will Queensland be allowed to participate in the benefits of the scheme on the basis applying to the other States?

Mr BRUCE:
NAT

– The Queensland Government has not yen signed the agreement, though I hope that it is about to do so. I received a telegram last week from the Premier stating that his Government proposed to sign the Migration Agreement, and asking me to send him new copies of it. Copies were sent to allthe States, but apparently those sent to the Queensland Government have been mislaid. The request for new copies is an indication that that Government proposes to sign the agreement, and when it does, Queensland, together with the other signatory States, will be entitled to the benefits of the scheme.

page 1225

QUESTION

MAIN ROADS GRANT

Mr LACEY:
GREY, SOUTH AUSTRALIA

– Before asking a question about the main roads grant, I wish to read an extract from the South Australian Advertiser, dated the 24th February, 1926, reading as follows: -

The Premier said the Commonwealth Government proposed to make available certain money on a £ for £ basis, and thathad been done for years. The Government wanted to ascertain whether it would be of advantage to the State. Whether it was constitutional or not was not in question to-day.

Mr BUTLER:

– Mr. Latham, the Federal AttorneyGeneral, says it is not constitutional.

I now ask the Attorney-General whether he has said that the Main Roads Development Act or the proposed grant is unconstitutional?

Mr LATHAM:
Attorney-General · KOOYONG, VICTORIA · NAT

– It is not the practice to give legal opinions in response to questions asked by honorable members; but I direct the attention of the honorable member to the section of the Constitution which refers to the giving of financial assistance to the States by the Commonwealth. On no occasion have I said that the Main Bonds Development Act was unconstitutional.

page 1225

QUESTION

KYOGLE TO SOUTH BRISBANE RAILWAY

Mr BOWDEN:
PARRAMATTA, NEW SOUTH WALES

– Has any arrangement yet been made respecting the Kyogle to South Brisbane railway?

Mr HILL:
Minister for Works and Railways · ECHUCA, VICTORIA · CP

– The arrangement between the Commonwealth and the States concerned has not yet been finalized.

page 1225

PURCHASE OF WIRE NETTING

Mr GREGORY:
SWAN, WESTERN AUSTRALIA

– In the GovernorGeneral’s speech is the statement that a sum of money will be advanced to the

States for the purchase of wire netting. There have been great ravages by pests, particularly in Western Australia, because of the lack of fences. I have been inundated with letters to this effect, and I should like to know when the Government intends to bring forward a bill to deal with this matter.

Mr BRUCE:
NAT

– The Government hopes to introduce at an early date the measure to which the honorable member has referred.

page 1225

QUESTION

LEAGUE OF NATIONS

Admission of Germany

Mr WEST:
EAST SYDNEY, NEW SOUTH WALES

asked the Prime Minister, upon notice -

  1. Has his attention been drawn to a cablegram that opposition to increasing themembership of the Council of the League of Nations beyond the admission of Germany was voiced by members of all parties at a largely attended meeting of the League of Nations Parliamentary Committee of the House of Commons, the meeting unanimously expressing grave apprehension of the proposal to make fundamental changes in the constitution of the Council, and urging the Government to offer strenuous opposition ?
  2. Will he state whether this expression by members of the League of Nations Parliamentary Committee, if supported by the British Government, will involve Australia into supporting it?
  3. If so, what opportunities have the people of Australia to agree or disagree with the sentiment expressed?
Mr BRUCE:
NAT

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

  1. Yes.
  2. The Commonwealth Government is not yet aware of the attitude that will be taken by the British Government in respect to. any increase in the membership of the Council ofthe League of Nations.
  3. The Government, in coming to any decision on the attitude it may take up on this question will naturally give clue consideration to Australian public opinion, and will make the appropriate representations accordingly.

page 1225

QUESTION

HIGH COMMISSIONER’S OFFICE

Staff and Salaries

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

asked the Prime Minister, upon notice -

  1. Will he furnish a list of the staff at the High Commissioner’s Office, showing number, names, salaries, and periods of absence from Australia ?
  2. What is the total staff, and under what conditions are the members of the staff employed ?
  3. What is the total number receiving £300 per annum and upwards?
  4. Is it a fact that many officers have been appointed in England under the High Commissioner Act for periods of from five to fifteen years; if so, how many have been so employed, and how many (if any) have been employed over fifteen years?
  5. In respect of how many positions at Australia House does the “ exchange system “ with Australia at present operate?
  6. Will the Government consider , the desirability of extending the “exchange system” to cover such positions at Australia House in respect of which there is permanency of employment, thereby ensuring that Australia House is, as far as possible, staffed by Australian officers who, by reason of triennial exchanges, will maintain an Australian atmosphere in the office of the Australian High Commissioner ?
Mr BRUCE:
NAT

– The answers to the honorable member’s questionsare as follow : - 1 and 2. I have to-day laid on the table of the Library a copy of the return of the staff of the High Commissioner’s Office, as at 31st December, 1925, which, whilst not covering all the details asked for by the honorable member, gives the essential information desired by him.

  1. Twenty-six officers.
  2. Yes; . 124 have been employed for periods of from five to fifteen years, and nine for periods in excess of fifteen years.
  3. The “ exchange system “ covers “ key ‘’ positions to the number of sixteen.
  4. The suggestion of the honorable member will receive consideration.

page 1226

QUESTION

CUSTOMS HOUSE. MARYBOROUGH, QUEENSLAND

Suggested Closing

Mr CORSER:
WIDE BAY, QUEENSLAND · LP; NAT from 1917

asked the Minister for Trade and Customs, upon notice -

  1. Has his attention been drawn to the Public Service Board’s report in connexion with the suggested closing of the Customs House of the City of Maryborough, and other ports in Queensland?
  2. Is it a fact that grave alarm has been caused owing to the suggestion, and that public inconvenience and loss and delay will he caused by closing these Customs Houses in these important and developing cities and districts?
  3. Does he consider the policy of decentralization will be served best by the continuance of the policy he has so far adopted?
  4. Will he adhere to the position he has taken up in the interests of the policy of decentralization and public convenience, and continue to refuse to endorse such unfair and unbusinesslike recommendations as those made by the Public Service Board?
Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT

– The answersto the honorable member’s questions are as follow : - 1, 2, and 3. Yes.

  1. While the present reasons remain, I shall adhere to the position I have taken up as the Minister responsible to Parliament for the administration of the department.

page 1226

QUESTION

BRISB ANE-KYOGLER A ILWA Y

Tenders : Queensland’s Quota

Mr BAYLEY:
OXLEY, QUEENSLAND

asked the Minister for Works and Railway, upon notice -

  1. What would Queensland’s quota havebeen, had the lowest tender been accepted for the South Brisbane-Kyogle railway?
  2. What will Queensland’s quota be under the proposed arrangement, whereby the work is to be carried out by day labour?
Mr HILL:
CP

– On the basis of the work for which tenders were recently received, the answer to the honorable member’s questions is, approximately : -

  1. £278,580.
  2. £254,919.

But in regard to the estimated cost of the whole of the work, Queensland’s quota would, approximately, be -

  1. £492,274.

2.£468,613.

page 1226

QUESTION

AUSTRALIAN COMMONWEALTH LINE OF STEAMERS

Sale of Vessels: ‘‘Bay” Liners.

Mr BRUCE:
NAT

– On Wednesday last, the Leader of the Opposition (Mr. Charlton) asked the following questions : -

In regard to the 54 vessels taken over by the Commonwealth Shipping Board on 1st September, 1923, will the Prime Minister state -

The names of the vessels sold to date, to whom sold, and the price paid for each?

The names of the remaining vessels in commission, and those not in commission?

Whether efforts are being made to sell any more. If so, what are the names of the vessels intended for sale, and the names of the vessels not for sale?

What profit has been made by the “ Bay “ liners to date?

I now desire to inform the honorable member that the replies to his questions are as follow : -

  1. The following list shows the names of vessels sold since the inception of the Commonwealth Shipping Board on the 1st September, 1923, and the names of purchasers: but the Board does not consider it desirable to disclose the price realized for each ship, as this might prejudice negotiationsatpresent proceeding. Accordingly, the total amount realized for each class of vessel only is shown : -
  1. The names of the remaining vessels in commission, and of those not incommission, are: -

Vessels in commission -

Moreton Bay, Jervis Bay, LargsBay, Fordsdale, Bulla, Hobson’s Bay, Ferndale, Carina, Esperance Bay, Boorara.

Vessels not in commission -

Booral, Emita, Erriba, Dinoga, Dromana, Delungra.

  1. The vessels which the Board are , endeavouring to dispose of are those at present not in commission; while the steamers which it is not intended to sell are the tenvessels enumerated above, which are at present in commission.
  2. The profits for the period 1st September, 1923, to 31st March, 1925, equal £58,172; and the estimated profits for the period 1st April. 1925, to 31st March, 1926, is £41,062.

page 1227

QUESTION

PUBLIC TELEPHONE,BARMUNU, QUEENSLAND

Mr GIBSON:
Postmaster-General · CORANGAMITE, VICTORIA · CP

– On Thursday last, the honorable member for Capricornia (Mr. Forde) asked the followingquestion : -

What rental is paid by the PostmasterGeneral’s Department to the Railway Department for the use of the Railway Department’s building at Barmundu, Boyne Valley line, Queensland, for public telephone purposes?

The following is the reply: -

No rental is paid by the Postal Department to the Railway Department, Queensland, for the building at Barmundu used for public telephone purposes.

page 1227

PAPERS

The following papers werepresented : -

Australian Soldiers’ Repatriation Act - Report of the Repatriation Commission for the year ended 30th June. 1925.

Ordered to be printed.

General Election of 1925 - Statement of overtime worked by Divisional Returning Officers and their Clerks, from September to December, 1925, inclusive.

Northern Territory Acceptance Act and Northern Territory (Administration) Act - Ordinance of 1926- No. 7- Dingo Destruction.

page 1228

TARIFF

Customs and Excise Duties

In committee of Ways and Means:

Mr PRATTEN:
Minister for Trade and Customs · MARTIN, NEW SOUTH WALES · NAT

.- I move-

  1. That the Schedule to the Customs Tariff 1921-24 be amended aa hereunder set out, and that on and after the Fourth day of March, One thousand nine hundred and twenty-six, at nine o’clock in the forenoon, Victorian time, Duties of Customs be collected in pursuance of the Customs Tariff as so amended.
That, excepting by mutual agreement or until after six months' notice has been given to the Government of the Dominion of New Zealand, nothing in this Resolution shall affect any goods entering the Commonwealth of Australia from the Dominion of New Zealand. That the Schedule to the *Excise Tariff* 1921-24 be amended aa hereunder set out, and that on and after the Fourth day of March, One thousand nine hundred, and twenty-six, at nine o'clock in the forenoon, Victorian time, Duties of Excise be collected in pursuance of the Excise Tariff as so amended. Most honorable members will recollect that on the 19th September last, a validating act was passed by this House, whereby the collection of the duties set out in the above schedule was made legal for one year. It is thought by the Government that the present time is opportune for a discussion by Parliament of these proposals. The speech I made on the 2nd September last, when introducing the various proposed changes in the tariff, covered in some detail various general matters which I shall not discuss to-day. Six months almost to the day have elapsed since the new duties were first collected, and I am in a position to say that very considerable progress has been made in the industries affected and helped, and in committee 1 shall be able to place before honorable members every justification for the action that the Government took. Dealing, first of all. with investigations by the Tariff Board, I may inform honorable members that practically the whole of the requests that have been made to the department up to, and in many cases later than, the 1st January of this year, have been considered. The exceptions comprise what may be called the Newcastle iron and steel group. The manufacture of iron and steel being an essential basic industry, this group is one of the most important, if not the most important, in the tariff.- Owing to a late application, the board has been unable to finalize its reports upon these industries. Further evidence is necessary, and great care must be taken, because of the wide ramifications of the group and the repercussions that may attend any but the most careful and well-considered action regarding it. The iron and steel industries in their various forms, and also in the more advanced stage of galvanized iron fencing wire and wire netting manufacture are largely interlocked, and I think I may, on behalf of the Government, give the committee the assurance that the proved requirements of these industries, apart from any controversy regarding weekly hours of working, will not be neglected. There are in the schedule 53 proposals to increase duties. These, in the opinion of the Government, will create a great deal of further employment, and are particularly directed towards placing some of the main branches of the textile industry and our engineering trades upon a much healthier basis than has existed during the last few years. The reductions in duty cover 47 items. There are thirteen items inserted purely for the simplification of administration, so that there are. in all, about 113 items, major and minor, for the consideration of honorable members. As the result of subsequent inquiry and experience a few minor alterations were found to be necessary in the proposals first placed before the House1. These have been incorporated in the new schedule now proposed. By far the greatest number of these items are based upon the investigation and report of the Tariff Board; but the Government has not accepted in every instance the recommendations of that body. I have received from the Tariff Board about 50 reports of further inquiries that have been made. In these the board recommends no alteration of existing duties, and no alteration is proposed by the Government; but in some cases the board recommends further investigation at n not distant date. In 65 of the applications received, it was decided after investigation by the department, and with my approval, not to hold a public inquiry at present. In 54 applications for increases and decreases in the tariff, a preliminary questionnaire was sent to the applicants to elicit particulars for consideration before reference to the board. Replies to this questionnaire have not yet been received. Outside the iron and steel industry a number of further inquiries have recently been made by the Tariff Board. No reports are yet available, butI am informed that no alteration of existing duties, or, at all events, very few alterations, will be recommended. In addition, a number of minor troubles have been dealt with under the classification items of the tariff, so that it can be stated with perfect accuracy that the tariff now before the committee is the result of a combing out of nearly 400 items and sub-items of the tariff in regard to which applications for increases or decreases of duty had been made up to the 1st January of this year. The exception is the Newcastle group of iron and steel and subsidiary industries, inquiries upon which have not yet been completed. This work reflects much credit upon the industry, and application of the officers of the department, from the ComptrollerGeneral down, and indicates good service on the part of the Tariff Board. {: .speaker-KV8} ##### Mr Stewart: -- It also explains the appetite of applicants for tariff increases. {: .speaker-K1J} ##### Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT -- For my own part, I have scrutinized every item, and am in agreement with what has been done. In addition to the great Newcastle group of iron and steel industries to which I have referred, I intend remitting to the Tariff Board for inquiry and report important matters concerning the further development of national natural industries. The Government is still giving attention to the manufacture of paper, and will treat with sympathy and businesslike consideration any practical proposals from our own citizens, submitted with or without co-operation from overseas. The assistance of cottongrowing, cotton yarn making, and other further possible manufactures of cotton has still to be dealt with. Tobaccogrowing and cigar manufacture will have attention later on. The copper industry also must be thoroughly investigated. These matters, together with various applications for bounties and other possible important requests, will keep the Tariff Board occupied for the rest of the year - after completing the work in hand. The oil question should again be considered. It is so important that no government should allow it to lie dormant for long; and I am sure that all honorable members would welcome any and every reasonable proposal to develop this great basic industry. I am hopeful that the development of an all-Australian motor car will be an accomplishment of the not far distant future. I have given honorable members a bird's-eye view of the work that has been done by the Tariff Board. Honorable members, will, of course, realize that everything cannot be done at once; but the present tariff is an earnest of the desire of the Government to see to it that, given efficiency, the further development of our secondary industries shall not be hampered. {: .speaker-KV8} ##### Mr Stewart: -- **Senator Massy** Greene told us that in 1921. {: .speaker-K1J} ##### Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT -- I should like to have fewer interjections from my friend the dried-fruit protectionist. There is one thing which I, as Minister for Trade and Customs, must publicly proclaim, and that is that no shrift will be given by the Government to those industries which unnecessarily raise their prices to the consumer, either by combinations under the shelter of the tariff, or by control of distribution. While I am in office, attention will be directed to this side of the tariff question. Section 15 of the Tariff Board Act reads - The Minister shall referto the board for inquiry and report the following matters : - {: type="a" start="h"} 0. any complaint that a manufacturer is taking undue advantage of the protection afforded him by the tariff, and in particular in regard to his . 1. charging unnecessarily high prices for his goods, or {: type="i" start="ii"} 0. acting in restraint of trade to the detriment of the public, or 1. acting in a manner which results in unnecessarily high prices being charged to the consumer for his goods. I shall not hesitate to give a reference to the Tariff Board on these lines with regard to any Australian industry that is enjoying the protection afforded by Parliament but is not dealing fairly with the people of the Commonwealth. Before the tariff proposals were introduced in this House last year the textile industry of Australia was in a parlous condition. The detailed reasons for that I shall state in committee. The industry had " touched bottom " before the tariff wag imposed. The proportion of unemployment was never greater; in almost all sections of the industry there was grave unemployment, and the story was the same in Sydney, Melbourne, Geelong, Warrnambool, Stawell, Ballarat, and Hobart. We spent huge sums overseas for goods for which a considerable proportion of the raw material was derived from Australia, while this natural, national, and highly important basic industry was wilting. Ineffective protection- ineffective in view of the high standard of wages prescribed - "was the only feasible explanation of this. .No charge of inefficiency can be sustained against the Australian manufacturers, because charges of that sort are answered by thefact that failure and declining business were the experience of those, whose plant and methods were admittedly as good as any in the world, as well as of that small proportion who entered the business1 unequipped and untrained. There are over 50 woollen factories in the Commonwealth, three-fifths of which are in the country districts. In addition to important knitting factories, many small knitting establishments have sprung up in our midst as a result of the new tariff, because that tariff has revived and resuscitated the whole textile industry, and given it fresh hope. The action of the Government has been fully justified by the large amount of additional employment found and projected, and the consumer to-day is able to purchase Australian goods of equal value in many cases to the foreign goods upon which he has previously spent his money. The requirements of Australia in knitted wear and cotton tweeds, if not met now, will within a few months be almost completely met bv the developments that are taking place in the textile industries. There will still be a considerable field for expansion in other textile lines, as seven-eighths of the woollen, cotton tweed, and shoddy goods used in Australia have in the past been brought from overseas, but this position, we hope, will be reversed in the not distant future. {: .speaker-KMQ} ##### Mr Mann: -- What doss the Minister mean by " shoddy goods?" {: .speaker-K1J} ##### Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT -- I shall tell the honorable member all about, shoddy goods when we come to deal with them. We import into this country about 18,000,000 square yards of woollens and worsteds, and in 1923-24 we made in our own factories only 5,000,000 square yards of woollen tweed and cloth. Flannel, blankets, and rugs are being made almost to the full requirements of . the Commonwealth; but we have not yet got very much further, even to-day, with pure woollen and worsted cloths, for of them we make only about one-fourth of Australia's requirements. The Australian production in 1924-25 was actually lower than iti 1919-20. There has been violent agitation about what are termed the " prohibitive " duties that have been placed by the tariff upon cotton tweeds or shoddy cloth; and the London *Times* *Supplement* of the 7th November last actually published a resolution passed by an important body in Australia opposing the duties on cotton tweeds, towels, &c, for the alleged reason that it was impossible to manufacture cotton tweeds in any part of Australia. What are the ' facts ? Within a month of the imposition of the duties those factories that had supplies of cotton yarn started the manufacture of cotton goods, and to-day the mills can supply the whole of the few million yards of cotton tweeds previously imported each year. And not only can they supply a good article at a reasonable price, but the public has the inestimable advantage accruing from a practical prohibition of the importation into Australia of shoddy goods. Much of the imported shoddy deceived the unwary purchaser. It could hardly be described as better or stronger than brown paper. Our 52 mills would require to be trebled to be able to manufacture the whole of our requirements in woollen cloths, worsteds, and male dress materials. There is a vast field of employment still untouched in this national basic industry, for which we can readily supply the whole of the raw material. A few days ago a most interesting letter was sent to me, quite voluntarily, by the management of an old-established country woollen mill, which puts the tariff position most succinctly from the point of view of the textile manufacturers. It read - As one of the oldest woollen mills in Australia you *may* appreciate our opinion on the working of the new tariff as it applies to the textile industry in Australia. In the first place, it is our opinion that the new tariff will moan the saving to Australia ofthis most important key industry. The industry has been fighting for its existence since its inception, with the exception of the period covered by the war, and it has been a fight against big odds, If there be a secondary industry in Australia that should be part and parcel of the national life, it is this woollen industry, and any steps to ensure its continued existence that the Government has already taken, or may take, are fully justified from both a national and economic stand-point. The woollen industry is one that lends itself most readily to decentralization; it provides employment for both men and women and juvenile workers, and the existence of a mill such as ours in a country town gives a stability to the business of the town that would be otherwise lacking. The number of hands that we employ is constantly growing, and since the introduction of the new tariff, we have increased the number of our employees greatly, and can do with more. The industry is growing; it is no longer an infant in swaddling clothes, but a stalwart and lusty youth, but still suffering from growing pains. Encouraged by the assurance of a former government that to Australian industries should be conserved the Australian market, this company entered upon a period of expansion. Since 1910 we have spent over £100,000 on new plant, &c. Other mills have done the same, but until the present tariff was introduced it looked as though the industry had been " sold a pup." We were meeting competition keener than ever, and were forced into the position of either selling at no pro fit (sometimes at a loss) or closing down. We hung on, and now face the future with renewed hopes. As regards the quality of Australian tweeds and woollens, more especially with regard to the cheaper goods, I quote from the *Textile Argus* (Bradford) of 30th September, 1925. A Dewsbury manufacturer says: - " The Australian manufacturer cannot make cheap cloth, because he has not got cheap raw material. We make ours out of old rags pulled up. How can he make cheap cloth out of pure wool; he has no shoddy ?" The same paper says - " Australian cloths havebeen shown to local manufacturers, and they have been asked for their opinion about them. They are typical cloths of Australian make, and there' is not the slightest doubt in the minds of those who have seen them that they are made of pure wool." With regard to prices of Australian woollens, we should point out that in the last twelve months flannels have dropped fid. per yard, blankets, approximately, 5s.6d. per pair, and Australian tweeds are being sold at prices lower than similar imported goods. There is sufficient local competition to keep prices right on bedrock, which fact bears out the manufacturer's statement that Australian mills : an supply Australia's requirements. The industry appreciates your action in introducing this tariff, without the assistance of which the woollen manufacturing industry must have crashed. To recapitulate, thenew tariff has been justified by these facts - {: type="1" start="1"} 0. Employment has increased, and is still increasing. 1. Plants have been expanded, and new companies have been established. (3)Prices are lower. 2. An Australian industry is employing Australian operatives in manufacturing Australian wools for Australian requirements. Now let me put the case from the point of view of the knitting mills. I visited Maryborough last Saturday morning, and there inspected a knitting mill in which 350 people were employed. The wages bill was about £1,000 a week. I also saw the girders in position for another building which the company has designed to enable it to produce 1,000 dozen knitted goods daily. I was informed that, since the inception of the business, the company had not received a single order which it could not execute. Their cheapest knitted vest was 9s. 6d. per dozen, and the price had not been increased, whilst the cheapest knitted vest imported into the Commonwealth from Japan had been priced at 8s. per dozen. I say that this represents a triumph for an industry that is going to pay in a comparatively small town like Maryborough a considerable amount in wages. The development of this industry alone has increased, and is going to increase very materially the population of the town. On the subject of decentralization it is well to remind honorable members that the activities of this one knitting mill are expected to increasethe population of Maryborough by 50 per cent. The engineering industry is a key industry, and is, therefore, of vital importance to the Commonwealth in times of peace and war. Labour and material are the two chief factors in the production of machinery, and of the two, labour, generally speaking, costs much more than material. The engineering industry employs a greater amount of skilled, highlypaid labour than any other industry in the Commonwealth. The rates of duty under the present tariff proposals have been based largely upon the cost of labour and material, in Australia, compared with the cost of labour and material abroad, but this has not been carried out in its entirety; otherwise the duties proposed would have been considerably higher. The new duties proposed have stopped the closing down of some important establishments, have lifted them from the position of repair shops which they occupied before the new tariff was imposed, and will at least allow the industry to undertake a greater proportion of the work required in Australia than would have been the case had further assistance not been given. I shall be able to quote instances in which, as a result of the tariff, prices have actually been reduced. In no case in connexion generally with efficient protection, where the market has been preserved by high duties for local manufacturers, and the industry has thereby been firmly established, have high duties - always considering our standard of social life - meant any material alteration in prices. I am informed and believe that the [duties have prevented the closing up of several important engineering shops in Australia. I dare say we shall have a few words from representatives of the western State, and I shall have pleasure in putting before them, in due course, the national aspect of the tariff items that are proposed. I want to remind them of the position of their State from the standpoint of the rest of the Commonwealth. First of all, we claim to have in our tariff a larger free list than any other protectionist country in the world. The financial position of Western Australia so far as the tariff is concerned is that the net revenue from Customs and excise in that State, in 1924-25, was £1,994,000. The total excise was £588,000. This deducted from the Customs and excise taken together, will give £1,406,000 collected in that State in Customs duties alone. I do not suppose that representatives of Western Australia would claim that the people of that State should differ from those of other States of the Commonwealth in their contribution to the revenue from spirits and narcotics. I shall, consequently, deal with purely Customs duties. The *-per capita* grant to Western Australia in 1924-25 was £561,000. A special grant of £450,000 is proposed this year in addition. This will leave a balance of £395,000 net received by the Commonwealth from Customs duties imposed in Western Australia. It is common knowledge that we derive most of the money required for the administration of the Commonwealth, and payment of war debts, from Customs duties. Western Australia contributes from this source an amount which, deducting the *per capita* payment and the proposed payment of £450.,000 subsidy- {: .speaker-DQC} ##### Mr Hughes: -- I rise to a point of order. The Minister is proceeding to discuss some mythical suggestion or arrangement for commuting the *per capita* payment to Western Australia after consideration of the amount paid by the people o.f that State in Customs duties. This would launch the committee into a discussion of the finances of the Commonwealth which would be more proper to a consideration of the budget. I submit that the Minister is not entitled to take this course. If it is decided that he may, we shall be unable to discuss the tariff on its merits. The **CHAIRMAN (Mr. Bayley).I** gathered from the remarks of the Minister for Trade and Customs that he was referring to the financial position in Western Australia in order merely to point a moral. {: .speaker-K1J} ##### Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT -- I think the right honorable member for North Sydney **(Mr. Hughes)** slightly misunderstood the drift of my remarks. Less the deductions I have mentioned, the net sum received from Western -Australia from Customs duties would be £395,000. {: .speaker-KXG} ##### Mr Watt: -- The Minister is aware that all the factors requiring consideration are not included in the sums he has given. {: .speaker-K1J} ##### Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT -- I know that the citizens of the Commonwealth have to find the money to pay the interest on our war debts, the cost of old-age pensions, and other Commonwealth expenditures, and the grants for main roads and wire netting which are proposed. My honorable friends from Western Australia should remember that the more densely populated States have to carry most of this burden. In strenuously opposing Customs duties merely because they are Customs duties, they remind me of the person who destroyed the goose that laid the golden eggs. A great complaint is being made in some quarters on the ground that by imposing these Customs duties we are deliberately penalizing British trade. If every nation she traded with had been as good a customer to Britain as Australia is, she would have sold and exported last year goods to the value of nearly £400,000,000 more than she did. In 1923-4 we took in imports from Great Britain £18,000,000 more than we sold to that country. In the succeeding year we took just about as much as we sold. The greatest balance of trade against us is in our trading with the United States of America. The greatest balance of trade in our favour is in our trading with France and Italy. In the case of the United States of America we take entirely manufactured goods, and in the case of France and Italy we send them almost entirely raw material. I again want to stress, in connexion with the controversy with regard to our preference to Great Britain, that in 1924-5 the value of goods from the United Kingdom which were admitted free under the preferential tariff was £27,400,000. Had these goods been subject to the general tariff rates the duty collected would have been £3,400,000. And if they had been charged the general tariff rates, the ad valorem duty upon them would have been about 12Jr per cent. The value of goods from the United Kingdom which were dutiable under both the general and the preferential tariffs was £38,000,000. We collected duty on these goods of a little over 26 per cent., or £10,000,000, and had they been subject to the general tariff rates the duty collected upon them would have been £14,600,000, or a little over 38 per cent. So that the clear preference given to the United Kingdom is over 12^ per cent, on the whole of her trade. {: .speaker-KXG} ##### Mr Watt: -- About £7,000,000 or £8,000,000 a year. {: .speaker-K1J} ##### Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT -- It will be seen from the figures that we give a preference to British trade which amounts to about £8,000,000 a year. The Commonwealth accorded to British goods a preference of £8,000,000 for the year 1924-5. We are, by the proposals before the committee, giving an additional preference to Great Britain which will practically mean a further rebate annually of £500,000 more. Honorable members will agree that we should place Australia first so far as our own manufactures and development are concerned. Our preferences are the most substantial, the most sympathetic, and the most generous in the Empire. We do not limit ourselves to that. Under the Indus tries Preservation Act, scores of cases have occurred in which, on. the application of the agents or importers of British goods, we have brought section 9 into action for Britain's sole benefit, and have placed dumping duties upon foreign goods which came into competition with British goods on this market, although such goods were not made in the Commonwealth, and were allowed into Britain herself entirely free. We have taxed the people of the Commonwealth by imposing some duties upon foreign goods entirely to protect British imports in this market, apart altogether from any other consideration than that of conserving and helping the trade of the Mother Country and penalizing that of foreigners when it came into competition with her interests. This, in my opinion, is a drastic proceeding to protect British trade, and in spite of all opposition, both in the Mother Country and here, to the duties proposed by the Government, it can be said that Britain is still holding the trade. Her proportion of trade with us has not decreased in spite of our proper desire to develop the secondary industries in Australia, and in connexion with the great interest exhibited in the Mother Country respecting immigration to Australia, and filling up our empty spaces, may I suggest to my fellow countrymen there that migration of industry should, in their minds, be linked with the migration of people. As an illustration of the benefits of the tariff to Britain, I would point out that the contract for the electrification of the Sydney' and suburban railways was secured by a British firm. It was admitted that, but for' the tariff preference accorded to Britain by the Commonwealth, this great contract would have gone to the foreigner. In other words, our tariff preference to Great Britain enabled that country to get the business. In many cases the tariff serves no other purpose than to protect the British manufacturer. In cotton goods alone, British traders do an enormous volume of business here, which the preference in their favour enables them to hold. Our fiscal position, if studied, will reveal the extent to which consideration is being given to the manufacturers of the United Kingdom, while little has been given to those of foreign countries. In ali these considerations, it must be remembered that the real solution of Australia's problems regarding population and development lies in the development of manufactures as. well as in ex-, tensive land settlement. As one of the only two members of the Cabinet who were born in England, I again stress the Imperialistic character of these proposals. We are generally agreed that Australia must be served first, and this the Government has seen to; bit British trade and interests are receiving, and will continue to receive, in this Commonwealth the best treatment that it is possible to concede to them consistent with our national policy. This is shown by our attitude regarding the British motor car trade, and the enormous advantage that we have given to this British industry has been acclaimed everywhere as a statesmanlike act. May I suggest the thought to British manufacturers that, instead of complaining of the unalterable Australian policy of tariff protection, they use some of their capital to establish factories in Australia. Our market would then be entirely open to them, and work would be available for the very class of men who at present swell the army of unemployed in the Mother Country. I am pleased, indeed, to note the operation in England of the Safeguarding of Industries Act and the McKenna duties, which are based upon an average of 33^ per cent, ad valorem duties. The most wonderful illustration of the effect of protection in England is the development in the silk manufacturing industry that has taken place there in the very short time that has elapsed since the imposition of the duties. I am greatly stimulated by confidential information that I have received regarding the migration to Australia of the British textile industry, and if this Parliament confirms the duties imposed, I believe we shall, within twelve months, have additional factories established in the Commonwealth by, at least, three of the leading British textile manufacturers. I shall not now produce arguments to justify any of the proposed detailed items, but, generally speaking, I can assure the committee that I shall be prepared, when the items are under discussion, to justify in every way the action of the Government from the stand-point of the interests of the Commonwealth, and to show that, even in the six months that have elapsed since the duties were proposed, a considerable amount of extra employment has been created; that there has been very little, if any, hurt to the consumer ; and that further great developments may be expected so soon as the duties are assured. The total production of Australia in the last statistical year for which figures are available - 1923-4 - was valued at £392,570,000. The added value given to raw material by the manufacturing industry was just about onethird of that vast amount - more than the combined value of the agricultural, dairy, poultry, bee-farming, forestry, and fisheries industries. It was 25 per cent, more than the value of the pastoral industry, and more than twothirds of that of the agricultural and pastoral production. A well-balanced progress should increase the production of our secondary industries in proper proportion. Are we to be the only continent in history that has confined its exports to raw materials? Are we to be the only community that is satisfied to confine its overseas trade to raw products and to take manufactured goods from the hands of others, instead of manufacturing our requirements from our own raw materials? Ethically it is an unassailable policy to spend on locally-made goods the money derived from locally-sold primary produce. We are continually met with the argument that if we do not import we cannot export, and that imports pay for our exports. It must not be forgotten that Australia is a debtor nation, and that a healthy overseas balance-sheet should show that the value of our exports at least balances the interest on our indebtedness abroad plus our imports. From whichever way we look at the present overseas economic position of the Commonwealth, we shall find that this is not the case, and that to pay interest abroad totalling from £20,000,000 to £25,000,000 per annum, we must increase our exports, or decrease our imports accordingly. I should suggest a little of both. The Government's policy is to help in both directions, so that our economic position may be sound. AVe should in our economic system strive for security before cheapness, because security is more important than cheapness. The problem of stemming the adverse balance of imports must be faced. In this respect the year 1923-4 was disastrous for Australia, partly due to the adverse exchanges that were unfairly ruling against the Commonwealth. The last financial year showed to greater advantage, owing to the improvement of the exchange, and an importation of over £10,000,000 worthof gold instead of goods; but even now our adverse balance of trade with the world, if we include payment of interest abroad, is upwards of £20,000,000 short of requirements. The motion which I have formally moved preparatory to a full detailed discussion of the tariffproposals of the Government, covers the same items as were previously laid upon the table, and no more. An alteration of date owing to the lapse of time has had to be made in several of the deferred duties submitted. The cottontweeds items has had to be re-drafted to cover exactly what was intended by the Government, and no more. This item is now much better defined, and will give greater facilities and clearer departmental administration in connexion with division V. This complicated division has always been the most difficult in administration and classification, and there is a clear improvement made regarding the wording of the item. Action has been taken to define woollen piece goods in a better way, and in committee I hope to give satisfactory reasons for the alteration in the wording. Two or three omissions and additions in particular words have been adjusted. The duty on screw hooks, eyes, and rings has been deferred until 1st January next, because their manufacture here has not yet been started. An error in item 381 of 5 per cent. has been rectified, and all British films have been included as free. Had the reductions in duty proposed by the Government come into force on the date of the tabling of the last tariff proposals, it is estimated that the Customs duties collected since thenwould have been about £400,000 less. I may also submit to the committee two or three items respecting reductions for slight alteration consequent on the Tariff Board's inquiryand report. {: .speaker-KMQ} ##### Mr Mann: -- Is there to be an alteration of the date of the deferred duty on glass ? {: .speaker-K1J} ##### Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT -- I think there is. {: .speaker-KXG} ##### Mr Watt: -- With the exceptions specified by the Minister are the figures in this schedule the same as in the schedule presented in September last ? {: .speaker-K1J} ##### Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT -- Entirely. So far as I know, I have afforded the committee complete information of thedifferences between this schedule and that presented in September. {: #subdebate-14-0-s1 .speaker-10000} ##### The CHAIRMAN: -- I shall put the items seriatim, but in accordance with custom a full debate on the schedule generally will be permited on item number 1. {: #subdebate-14-0-s2 .speaker-KMQ} ##### Mr MANN:
Perth .- I suppose that no previous tariff schedule excited more widespread public interest than that which is now before the committee, which is practically the same as the schedule introduced by the Minister in September last. {: .speaker-F4Q} ##### Mr Scullin: -- Nonsense! {: .speaker-KMQ} ##### Mr MANN: -- No previous tariff proposal aroused more general opposition in the community as a. whole. That opposition has come, not only from the trading sections, but also from many public bodies whose activities are restricted, and whose duties are rendered more difficult to discharge, by the additional expense caused by these duties. Municipal councils, electrical corporations, and many other bodies controlling public utilities are seriously handicapped by some of the duties which this motion will re-impose, and the public generally has been very much alarmed at the prospect of an enormous increase in the cost of living. {: .speaker-KJM} ##### Mr Jackson: -- The alarm of the public is nothing like the alarm of the foreigner at his prospective loss of trade. {: .speaker-KMQ} ##### Mr MANN: -- We are not concerned with the foreigner, and I am not advocating his interest. I am fighting for what I conceive to be the interests of the Australian people. If the honorable member thinks I am not doing so he is entitled to say so in the course of debate ; but it is not honest, fair, or proper, to suggest by interjection that I am speaking in behalf of the foreign trader. {: .speaker-KJM} ##### Mr Jackson: -- I did not say that. {: .speaker-KMQ} ##### Mr MANN: -- That is the innuendo contained in the interjections of some honorable members. Such remarks are neither witty nor cutting; they are not even intelligent. {: .speaker-KJM} ##### Mr Jackson: -- The honorable member has wrongly interpreted my interjection. {: .speaker-KMQ} ##### Mr MANN: -- I hope so ; but most of the interjections and insinuations that come from fiscal prohibitionists justify the remark I have just made. The public is very much aroused by the prospect of an increase in the cost of living. In many quarters there is an increasing resentment because some of the principle items in this schedule will take heavy toll of the people in respect of indispensable articles of daily and general use. The textile duties, particularly, are an enormous tax upon the people, especially the poorer classes. The Minister for Trade and Customs **(Mr. Pratten)** anticipated that Western Australian members will oppose these proposals, and he seemed to assume that they will have regard to the interests of that State only. He digressed into a quite irrelevant and improper discussion of the relations between the Commonwealth and Western Australia. In effect, he contended that the representatives of the State should not oppose these duties, because, if they did, their State would not be able to get from the Commonwealth assistance in the form of an annual grant. His attitude was extraordinarily inconsistent and illogical. First he told us that certain duties were intentionally prohibiten . If these imposts prevent the importation of certain goods as the Minister intends, how can they produce revenue. The attitude of Western Austral ian members is not parochial. I believe sincerely that the policy for which I have always fought would be beneficial to Australia as a whole. I should not be justified in championing a fiscal system that would benefit the State I represent to the detriment of its partners in the Federation. Honorable members may not agree with my views, but they will at least concede that I have never shown myself to be merely parochial in unpolitical outlook. This schedule is important for another reason; it is the first to be based upon reports of the Tariff Board since the law was amended to require that its investigations should be conducted in public. Honorable members will recollect the fight that preceded that amendment of the Tariff Board Act. All that has happened since is a complete justification of the attitude of those honorable members who fought so strenuously for the public hearing of al! investigations by the board. {: .speaker-KJM} ##### Mr Jackson: -- Otherwise we should never have known, that the International Harvester Company refused to give evidence before the board. {: .speaker-KMQ} ##### Mr MANN: -- Tha honorable member for Bass will have an opportunity to speak later. {: .speaker-F4Q} ##### Mr Scullin: -- Nevertheless his interjection is very pertinent. {: .speaker-KMQ} ##### Mr MANN: -- It is almost impertinent; but it is capable of a very convincing answer at the proper time. The honorable member for Bass is more ready to interject than to make considered and thoughtful contributions to debate. An interjection is not answerable without disturbance of the sequence of a speaker's remarks, and therefore is unfair. If the honorable member for Bass will rise in his place later and advance his views in a regular manner, I shall have much pleasure in answering him. The demand that the board's investigations should be conducted in public has been fully justified. Matters that previously were the subject of private negotiation are now dealt with in public, and those who have studied the newspaper reports of proceedings before the board during the last year or so must have been rather surprised by some of the revelations. As this is the first schedule to be tabled as a result of open investigation by the board, this committee has a duty to look closely into the methods of procedure, analyse the reports of the board, and satisfy itself that the recommendations were in accordance with the weight of evidence. I have been criticized in the past for reflecting upon the board. That body is the creature of this Parliament and who, if not the parliamentary representatives of the people, should criticize it ? An honorable member is justified in bringing before the House any facts or comments relating to the operations of the board which he thinks warrant consideration. Therefore I intend to criticize the board - fairly and honorably I hope - and I shall resent any suggestion that such criticism is necessarily unjust. We are entitled to ask ourselves whether the board has functioned in a right and proper manner. In regard to the public hearings, the public has been often shocked by the cupidity of applicants; their admissions of inability to meet ordinary competition in their business have amounted almost to confessions of inefficiency. There is need for a change of attitude towards these claims for fiscal help. The applicants, instead of being prospective public benefactors, are really attempting raids upon the public purse. They are asking that the public shall be taxed in order that private industries may be bolstered up. They are seeking protection against competition which would affect their pockets. Of course they support their applications with all sorts of .specious arguments. They say that to establish another industry will be for the benefit of the community. {: .speaker-KYI} ##### Mr Prowse: -- The letter read by the Minister was to that effect. {: .speaker-KMQ} ##### Mr MANN: -- Unquestionably it was. Had the Minister been possessed of a keener sense of humour he would have taken good care to keep that letter in his cabinet instead of reading it to honorable members. The argument is continually being advanced that we require to establish industries in Australia. We who are opposing these tariff increases are in entire agreement with that sentiment. We resent the suggestion that we are opposed to the establishment of industries in Australia. All we say is that the wrong method is being adopted. Protectionists assume that an industry may be established iu only one way. We join issue with them there. We are just as anxious as are any protectionists to see industries established in Australia, but we claim that it is a misapplication of the term to say that an industry is " established " when it has to be spoon-fed. There might be something in the argument that au industry should be artificially assisted over its initial difficulties. All we claim is that after protection for a limited period, it should be expected to get into deep water and swim by itself. The Minister should inquire, even suspiciously, into many of the applications for subsidies from the public purse to establish industries. The Tariff Board is supposed to be the guardian of the public purse. Its duties are to make those inquiries and investigations which the Minister feels that he cannot make himself. Every applicant on behalf of a company asking for tariff assistance should Se required to disclose its balancesheet. The board should make a searching investigation into its financial position, including the capital value of its property and its business methods generally. If this were done we should not have the spectacle of a company coming before the board with a request for tariff protection on the ground that its business was in a languishing condition, while at the same time men connected with it were erecting costly buildings and exhibiting every sign of prosperity. {: .speaker-KNP} ##### Mr Maxwell: -- Can the honorable member mention one specific instance of inefficiency having been admitted by applicants ? {: .speaker-KMQ} ##### Mr MANN: -- An application for increased Customs protection is, in itself, an admission of inefficiency. How else may we define inefficiency? {: .speaker-F4Q} ##### Mr Scullin: -- Does the honorable member contend that if an industry has to pay higher wages than an overseas competitor it is necessarily inefficient if it asks for increased protection? {: .speaker-KMQ} ##### Mr MANN: -- The efficiency of an industry should be judged by its capacity to produce an article at a competitive price. Applicants to the Tariff Board should be required to produce balance-sheets. This elementary rule has not always been observed. I have in mind one notable instance. I speak from memory, and, therefore, do not wish to be too closely tied to actual figures; but I recall that a company was started ten years ago with a capital of about £18,000. By the issue of bonus shares from its profits, it increased its capital to approximately £350,000, and yet it had the audacity to make an application for an increased duty on the article which it produces. Cases of this kind require the most searching investigation. This is recognized by corresponding boards or commissions in other parts of the world. The attitude of the Indian Tariff Board, for example, is in marked contrast with that of the Tariff Board of Australia. Applicants making claims before the Indian Board are submitted to the most critical examination. The Indian Board takes nothing for granted. Unlike the Australian Tariff Board, it does not take up a friendly attitude. It is not persuasive, and it does not encourage the applicant. On the contrary, it takes the stand that it is a guardian of the public purse, and that its duty is to resist onslaughts upon the public purse. {: .speaker-KNH} ##### Mr Mathews: -- In other words, it takes up a freetrade attitude. {: .speaker-KMQ} ##### Mr MANN: -- Not at all. It was appointed by a Government that is endeavouring to justify the imposition of protective duties in India. As the result of its inquiries, a number of applicants who have been exposed have withdrawn their claims for tariff protection. The same thing has happened in the United States of America and in Canada. The Canadian Tariff Commission conducts a searching inquiry into all claims for Customs protection. It requires applicants to make sworn declarations, and competent accountants are instructed to make a thorough investigation into the financial position of the claimants. Contrast this attitude with that of the Minister **(Mr. Pratten),** who, in his speech this afternoon, almost gloated over the fact that the Tariff Board had dealtwith about 400 items during the past fifteen months. He also mentioned that he had received about 160 reports from that body dealing with claims that had been made. The Tariff Commission in the United States of America could manage to make only three inquiries in one year. {: .speaker-KNH} ##### Mr Mathews: -- It is too slow. {: .speaker-KMQ} ##### Mr MANN: -- Of course it is too slow for those who are seeking to make an onslaught on the public purse, because delay means further inquiries, and these investigations may lead to damaging admissions. The Tariff Board is authorized to investigate and report upon the most far-reaching economic questions that can possibly be submitted to this Parliament, and I submit that it has not fulfilled its true purpose. {: .speaker-KNP} ##### Mr Maxwell: -- It would be of great assistance to the committee if the honorable member mentioned one specific instance. Mr.MANN. - I shall do so when we are dealing with the items in the schedule. {: .speaker-F4Q} ##### Mr Scullin: -- One fact, as an illustration, would be helpful. {: .speaker-KMQ} ##### Mr MANN: -- I prefer to make my speech in my own way. I have read a number of the reports of the Tariff Board, and I have also seen the transcripts of some of the evidence. The latter are very difficult to procure. One would have thought that the voluminous evidence taken by the board would be published. An official shorthand writer is attached to the board, and if an applicant desires to obtain a copy ofthe evidence, he is called upon to pay for it. {: .speaker-JOS} ##### Mr Bell: -I think that applicants have to provide their own shorthand writer. Mr.MANN. - I have been informed by those who have obtained evidence that it was furnished to them by the official reporter. At all events, that is not the vital point. My complaint is that in a matter of such great public importance any one who is interested in an inquiry by the board should be able to obtain a transcript of the evidence.I understand that the evidence of an ordinary inquiry made by the board costs from £20 to £50. {: .speaker-KYV} ##### Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP -- The whole of the evidence might cost that amount, but not the evidence of one applicant. Mr.MANN. - I believe that is approximately the cost of evidence given in one inquiry. The applicant may obtain copies of this evidence from the official reporters, but I believe he has to pay for it. {: .speaker-KEV} ##### Mr Fenton: -- In some cases the board has supplied transcripts of evidence free of charge. Mr.MANN. - I am speaking only of cases that have come under my notice. I have received copies of evidence given at certain inquiries, and I have been informed by the persons from whom I obtained it that they had to pay for it. It appears also that the attitude of the board largely depends upon the applicant who requires a transcript of the evidence. I say this deliberately. Copies of the evidence given at every inquiry should be readily procurable by those interested in the claims. {: .speaker-KNP} ##### Mr Maxwell: -- The board should be no respecter of persons. Mr.MANN. - It should not be. It is supposed to be a judicial and impartial body. I have maintained all along that the Minister should make the evidence available to honorable members. Even if it would cost £1,000 to print the evidence, that amount is infinitesimal in comparison with the immense amount of money that may be extracted from the public purse by way of Customs duties on specific items. Another feature of the board's attitude is disclosed by the transcript of the evidence. Those who are opposed to the imposition of duties very often receive scant and even insufficient consideration from the board.I make this statement deliberately. The evidence discloses that, becauseof their opposition to the statements made by claimants, certain witnesses have been actually snubbed by the board. {: .speaker-KNP} ##### Mr Maxwell: -- The honorable member should give a specific instance. Mr.MANN. - I do not wish to go into details; but I say that the evidence discloses several instances of want of courtesy by the board towards certain witnesses. If a witness has appeared to opposea duty, he has been snubbed, or figuratively, sat upon. He has been told that he was there only to answer questions put to him by members of the board. If lie has asked a question of the chairman to elucidate a question asked of him, he has been told, " You are not here to ask questions of the board." Those who have been before the board have said repeatedly that that kind of treatmenthas made their position very difficult. As evidence that my view is not due to personal prejudice, I shall read portion of a very important and interesting article that appeared in the *Argus* recently. It was written by **Mr. Dafoe,** editor of the *Manitoba Free Press,* who, after visiting Australia as a member of the Imperial Press Conference, wrote a series of articles in the Canadian press. The article before me, which is a summary of those articles, states : - >There is a Tariff Board which will recommend an increase in duties for the benefit of an existing industry, or the imposition of new duties at the solicitation of parties anxious to start a new industry, if any kind of a colourable argument can be made. {: .speaker-KYV} ##### Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP -- How long was that gentleman in Australia? Mr.MANN. - The honorable member knows as well as I do how long the Imperial Press Conference lasted. We have been glad to avail ourselves of opinions expressed by members of that conference favorable to this country and its institutions; we have been proud to quote them and to compliment the authors of them upon their observation, and the keenness of their perception. We ought, in fairness, to listen with the same degree of respect to their criticisms. If honorable members had read the reports of the Tariff Board, they would have formed the same impression as I have formed. My conclusions, after reading the evidence, are inevitable. If honorable members desire me to do so, I shall quote a very notable instance on the first item relating to spirit duties. I have a full transcript of the evidence, and I shall be delighted to show how the board accepted casual, offhand statements as if they were accurate, and prevented those who wanted to make clear statements from giving their evidence. Many objections can be raised to the methods pursued by the board in making its inquiries. It apparently gave consideration only to personal interests; that is to say, to the personal interests of claimants, without regard to the application of economic principles or the interests of the general public. General economic principles which obtruded themselves were either conveniently ignored or brushed aside with a phrase. The board does not seem to have considered, except in one or two cases in which it rejected applications, the effect of duties on the cost of living. The effect on the cost of living appeared to be, in the mind of the board, a sufficient ground for rejecting an application, but, if the application was recommended, it avoided any discussion of that aspect of the matter. It has ignored the effect of higher duties, and the encouragement of certain industries, upon the movement of capital from one class of investment to another. That is a very important economic consideration in connexion with the encouragement of industries, and it is exercising a very profound effect upon the financial conditions of this country. The board has not considered the effect of duties upon the distribution of population. It has not applied to its inquiries any consideration of the problem of the segregation of people in the cities, which is one of the greatest problems facing Australia to-day. This country has a greater proportion of its population segregated in city areas than has any other country. Questions have been almost invariably dealt with by the board from the point of view of the seller, or manufacturer, rather than from the point of view of the buyer, or public. The public, after all, will have to find the money to subsidize these industries, and surely the man who pays the piper ought to be allowed to call the tune. Boards, departments, and even members of parliament, oftenassume that they are expressing the views of the mass of the community when, as a matter of fact, a large proportion of the mass of the community has no knowledge of what is being done; and it is afterwards assumed that the dumb, servile acceptors of the policy have agreed to it. At inquiries conducted before the board the public has had no real representation. Had the board been a strongly impartial and neutral board, had it adopted the attitude that the applicants before it were making raids on the public purse, and had to be critically cross-examined, the public might have been represented; but, instead, we find the board adopting consistently a sympathetic attitude towards claimants. No search has been made for independent, authoritative information about industries that required a high degree of technical knowledge to understand them. Members of the board seem to regard themselves as experts in everything. There is hardly an industry into which the board has inquired that is not highly technical. A proper examination of a claim for higher duties necessitates an intimate knowledge of the industry, including an understanding, not only of the business side, but also of the technical processes involved. {: .speaker-KJM} ##### Mr Jackson: -- **Sir "William** Vicars knew something about wool. {: .speaker-KMQ} ##### Mr MANN: -- That interjection emphasizes my point. The honorable member considers that if the applicants who appear before the board are experts, that is sufficient. What a puerile, what a futile, argument, that all the expert knowledge should be centred in the men who appear before the board as claimants ! {: .speaker-KJM} ##### Mr Jackson: -- Has **Sir William** Vicars not been a member of the board ? {: .speaker-KMQ} ##### Mr MANN: -- Not during the last twelve months. He did not report on the textile duties. So far as I know- and I speak with some trepidation - only one member of the board claims to have technical knowledge of any kind. Numerous technical questions arise which require independent knowledge, without which the board is dependent on conflicting technical evidence fi om opposing sides. Sometimes the necessary technical evidence has not been available. There may be no men in this country with training and experience in the particular industry under review, and then evidence has to be obtained second-hand elsewhere. Consequently, the claimant always has a marked advantage. As an instance, I shall cite the inquiry into the glass industry. If the board had investigated thoroughly and properly the technical side of that industry, I fail to see how it could have made its recommendations. Insufficient notice is often given by the board for the preparation of replies to claims. I quote from the *Argot,* of about three months, ago, a complaint under this head - Members of the Chamber of Commerce have found it necessary to question the manner in which tlie Tariff Board advises those opposed to applications for increases in duty of its intention to hear evidence upon the subject. An advertisement may appear in the newspapers, but the complaint is that the notice given is inadequate. Those wanting higher duties do not go to the Tariff Board until they have collected every detail likely to weigh with the board. Their case may have taken a year to prepare, and they may make assertions difficult to challenge effectively at the moment. General statements in denial carry little weight in the absence of supporting evidence. It would bc fairer if, after tlie case for protection was stated, some time were allowed to those opposed to the increase in the duty to prepare their case in rebuttal. An instance of the lightness with which assertions can be made, and the care required to investigate them, occurred in the United Kingdom recently. There, protection was applied for by makers of superphosphates. It was alleged that 17,000 workers would bc affected by the decision of the. committee appointed to report upon the matter. When it had sifted out the facts, it was disclosed that tho number of employees was about u third of those represented. The Chamber of Commerce has discussed the foregoing points with the Tariff Board, and it is understood that it will arrange to give those opposed to increases of duties reasonable time in which to prepare statements in reply. Notice was given to the primary producers of Western Australia that there would be an inquiry into the question of duties on wire netting and fencing wire. They were given notice of a hearing in Melbourne on a certain date, and, when they received the notice, they had only two days in which to prepare their case and present it in Melbourne. The procedure was utterly absurd, and, later, they were told, " We have already been over to Western Australia, and we do not think it is necessary to take further evidencethere, but the board will be sitting in Melbourne, and, if you like to come over, you can give further evidence there." That is very unfair treatment of those who wish to appear before the board. These men have their businesses to attend to in Western Australia, but they are expected to travel to Melbourne at their own expense to oppose a claim on the public purse. The board should certainly visit the other States in conducting its inquiries, and the Government should bear the expense of having the inquiries made in every centre where it is necessary to make them. It is ridiculous that the responsibility should be thrust upon private individuals, and that they should be expected to find the money and lose the time necessary 1 to visit Melbourne to represent the interests of "Western Australia. Reverting to my allegation that insufficient time is devoted by the board to making inquiries, I direct the attention of the committee to the recent inquiry in Adelaide into the question of iron and steel duties. The statement was made that evidence submitted to the board bv claimants could not be adequately met except by obtaining certain information from Great Britain ; but the board declined to adjourn the inquiry to permit of information being obtained except by cablegram. There was some complaint about the attitude of the board in this matter, and the chairman actually stated his views about it in the public press. He was reported as having said - I further explained that the board had been requested by the Federal Cabinet to present its report by a certain dale. . . . The board trusted that the representatives of the association and those of leading British manufacturers did nol think that the board either did not seek full information from their sources of supply, or was unduly speeding up the investigation, which obviously could not be permitted to extend over three or four months, otherwise its report could not be prepared in time for Parliament to give consideration to the question, which had been referred to the board by the Minister for Trade and Customs on behalf of the Federal Government. In other words, this independent board, which is expected to make an impartial inquiry into the matters submitted to it, says that it cannot wait until evidence, which witnesses say is essential to an impartial inquiry, can be obtained. If that statement is correct, and it was made by the chairman, I want to know whether the Tariff Board is, as the Minister has often claimed, an independent and impartial tribunal, which conducts its inquiries in an exhaustive and proper way. It is extraordinary that the board should feel itself bound by instructions from the Government. In these circumstances, I trust that Parliament will very carefully consider the report that it submits on the iron and steel industry. I was astonished to find the following conclud ing paragraph to the report of the board on the engineering industry: - >One member of the Tariff Board has an indirect interest in one of the many general engineering works in the Commonwealth ; but, seeing that this fact was well known to the Minister for Trade and Customs, and to his colleagues on the Tariff Board, and in view of the magnitude of the industry, it was not considered wise to deprive bis fellow-members of his special general knowledge on the subject. I do not wish to make any imputations, but it is extraordinary that the board should have felt it necessary to put that note at the conclusion of its report, lt suggests that the board members recognized that they were doing something that required an explanation. What would honorable members opposite say if they happened to unearth a case of this kind! {: .speaker-DQC} ##### Mr Hughes: -- The honorable gentleman complained a few moments ago that the members of the board were lacking in expert knowledge, and yet when they retain the assistance of one of their number who has expert knowledge of the industry they are about to investigate, he is not satisfied. {: .speaker-KMQ} ##### Mr MANN: -- Why should not independent technical evidence be obtained by the board when it is available? If only interested technical advice is availed of, the position is worse still. If other honorable members are satisfied with proceedings of that kind, I am not; nor do I think the public will be satisfied. {: .speaker-KYV} ##### Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP -- Who is the interested member of the board ? {: .speaker-KMQ} ##### Mr MANN: -- I do not know who he is. I have made no inquiries about him, nor do I intend to do so. The very fact that the members of the board felt it necessary to retain his assistance, emphasizes my argument. It must be apparent to everybody that in this particular case the interested member dominated the other members of the board. {: .speaker-KYV} ##### Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP -- Not necessarily so. {: .speaker-KMQ} ##### Mr MANN: -- It must have been so. Happenings like this seriously shake public confidence in the board, and are most regrettable. Some honorable members have made it clear that they consider that I am prejudiced and biased in regard to the tariff, but I have tried to discuss it in a thoroughly disinterested manner. At any rate, I may fairly claim that I am no more biased than those who criticize me. A general and dispassionate study of the Tariff Board's procedure and reports leads to the very unwelcome conclusion that it does not show that unbiased and judicial attitude in. dealing with the matters submitted to it that we are. entitled to expect; and it does not justify the retention of the great powers that, have been entrusted to it. If honorable members will read carefully the whole of the evidence upon which the reports of the board are based, they will find frequently that most weighty testimony is often brushed aside without a moment's consideration. I have read evidence on various matters which I have considered to be most important, but which has not been mentioned in the findings of the board. In justification for its attitude the board has intimated, either directly or indirectly, that it conceives it to be its duty to uphold the established and settled protectionist policy of the Commonwealth, and to comply, whenever it is at all possible, with the requests made to it. In the few cases in which it refuses applications made to it. it does so apologetically, and almost invariably it suggests that if another application is made cai some future occasion it may be favorably considered. Manufacturers are encouraged to be persistent. That is a wrong attitude, in my opinion. I know that some honorable members regard the board as a machine for the purpose of granting as many and as high protective duties as possible, but I contend that it should inquire impartially and thoroughly into the matters submitted to it, and not hold out encouragement in cases in which it declines to recommend a duty. Parliament should give its closest and most careful attention to every case in which the board only recommends a duty after the second 01 third application. It has been said that either the Minister for Trade and Customs or the board has, on occasions, actually invited manufacturers to apply for protection. Statements like this are made, " If you apply to the board, it will try to help you." It is utterly wrong to encourage people to raid the public purse like that. {: .speaker-K1J} ##### Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT -- Will the honorable member name a specific instance of that kind *1* {: .speaker-KMQ} ##### Mr MANN: -- I did so on a previous occasion, and the Minister took no notice whatever of it; I do not intend to do it again. The Minister knows perfectly well that it is extremely difficult to get. specific cases. The invitations are generally given privately. When men with first-hand information refer to them they generally say, " I am telling you this for your information, but you must not mention my' name in connexion with the matter." {: .speaker-K1J} ##### Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT -- The honorable member is apparently relying upon hearsay evidence. {: .speaker-KMQ} ##### Mr MANN: -- I do not regard the statement of a principal concerned in such a matter as hearsay evidence. The Tariff Board apparently considers itself bound to recommend protective duties wherever possible, on the ground that protection is the settled policy of Australia. I should like to know how many of our people are satisfied with this socalled settled policy, but I shall not prosecute that inquiry just now. Assuming that the people generally are satisfied with it, are no limits to be placed upon its nature or extent? {: .speaker-KV8} ##### Mr Stewart: -- That is what I want to know. Where is it going to end? {: .speaker-KMQ} ##### Mr MANN: -- The original object of the Tariff Board was to prevent the indiscriminate imposition of duties on imported goods. Men who are what are called moderate protectionists are in a difficult position in these days. They have uo solid ground on which to base their arguments. The only men who can be absolutely logical are the free traders and the prohibitionists. They can get down to rock bottom in their arguments; moderate protectionists can not. I believe that a good deal of feeling was manifested by the members of this chamber when th6 present high duties were under discussion in 1921. It was argued that some independent authority should be set up to watch the incidence of the tariff, and recommend alterations from time to time. It was for that purpose that the Tariff Board was appointed. Its duty was to prevent log-rolling, wire-pulling, and departmental trotting; to relieve the Minister of undue responsibility ; and to advise the Government as to what was a fair degree of protection. But to-day one hears numerous complaints about the policy k has adopted. Statements like this are made frequently, " I believe in a moderate and reasonable degree of protection, but not in prohibition. The present high duties go too far altogether. This is protection run mad." But what is reasonable protection? I believe that almost every advocate of it would define it differently. As a matter of fact., it is incapable of exact definition. The palpable weakness of the whole situation is that neither Parliament nor the people has laid down the limits to which it is prepared to go, and in my opinion that is essential. Otherwise we shall always be met with the cry of the " wholehoggers " or absolute protectionists. Apparently even the board itself has not adopted any guiding rule. The ex-chairman did on one occasion set up an unofficial standard. That standard was that an industry was no longer to be protected when it was in a position to provide 60 per cent, of local requirements. That was not laid down in any definite material decree, but was referred to and quoted from time to time, lt has now been entirely lost sight of. If that standard had any influence upon the Tariff Board at all, it is obvious that it had no effect in the case discussed on a motion for the adjournment of the House on Friday last affecting au industry that enjoys the local market for 82.5 per cent, of its output, and still claims to require further protection. The Prime Minister **(Mr. Bruce)** has on several occasions endeavoured with great care to set out certain principles which ought to be followed when applying protection. He has contended that it should be given only to industries which are efficient. Experience clearly shows that it is utterly impossible for any department, or the technical officers of any department, to "say when an industry is being run efficiently. There is only one test of efficiency, and that is that the industry should be able to meet competition. {: .speaker-F4Q} ##### Mr Scullin: -- In any conditions? {: .speaker-KMQ} ##### Mr MANN: -- PUt in common language, that is what efficiency means, and honorable members know it. That is what the ordinary man in the street regards as efficiency in industry. {: .speaker-KNP} ##### Mr Maxwell: -- Then might is right? {: .speaker-DQC} ##### Mr Hughes: -- The most efficient nations in the world are those that have adopted protection. America is the most efficient nation in the world, and is the most highly protected. {: .speaker-KMQ} ##### Mr MANN: -- I shall have something to say on that point in a moment. {: .speaker-KYI} ##### Mr Prowse: -- The right honorable member for North Sydney **(Mr. Hughes)** is an old Free Trader. {: .speaker-KMQ} ##### Mr MANN: -- I shall have something to say about the right honorable gentleman directly. The Minister for Trade and Customs has given his ideas on the subject of the limits to protection. He said, " The more we export and the less we import the better for Australia." {: .speaker-KV8} ##### Mr Stewart: -- Every nation cannot export more than it imports. {: .speaker-KMQ} ##### Mr MANN: -- Carried to its logical conclusion, the Minister's statement is a *reductio ad absurdum.* Every business man knows that such a thing is absurd. It is only a euphemism for prohibition, and that is both objectionable and unwise. {: .speaker-KYI} ##### Mr Prowse: -- It is dangerous. {: .speaker-KMQ} ##### Mr MANN: -- It is worse. It is, in fact, impossible carried to its logical conclusion. The Minister tried to make out that the money we get for our exports should be spent in paying for our internal productions. Any country that conducts its commerce on such lines must soon get into a very peculiar position, as any business man, or, for that matter, any one possessing common sense, will readily understand. If we adopt the Minister's limit for the application of protection his policy will be found to amount to prohibition pure and simple. In considering the limit to the application of protection it is to be remembered that in the majority of instances labour costs in proportion to output amount to about 22 per cent. This covers practically every industry, and therefore 25 per cent, protection should be ample for any industry. {: .speaker-F4Q} ##### Mr Scullin: -- The honorable member is dealing with averages, and they are dangerous things to deal with. {: .speaker-KMQ} ##### Mr MANN: -- I have given, not an average, but the maximum. In the case of some industries the figure representing labour costs falls as low as 10 per cent, or 12 per cent, instead of 22 per cent. A protection of 25 per cent, in view of labour costs should be ample for any industry, especially when we consider that over and above that, every industry in Australia enjoys the immense advantage of the natural protection, which in many cases amounts to quite as much. {: .speaker-KV8} ##### Mr Stewart: -- And the cheapest food in the world. {: .speaker-KMQ} ##### Mr MANN: -- Quite so. None of these standards have been formally adopted. No one has laid down where protection is to stop ; but even men who call themselves moderate protectionists are askingto-day. " How far are we going ? What is the limit ? " The Tariff Board, which was supposed to fix the limit, has no idea on the subject. It has never been able to get any reasonable basis upon which to work, and it simply considers that itis its duty to give protection to any extent requested, because protection is the will of Parliament. After all these years, no standard has been laid down, and Parliament is obliged to deal with this big question with a chaotic mass of expedients. The honorable member for Maribyrnong **(Mr. Fenton)** would regard the whole question as one of opinion; but all hold different opinions, and an independent board appointed for the purpose cannot fix a standard. We are getting only from one bog into another as the result of the adoption of expedients dictated by interests seeking favours under this so-called protectionist system. Though the matter is often treated in a jocular way, the position is a very serious one. On this unsound basis we are building an economic structure of unstable equilibrium. This must end in financial crisis. I sneak in all seriousness, and not as a croaker or a " dismal Jimmy," but from inbern conviction, and my opinion is held by thousands of business men and others who are in a position to understand the matter. In common with them, I believe that the present system must end, and that very soon, in financial crisis, and in much hardship to the people of Australia. It will be found that economic conditions are not controllable, and those who are trying to control them will fail to do so. I believe that it is time to call a halt, for even if some loss were caused to some sections of the community by refusing to push the protectionist system further, the general body of the people would benefit. There would be far less suffering and disturbance caused by retracing our steps now than will be caused by persisting in this system to the bitter end. In connexion with this aspect of the matter, I want to quote a few words from a reportby **Sir Josiah** Stamp. This will serve to some extent as a reply to the reference to America by the right honorable member for North Sydney. {: .speaker-F4Q} ##### Mr Scullin: -- Rub it in. {: .speaker-KMQ} ##### Mr MANN: -- I do not want to rub it into any one. I am bringing forward the opinions of authorities, and certainly of better authorities than any member of this House, on the economic position in America. The report from which I propose to quote was considered of sufficient importance to be reproduced in the report of the National City Bank of New York, which most honorable members probably know very well : - >He showed that the American policy of diverting the whole of this import stream into other countries - just as the Minister for Trade and Customs says we should do - if successful, would lead the United States of America in30 years (under the power of compound interest) into an extraordinary economic deadlock, for she would have enormous possessions (abroad), and be unable to enjoy the fruit of them without extreme internal discomfort, much greater than would come from her acquiescence in an import surplus at a much earlier date. That is put in academic language, but means only just what I have been saying as regards Australia. One cannot fix a time definitely, but I believe sincerely that the present policyis leading Australia into an economic crisis. I believe that if we persist with it, when the crisis comes, it will be attended with far greater distress and trouble to the community as a whole than any trouble whichmight arise from an immediate cessation of this foolhardy policy. I want now to show how the economic crisis will be brought about. During the war the whole of the primary products of this country were financed by the Imperial Government. That meant that money available in the banks, and generally used for that purpose, was not required. About that time a very strong campaign was started for the establishment of secondary industries in Australia for what was called " the war after the war." Honorable members are aware of the great campaign that was conducted to build up industrial enterprises in Australia during the war, so that we might be able to compete with other countries after the war. That campaign was largely featured in the press, and by general publicity methods, industries were started in all directions, and the capital available was devoted by the banks to this purpose. The consequence was that in a few years the banks were tied up by having enormous quantities of capital invested in secondary industries, and also in a building and land settlement policy. Let me say here that it is a very extraordinary fact that the inflation of land values is the invariable concomitant of a high protectionist policy. A very large amount of capital was invested in the establishment of secondary industries at war prices and on a war basis. The high prices which were being obtained for goods under war conditions were used as the inducement for people to go into industries, and capital was locked up in those industries under those conditions. Honorable members have only to read the commercial columns of the newspapers today to see that the result has been that many industries, which it was claimed were well established in this country, have tremendous blisters upon them in the shape of enormous advances by the banks. It is quite common to read of advances of from £60,000 to £90,000. The industries are striving to meet the advances made for their establishment, but are unable to do so, because in a great many cases the buildings were erected and machinery paid for at the top of the market for construction prices during the war. The only way for the industries to succeed is to continue to sell their products at the extreme war prices. Naturally there is a reaction against that. Whilst every other country is striving in every possible way to get back to reasonable conditions, not exactly pre-war conditions, but stable and competitive conditions, we have maintained a high tariff and high prices in this country simply to enable all these interested industries to save the capital invested in them. {: .speaker-F4Q} ##### Mr Scullin: -- I ask the honorable member to name one country which has reduced its tariff since the war. {: .speaker-KMQ} ##### Mr MANN: -- I shall deal with that matter directly. Naturally other countries, having reverted to normal conditions, are able to send goods to Australia to compete favorably with ours. The present high tariff enables these interested industries to carry on under war prices and conditions. What is happening? The cost to the community is enormous. The Minister himself quoted statistics showing that our manufacturing industries had added £140,000,000 to the value of our raw materials. That is true, but it has been shown again and again that the customs policy of Australia to-day is directly and indirectly costing this country about £150,000,000 per annum. In view of this, I ask where is the profit to this country as a whole ? That figure has been confirmed by the Government Statistician. What is the use of talking about an added value of £140,000,000. when it is costing us £150,000,000 to obtain it. There is no economic advantage to be obtained from such a transaction. We should consider this matter sanely and not from the view-point of individual manufacturers. We should consider Australia's interests only. The Minister himself has said that our exports do not pay for our imports and the interest on the national debt. This means that we are living on borrowed money, and how long can we continue in that position? The end must come, and when it does, it will bring down with a disastrous crash the artificial structure that we have built around ourselves. It would be better for us to stop this practice now. Although a few individual firms might suffer a loss, and become insolvent, this would certainly be preferable to the later insolvency of the Commonwealth. Unless we mend our ways, we shall bring upon this country a financial crisis far more serious than that which followed the land boom. The Minister has said that it is necessary for us to pay for our imports and interest on our debts abroad, and that this can only be done by increasing our exports. How are we to increase our exports? Are we to increase primary exports or secondary exports? Any attempt in this direction must fail. Statistics show that thousands of men are being diverted from primary industries to secondary industries. What has made primary industries so remunerative during the last few years has been the high prices ruling for our products; but if men are diverted from primary industries to secondary industries, how will it help the export of primary products? I presume that the Minister would reply that we must increase our exports of secondary products, but how can we do that when the policy of building up our secondary manufactures is based upon a prohibitive cost which renders impossible the export of locally manufactured articles. Export markets are closed to us, because of the high cost of production and our protection policy. Our exports will never pay for our imports and the interest on. our national debt, while we pursue our present policy. The object is desirable, but the method of attaining it is useless. I had some hope that the Tariff Board's inquiry and the public resentment against increases in the tariff would have prevented further proposals such as these being introduced. It is time, that we called a halt. Some of these duties are atrocious. The Industries Protection League and those who are anxious to make hay while the sun shines are nervous, because public feeling is arising against additional duties, so they are endeavouring to rush these duties through before the door is closed against them. Let those honorable members who declare themselves against prohibition awaken to the fact that prohibition is embodied in these tarin proposals. {: .speaker-KEV} ##### Mr Fenton: -- Surely not. {: .speaker-KMQ} ##### Mr MANN: -- The Minister has made that admission. He said that in some instances these duties were intended to be prohibitive. Is that not prohibition ? The duty on cotton tweeds, for instance, is rank prohibition, and in many other cases, whatever the intention, the result will be equally mischievous. Information was given me to-day of the effect of these proposals on two lines of goods, which are now lying in bond in Melbourne. One is a shipment containing 393 dozen cotton knitted undershirts and underpants. The invoice value is £177 6s. The proposed new duty at 24s. a dozen amounts to £471 18s. and the additional duty of 45 per cent, to £87 15s. 3d., so that the total duty on £177 worth of goods is £559 13s. 3d., equal to a duty of 315 per cent. The other line is cotton bathing costumes. {: .speaker-KEV} ##### Mr Fenton: -- Where were they made? {: .speaker-KMQ} ##### Mr MANN: -- What has that to do with the subject? {: .speaker-KEV} ##### Mr Fenton: -- Evidently they were made in Japan. {: .speaker-KMQ} ##### Mr MANN: -- The honorable member wishes to encourage racial antagonism. These cotton bathing costumes were not made in Australia, but this class of goods is used in the summer season by almost every person in the community. The shipment contained 263 dozen cotton bathing costumes at an invoice value of £110. The total duty on those articles is £371 6s. 2d. {: .speaker-KZA} ##### Mr West: -- The same thing happened when the last tariff was before Parliament. {: .speaker-KMQ} ##### Mr MANN: -- The honorable member should have been ashamed to assist in passing it. If that is not prohibition, I do not know what to call it. To go to such extremes is a scandalous imposition upon the poorer people of this community. The Tariff Board's inquiries in other directions have 'been inadequate. It has failed in its reports to consider the meaning and interests of trade. It is common iu this House, and elsewhere, to speak of trading interests as being inimical to this country. Such a narrow view is unworthy of honorable members. It ought to be well known that the only way that a nation becomes rich is by trade. {: .speaker-KJM} ##### Mr Jackson: -- Sending our money to foreign countries. {: .speaker-KMQ} ##### Mr MANN: -- Evidently the honorable member knows nothing about trade. {: .speaker-KJM} ##### Mr Jackson: -- Of course, when I say money, I mean goods. {: .speaker-KMQ} ##### Mr MANN: -- Then why make use of the statement. That is the argument used by many people. In actual fact, no money goes out of the country except what is necessary to effect a balance. Honorable members, instead of using the specious argument that we are sending money out of the country, should say straight out that we are sending goods, the very thing we desire to do. They are afraid to face the true position. On Friday last the gibe was thrown across this chamber that certain honorable members of the Country party were foreign traders. The term is ridiculous. It was, no doubt, meant to be offensive, and to convey some sinister meaning. What is the objection to foreign traders? We cannot have foreign traders without home traders. Unless people from other countries came here to trade Ave should have no trade at ail. There is something unique about trade and commerce. It is the only process by which two individuals can mutually benefit, without disadvantage to either. It is only by trade that persons may profit and yet remain friendly. {: .speaker-KJM} ##### Mr Jackson: -- The more profit a foreign trader makes, the more friendly he becomes. {: .speaker-KMQ} ##### Mr MANN: -- And the more profit we make. It is really a question of the exchange of commodities that we do not want for those that we do. This country could manufacture large quantities of articles that would be valueless unless exported to a country in need of them. Wealth consists in that which is of exchangeable value, and only by the process of exchange do we obtain wealth. The board has entirely failed to consider the meaning and interests of trade. Its value and importance have been obscured in fiscal deliberations for many years past, and it is anomalous that the Minister for Trade and Customs should introduce proposals which are calculated to discourage trade. The board has failed to recognize or give due weight to the international' considerations involved in trade restriction, and has had no regard for the political and social effect of the policy it has recommended. It may be that such considerations are not within the province of the board; but this Parliament cannot ignore them, and the committee is justified in rejecting the findings of the board if they run counter to conclusions based upon them. It is of paramount importance that the national Parliament should consider the political and social effect of its policy, and weigh very carefully its influence on international relations. If the board hag no authority to deal with these matters, it is obviously wrong to remit to such a body questions of policy in which they are involved. In regard to the socialistic character of- protection, I have a bone to pick with the right honorable member for North Sydney. The last election was fought upon the socialistic issue. It is the duty of honorable members on this side of the chamber to oppose extravagant doctrines wherever we find them, whether amongst the manufacturers or the employees. When I was speaking on the Tariff Validating Bill in September last, I referred to protection as a socialistic policy, and said that a government returned to power on an anti-socialistic programme should not father a socialistic policy like protection. The right honorable member for North Sydney said that I was speaking nonsense. Incidentally he explained his apostasy from free trade principles by saying that he, like Saul of Tarsus, had seen the light. I reply to the right honorable gentleman with another biblical allusion - "If the light within thee be darkness, how great is that darkness." In his work on *Protectionism,* Professor Somner, of Yale University, a well-known writer on economics, shows that socialism and protection are two branches growing on the same stem. He says - When .[ say that protectionism is socialism, I mean to classify it, and bring it not only under the proper heading, hut into relation with its true affinities. Socialism is any device or doctrine whose aim is to save individuals from any of the difficulties or hardships of the struggle for existence, and the competition of life, by the intervention of ''the State." Inasmuch as " the State " never is, or can' be. anything but some other people, socialism is a device for making some people fight the struggle for existence for others. The devices always have a doctrine behind them which aim* to show why this ought to be done. The protected interests demand that they bc saved from the trouble and annoyance of business competition, and .that they be assured profits in their undertakings by " the State," that is. at the expense of their fellow-citizens. If this is not socialism, then there is no such thing. If employers may demand that '' the State " shall guarantee them profits, why may not the employees' demand that " the State " shall guarantee them wages? If we arc taxed to provide profits, why should we not be taxed tor public workshops, for insurance to labourers, or for any other devices which will give wages, and save the labourer from the annoyances of life, and the risks and hardships of the struggle for existence? The "we" who are to pay changes all the time, and the turn of the protected employer to pay will surely' come before long. The plan of all living on each other is capable of great expansion. It is, as yet, far from being perfected, or carried out completely. 'J he Protectionists are only educating those who, as yet, are on the "paying" side of it, but who will certainly use political power to put themselves also on the " receiving " side of it. The argument that " the State " .must do something for me because my business does not pay is a very farreaching argument. If it is good for pig-iron and woollens, it is good for all the things to which the socialists apply it. That seems a perfectly sound and consistent argument. {: .speaker-DQC} ##### Mr Hughes: -- It seems sound. {: .speaker-KZA} ##### Mr West: -- That does not make protection wrong. {: .speaker-KMQ} ##### Mr MANN: -- No doubt the fact< that it is socialism commends it to honorable members opposite, but the adoption of such a policy by a government which does not believe in socialism is a grave inconsistency. {: .speaker-DQC} ##### Mr Hughes: -- Is Ramsay MacDonald a protectionist? {: .speaker-KMQ} ##### Mr MANN: -- No, he is a freetrader. {: .speaker-DQC} ##### Mr Hughes: -- But he is a socialist. {: .speaker-KMQ} ##### Mr MANN: -- The fact that a socialist is a freetrader does not affect the argument that protection is socialism. I suggest that **Mr. Ramsay** MacDonald is not a complete socialist. This political aspect of the fiscal policy cannot be dealt with by the Tariff .Board, but it must be considered by this committee. I come now to the subject of international relations arising out of our fiscal policy. Like all Australians, I intensely admire the work done by the right honorable member for North Sydney in securing the admission of Australia to the League of Nations, but I regret that he should be today defending a policy which must cause international hostility. The League of Nations was established to promote international peace and amity. This policy of protection tends to have the very opposite effect. Quite recently **Mr. Swinburne,** who represented Australia at the Sixth Assembly of the League of Nations, returned to Victoria. He is a man of high character, wide knowledge, great ability, and extensive experience. A6 a member of the Interstate Commission, he had a very good, opportunity to study the fiscal problem. I believe that he is a protectionist; but he was so impressed with what he saw and heard at the meeting of the Assembly of the League of Nations that he is convinced of the need for reconsidering Australia's fiscal policy in the light of its effect upon international relations. Upon this subject he has delivered some striking addresses, which attracted wide attention. We have testimony from the Labour camp also. **Mr. Ramsay** MacDonald, speaking at Northampton on the 21st November last, in reference to the protectionist policy of the present tory government in Great Britain, said - >The Government, elected on pledges which the public believed would protect this country against Protection, is steadily week by week, month by month, devising means by which Protection is to be introduced, so that at the end of their office they will be able to present an accomplished fact to the country. If that is bow politics is going to be worked, don't let us talk about Constitutionalism, because there is no such thing as constitutional instinct surviving under such conditions. While on the Continent I found that this policy is doing our trade more harm than anything else. I found in country after country that Protection is being discredited. Political leaders, irrespective of party, irrespective of economical and industrial factors, are beginning to see that unless in Europe they can create an enormous federation of freetrade nations, there is not a single nation in Europe which can flourish in the industrial standard it ought to occupy. Further, to-day in Europe there is a tremendous volume of opinion being directed in the direction of low tariff walls. Unless the nations of the world adopt the principle of mutualism, no nation is going to nourish, but each is going to pull down the others to sweated and deplorable levels. {: .speaker-DQC} ##### Mr Hughes: -- The last few words of that extract sum up the whole position. {: .speaker-KMQ} ##### Mr MANN: -- Sweating flourishes more under protection than under freetrade. {: .speaker-KYV} ##### Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP -- Not if industrial laws are operating to regulate industry. {: .speaker-KMQ} ##### Mr MANN: -- Recent events in Europe support my contention. The Security Pact is designed to effect the relaxation of moral tension between the nations. Nothing is more likely to disrupt international goodwill than the mutually hostile tariff walls which are being erected by the respective nations of Europe. {: .speaker-KFE} ##### Mr Gregory: -- And in Australia the position has been accentuated by antidumping duties. {: .speaker-KMQ} ##### Mr MANN: -- I do not know whether honorable members have been studying carefully the reports on foreign affairs, made available to them through our Empire Parliamentary Association. If they have, they will know that, for several months past, a very important movement has been in progress in Austria. Following the reconstruction scheme of the League of Nations, Austria, divested of her former territory, was faced with very great difficulties because the newly-formed nations around her had imposed Customs duties on Austrian goods. It is. now proposed - and the scheme has had wide acceptance, especially in German Austria - that Austria should enter into a Customs federation with Germany. The proposal is known as the Anschluss movement. Its purpose is stated to be economic - not political or military. Actually it appears to be the beginning of a movement to reunite the two nations that were largely responsible for the recent great war. . There is another proposal for a Danubian confederation to incorporate all the countries along the Danube in a zollverein. Here, again, are possibilities of very serious consequences for Europe, for it should not be forgotten that with the exception probably of purely religious conflicts, all wars have had their genesis in commercial rivalry. History teaches that the Trojan war was fought over the beauty of Helen, but modem historical research discloses that it was due to commercial rivalry between the pottery manufacturers of the contending nations. All these Customs confederations are likely to lead to international hostilities,' which it should be our object to avoid. Only the other day I read that very great trouble had been caused in Switzerland by the introduction recently of safeguarding Customs provisions in England. As Swiss trade is very important those developments are pregnant with possibilities of further trouble. A few weeks ago the following report was cabled from London - , The *Daily News* says that tlie German Chancellor **(Dr. Luther)** and Foreign Minister **(Dr. Stresemann),** during their London conversations with Cabinet Ministers, preached the urgent need for a revival, of freetrade in Europe. They instanced Germany's experiences under protection- i It has been stated again and again that Germany was forced into the late war to escape some of the terrible results of her protectionist policy. **Dr. Stresemann** believes a general abrogation of protective tariffs iai essential before Europe can attain economic health and international harmony. 1 {: .speaker-KNP} ##### Mr Maxwell: -- And before Germany can pay her debts. {: .speaker-KMQ} ##### Mr MANN: -- Germany is paying her debts very well under the present arrangement. Here is another extract - honorable members will observe that 1 quote both sides - from the *Westminster Gazette: -* >Sloppy sentiment about the Empire cannot survive the growing success of Canadian ami Australian manufacturers in using a high tariff to nurse their own industries at the expense of their own population and the British manufacturer. We will soon have the world against us in tariffs, diplomacy, and armaments if this illusion of a self-contained Empire based on pampering protectionists here and in the dominions he allowed to became a false commonplace of our political vocabulary. Events are tending in the direction of Customs rivalries between the nations, and, as we know, these are likely to give lise to international hostilities, lt is useless to preach the doctrine of international disarmament unless we practise moral and commercial disarmament. M. Loucheur has brought forward an important proposal arising out _ of these economic tariffs for consideration at the next Assembly of the League of Nations. What will be' the position of our delegates at that convention ? What would be the position of the Prime Minister **(Mr. Bruce)** at the Imperial Conference if he put forward this schedule as an indication of the national attitude of Australia towards Great Britain? This is not, it cannot be, a domestic policy. There must be - to use a term which the Minister probably abstracted from the report of the tariff debates in Great Britain - repercussions. The honorable gentleman claimed that this policy had received the approval of the electors. {: .speaker-KJM} ##### Mr Jackson: -- It did in my electorate, because I put it straight to them. {: .speaker-KMQ} ##### Mr MANN: -- The Minister made the statement that the result of the election was a distinct approval by the people of this policy. He cannot " get away " with that. On the contrary, in some portions of Australia the election was won by government candidates on a distinct understanding in the opposite direction. The success of the Government in Western Australia was due to an understanding that was arrived at between the Country party and the Nationalist party, under which they combined to advocate a programme of tariff reduction. {: .speaker-KYV} ##### Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP -- Now the secret is out. {: .speaker-KMQ} ##### Mr MANN: -- It is already public property, as a statement to that effect appeared in the press. The Minister misrepresented the facts when he said that the result of the election confirmed this policy. The election was fought on only one issue. When the validating bill was being considered last year, I stated specifically that for my part it was to be understood that whatever the result of the election, it could not carry an approval of this policy. The subject was carefully avoided during the election campaign. But while the election was pending, because of the objections that were raised, find the protests that were made in many quarters, the Minister promulgated a ruling under which the operation of portions of this schedule was suspended. {: .speaker-JSC} ##### Mr Brennan: -- These are facts with which we want to be made acquainted. {: .speaker-KMQ} ##### Mr MANN: -- A very serious and im- "portant modification of the schedule was made during the election campaign. There may have been good reason for that action. Although I was anxious that a certain duty should be wholly taken off, I still maintain that an improper method was adopted. The schedule named certain specific items. A validating bill was passed, making the new duties applicable to those items. . Then the Minister used item No. 404 of the tariff to suspend the operation of duties that had been specifically agreed to by this chamber. Whether I approved or disapproved of the removal of a duty is not inquestion ; the method adopted was not the correct one, and the Minister had no right to exercise that power. {: .speaker-K1J} ##### Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT -- Does the honorable member say that that action was taken illegally ? {: .speaker-KMQ} ##### Mr MANN: -- I maintain that it was. It had a very material effect on the elections. It is, therefore, absurd to say that the result of the election constitutes an approval of this schedule. It does nothing of the kind. There are one or two other phases of the application of these duties to which I wish to refer. As we know, the new duties became operative immediately they were brought in. Large quantities of goods that had arrived in Australia weeks previously were held up at the wharfs, and could not be discharged until after the schedule had been introduced, because of the shipping strike that was then in progress. Although the importers could not be held to be in any way responsible, those goods became subject to the new duties when they were discharged. {: .speaker-K1J} ##### Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT -- Was that illegal? {: .speaker-KMQ} ##### Mr MANN: -- It was wrong. Many business men had lost considerably by the strike, and the sympathies of the Minister should have gone out to them. Par more common sense should be exercised in applying duties in such cases than is necessary in ordinary cases. Duties should not be made to apply to goods that were ordered before the schedule was brought in. {: .speaker-KEV} ##### Mr Fenton: -- If that policy were adopted, goods could be ordered three years beforehand. {: .speaker-KMQ} ##### Mr MANN: -- Why not? Where it can be shown that an order stipulating immediate shipment was placed in England before the duties were brought in, it is grossly unfair to levy them. A man buys on the basis not only of the cost of the commodities, but also of the duties that exist at the time he orders. I know of cases in which, after goods have been bought, a duty has been altered, and it has been more profitable to sendthegoods back toAmericathanto land them in Australia. Far greater con sideration should be shown to the trading public. In my opinion, the Minister has gone even beyond the schedule. It provides that a certain duty shall be chargeable on cotton tweeds. *Sitting suspended from 5.30 to8 p.m.* {: .speaker-KMQ} ##### Mr MANN: -- Lest my remarks before the adjournment should be misunderstood, I wish to make it quite clear that I was not suggesting that the Minister for Trade and Customs **(Mr. Pratten)** should exercise a discretion contrary to the provisions of the Tariff Act in dealing with goods that were either ordered or in transit to Australia, and delayed in delivery owing to the British seamen's strike. I have been arguing all along that the Minister should act strictly within the provisions of the act, and that his ruling in regard to cotton tweeds was contrary to them. My point was that, as this schedule is before us, the Government should, in the interest of all bona fide traders, make some provision to meet exceptional circumstances, such as those which arose in consequence of the seamen's strike. I am sorry to say that apart altogether from the imposition of the higher duties on goods under order at the time the new tariff schedule became operative, the department has not been fair to importers of cotton tweed goods. One would have imagined that in common fairness the department would have limited the application of the higher duties to materials which the textile trade knew were classed as' cotton tweeds; but, not satisfied with doing that, it brought quite a number of other materials, which previously had not been treated as cotton tweeds, under that heading. It is unfair that simultaneously with the introduction of the new tariff, the interpretation of cotton tweeds was enlarged to include quite a number of other fabrics. The department, in my opinion, went quite beyond the intention of Parliament in that regard. I shall bring this matter up again in detail, and exhibit samples of the materials in question, when we reach the appropriate item in the schedule. Ever since the election we have had indications that members of the Cabinet itself recognize the necessity for some kind of a change in our fiscal policy. At any rate they realize that the case for excessively high protection is somewhat weak, and that there are certain incon sistencies and anomalies in the tariff administration. The Prime Minister **(Mr. Bruce)** referred to the matter at the Lord Mayor's banquet some time ago, and emphasized very strongly that only efficient industries should be protected. I agree with that. The 1 question was asked this afternoon what were efficient industries, and I attempted a rough definition of them. It1 is becoming a common practice to use loose general phrases in discussing the tariff ; but we must get down to bedrock, and frame proper definitions. The Prime Minister, in the address to which I have referred, indicated also that he felt that some of the claims that were being, made for protection were not justified. The Treasurer **(Dr. Earle Page),** in speaking some little time ago on the Western Australia -Grant Bill in this chamber, referred te- the fiscal position of Western Australia, and I must confess that II was agreeably surprised at the soundness of his views in that connexion. I wish *hk* would realize that the principles he the* stated are of universal application. *Mutatis mutandis,* the conditions that apply to Western Australia apply to Australia as a whole. Even the Minister for Trade and Customs **(Mr. Pratten),** in introducing the bill for the remission of duties on New Guinea products, enunciated some sound fiscal ideas. I trust that he will follow them up. Although it is true that we cannot go on theory only, I suggest that we cannot have sound practice, unless it is based upon sound theory. Our policy of protection, which we are following to an inordinate degree, reflects adversely on many phases df our national life. For instance, it militates against immigration. It is of little use for us to talk of the need of immigrants to settle our empty spaces, so long as we maintain a fiscal policy that encourages people to settle in the metropolitan area instead of in the rural districts. Our schemes for bringing people here are intolerably expensive because new settlers are enticed to leave the country districts and live in the cities. On other occasions I have shown that we are throwing the heaviest burden and expense of our migration policy upon the State Governments, but are taxing every new settler who arrives here. This is highly, detrimental to the States. Our protectionist policy is also inconsistent with our professed desire to develop imperial trade. We talk in a large way about the necessity for Empire development and reciprocal trade arrangements with the Mother Country, and contradict our talk by our actions. Just recently **Sir Austen** Chamberlain said that as we had a great deal to say about imperial trade preference schemes, and so on, it was to be hoped that we would adopt a policy of give and take. So far, he added, it had been a case of all give and no take so far as Great Britain was concerned. I suppose I shall be told that we are already giving Great Britain preference as against foreign countries. The trouble- is that, even with the preference, the tariff hurdle is too high for her to jump. Although the duties are higher on foreign goods than on British, it is sometimes easier to get the manufactures of poorly-paid foreign workmen over the high barriers that confront them than it is to get British manufactures over the lower ones that they have to face. Our preference to Great Britain is, as a matter of fact, largely ineffective. Quite recently, a committee, of which Lord Balfour was chairman, submitted an exhaustive and instructive report to the British Board of Trade upon the effect of foreign tariffs on British trade. Among the remarkable facts that were stated was this significant one, which I give exactly as it appeared - >The main increases of tariff rates on British exports have been within the British Empire, where the average ad valorem incidence has risen by nearly two-thirds, while in foreign countries, despite the great increase in the United States tariff, the average ad valorem incidence has decreased by one-fifth. > >It is extraordinary that Dominion fiscal policies are the most serious obstacle to the growth of British trade. That is a remarkable commentary upon our claim that we wish to foster British trade. As a matter of fact, British trade with Australia has diminished proportionately in a remarkable degree in the last decade or so. In 1880 our imports from Great Britain totalled S3. 5 per cent., and from the United States of America 2.1 per cent., whereas, in 1924, the respective figures were 45.2 per cent, and 24.6 per cent. That shows a remarkable change. Therefore, the effect of our imperial preferential policy has been to drive the larger proportion of our trade away from Great- Britain and into the hands of America. The tendency sometimes, when the general protective policy is attacked, is to retreat to a narrower ground. There are those who say that, whether we protect our industries or not, it is important that we should give protection, at any rate, to what we call our key industries. Although this argument is often used, it is most fallacious. If one considers the matter critically, he will realize that a key industry should be about the last to be protected, because, by its very definition, it is one upon which a number of other industries depend for their raw material. The steel industry, for instance, is closely related to a number of other industries. If we protect the steel industry, and raise the price of its product, we immediately raise the price of the products of the other industries dependent upon it. lt is most fatal to start at the bottom, and say that raw materials should be protected. Most protectionists agree that raw materials and foodstuffs should not be taxed. It is a truism that the product of one factory is the raw material of another. {: .speaker-KNP} ##### Mr Maxwell: -- If we protect a key industry, the price of the products of the other industries dependent upon it is automatically raised. {: .speaker-KMQ} ##### Mr MANN: -- Yes. That means an increase of prices all around. If we are to check the enormous increase in the cost of living, the products of key industries, in particular, must be free of duty. The steel industry, for instance, should be better able to establish itself than any other industry in the Commonwealth, because it has at its disposal richer iron ore than is to be found in any other part of the world. With this great natural advantage, it should be in no need of a protective tariff. The schedule, however, will place a tax on key industries. An attempt is being made to develop the dis.tribution of electrical power. It is necessary, therefore, that all the appliances, such as electrical gear, distributors, switches, alternators, and. transformers, should be made as cheap as possible ; but, under the schedule, these goods are to be taxed up to the hilt. {: .speaker-KFE} ##### Mr Gregory: -- The duty on copper wire alone would amount to hundreds of thousands of pounds. {: .speaker-KMQ} ##### Mr MANN: -- Yes. It is also proposed to place duties on yarn. Here, again, is a proposal to tax what is a raw material for other manufactories. Whatever duties we decide to levy, we should strenuously oppose a tax on a raw material when it would mean an increase in the price of every product made from that material. Taking the items in the schedule in their order, we find that spirit duties are to be imposed. It has been declared and demonstrated before the Tariff Board that, if they are levied, they will cause a diminution of *employment* in Western Australia. That, surely, is most undesirable. The duty on textiles, and principally on the cheaper classes of clothing, will fall particularly on the poorer sections of the community. I am astonished to find that the Labour leaders approve of these duties, since they will fall with the greatest severity on those classes whom they profess especially to represent. Windmills, pumps, and all the small plants used by farmers to reduce production costs will bear duties which fall heavily on the small producers. The man who wishes to erect an ordinary windmill will now have to pay a duty that has been raised from 45 per cent, to 60 per cent. Under this schedule it is proposed even to tax food and raw materials. This must inevitably lead to an increase in the cost of living. The principal argument now used in support of these duties is that it is necessary to introduce them to safeguard the country against unfair competition. That phrase, in itself, begs the question, because it makes an assumption of which there is no proof. I doubt whether, except in the mind of a person being competed with, there is such a thing as unfair competition. It is a loose and objectionable phrase, which I think should not be used. In reading the reports on tariff questions in the Imperial Parliament I found in a speech by Lord Hugh Cecil, these remarks - " Dumping " differs from normal importation, not because of its cheapness or of unfair competition. It is most lamentable to find in a government paper, purporting to deal seriously with economic questions, that dreadful phrase < unfair competition." No human being knows what it means, and it ought never to appear in a serious economic document. I entirely agree with Lord Cecil. If one asks what is meant by unfair competition, advocates of high protection usually say that it means competition by countries where sweated labour obtains. This competition has been carefully studied by the Labour party . itself in England. Some honorable member stated to-day, I think, that the Labour party in Great Britain was becoming protectionist. If I thought that the Labour party in Australia were as far removed from protection as the Labour party in Great Britain is, I should be very happy. The Labour party in the Old Country, some time ago, felt that this subject was a difficult one with which to deal, and it appointed a special committee under the presidency of **Mr. Snowden;** ex-Chancellor of the Exchequer, to inquire into it. The report immediately rejected the use of discriminatory tariffs as a means of securing the objects of Labour, in terms which showed that there was no common ground of agreement with the protectionists. The report stated - >It does not seem a feasible policy to discriminate by means of differential tariffs on sweated goods. It would mean that goods, however evil and immoral the conditions upon which they wore produced, would be permitted to enter a country if they were made dear enough by the payment of a fine. The offending country or countries desirous of maintaining their markets in spite of the tariff would bo driven to produce even more cheaply, and to sweat their work people more disgracefully. In other words, the evil would bc intensified, and labour standards, instead of being levelled up, would be degraded. The tariff policy condones sweated conditions, and is, therefore, to bc condemned. Any proposal, whether it be a tariff or a boycott, which assumes that an individual nation can act alone is in our view useless. The matter calls for international treatment, both as regards the minimum standards to be adopted and the method of enforcement. I am entirely in agreement with that committee. The existence of immoral labour conditions in other countries - conditions that are not in accordance with our conception of humanity and decency - should be remedied. But as this committee pointed out, the difficulty would not be overcome, but rather intensified, by restrictive tariffs. It should be dealt with by international action such as that contemplated through the International Labour Bureau. {: .speaker-KNP} ##### Mr Maxwell: -- That body recognizes the existence of unfair competition. {: .speaker-KMQ} ##### Mr MANN: -- The committee was ap-. pointed by the Labour party to deal with it. That is the conclusion to which the committee came after examination. {: .speaker-KNP} ##### Mr Maxwell: -- Exactly, and it recognizes the existence of unfair competition. {: .speaker-KMQ} ##### Mr MANN: -- It speaks of competition due to different conditions. To that extent, I agree with the honorable member; but the committee said that that can be met not by means of a tariff, but only by international action through the International Labour Bureau. I have always given my support to the efforts of the International Labour Bureau. Whilst honorable members opposite will approve, of that, I want to ask them whether if through the International Labour Bureau labour conditions in other countries haveimproved - and in some countries improvements have already been made asthe result of certain conventions arrived at by the International Labour Bureau - they are prepared, in view of that improvement, to relinquish any of the tariff restriction which they say is required. I trow not. If they were logical, and the object of the tariff is to deal with unequal conditions in other countries, they should; be prepared to relinquish tariff restriction when the unequal conditions are removed. I hear no proposal to do anything of that kind. I hear no proposal to meet the improvement of conditions in other countries by tariff discrimination. If honorable members were logical and sincere, that should be the result of such improvement, Would it not be one of the best means to encourage the growth of international action for the improvement of labour conditions if we were to say to those countries in which such conditions have been improved, " Because you have improved your labour conditions, we are prepared' to relinquish our tariff restrictions to encourage you to go on to greater improvement " ? Would not that be a logical course to adopt? {: .speaker-KZA} ##### Mr West: -- It would not be practicable, if it were logical. {: .speaker-KMQ} ##### Mr MANN: -- I have generally foundthat the logical is practical, and is the safest course to adopt. To depart from the logical is to get into a tangle of inconsistencies. We have 'been told today that the duties proposed to be imposed on cotton tweeds are intended toprevent the introduction of foreign " shoddy." Does the Minister for Trade and Customs mean to inform me that the cotton tweeds which he says the imposition of these duties will exclude are "shoddy"? {: .speaker-KRD} ##### Mr McGrath: -- Most of them are. {: .speaker-KMQ} ##### Mr MANN: -- Nothing of the kind. I have samples of this material, and I know what I am talking about. A great deal of it is not " shoddy," and the cotton tweeds made in this country are, if anything, inferior to those imported. Yet it is proposed to exclude tlie foreign goods because they are described as "shoddy," whilst we encourage the manufacture of similar goods here which, when we make them, are not to be called "shoddy." Again, in his statement in regard to the woollen trade in Great Britain, the Minister was very unfair. He implied that tlie whole of the woollen manufactures of Great Britain are made from old garments re-manufactured. {: .speaker-L1J} ##### Mr Lister: -- No. He said that the " shoddy " was so made. {: .speaker-KMQ} ##### Mr MANN: -- Imported cotton tweeds are not made from old material. There is no doubt a great deal of old material worked up in Great Britain for the manufacture of cloth that is known as "mungo," but that material is almost exclusively exported to countries with poor, ignorant and unadvanced populations such as the natives of portions of Africa and elsewhere. To contend that much of the material imported into Australia and used by our working people is " shoddy " is grossly unfair. To promote the manuf acture of these goods in this country will not give us goods of higher quality, but similar goods for which our people will have to pay double the price. When we are told of the number of mills that are able to make these tweeds in Australia to-day, I inform honorable members that orders are going out every day that cannot be filled by the Australian mills. They refuse orders. I know of a mill that sent its representative around to ask for orders, and when asked to deliver the goods it said that it could not deliver them until it got the orders, because until then it could not secure the money to put in its machinery. We have been told that in Australia we have a longer free list than that of any other protectionist country in the world. That may be true if regard is had only to the number of items that are free. But in many cases they are quite insignificant items, and the fact remains that, taking the average incidence of our tariff schedule, including items liable to duty and items duty free, we have the highest percentage of duties imposed in any country in the world. In England wu find the same argument used, the same methods applied, the same disingenuous statements made, and the same abuse of political power in the attempt to bring about the imposition of protective duties there. It is not called protection there, because the Government said it would not bring in protection. It brought in something which it has called a "safeguarding" instead. I recently read some comments on the procedure which has been going on for some months in Great Britain, and the remarks with which those comments concluded are applicable to the present tariff proposals in this country: - >No matter what one's views may be of the desirability or undesirability of protection, the safeguarding scheme, judged by its provisions and tlie procedure under it, is undesirable. No sincere protectionist has a good word for it. To those who object to protection, it presents itself as a dishonest scheme; a dishonest and deliberate intention to give a superficial appearance of British fair play to what is in essence a crooked and illicit operation. So it is, because I believe that, under cover of official forms, political procedure, and the mechanism created to deal with these matters, it is possible to work improper points upon the community. Because I feel that this is being done, and the public interest is being sacrificed to private interests in many of the items included in the schedule, as well as because of my general objection to the prohibitive principle, I oppose many of the items of the schedule; and when we come to them I shall deal with them individually. **Mr. HUGHES** (North Sydney) [8.40J. - I shall not be expected to traverse the whole of the ground covered by the honorable member for Perth **(Mr. ' Mann making no pretence to rank with those whose names will be handed clown as Marathon orators. I shall confine myself, so far as is possible, to those points of his speech that I can recollect, and if the omissions are serious, I hope he will attribute them to the frailty, rather than to the perversity, of human nature. Before starting on a journey which promises at best to be far too long, I should like to say that I do not necessarily support every item of the schedule. Some items I may oppose; but my attitude towards the policy of the Government as embodied in the tariff is one of enthusiastic and emphatic approval. Before attempting to deal with the arguments of the honorable member for Perth, let me clear the ground a little by dealing with fundamentals, the principles about which he said so much, and the flights of my honorable friend into the higher regions of economics. According to him, protection is a policy based upon fallacies; opposed to natural law; illogical; its benefits illusory, or, at best, only temporary. It is a creature of the hot-house, and is dangerously fragile. These are hard sayings, but they do not complete the indictment. For the first time we learned this evening that it is dishonest, or, at any rate, that it is the result of a recourse to dishonorable practices. Suggestions were made regarding the Tariff Board which., no doubt, will be resented. I am not here to couch a lance for the members of that board; but I say that the proper course for the honorable member to pursue was to put his charges into plain words, so that they might be answered. His innuendoes were unmistakable. No one could misunderstand' what the honorable member said about improper practices. He told us that men who had approached the Tariff Board with dishonest purpose had succeeded, and that evidence which should not have been received was acted upon. Here, then, is a policy flagrantly defying natural laws, a hothouse plant, illogical, dishonest; unscientific, "immoral; and yet not only is protection the national policy of this country, but, with one notable exception, it is the policy of all the great nations of the civilized world. According to him, it is contrary to the ideals of the League of Nations, a hindrance to the comity of nations: calculated to provoke wars; a dagger aimed at the heart of the Empire, and particularly at Great Britain herself. This is a formidable indictment, and the honorable member might well have paused before making it in such an assembly as this. He refrained, indeed, from, a plain, downright declaration of hostility to the encouragement of native industries. He prefaced his remarks by the pious declaration that he desired to encourage Australian industries, but that was to be done by some esoteric process to which he did not further allude. We are therefore in the dark as to how be would encourage the industries of this young and amazingly rich Commonwealth without falling into those pitfalls which he so graphically described and located. While from hia stand-point protection is a policy at once dishonest, artificial, provocative of war, anti-empire, and illusory, the- policy for which he stands rests upon the eternal principle of natural law. It is at once logical and moral, and ought long ago to have captured a too credulous world, which has been striving these many centuries after truth, which is here lying at its1 feet only waiting to be raised. Protection, so the honorable member says, retards development and handicaps the primary industries; it increases the cost of production, destroys efficiency, retards settlement, and inflates1 land values. This last, to use his classic phrase, is the inevitable concomitant of the application of the policy. It is very curious that when men wish to confuse and mislead they use terms that none may understand. Let us look at the first of the terms upon which the honorable member placed such a pathetic reliance. He spoke of freetrade as a natural policy, and of protection as artificial. These terms are meaningless. In one** sense there can be nothing unnatural in a world which is inevitably governed by natural law, where everything is natural. When he contrasts "natural" with "artificial," may I remind him that civilization itself is an extremely complex and wonderful product of artificial culture. It depends on artificial aids. What is the law but a means to protect, the weak, the helpless, and the unfortunate . from the strong and unscrupulous? The agents of the law are at every street corner - or are supposed *by* the public to be there. They are there to restrain the power of the strong, to arrest free individual development, and to deprive the natural man of the right to take what he wants wherever he may find it. Yetthere is nothing more natural than the resort of civilized man to artificial means. It is natural in heat to seek coolness, and in cold to seek warmth. The natural garb of man has long been overlaid. If the honorable gentleman were to go to Williamstown, and there try to approach ever so little to nature's prehistoric methods, he would discover that artificiality is the order of the day. To say that freetrade rests on natural law is to utter once more the shibboleth that served in the time of the French Revolution, and upon which the Physiocrats built their imposing, but futile, doctrines. Protection and freetrade both rest upon the same foundation, which is human nature. It is natural to sell as dearly and to buy as cheaply as one can. As a seller, I want high prices; but. hf a buyer I want to operate in that ideal market spoken of by the honorable gentleman where unfair competition is but a name, and where I can get an article as cheaply as is possible. The honorable gentleman was most unfortunate in one of his authorities. He quoted Lord Hugh Cecil - an artificial product of an artificial age - as an authority who did not admit there was such a thing as unfair competition. The existence of Lord Hugh Cecil and his class depends upon laws which the Labour party of England would tell us are laws which elevate the few at the expense of the many. He is a living proof that there can be unfair competition, and in England, too. According to the honorable member, protection increases centralization and the cost of implements used by those engaged in primary industries. He said that the primary industries alone create wealth, and that the secondary industries are parasitic. {: .speaker-KMQ} ##### Mr Mann: -- I did not say that. {: #subdebate-14-0-s3 .speaker-DQC} ##### Mr HUGHES: -- I am sorry that I misunderstood the honorable member. It is the result of missing ever so little of the honorable member's speech. He said that the policy of protection did not benefit the wage-earners of this country in proportion to the tremendous burden imposed upon them ; that they only received 22 per cent. of its cost. He said that, in effect, this tariff was prohibitive, and predicted an economic crash with a confidence that fits him for the role of a modern Cassandra. So far as I can, let me follow the argument in the order that I have noted it. I have spoken of the principles upon which he laid so much stress, and I should like to add that nothing is so deceptive in this matter, so unreliable, as what are called " principles," because there are many principles, and they can be applied in every direction. It is a fundamental principle or trait of human nature to desire full scope for development. That is in the nature of man. Man believes in competition with reservations. He wants to be left alone; but when in trouble, he calls for help. Civilized society listens to his appeal for protection when competition becomes distressing. In effect, competition in the eyes of the ordinary man is fair when he is winning, but unfair when he can win no longer. To honorable members who worship at the shrine of free trade, secondary industries occupy a subordinate and hardly respectable place, and, as I have said, they openly declare them to be parasitic. I am speaking now of the general opinion of honorable members who hold the same views as the honorable member for Perth, but perhaps do not express them in the same way. I shall give the best and most convincing proof of the debt of the Commonwealth to its secondary industries before I finish. Let me now deal further with the arguments of the honorable gentleman. He said that a tariff destroys efficiency. That is one of his main objections to protection. He did not support that statement with any convincing evidence. I repeat what I said by way of interjection - that the nations of the world in the vanguard of civilization have, with one exception, adopted for many years this policy of protection, notwithstanding the defects and shortcomings to which the honorable gentleman has referred. Those who have studied the matter must admit that no country has achieved such efficiency in agriculture, in secondary industries, and in organization, as has America. Protection, instead of destroying her efficiency, has stimulated her to greater effort. There is a greater volume of horse-power available for each individual worker in America than in any other country, and there is, therefore, a larger *per capita* output than in any other country. If there is one which excels it, it is that in which we live. Contrast America with Great Britain. Great Britain has a policy of freetrade which, according to the honorable member, rests upon natural law and ensures efficiency, progress and prosperity. These many years she has pursued a fiscal policy devoid of suspicion and provocation. She invites with outstretched arms the nations of the earth to join her. Her policy according to the honorable member is sound ; her attitude impeccable. Yet how fares it with England to-day ; well or ill ? The honorable member had a great deal to say concerning the injustice which our protective tariff does her. He said nothing of the hostile tariffs of the whole world. A few days ago, Lord Rothermere said that Great Britain, amongst all the nations of Europe, was the one whose fall could be most surely predicted. His opinion is one which can not be disregarded. He said that surveying society, and looking at the conditions of industry and commerce, he saw no promise of better things to come. He declared the British Parliament inept, and incapable of devising a policy which would help. Of her population, 1,250.000 subsist on a dole; many of her industries are stagnant, her methods stand exposed by competition as ineffective. Great Britain, faced with competition, is losing ground. Freetrade has failed to ensure efficiency. The honorable member said that the policy of protection is not only provocative of war, but, adopted by us, is a blow aimed at the heart of the Empire. May I remind the honorable member that if Great Britain is losing trade in this country, it is despite the fact that she enjoys here a substantial preference over her competitors. She has been given advantages in the economic and commercial race, and despite that, is falling back. Great Britain is falling back in the race for the world's markets, not only here, but everywhere. She is the only nation which is not now able to show a more or less complete recovery from the effects of the great war. I shall not say for a moment that there are not grave causes, apart from the tariff, to account for her present position. But the fact of her depression is undeniable. Lord Rothermere was so impressed with the situation that he recommended a revolutionary change in the method of government in order to save her from the pit into which she was falling. But whatever may be said of Great Britain, America has in every department of industrial activities, achieved efficiency under a policy of protection. The effect of that policy on Australian industry wc can discover when we look at the figures, and test it by experience. For the four years prior to the 1920-1 tariff, the total British trade of Australia was valued at £92,000,000. For the four years since that tariff became operative the British trade with Australia was valued at £198,000,000. For the year 1925 the figure was £65,000,000. So far from Britain losing ground here as a result of the tariff, she seems to be gaining. In Empire trade Australia has dealt fairly with Great Britain. The figures will show that we have preferred her to others, and shown due regard to what we owe her for reasons of sentiment and for value received. We have spent our money in her markets, encouraged her industries, and have done what we could to help her to maintain her position in the world. The honorable member for Perth says that protection is provocative of war, and ought to be condemned by modern civilization for that reason alone. But there is no proof that it is so. It is perfectly true that tariffs may be a cause of quarrels between nations, but that is because their interests clash. Freetrade did not prevent Great Britain from being drawn into the Great War. Freetrade has not protected China, the only great nation that has pursued a pacific policy for thousands of years. China is a pathetic figure. The Great Powers demand the right to send their goods into her country. She protests, but her weakness makes her protests futile. Whatever may be said of protection, it cannot be said that it is an antipeace policy. Tariffs and disarmament stand in the same position. A nation which disarms while other nations are arming themselves to the teeth pursues a foolish policy. When, during the throes of the French Revolution, talk of natural laws and logic cut the air, and when the Assembly was daily passing resolutions of a most amazing character, circumstances compelled the people to declare a policy for France suited to her interests and ambitions. The economic, as well as the national policy of a country must be determined by its circumstances. Those who have nothing with which to trade cannot expect to do business with those, who have. As the late **Mr. Joseph** Chamberlain pointed out, Great Britain has nothing to bargain with. If she had a tariff she could say to other nations, " Unless you lower your tariff I shall raise mine." Great Britain is now as a sheep before the butcher. There is nothing she can do. The assertion that protective tariffs breed wars, coming from countries hedged around with tariff walls, and armed to the teeth to defend them, is so much hypocrisy. I trust this nation will not be turned from a policy, which is suited to its circumstances, and necessary for its progress, by such idle talk. It has been said that protective tariffs retard land settlement, and accentuate centralization. We have heard a great deal to-day concerning economic principles, but I am bound to say that a more monstrous misstatement of the facts could not be made. What has been responsible for modern development? During the last 100 years the world has changed from primitive to modern methods. We are able to gather from the story of that development why our cities have become such great centres of populations, . whereas before they contained few when compared with the number settled ou the land. The distribution of population is determined by the needs of society. When individuals can produce only by long and hard labour barely more than sufficient to feed and clothe themselves, it follows that the major portion of the population must be engaged in the primary industries. This was the position until the beginning of the nineteenth century. But with the introduction of modern methods the distribution of population necessarily changed. One hundred, 75, and even 50 years ago, perhaps 20 in every 100 people were required to produce food and the essentials of life. Those honorable members who claim particularly to represent the man on the land know with what amazing rapidity the methods of the primary industries have developed. I remember well when wheat was cut in some places with a sickle, and in others with a scythe. Then came the reaper without the binder; later, the reaper and binder, and finally the stripper. It is literally true that now one man with a stripper can harvest in a day the same quantity of wheat, ready for the mill, as 100 could do in a week at the beginning of the nineteenth century. And as one man can do to-day as much as 100 men could do before in a week, what need is there for the other 99 men to remain on the land? Man does not attach himself to industries according to some philosophical principle or formula; he does what he must do, and no more. {: .speaker-KFE} ##### Mr Gregory: -- Did not machinery do as much for secondary production? {: .speaker-DQC} ##### Mr HUGHES: -- Of course, and the secondary industries have been, and are, engaged in ministering to the constantly expanding wants of the people. A hundred years ago people had to be content with one-fiftieth of the wealth that is available to-day. Tlie masses of the world now live better than did the barons iu the days of King John. Wealth in an ever-increasing shower is descending upon the people, and that more than anything else explains the unrest in the modern world. Who is to share, and to what extent, in this marvellous stream of wealth that is flowing into tho laps of mankind ? Secondary industries have developed in accordance with the redistribution of population, and in many industries efficiency demands that large numbers of people shall work .together under certain conditions. The honorable member for Perth has said that the policy of tariff protection cannot last. He predicted an economic crisis, but did not explain why this crisis must come upon Australia, which is certainly not the worst offender, and leave others unscathed. If protection be an offence, America is the worst offender. {: .speaker-KMQ} ##### Mr Mann: -- No. {: .speaker-DQC} ##### Mr HUGHES: -- It is. The honorable member cannot determine the matter by a mere gesture pf negation. Whatever he has said, or may say, of this tariff has been said hundreds of times before of other tariffs. There is nothing new in his prediction of disaster. He has said that this new schedule is the laststraw - but the beast still staggers on, and, amazing to relate, it positively flourishes upon a diet that should destroy it. The honorable member said that the tariff is illogical. It would be amusing, if the matter were not so serious, to consider the application of this word " logical " to other activities of mankind. Life itself- is most illogical. If we apply democracy logically, whither would it lead us? The Constitution is illogical. What is called the Constitution of the Empire is the most illogical system of government ever evolved. Every part of the Empire insists upon governing itself in its own way. Yet we claim that the Empire is one and indivisible, that its people are many, and yet one. Logic has nothing to do with human nature or the. institutions of man. The more one examines them the more is one compelled to admit how. utterly illogical they are. The most logical people in the world are the French, and they do not get very far. Britons are illogical in their Constitution and their methods, and yet they have conquered the earth. The doctrine of protection is at least as logical as free trade, but neither is carried to -what is termed its logical conclusion. Free trade has never been, and is not now, practised in its entirety, even by Great Britain. The Imperial Preservation of Industries Act is an outstanding example of this. Always the guiding principle of nations is that each does that which it believes will further its own interests. Australia has found from experience that the policy of protection advances her interests. A few ' years ago primitive conditions obtained in this land. We were mainly a pastoral people. By the discovery of gold, people were attracted from all parts of the world. A new era began. Then agriculture came upon the scene, and, lastly, in its natural order, manufactures formed the cupola of the industrial temple. Protection has been proved to be suited to the circumstances of Australia. We need not inquire what will happen when the whole world has reached that ideal stage when every nation is ready to discuss principles without regard to selfish interests. When civilization has advanced that far, universal free trade may be discussed on its merits, but until then the Commonwealth must pursue the same policy as each individual adopts in the conduct of his own affairs; it must protect its own interests. The honorable member for Perth spoke as if the law of competition prevailed in every walk of life, and every sphere of human activity. That is not so. We see on every hand men making supreme efforts to avoid the effects of competition. Honorable members opposite are living examples of the point to which organization can be developed by one section of the community in order to protect itself against the attacks of other sections. The organizations of Labour are protective combinations brought into being to defeat the effects of so-called " natural " laws of competition, by preventing individuals from offering their labour at prices extorted by pressure of circumstances, with a consequent reduction of the standard of living and the denial of the claim of the workers to enjoy a fair share of the benefits of civilization. And we see similar organizations on the other side. A few days ago the honorable member for Maribyrnong **(Mr. Fenton)** moved the adjournment of the House in order to discuss the action taken by two great foreign oil companies, who had had the brazen effrontery to increase the price *'of* petrol by 2d. per gallon so that they might recoup themselves the cost of supplying fo distributors several hundreds of foreign-made pumps. It is well known that the great corporations of the world frequently enter into arrangements with each other to avoid competition. It. is an outstanding fact of life that when free dom can be exercised without let or hindrance men are all for freedom, but as soon as some one stronger, more skilled, and more efficiently equipped, outstrips them in the economic race, they demand some sort of protection or aid. That characteristic has marked man ir. every country and in every age. In regard to the application of the Customs tariff, I do not deny the right of the primary producers to take whatever action is necessary to promote their interests,, but I take exception to the claim that in so doing they are more honest, more moral, more honorable, or more logical, than men engaged in the secondary industries, who are moved by precisely the same motives and seek to further their own interests. Each section endeavours to promote its own welfare. I have no doubt that the honorable member for Swan (Mr. Gregory) will tell the committee to what extent and in what way the primary producer is oppressed by the tariff. If the honorable member can make out a good case I shall be delighted to support him. I do not say that there are no spots on the sun. The Minister for Trade and Customs told us that he had been credibly informed by a manufacturer that he is a man of light and learning and has done great things: but it is possible that the honorable gentleman has made mistakes, and if such mistakes can be clearly shown, I shall be very glad to support honorable members in rectifying them. Sometimes men engaged in primary industries do not look at the problems of production from the stand-point of the whole community. They have been told that if there were no tariffs they would be in much better case - that they would get their implements much cheaper and be able to produce wheat or whatever they grow at less cost. They or their representatives would have us believe that the effect of the farmer producing cheaper wheat would be that the pf>]-i« would get cheaper bread. But that is not what is at the back of the farmer's mind. He wants to be able to produce wheat at less cost in order that he may get more profit. Nothing could be more natural. For my part, I have done all that any man could do to help the farmer to get a fair return for his labour. He is entitled to that, but there is no evidence that the Australian farmer is handicapped in his competition with farmers in other countries. For example, there is no proof that the Australian primary producer is handicapped in competition with the farmer in New Zealand, who is able to buy imported implements free of duty. I find that the farmers of Australia, in 1903, imported £450,127 worth of agricultural implements, and, in 1924-25, implements to the value of £784,024. On the other hand, farm implements of local .production, in 1903, amounted in value to £860,348, and, in 1923-24, to £3,132,305. Thus, while in the period under review imports were nearly doubled, the value of implements of local production purchased by Australian farmers was nearly quadrupled. This shows clearly that the greater proportion of the implements purchased by the farmers of Australia are made in this country. The other night, the honorable member for Yarra **(Mr. Scullin)** said that no farmers in the world had been so well catered for by local manufacturer!! as had those of Australia. Most honorable members will be inclined to agree with that statement. The agricultural machinery devised, developed, and improved foi the use of the man on the land in Australia will bear favorable comparison with that manufactured in any other country. Honorable members of the Country party will be able to tell us how much it costs to produce a bushel of wheat in Australia, Canada, and the United States of America. That, after all, is the test; but I venture the opinion that the competition of Australian wheat with that produced in Canada and the United States of America is regarded as extremely serious by the farmers of those countries. The methods of the Australian farmer will compare favorably with those adopted in any other country. But there is room for improvement in every industry. The agriculturist is sometimes not so efficient as could be wished. I heard the honorable member for Gippsland **(Mr. Paterson)** last week refer to the ideal dairy cow which would yield 80 per cent, of butter-fat. No doubt, that would be a very desirable cow; and there is no reason why the Australian cow should not produce, at least, as much milk as, say, the Danish cow. The climatic conditions are entirely favorable to the Australian dairyman. I am aware that here I am treading on dangerous ground, and since I do not wish to face a posse of indignant and outraged dairymen, who are always powerful and,' sometimes, desperate men, I shall content myself with the statement that, on the whole, the primary producers of Australia have' benefited greatly from the development of our secondary industries. They have been admirably served with machinery most suited to the climatic conditions of this country and the special circumstances of their avocation. The honorable member for Perth made an extraordinary statement about the intimate relationship between socialism and protection. I noticed that the honorable member for Fawkner **(Mr. Maxwell),** to whom certain aspects of socialism are very much like rats to a terrier, at once manifested deep interest in this . statement, which is, without doubt, the most cold-blooded and unprovoked that I have ever heard. There is no more relationship between protection and socialism than there is between a bishop of the Established Church and a field of battle. Because a bishop, prior to his preferment, was probably a canon, there may be some obscure relationship between a bishop and a battle-field, but the suggestion is very far-fetched. The relationship between socialism and protection is no better established. I understand that the honorable member quoted as his authority Professor Sumner, of Yale University. I have not read Professor Sumner's book, but I hope it contains other things besides that. After all, the best answer to the honorable member's statement is that which I gave him by way of interjection, namely, that the British Labour party is in the main, if not wholly, a freetrade party, yet is avowedly socialistic in its aims. There is no more relationship between socialism and protection than there is between civilization and socialism. Civilization, like protection, depends upon the interposition of the law to protect the individual from the effects of competition in one or other of his many activities. The maternity allowance may be regarded as a definite feature of socialistic policy. But it is not fiscal protection, although it protects many women at a critical period of their lives, and in any discussion of the fiscal issue, reference to the maternity allowance would not be in order. I could pursue this question further, but I want to round off my arguments with convincing proofs of the efficacy of our protective policy. This policy has been in force in Australia for over twenty years. I remember when it was first mooted in this House. I said then many things which I think were more effective than anything I have heard since. I propose to remind honorable members of the condition of the country at that time, and to compare it with the position to-day after twenty years of this policy, which, we have been told, is illogical, is opposed to natural law, is advocated by artful and dishonest business men, is provocative of war, is anti-imperial, is destructive of the primary industries, and opposed to the. best interests of the community. The proof of any policy is the experience of its effects. The proof of the pudding is in the eating of it. In 1903-4, when protection as a policy was formulated, the population of Australia was 3,916,592. In 1923-24 it had risen to 5,873,507. In other words, it had increased by nearly 2,000,000. The figures dealing with production in our primary and secondary industries are illuminating. They are as follow : - Thus, whilst our population between 1903 and 1924 increased by nearly 2,000,000, the wealth produced increased by nearly £275,000,000. The total area under crop in Australia in 1903-4, after a long era of uninterrupted free trade in most of the States, was 9,30.1,785 acres, and in 1923-24 it was 16,531,186 acres. This, I submit, is a complete answer to those who say that protection has placed a crushing burden on the shoulders of our primary producers. The honorable member for Perth delivered an address, lengthy, but not, to my mind, convincing, on the effect of protection upon trade. He said that the inevitable result must be that trade would wither and collapse under the blighting influence of a protective tariff. This is what happened under protection during the twenty years under review - The total trade rose from £85,981,635 in 1903 to £319,173,455 in 1924-25. These figures furnish a complete and convincing answer to the charge that protection strangles trade. Treasurer after Treasurer, with that excess of caution that the tremendous responsibility of the task creates, has in his budget estimated a falling off in trade ; and' every year, so far as I can recollect, his prediction has been falsified. Despite the devastating blighting effect of this tariff, the value of the goods purchased by Australia from countries overseas rose from £37,811,471 in 1903, to- £157,143,296 in 1924-25. Turning from trade to banking, we find that deposits in the cheque-paying banks rose from £91,757,234 in 1903, to £321,594,080 in 1925; whilst the advances and investments increased from £88,223,686 to £261,340,527. Thus, tested by the increase of population, growth of production, primary and secondary, area under crop, overseas trade, and banking, the progress of the Commonwealth under a protective policy will compare with that of any country in the world. There are one or two other statements to which I must refer. In dealing with the effect of protection upon the worker, the honorable member stated that the worker's share of all these millions amounted to only 22 per cent, of the total. In refutation of that statement, I quote **Mr. Hume** Cook, who in a letter to the *Argus* on 12th January last quoted from Professor Bowley's booklet *The Division of the Product of Industry,* that, taking all the industries of Great Britain covered by the census of 1907, the wages and salaries cost amounted to 68 per cent, of the total. **Sir Frederick** Mills, chairman of the British Iron and Steel Federation, places these wages as high as 90 per cent, of the cost of production: and **Mr. Ayre,** O.B.E., chairman and managing director of the Egtheburnt Island Shipbuilding Company, Scotland, makes the proportion of wages to the selling price of the ship about 80 per cent. The best - the truest - test of a policy is to be found by a scrutiny of the condition of the masses of the people. To show the effect of this national policy of protection upon the great mass of the people of this country, . those who earn their living as wageearners, and the margin that is left to them after they have enjoyed the highest standard of living that exists in the world, I shall read figures relating to the deposits in our Savings Banks. They are as follows : - Those figures completely answer the declaration that protection is a bad policy for Australia. I have shown that its benefits have been spread over the whole community; that it encourages trade, industry, primary and secondary; and is the most effective cause of the growth of population. Immigrants have come to Australia because work at good wages awaited them. During the whole of my life I have been a believer in land settlement. I believe it to be the basis of a nation's greatness. In what way can land settlement be induced ? There is only one way. It must be made profitable. That cannot be done by the writing of books or the making of speeches, but only by making available profitable markets, and providing facilities for placing primary products upon them. In short, the conditions must be such that there will be a profitable return in pounds, shillings, and pence, and the adjuncts of civilization for the farmer. The British scheme of Empire settlement is the best yet devised. I had the honour to inaugurate it, and it has gone on haltingly ever since. What have we to show for the expenditure of so much money and energy ? If we could show on a screen in parallel columns the amount that has been spent, and the amount that ha3 been gained by that scheme, we should see that we had spent millions and obtained very little. But immigrants have been induced to come to this country by the high standard of living that we enjoy, and the promise of employment. Our secondary industries employ 440,000 persons directly, and many more indirectly. They are the country's standby. They have attracted people to our shores, and provide employment for tens of thousands of persons, not only in the large cities, but also, as my friend the Minister for Trade and Customs said this afternoon, in the smaller towns of Australia. I sympathize with my friends in the Ministerial corner who preach the policy of decentralization. I believe in decentralization. It would be a splendid thing if we could establish, in every town some industry that would prevent its young men from trickling to the large cities. But you cannot induce men to go on the land merely by placing before them glowing pictures that have been painted by men in the snug recesses of city offices. The most effective means of encouraging decentralization is a national policy that will provide employment, and, by diversifying industry, create openings for every temperament and every kind of talent. In America, where this policy has been in operation for many years, it has done what no amount of effort on the part of the agricultural bureaux, or any " back to the land " movement, could achieve. It has scattered the industrial organization of America over every State, and distributed it in small centres. I was informed, whilst in America, by the American Federation of Manufacturers that the great bulk of the 50,000 firms which it represented did not employ more than 100 hands. In almost every small town in the United States of America, a secondary industry has been established; the men employed have their homes about the factory, and round about it land settlement flourishes, providing food and other necessaries for the population attracted by the factory. Settlement begets settlement. Land settlement in Australia has been, is being, andwill be encouraged by the wholesale endorsement of a national policy of manufactures, so that there will be sure and certain employment for those already here, and others who come to this country. By the distribution of secondary industries throughout the continent, markets will be established at the doors of the men on the land, who will be given opportunities that were formerly denied to them. One more table and I have done. It relates to the breadwinners in the Australian population. I shall quote only those figures that are relevant to this discussion - This table completes what the others began; it shows the magnitude of the operations of the secondary industries. The greatest thing to the credit of this country is the standard of living that is enjoyed by the mass of the people. It is not the few wealthy persons who make a nation great; but the diffusion of wealth and the happiness of the many. It is the glory of Australia that her sons and daughters enjoy a high standard of living. That high standard is reflected in the physique of her people. When our men went to the war, they went well equipped. They had sprang from a great stock, and they had lived in a favoured environment. They had been well fed, and they were fit not only to pursue the arts of peace, but also to defend themselves on the bloody plains of war. In this high standard of living and the great margin over and above it, which is shewn by the deposits in our savings banks - in the tremendous growth of our oversea trade, and the amazing increase of deposits in our cheque-paying banks, in the extraordinary progress of production, and the growth of population - in all these things is shown the value of our great national policy of protection. As for me, when I believe in a thing, I believe whole-heartedly. I believe whole-heartedly in this policy. I am not one who takes two bites at a cherry. I do not deny that there may be in the schedule before us some items that need amendment. I have said that if any honorable member has arguments to prove that there are, I will listen to him, and will do my best to prevent injustice. It may be true that merchants are suffering unfairly because of the delay in the delivery of their goods on account of the seamen's strike. If hardship has been inflicted, I, and I am sure every other honorable member of this committee, will do everything possible to remove it. If this great policy falls short at all, it is in so far as it has not been applied as widely as it might have been ; but it is upon this policy that we must depend to develop the great potentialities of this country, and to make it what it is destined tobe - one of the great nations of the earth. Progress reported. {: .page-start } page 1279 {:#debate-15} ### ADJOURNMENT {:#subdebate-15-0} #### League of Nations - Admission of Germany Motion (by **Mr. Bruce)** proposed - >That the House do now adjourn. {: #subdebate-15-0-s0 .speaker-KZA} ##### Mr WEST:
East Sydney .- This afternoon, I asked the Prime Minister, on notice, a series of questions in connexion with the admission of Germany to the League of Nations. I am sorry that he did not appear to realize the importance of the matter and to rise to the occasion. He seemed to think that I asked the questions out of mere curiosity, or with some frivolous object; but I wish to inform him that many of my constituents are deeply interested in the League of Nations, and are thoroughly acquainted with its. proceedings. At East Sydney we have a strong branch of the League of Nations Union, which includes in its membership some university professors, a number of clergymen, and other persons of high standing in the community. I wished to obtain some information for them. My questionsto the Prime Minister were as follow : - {: type="1" start="1"} 0. Has his attention been drawn to a cablegram that opposition to increasing the mem bership of the Council of the League of Nations beyond the admission of Germany was voiced by members of all parties at a largely attended meeting of the League of Nations Parliamentary Committee of the House of Commons, the meeting unanimously expressing grave apprehension of the proposal to make fundamental changes in the constitution of the Council, and urging the Government to offer strenuous opposition? 1. Will he state whether this expression by members of the League of Nations ParliamentaryCommittee, if supported by the British Government, will involve Australia into supporting it? 2. If so, what opportunities have the people of Australia to agree or disagree with the sentiment expressed? In reply, the Prime Minister said - 1.Yes. {: type="1" start="2"} 0. The Commonwealth Government is not yet aware of the attitude that will be taken by the British Government in respect to any increase in the membership ofthe Council of the League of Nations. 1. The Government, in coming to any decision on the attitude that it may take up on this question, will naturally give due consideration to Australian public opinion, and will make the appropriate representations accordingly. I am not satisfied with those answers. The Prime Minister should give the people, or atleast the representatives of the people in this House, an opportunity to express their views on the subject. Many of our people are opposed to Germany being given a seat on the Council of the League inpreferencetoPolandorSpain.Ihave no doubt that those two countries will feel seriously aggrieved should Germany be chosen in preference to them. I suppose no European country in the past has suffered so much, in one way or another, as Poland. The Premier of Prance, M. Briand, has stated that if Poland is not admitted to the Council of the League there will be perpetual war at Warsaw. The Government should be very careful before it makes any determination on this matter. The question is of momentous importance. We should be very careful lest we involve ourselves too much in foreign affairs. For my own part, I do not think that the Locarno Pact will be of any great benefit to Australia, particularly if the trickery that is going on at present continues. The Pact only takes into account the affairs of three big European Powers, and I am afraid that the tendency on their part is to revert to secret diplomacy. **Mr. Ramsay** MacDonald is revered in Great Britain and on the continent to-day because while Prime Minister he initiated the system of open diplomacy which made available to the people full information on all foreign affairs. Personally, I have not much confidence in **Sir Austen** Chamberlain. He was friendly with Germany before the war, and it seems as though he is getting back to the old relationship. I hope that the questions I place on the notice-paper will not be treated with contempt, but that proper respect will be paid to the people on whose behalf they are asked. Anything that I can do to promote the welfare of the League of Nations I shall do, despite the way in which the Prime Minister has treated me in this matter. {: #subdebate-15-0-s1 .speaker-F4B} ##### Mr BRUCE:
Prime Minister and Minister for External Affairs · Flinders · NAT -- If the honorable member for East Sydney **(Mr. West)** has gained an impression, from the answers I gave to his questions this afternoon, that I was treating either him or his constituents with any disrespect, I very much regret it. I am afraid that, perhaps, to use the words employed by the honorable member at the beginning of his remarks, I did not rise to the heights to which his questions gave me an opportunity to soar; but no slight or disrespect was intended. The position with regard to the permanent members on the Council of the League of Nations is now under consideration. The matter involves great difficulties, and is one that may do much to destroy the very much better spirit that came over Europe after the signing of the Locarno Pact. The right honorable member for North Sydney **(Mr. Hughes)** also submitted some questions on this matter, and I imagined that the answers I gave him, together with my replies to the questions by the honorable member for East Sydney, would furnish all the information desired. No question of secret diplomacy is involved. The whole issue is perfectly open. The situation is both difficult and delicate, but I am hopeful that a way out of the trouble will be found. At the moment I can give no more information than was supplied this afternoon.I again assure the honorable member for East Sydney that the replies were not in any way intended to be disrespectful, or to cast any slur upon him. Question resolved in the affirmative. House adjourned at 10.14 p.m.

Cite as: Australia, House of Representatives, Debates, 3 March 1926, viewed 22 October 2017, <http://historichansard.net/hofreps/1926/19260303_reps_10_112/>.

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