House of Representatives
6 November 1930

12th Parliament · 1st Session

  1. House of Representatives
  2. 12th Parliament
  3. 1930

Mr. Speaker (Hon. Norman Makin) took the chair at 2.30 p.m., and offered prayers.

page 86

BACON AND HAM PRODUCTS

Tariff Board’s REPORT

Mr FRANCIS:
MORETON, QUEENSLAND

– On several occasions daring the last session I inquired of the Assistant Minister for Trade and Customs (Mr. Forde) whether the report of the Tariff Board on bacon and ham products had been received. The honorable gentleman replied that the inquiry of the board had been completed, and that the report would be presented almost immediately. I now ask him if he has received the report, and, if so, whether he will lay it on the table.

Mr FORDE:
Assistant Minister assisting the Minister for Customs · CAPRICORNIA, QUEENSLAND · ALP

– I think the report has been received. If so, I shall, place it on the table.

page 86

QUESTION

DAIRY EXPERT IN LONDON

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– So far back as August last I wrote to the Acting Ministor for Markets and Transport (Mr. Forde), asking for a reply that had been promised to my question regarding the report of Mr. “Wigan, the Commonwealth dairy expert in London. I have again written on the subject, and I now ask the honorable gentleman if he will attend to my request.

Mr FORDE:
ALP

– Honorable members are well aware that all letters sent to me are promptly answered. Possibly the letters of the honorable member for Richmond (Mr. R. Green) were addressed to the department, and not to me, or they may have been sent to the Minister for Markets and Transport. Certainly the honorable member’s request has not previously come to my notice. I shall inquire into the matter, and let the honorable member see the report. I assure him, further, that if at any time he requires information, he need only apply to me in my office, and, if possible, it will be furnished to him without putting him to the trouble of asking questions in this House.

page 87

QUESTION

NEWSPAPER CRITICISM: PRIVILEGE

Order of the day called on for the resumption of the debate from 5th November(vide, page 35), on motion by Mr. Yates -

That the editor of the Adelaide Advertiser be declared guilty of contempt of this House, and that Mr. Speaker give effect to the resolution agreed to by this House on the 20th December, 1912, having reference to newspaper misrepresentation.

Mr YATES:
Adelaide

.- The motion has called attention to the falsity of the Advertiser’s report, and its misrepresentation of my attitude. The House is now cognizant of the facts, and my object having been served, I ask leave to withdraw the motion.

Leave granted; motion withdrawn.

page 87

QUESTION

ELECTORAL EIGHTS FOR NATURALIZEDPERSONS

Mr NELSON:
NORTHERN TERRITORY, NORTHERN TERRITORY

asked the Minister for Home Affairs, upon notice -

Whether a Certificate of Naturalization, granted under the law of the Commonwealth or of a State, to any resident of Australia, entitles such person to exercise the franchise under the Commonwealth electoral law?

Mr BLAKELEY:
DARLING, NEW SOUTH WALES

– Yes, in accordance with section 39 of the Commonwealth Electoral Act as amended in 1925, provided the certificate is still in force and subject to the usual conditions relating to enrolment and voting.

page 87

IMPORTS AND EXPORTS

Mr.PRICE asked the Acting Minister for Markets and Transport, upon notice -

What was the total value of (a) imports, and (b) exports, for each State of the Common wealth for each of the last three years?

Mr.FORDE. - The answers to the honorable member’s questions are -

page 87

QUESTION

SIR OTTO NIEMEYEE

Mr McGRATH:
BALLAARAT, VICTORIA

asked the Acting Prime Minister, upon notice -

In view of the many contradictory statements regarding the visit to Australia of Sir Otto Niemeyer, will he make a statement to the House regarding the invitation alleged to have been extended to Sir Otto Niemeyer by the Commonwealth Government?

Mr FENTON:
Minister for Trade and Customs · MARIBYRNONG, VICTORIA · ALP

– I shall endeavour to furnish a reply to the honorable member’s question to-morrow.

Mr MACKAY:
LILLEY, QUEENSLAND

asked the Acting PrimeMinister, upon notice -

Whether he will state the circumstances leading to the visit to Australia of Sir Otto Niemeyer ?

Mr FENTON:

– I shall endeavour to furnish a reply to the honorable member’s question to-morrow.

page 87

EXCHANGE RATES

Mr.PROWSE asked the Acting Prime Minister, upon notice -

In view of the parlous condition in which the primary producer finds himself through the serious fall in the prices of the products he sells, will the Government take steps to prevent the pegging of exchange to his disadvantage ?

Mr FENTON:
ALP

– The Government has for some time been in close touch with the Commonwealth Bank, and, through it, with the trading banks, in regard to exchange rates. These rates were recently increased. The position is still being carefully watched and the Government will, from time to time, take such further action as may seem desirable.

page 88

QUESTION

UNEMPLOYMENT GRANT TO STATES

Mr PRICE:
BOOTHBY, SOUTH AUSTRALIA

asked the Acting Treasurer, upon notice -

With reference to the Commonwealth grant of £1,000,000 to various States to help relieve unemployment to date, will he state -

a ) the amount allotted to each State ; and

b ) the amount paid to the States by way of advances and in recoupment of expenditure incurred ?

Mr LYONS:

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

  1. The original allocation of the proposed grant of£1,000,000 was: -

At the conference of Commonwealth and State Ministers in Melbourne in August last, the States agreed to forgo portion of this grant, so as to enable the Commonwealth to make a special grant to South Australia to assist in the balancing of the South Australian budget for the present financial year. The amounts which the States agreed to forgo in respect of the unemployment grant were: -

In addition, Victoria agreed to payment of £100,000 in respect of the Federal Aid Roads grant being deferred in order that the total special grant to South Australia might be brought up to £850,000.

  1. The total amounts paid to the respective States in respect of the grant for unemployment are as follow: -

An amount of £27,000 which has been paid to South Australia will be regarded as portion of the special grant of £850,000 for general financial assistance.

page 88

QUESTION

ASSISTANCE TO WHEATGROWERS

Mr PROWSE:
FORREST, WESTERN AUSTRALIA

asked the Acting Prime Minister, upon notice -

In view of the fact that the Commonwealth Government, as well as some State Governments, urged the farmers of Australia to grow more wheat, and in view of the fact that while the farmers fully responded to the urge, they now find that at the low market price of wheat they will lose considerably on every bushel of wheat grown, will the Government pay a bonus of1s. per bushel on all wheat marketed for the 1930-31 season, and thereby assist the farmers to carry on their operations?

Mr FENTON:
ALP

– The Governmentis fully seised of the seriousness of the position in regard to the wheat industry, and has convened a conference of State Ministers of Agriculture and representatives of wheat distributing organizations, wheatgrowers and millers, to commence in Canberra on the 10th November, for the purpose of considering the best way in which the industry can be assisted, having regard to the existing financial stringency.

page 88

QUESTION

NOTE ISSUE

Mr LATHAM:
KOOYONG, VICTORIA

asked the Acting Trea surer, upon notice -

  1. What was the amount of the issue of Australian notes on 31st October, 1930?
  2. What was the amount of the gold reserve held by the Commonwealth Bank against such notes ?
  3. What was the percentage of the reserve on the total issue?
Mr LYONS:
ALP

– Information is not available as to the position on 31st October, 1930. The position on the 3rd November, 1930, was : -

  1. £45,153,426.
  2. £15,285.193.
  3. 33.85.

page 88

QUESTION

COMMONWEALTH PUBLIC SERVICE

Mr LATHAM:

asked the Acting Prime Minister, upon notice -

  1. How many persons are employed by the Commonwealth Government (a) as members of the Commonwealth Public Service, and (b) in other capacities?
  2. How many persons in the two classes above-mentioned are in receipt of salaries of over £725 per annum?
Mr FENTON:
ALP

– The information is being tabulated, and will be made available as soon as possible.

page 89

QUESTION

PETROL INQUIRY

Mr LACEY:
GREY, SOUTH AUSTRALIA

asked the Acting Prime

Minister, upon notice -

Whether he will, during the inquiry concerning the price of petrol, have the position of Commonwealth Oil Refineries Limited investigated and ascertain -

Whether it is a fact that the profit on C.O.R. motor spirit to retailers is greater than on other kinds?

Whether Commonwealth Oil Refineries Limited acted in conjunction with other companies in regard to the latest increase in the price of petrol ?

Whether the distributing rights of the C.O.R. product are confined to a few people in each State?

Mr FENTON:
ALP

– In the course of the inquiry which is being made in respect of the price of petrol, all aspects of the matter will bo investigated as far as practicable.

page 89

QUESTION

POSTMASTER-GENERAL’S DEPARTMENT

Dismissal of Returned Soldiers - Overtime

Mr LATHAM:

asked the PostmasterGeneral, upon notice. -

  1. Is it a fact that since the beginning of September, 1930, approximately, 700 returned soldiers have been dismissed from the Postmaster-General’s Department in New South Wales?
  2. Is it a fact that rationing at the rate of one week off ‘in each month has been in operation for all temporary men in the Mail Branch in New South Wales for the past seven weeks?
  3. Is it a fact that on Sunday, 12th September, theMail Branch at the General Post Office, Sydney, worked 300 permanent men at overtime rates for the day at a cost of over £600?
  4. What amount of overtime has been worked by permanent employees of the department in New South Wales since the beginning of September, 1930?
Mr LYONS:
ALP

– Inquiries are being made and a reply will be furnished to the honorable member as soon as possible.

page 89

FEDERAL CAPITAL

Furnishing of Kingston Cafe

Mr MORGAN:
DARLING DOWNS, QUEENSLAND

asked the Minister for

Home Affairs, upon notice -

Is it a fact that some of the expensive furniture from the Hotel Acton, Canberra, has been removed to the drinking bar at Kingston; if so, will he have inquiries made with a view to discovering on whose authority this was done, and intimate whether it meets with his approval ?

Mr BLAKELEY:

– Some settees and small tables from Hotel Acton were utilized in furnishing new saloon bars at City and Kingston Cafes. The transfer of these articles was authorized by the Civic Administrator and I approve of his action as being in the nature of an economy. The alternative would have been to purchase new furniture, whereas the Hotel Acton is not now being used for residential purposes and its equipment is lying idle. The provision of furniture in the bars is required under the terms of the Liquor Ordinance, and the articles transferred are quite suitable and economical for the purpose.

page 89

QUESTION

UNEMPLOYMENT STATISTICS

Mr LATHAM:

asked the Acting Prime Minister, upon notice -

What was the percentage of unemployment among trade unionists in Australia according to the reports made by the Commonwealth Statistician, at thefollowing dates: - (a) 30th September, 1929; (b) 31st December, 1929: (c) 31st March, 1930; (d) 30th June, 1930; and (e) 30th September, 1930?

Mr FENTON:
ALP

– The answer to the honorable member’s question is as follows : -

The figures compiled by the Commonwealth Statistician showing the percentages of unemployment among trade unionists in Australia for the quarters ending on the dates mentioned by the honorable member are as follow: -

12.1 per cent.

13.1 per cent.

14.6 per cent.

18.5 per cent.

20.5 per cent.

page 89

BRITISH ECONOMIC MISSION

Supplementary Report

Mr MACKAY:

asked the Acting Prime

Minister, upon notice -

Whether any supplementary report has been received by the Government from the members of the British Economic Mission, as suggested in the report of the latter dated 7th January, 1929?

Mr FENTON:
ALP

– I am advised that no supplementary report has been received from the members of the British Economic Mission.

page 90

QUESTION

GOLD BONUS

Mr LATHAM:

asked the Acting Prime Minister, upon notice - 1.Didthe Prime Minister, on 25th June last, state he was not impressed by thealign- ments in favour of the granting of a bonus on the production of gold?

  1. Did the Acting Prime Minister state, on 20th October last, that the Federal Ministry had decided to grant a bonus on the production of gold?
  2. Did the Acting Prime Minister, on the 2 1st October, 1930, state that Cabinet had not decided to grant a bonus on this production of ofgold?
  3. Has the Government arrived at any decision with respect to the granting of a bonus on the production nf gold. and. if so. what is it?

Mr.FENTON.- The replies to the honorable member’s questions are as follow : -

  1. The official notes of the deputation which waited upon Mr. Scullin on the 25th June last do not indicate that be made the statement mentioned. They show that he declared himself us not unsympathetic towards the request, but that he referred to certain obstacles in the way and stated that information on a number of points would be required before a decision could be reached. 2 and 3. I would refer the honorable member to a statement which I! made to the pros* on this subject on the 21st October, in which I explained that the construction that had been placed upon an earlier statement by me was not correct.
  2. The question is still under the consideration of the Government.

page 90

QUESTION

BRITISH MIGRANTS

Mr BAYLEY:
OXLEY, QUEENSLAND

asked the Minister for Home Affairs, upon notice -

How many British migrants landed in Australia (a) during the nine months ending 30th September, 1930; and (b) during the nine months ending 30th September, 1929?

Mr BLAKELEY:

– The total British arrivals during the respective periods mentioned were as follows: -

  1. 37,066.
  2. 48,775.

page 90

QUESTION

DAIRYING INDUSTRY

Mr FRANCIS:

asked the Acting Prime Minister, upon notice -

  1. Whether the Council for Scientific and Industrial Research has yet completed its inquiry regarding the intensification of production in the dairying industry?
  2. If not, when is it expected that the report will be completed?
  3. If the report has been received, when will it be made available to honorable members ?
Mr FENTON:
ALP

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

  1. Yes. 2 and 3. The question of printing copies of the report with a view to circulation is at present receiving consideration.

page 90

QUESTION

LOAN OF AEROPLANES

Mr BERNARD CORSER:
WIDE BAY, QUEENSLAND

asked the Minister for Defence, upon notice -

  1. Does his department make available new aeroplanes to aero clubs on loan, without cost?
  2. If so. on what conditions and for what period arc the ‘planes supplied free?
  3. How many are so loaned, and to what clubs ?
  4. Have requests forplanes on loan been refused: if so, to what clubs?
Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

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

  1. Yes.

  2. The conditions of loan are as follow: -

    1. The club must be approved and must be registered as a company under the laws of the State in which it is situated.
    2. Certain approved personnel must be employed by the clubs.
    3. The syllabus of training to be followed by the club must be as laid down by the department.
    4. The club must be able to assure the department that it will be able to continue operations after the termination of the agreement, which is usually for a. period of two years.
    5. Certain conditions have been inserted in agreements regarding the replacement of any machines on loan which may be damaged beyond repair during the period of the agreement.
    6. The aeroplanes so issued must be used for the purpose of carrying out only the object of the agreement with the club.
    7. The aeroplanes must be maintained by the club in an airworthy condition.
    8. The fees to be charged members must be approved by the Minister.

The purpose for which aeroplanes are loaned is that of assisting the club to enable its members to learn and practice the art of flying.

  1. Thirty-two aeroplanes have been issued on loan, or have been promised, to the following clubs since 30th August, 1926, when the first agreements were made: -

Australian Aero Club (Queensland Section).

Aero Club of Central Queensland.

Aero Club of New South Wales.

Newcastle Aero Club.

Australian Aero Club (Victorian Section ) .

Australian Aero Club (Tasmanian Section ) .

Aero Club of South Australia Limited.

Australian Aero Club (Western Australian Section).

  1. Applications have been made from the following clubs, but up to the present it has not been possible to make an issue: -

Australian Aero Club (Western Australian Section) - Additional aircraft.

Aero Club of South Australia Limited.

Australian Aero Club (Queensland Section ) .

Bendigo, Victoria.

Ballarat, Victoria.

Goulburn, New South Wales.

Cessnock, New South Wales.

Lismore, New South Wales.

Katanning, Western Australia.

Merredin, Western Australia.

In addition, ten training organizations have requested cash payments for pilots trained in their own aircraft. These requests have also been refused.

page 91

NATIONAL DEBT SINKING FUND BILL

Motion (by Mr. Lyons) agreed to -

That he have leave to bring in a bill to amend the National Debt Sinking Fund Act 1923-1929.

page 91

SALES TAX ASSESSMENT BILLS

(Nos. 1a to 9a.)

Motions (by Mr. Lyons) agreed to -

That he have leave to bring in a bill for an act to amend sections 3 and 17, sub-section (1) of section 18 and paragraph (d) of section 20 of the Sales Assessment Act (No. 1) 1930.

That he have leave to bring in bills for acts to amend section 3 of the Sales Tax Assessment Acts Nos. 2 to 9.

page 91

INCOME TAX ASSESSMENT BILL (No. 2) 1930

Motion (by Mr. Lyons) agreed to -

That he have leave to bring in a bill for an act to amend the Income Tax Assessment Act. 1922-30.

Bill brought up, and on motion by Mr. Lyons, read a first time.

Second Reading

Mr LYONS:
Acting Trea surer · Wilmot · ALP

– by leave - I move -

That the bill bc now read a second time.

This bill provides for the amendment of section 24 of the Income Tax Assessment Act 1922-1930 for the purpose of reducing the general exemption applicable to income from property. Under both the existing and the proposed provisions the general exemption is deducted from the assessable income remaining after allowing all the deductions under the act except the general exemption. At present the general exemption is £300 where the income is £300 or less, whether the income is derived from personal exertion or from property, or comes from both sources. This general exemption of £300 is reduced by £1 for every £3 by which the income, from whatever source or sources derived, exceeds £300. It follows that where the income is £1200 or more, there is no general exemption. Where the income is derived from personal exertion and property, the act provides that the exemption shall be deducted in the first instance from that portion of the whole amount which is income from property, and any excess is then deducted from the income from personal exertion.

Where the income is wholly derived from personal exertion, the position will continue to be as, at present, that is, there will be a deduction of £300, less £1 for every £3 by which the income exceeds £300. Where the income is wholly derived from property, and does not exceed £100, there will be a general exemption of £100; and when the income exceeds £100, a general exemption of £100, less £1 for every £1 by which the income exceeds £100. Consequently, when the income from property is £200 or more, there will be no general exemption.

Where the income is derived partly from personal exertion and partly from property, the deduction from each source of income will be ascertained by calculating the deduction which would bo allowed from each source if the total income were derived from that source; and by reducing the deduction so obtained to the proportion that the income from that source bears to the’ total income. The effect will be as follows: - Where the total income is £100 or less, the aggregate amount allowable as deduction for general exemption will be the amount of the total income, irrespective of the respective proportions to total income which may bc represented by income . from personal exertion and income from property comprising the total income. When the total income exceeds £100 in what may be culled the lower grades of total income, there will usually be an amount deductible as general exemption from each class of income in the total. For example, if the total income is £101, consisting of £.100 from personal exertion and £1 from property, there will be .allowed a deduction of £100 from the personal exertion t income and of about £1 from property. To state the position in another way -

The general exemption allowable for £101 of personal exertion income would be £101. Therefore, the part of £101 which is attributable to £100 in the mixed total income is 100 over 101 of 101, which is £100.

The general exemption allowable for £101 of property income would be calculated as follows : - The excess of £101 over £100 is £1. Therefore, £100 must be diminished by £1 leaving £99 as the general exemption for £101 total income from property. The part of this which is attributable to £1 income from property is 1 over 101 of £99, which is .9S, or practically £1.

The position may be further illustrated by taking a total income of £150, half of which is derived from personal exertion, and half from property. If that total income had been derived exclusively from personal exertion, the general exemption would bc £150. The proportion of that which would be deductible from the £75 of personal exertion income in the total income of £150 would be 75 over 150 of 150, or £75. This would leave no tax payable on the income from personal exertion in that case.

The general exemption on £150 derived exclusively from property would be calculated as follows : - The excess of £150 over £100 is £50. Therefore, the basic general exemption of £100 must be reduced by £50, which would leave a residue of £50. A taxpayer with a total net income of £150, derived exclusively from property, would thus receive a deduction of £50 on account of general exemption,’ and would pay tax on the balance of £100.

As the total income of £150 in the ‘ example is only partly derived from property, the exemption of £50 must be apportioned to the actual property income in the total. This actual income would be £75, therefore, 75 over 150 of £50, namely, £25, would be the deduction on account of the general exemption ‘ allowable in this case. By deducting £25 from £75 income from property, there would be left a taxable income of £50 from property. The total general exemption allowed in this case would be £75 plus £25=£100.

The position under the new proposals of a taxpayer with a total income of £200 would be as follows : - If the total income were derived exclusively from personal exertion, the general exemption to be deducted would be £200, and no tax would be payable. If the total income were derived exclusively from property, there would not be any general exemption, because the basic exemption of £100, through being diminished by £1 for every £1 by which the income exceeds £100, would become nil when the income amounted to £200. This taxpayer then, would pay tax on a taxable income of £200. If the total income were derived partly from personal exertion and partly from property there would be no tax payable on the part derived from personal exertion because -the amount of the deduction on account of general exemption would be equal to the amount of that part; but there would be no deduction on account of general exemption from the part derived from property, because there would be no general exemption deduction allowable on account of £200 derived wholly from property, and because a fractional part of nothing is nothing.

It is desirable to take still another example, namely, the case of a taxpayer whose total income is, say, £600. If the total income were derived exclusively from personal exertion the general exemption would be calculated as follows: - The excess of £600 over £300 would be £300. This would need to he divided by three to find the amount by which the general exemption must be reduced on account of that excess. The reduction in this case would amount to £100. Therefore, this taxpayer would be entitled to a deduction of £200 on account of general exemption, and lie would pay tax on a taxable income of £400. If the total income of £600 were derived exclusively from property, there would be no deduction on account of general exemption, because that deduction would become ‘ nil “ when the net income amounted to £200. If the total income were derived partly from personal exertion and partly from property, the deduction of £200 already ascertained for a total income of £600 from personal exertion must be apportioned to the amount of personal exertion income in the mixed total income of £600, and the taxpayer would pay tax on the balance of his income from personal exertion. There would be no deduction on account of general exemption from the property part of the mixed total income, and the taxpayer will pay tax on the whole of that property income.

It is necessary to draw attention to a provision of the bill which alters the present departmental practice regarding deductions on account of general exemption. That practice was connected with the calculation of the five years’ average taxable income, by reference to which the taxpayer’s rate of tax is ascertained. The practice, based upon advice by the Crown Law Department, is that when the total income in a year is less than the amount of the general exemption, namely, £300, the deduction allowed by the act is £300, and, therefore, the minus difference between the deduction and the amount of the income is treated as a loss for that year which is to be deducted from the taxable income of a future year in the fiveyear averaging period in calculating the average income.

For example, assume that the following incomes are derived in the first two years of a five-year period from persona.! exertion : -

The average income for those two years is half £300, which is £150. Under the bill the position will he as follows: -

Under the present proposal this taxpayer will not get the benefit of any difference between his income and the amount of the exemption to which he was entitled when his income did not reach the exemption figure. His rate under the bill would be ascertained by reference to a taxable income of £200 instead of to £150.

While the general exemption of £300 was applied to all classes of income, no difficulty presented itself as a result of that practice. Under the new proposals, which introduce a different general exemption for property income, the allocation of deduction on account of general exemption to the respective classes of income in a mixed taxable income, made it impossible readily to secure a continuance of the practice, because there never could be a minus quantity of general exemption deduction to be carried forward to a future year for averaging purposes. It would have been unfair to persons with mixed incomes, if other taxpayers with incomes derived exclusively from either personal exertion or property were to be left in enjoyment of their minus quantities of general exemption deduction. It has, therefore, been decided to place all taxpayers on the same basis in this respect, and ,to provide as is done in the bill, that where the amount of the net income from which the general exemption is deductible is less than the maximum amount of general exemption, the amount deductible on account of general exemption shall be an amount which is equal to the amount of the net income. It is estimated that the additional revenue that will result from the proposed’ reductions of the general exemption will amount to £250.000 on the year’s general assessment.

The bill also provides for the amendment of section 32 of the Income Tax Assessment Act relating to the power to call for returns in order that power may exist to call for returns of persons with income from all sources amounting to £100 or over in the case of resident individuals. The present power to call for returns from resident individuals is limited to cases in which the total income from all sources amounts to £300 or over. There is already power under the law to call for returns of all income without limitations of amount in the case of companies and non-resident individuals.

Debate (on motion by Dr. Earle Page) adjourned.

page 94

INCOME TAX (SALARIES) ASSESSMENT BILL

Motion (by Mr. Lyons) agreed to -

That he have leave to bring in a bill for an act relating to the imposition, assessment and collection of a tax upon certain incomes, being salaries payable by the Commonwealth or by an authority under the Commonwealth.

Bill brought up, and read a first time.

Second Reading

Mr LYONS:
Acting Treasurer · Wilmot · ALP

– by leave - I move -

That the bill be now read a second time.

This measure is designed to give effect to the decision of the Government to impose a tax on the salaries of members of Parliament and Ministers, and also of the higher-paid Commonwealth officials. The first group comprises parliamentary allowances and salaries, and in this instance the tax will apply to the allowances of all senators and members. In the case of a senator or member who is a Minister, the President of the Senate, the Speaker of the House of Representatives, the Chairman of Committees, or the Leader of the Opposition, in either House, the tax will apply to the salary attaching to the office which he holds. The officers in the second group will include every public servant whose salary exceeds £725 per annum and is paid from the Commonwealth public account or the North Australia Commission fund, unless the officer concerned is employed by the Com- monwealthin any territory which is not part of the Commonwealth, and where the revenues are raised within that territory for its own purposes. This group embraces officers of the Development and Migration Commission, the Council for Scientific and Industrial Research, the Commonwealth Railways, the War Service Homes, the Repatriation Commission, the North Australia Commission, the Naval, Military and Air Forces, the Public Service generally, as well as the High Commissioner, and the CommissionerGeneral in the United States. It does not include officers of the Commonwealth Bank, the Commonwealth Shipping Board, the Dried Fruits Control Board, and the Commonwealth Oil Refineries. Nor does it include the Administrator of Norfolk Island and the Administrators and officers of the Papuan and New Guinea Services. It does not include any person whose salary is not paid directly from the public account. For instance officers of the Amalgamated Wireless Australasia Limited, which is a semi-government institution, will not be affected.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– Will it apply to the judges ?

Mr LYONS:

– No special tax can be applied to the judges. I feel sure, however, that the judges will rise to the occasion, and join with members of Parliament, Ministers and members of the Public Service to whom the act will apply in contributing their proper percentage.

Officers who have been rationed in any financial year on or after 1st July, 1930, will not be subject to the tax during that financial year.

Should there be cases in which the amount of rationing is not equal to the amount of tax it will rest with the administration to see that the same sacrifice is made by rationed officers as is made by others. But, generally, the rationing which has taken place so far is at least equal to the tax which it is proposed to levy.

The basis of the tax is expressed in a separate taxing bill which provides for the following taxes: -

On allowances of senators and members - a tax of 10 per cent. of those allowances.

On allowances and salaries of Chairmen of Committees, and Leaders of the Opposition, inboth Houses - a tax of 12½ per cent. of those allowances and salaries.

On allowances and salaries of Ministers, the Speaker of the House of Representatives and the President of the Senate - a tax of 15 per cent. of those allowances and salaries.

On salaries of Commonwealth officials - (a) where the salary exceeds £725, but does not exceed £1000, a tax of 10 per cent. of salary, but so that no salary is brought below £725;

  1. where the salary exceeds £1,000, but does not exceed £1,500, a tax of 12½ per cent. of the salary, but so that no salary is brought below £900 - the net income remaining afterpayment of tax on £1,000 - and
  2. where the salary exceeds £1,500 a tax of 15 per cent. of salary, but so that no salary is brought below £1,312 10s - the net income remaining after payment of tax on £1,500.

The tax will be deducted at the source from each payment of salary or allow- ance, and will commence with the first payment of salary after the 1st November, 1930. It will not, however, apply to any payment of salary on or after the 1st November, 1930, in respect of the period prior to that to which the first periodical payment of salary on or after that date relates.

It is possible that the salaries of some Commonwealth officials may fluctuate during the course of a year, and therefore in order that the amount of the tax shall be definitely ascertainable in respect of each payment of salary in such cases, it has been found necessary to provide that the annual salary, for the purposes of the rate of tax to be applied to each payment, shall be calculated at the rate of the official’s salary at the time of the payment.

The salary of a taxpayer who is a Commonwealth official is defined to mean the annual remuneration paid to the official in respect of the office occupied by him, and any annual allowance paid in respect of any duties performed in addition to those of that office. That applies to such payments as the higher duties allowance.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

-Will the tax be an allowable deduction when making assessments of income tax ?

Mr LYONS:

– Yes. The tax docs not extend to any income received from any outside source.

Although, technically speaking, the salary or allowance of any person affected by the tax remains unaltered, the practical effect of the tax is to reduce thatperson’s salary or allowance. In the circumstances, it is considered that the salary of any person, to the extent that it is subject to a reduction by way of tax, should not form a part of his income for the purposes of ordinary income tax or of any other form of taxation of salaries or allowance.

Mr Prowse:

– Will the amount of tax he an allowable deduction by the States?

Mr LYONS:

– Apparently those who contribute to the revenue in this way will be safeguarded against taxation by the States as well as by the Commonwealth for the bill provides that the salary of any taxpayer, to the extent of any tax payable by him under this legislation, shall not be income or salary for the purposes of any other law of the Commonwealth, or of any law of a State, relating to taxation.

Mr.ArchdaleParkhill. - How many officers will be affected?

Mr LYONS:

– The following summary indicates the scope and effect of the tax: -

Mr Latham:

– What is the total number of Commonwealth public servants?

Mr LYONS:

– In the general Public Service there are about 33,000 officers; if officers of departments at present outside the Public Service are included, the total would be about 36,000. I feel sure that the measure will meet with the approval of honorable members who.I believe, are prepared to set an example to others by making some sacrifice.

Debate (on motion by Mr. Latham) adjourned.

page 96

IRON AND STEEL PRODUCTS BOUNTY BILL

Second Reading

Debate resumed from 5 th November (vide page 76), on motion by Mr. Forde -

That thebillbe now read a second time.

Mr GULLETT:
Henty

.- This is a measure to ratify an agreement entered into by the Government with the firm of John Lysaght Australasia Limited, which is to be deprived of the payment of a bounty upon the manufacture of galvanized iron in exchange for the imposition of an embargo on importations of that commodity.

Before discussing the merits of this measure I should like to say that the Nationalist party has always recognized the importance of the iron and steel industry to Australia, and has contended that, to ensure the successful manufacture of iron and steel in Australia, the industry should receive an adequate measure of protection. Indeed, it can be said that the industry owes its existence in Australia to-day to the various measures of protection which have been granted to it by those on this side of the chamber. I have the greatest personal respect for the firm of John Lysaght Australasia Limited, and also for other big Australian iron and steel concerns associated with the original Lysaght enterprise at Newcastle. I am, howover, entirely opposed to the bargain upon which this measure is based. I strongly object to the building up of industrial monopolies, and to this one in particular, which cannot be in any way justified. Owing to the fall in the prices of raw materials used by this firm, the Government would have been justified in withdrawing the bounty without imposing an embargo. If that had been done, the company would still have been substantially better off than it has been in the past.

It is indeed remarkable to find a Labour government assisting in establishing industrial monopoly after monopoly in this country. I recall the time when the Labour party was the greatest enemy of industrial monopolies. A reference to the reports of the proceedings of this Parliament of 20 or 25 years ago would show that hundreds of pages of Ilansard had been taken up in recording the speeches of Labour members when attacking commercial monopolies such as the Colonial Sugar Refining Company, and what the members of the Labour party then termed the great tobacco trust of Australia. At that time they objected to such commercial undertakings on broad democratic principles; but to-day the members of that party have completely changed their attitude, and are actually assisting in the establishment of monopoly after monopoly. In fact, a monopoly is their god in politics.

One of the most amazing things that has happened politically in this country is that the members of the Labour party, ostensibly representing the workers of this country, are building up one wealthy corporation after another, and placing them in a position absolutely to exploit the consumers of this country. 1 do not suggest for a moment that honorable members opposite are much concerned with the capital behind this industry. They are desperately endeavouring to bolster up the trade union movement, and in doing so are assisting in establishing a succession of monopolies. I object to all monopolies, and to this one in particular, upon a number of grounds.

We are told that John Lysaght, Australasia Limited, has entered into an undertaking with the Government not to increase its prices for the present, and the Assistant Minister (Mr. Forde) gave us some indication of what the undertaking means. That undertaking is absolutely valueless and unconvincing. Thif great company cannot, under this agreement, be controlled by this Parliament, by the Minister, or by the department, in the matter of prices. Even under this bare undertaking by the company that it will not increase prices, which cannot be enforced by the Government, there is no suggestion that the company is to carry on its operations in an efficient and businesslike way and pay only a resonable rate of interest. The company, on its own statement, has invested approximately £700,000 in its works; but we do not know if that amount has been wisely spent. It would be an extraordinarily efficient company if such an amount invested in a pioneer industry in this country had all been well spent, and if it represents actual capital to-day. That is one of the great evils associated with the establishment of monopolies under tariff protection. Irrespective of how much capital has been lost, and how many grave mistakes have been made, such companies have the right to make a full rate of profit on the amount of capital which appears on their books. During periods of depression, such as the present, such companies should clearly state the position of their capital account, and a writingoff of dead capital should be insisted upon, but the Government, which represents the users of galvanized iron in Australia, has said, in effect, that if the company does not increase the price of its product it will, by act of Parliament, grant it a monopoly. In these circumstances the company has the right to make practically what profit it wishes upon all its capital, actual or nominal. Immediately such a monopoly is granted the users of galvanized iron are, owing to the absence of competition, deprived of the benefits they would otherwise receive in the matter of prices and quality.

On behalf of the members of the Nationalist party in this House, I again assert that we believe in adequate protection to the iron and steel industry, and in a fair measure of protection to this particular industry. But we do not believe in giving to this company unlimited opportunity to exploit the users of galvanized iron in Australia. So long as some galvanized iron is being imported, or there is an opportunity to obtain supplies, a measure of control can be exercised over the prices that are charged to Australian users of the commodity, and in addition, there is laid down a standard of quality which at all times is a challenge to the Australian product. Once a monopoly has been granted, there can bc no standard in regard to either price or quality. This would be a remarkable proposal if sponsored by any government, but coming, as it does, from the present Government it is utterly incomprehensible. Galvanized iron is used to some extent in metropolitan areas, but most extensively by our primary producers.

This proposal, in conjunction with the operation of the embargo upon the importation of galvanized iron, will have the effect of increasing immediately the price of this commodity, and will be a standing guarantee against any reduction of price in the future. There has been a drop in the prices of the raw materials that are used, some of them by this company, such as zinc or spelter, coal, iron and steel. Throughout the world to-day the price of galvanized iron is falling; yet, although we arcmore dependent now than ever previously upon our primary producers, it is proposed not only to prevent them from deriving the advantage that is to be gained from the lower price, but actually to increase the cost to them. We are all aware of the position in which our primary producers find themselves to-day, with wheat at 2s. a bushel at country railway stations, and wool averaging Sd. per lb.; yet, despite the supreme necessity for maintaining primary production for financial purposes overseas, we are deliberately increasing by act of Parliament the price that the farmer, the pastoralist, and every other man on the land in Australia has to pay for galvanized iron. The proposal is the more extraordinary in that it is put forward by a party which embraces every opportunity to emphasize its friendship for the man on the land. Scarcely a farmer’s house in Australia is roofed with other than galvanized iron.

The building trade generally furnishes an example of the inexplicable conduct of the Government in relation to monopolies. In addition to this proposed monopoly there is virtually a monopoly in regard to timber, and an absolute monopoly notwithstanding the absence of an embargo with respect to glass. Therefore, it will be seen that the fixation of the prices of the materials essential for the roof, the windows, the walls and the floors of a house has been placed in the hands of monopolies by a Labour Government. Whether it be in regard to woollens, cottons or any other essential commodity, this Government is prepared to give the Australian manufacturers or producers absolute immunity from competition from overseas. In every other country in the world, prices are falling rapidly, but in Australia the prices of many big items are still being raised deliberately by honorable members opposite. It is hopeless for us to expect to be lifted out of the economic depths in which we have been plunged so long as si i cb it state of affairs is allowed to continue. Within the last year the Government has had experience of the effect of the creation of new monopolies, in the accentuation of unemployment that has resulted. Its hopelessly stupid and callous, actions have been the means of throwing thousands of good Australians on the streets and making them dependent on the dole. That, ought, to have convinced honorable members opposite of the folly of the course that they were pursuing. I know, however. that Australian manufacturers are being asked if . they want additional tariff protection, and if they desire to be given a monopoly.

Mr Forde:

– That is absolute nonsense.

Mr GULLETT:

– Let us examine the amazing story of this latest performance. On the 22nd September last this particular company suddenly and dramatically closed its Newcastle works, on the ground that the heavy imports of galvanized iron were making manufacture in Australia unprofitable. It represented that the Australian market had recently been and was being flooded with galvanized iron from overseas. Simultaneously it announced that it might re-open its works within a week or a fortnight, but stated that further periods of idleness would probably be necessary unless a prohibition was placed upon imports. I have no doubt that that was almost an ultimatum, and that the public were invited to believe that the Minister was tremendously surprised at what had occur red.

Mr Forde:

– I understood the honorable member to say that he had great respect for the company.

Mr GULLETT:

– I have. But business is business.

Mr Forde:

– If the company did what the honorable member suggests, its action would be absolutely con.temptible

Mr GULLETT:

– The impression conveyed was that the company was being driven off the market, and that 900 good Australian workers were being thrown into idleness by its importing rivals. That, however, was not the position. A correspondent to the Melbourne Argus, writing on the 1st October last, declared that for years Lysaght’s Australasia Limited had, been the ‘heaviest Australian importers of galvanized iron and that they were very heavy importers during the early months of this year. , 0

Mr Forde:

– Then they duplicated their plant.

Mr GULLETT:

– Al that, time tin- firm carried huge accumulations of galvanized iron imported from their British works. On the 8th October, Lysaght’sreplied to a number of criticisms; but they did not deny, that they had been heavy importers immediately prior to the introduction of the embargo. My information is that, in the month of January last, the firm imported 2,89S tons; in February, 2,219 tons; in March, 2,395 tons; in April, 1,024 tons; and in May, 1,882 tons, or a total for five months of no less than 10,418 tons of galvanized iron. Actually,’ the Australian, manufacturers flooded the local market with their heavy importations, and then exploited the position to lead this Government to place an embargo on all imported galvanized iron. I do not suggest that Lysaght Limited imported specifically for that purpose. I daresay that they, together with many other local importers, were caught by the swift descent of the prevailing depression. But it is absurd for them to urge that it was imperative that an embargo should be placed upon’ imports. The imports were their own. Yet they represented to the Federal Go:vernment that, because of the action of the importers- that is, themselves - they were compelled to close their works. The Acting Minister must have been aware of those heavy importations by Lysaght’s Certainly officers of the Customs Depart-‘ ment were aware of them, and i cannot believe that the honorable gentleman entered into this serious and extraordinarily far-reaching proposal, which set up a monopoly’, without investigating the position. I am informed that, some time before the embargo was granted, Lysaght Limited increased the price of their imported galvanized iron by 30s. a ton. They used’ the embargo, not only to bolster up the prices of the Australian product, but also to increase the price of the galvanized iron that they had themselves imported from (heir British, factory. T find it impossible to- believe that, when Lysaght’s closed their Newcastle works, the arrangement, with the Government had not already been entered into. It seems patent to uie that it was all a put-up job, a sort of pretty suggestion - “ Show us how extreme your position is by closing your works for a few days,, and then the embargo will be granted.”

Mr Forde:

– -That is absolutely in* correct, and unworthy of the honorable gentleman. ,

Mr GULLETT:

– I did not expect the honorable gentleman to admit it; but how can I believe otherwise?’ Why that providential increase of 30s. a ton on the heavy stocks of galvanized iron that Lysaght’s” had imported just prior to the introduction of the embargo? The stage ivaa all set for it. < Mr. Forde. - I had a ‘better opinion of the honorable gentleman, and did not expect such an insinuation from him. Mr. GULLETT.-^-! am not suggesting, that improper motives prompted the action of the honorable gentleman; but merely pointing out what a wonderful, ramp this has been for- the importers of galvanized iron in Australia?

Mr Gabb:

-Is the honorable gentle man giving us facts,?

Mr GULLETT:

– I do not wonder at the honorable member for Angas (Mr. t Gabb) becoming restive under my exposure of the position. ‘ He represents primary producers, who are finding themselves in a most unenviable plight because of the tariff action of the Government. I also draw attention to the very heavy reductions which have taken place in Lysaght’s manufacturing costs during the past twelve months., Actually, the bounty on galvanized iron could have been removed and’ the Government saved over £90,0,00 without the imposition of an embargo. I need deal with only one of he commodities .rosed in the manufacture of galvanized iron. Lysaght Limited stated in’ a letter to the Melbourne Argus that they use# 11,500 tons of zinc, annually. The price of zinc has fallen during the past -twelve months from £25 to, £14 a ton, a reduction of £11 a. ton, which represents a saving to the company of £126,500 per annum, or a gain of £4 on each ton of galvanized iron. Analysing the position still further, tlie bounty could, have been saved to the

Government during this period of stringency, and the company would still have been £1 a ton better off than they were- a year ago, under the old prices. The, Acting Minister may be able to explain such, things, but he certainly did not ‘!<“> so in the entirely unsatisfactory speech with which he introduced the measure yesterday. There has been no reduction in the price of Lysaght’s galvanized iron during the past year.

Mr Latham:

– What has been the reduction in the price of coal during that period ?

Mr GULLETT:

– I am unable to say, precisely, what the fall in the price of coal has meant per ton of galvanized iron, but coal supplied from Maitland is at. least 2s. 6d. per ton less now than it *wot** prior to. the great cessation of work on the coal-fields.’

Mr Forde:

– But no reduction waa made in the price of coal to Lysaght Limited.

Mr GULLETT:

– Why not?

Mr Forde:

– Because they have been getting their coal at the same rate all through under a contract.

Mr GULLETT:

– The Minister is in his customary role of defender of the great capitalistic companies of Australia, offering excuses for them and explanations of the.ir actions, incomprehensible as they may be to others.

Mr Forde:

– I am merely exploding some of the honorable member’s! statements.

Mr GULLETT:

– Taking the quantity of coal required for converting the iron ore into pig iron and in the manufacture pf steel, and again when the steel ii changed into galvanized iron, it will be seen that a considerable number of tons of coal is consumed in the production of each ton of galvanized iron. A reduction in the price of coal, therefore, represents a big saving in cost to this manufacturing company. Indeed, the saving of £126,500 brought about by the fall in the price of zinc -is based on the low output of from 28,000 to 30,000 tons of galvanized iron in a year, where.as from this time forward the company will be producing 60,000 tons of galvanized iron a year, ami the advantage it has gained through the huge drop in the price of spelter will, therefore, apply also to the increased production. J have the fullest .sympathy with this pioneering company at Newcastle ; but I know that its position to-day, even without a bounty, is incomparably better than it has previously been. The effect of the step the Government has t:iken is to place the company in the position of a monopolist.

Mr Forde:

– If the company had not been paid a bounty last year, it would have lost £4,000.

Mr Latham:

– On n capital of £700,000 !

Mr GULLETT:

– If the Minister set out to redress the fortunes of every company in Australia which has lost money in the same proportion during the past year, his hands would be pretty full.

Mr Forde:

– I have been guided by the report of officers of the department.

Mr GULLETT:

– I advise the Minister not to say too much about the opinion of the officers of the department as to whether or not Lysaght’s are entitled to more protection. I could say something on that point.

Mr Forde:

– The officers of the department recommended that this step should be taken.

Mr GULLETT:

– Last year I had the benefit of the advice of the officers of the department; and if what the Minister says now is correct, all I can say is that there has been an extraordinary change of front on their part. The whole incident - the dramatic closing down of Lysaght’s works, and the instant response of the Minister, his rushing in with an embargo to save the situation, particularly at a time of falling costs in the industry - amounts to a positive scandal. If the Minister is wise he will refer the matter to the Tariff Board. That body exists for the purpose of dealing with such, questions. By what right does any Minister or any government set aside all precedents in regard to tariff questions, and in doing so establish a great monopoly with punitive results upon the only surviving producing class in Australia to-day? Why should the Tariff Board be ignored ? And seeing that this embargo has been put on by proclamation, why should the rights of this House be set aside? One of two things must have happened. The Minister declares that when Lysaght’s closed their works, he had not in mind the placing of an embargo on the importation of galvanized iron. Either he took a very serious and far-reaching action with very little consideration, or the department, before the works were closed down, must have known what it intended to do. The Minister cannot have it both ways.

The case calls for the fullest investigation. I repeat that I am sympathetic with this company, I want to see it kept going and extended. If it had not been for honorable members on this side of the House, neither it nor other great manufacturing industries of Australia would be in existence to-day. We, on this side, stand for adequate protection, we remain true to the practice of protection which has built up great industries in Australia. The present Government’s contribution to tariff making which is the only important effort in this direction that Labour has made in Australia, has had the most disastrous effect this country has ever felt. It has had the effect of building up monopolies and antagonizing countries overseas. It has incited acts of retaliation from other countries. The present Government’s record in regard to tariff stands unparalleled.

I suggest that the whole matter touched by this bill should at once be referred for the fullest investigation, and I appeal to the Minister so to re-shape the agreement, even before the bill goes through the House, that we and the users of galvanized iron will have absolute control over the prices charged for the commodity, and shall have the assurance that, if the cost of material falls, the price of the iron will fall, and that under no circumstances will it be allowed to rise.

Mr GABB:
Angas

– I am becoming very impatient with embargoes and I dissociate myself from this particular embargo which makes the bill before us necessary. That is my reply to the assertion of the honorable member for . Henty (Mr. Gullett) that I was becoming restive. When primary products are feeling the full effect in the fall of the values of commodities it is in my opinion wrong to place a firm of galvanized iron manufacturers in a position in which, no matter what may be the price of galvanized iron in the outside world, there will not be any need for them to lower the price of that particular commodity here. It has been said that there will be no immediate increase in its price.

Mr Prowse:

– We want a reduction in the price.

Mr GABB:

– I should think that there would be every need for a reduction if the honorable member for Henty (Mr. Gullett) is correct in saying that Lysaght’s prior to the proclamation of the embargo increased the price of their imported iron by 30s. a ton. I think it is necessary for the Minister to answer the honorable member’s assertion, because it seems to me that if the honorable member for Henty is correct, the department has been bluffed by the Australian manufacturer io his advantage -and profit.

Mr Watkins:

– The honorable member heard the honorable member for Henty praising this firm.

Mr GABB:

– I am not concerned with whether he did so or not. I have no axe to grind for any big manufacturing concern in Australia. If I have reason to believe that any big manufacturer is to be given a substantial advantage at the expense of the primary producers I shall vote against it. The primary producers are being heavily penalized; the full force of the fall of commodity values is being borne by their products, and they are entitled to the advantage of any fall in the values of the commodities they use. When the Assistant Minister for Trade and Customs (Mr. Forde) replies, I hope he will be able to refute some of the statements made by the honorable member for Henty (Mr. Gullett), but whether he does so or not, I shall vote against the bill because I am tired of embargoes.

Mr PATERSON:
Gippsland

.- The bill does not provide an opportunity for the expression of opinions as to whether an embargo should or should not he imposed. If it did, the issue would be very much simpler. It merely provides that when an embargo is imposed the payment of bounty shall be discontinued. The Assistant Minister for Trade and Customs dearly loves embargoes, and apparently has not yet learned that they are the most deadly two-edged economic weapons in existence, and they are doubly dangerous in the hands of a Minister who is but a fledgling in commercial affairs. With his confident self-sufficiency the honorable gentleman reminds one of those who are said to “ rush in where angels fear to tread “. He would attempt to regulate anything and everything, even the planets in their orbits; no doubt he would regard that as coming well within his province as Acting Minister for Transport. The present Government has a tender regard for monopolies, and undoubtedly has done more to create and promote them than all other governments since federation. Galvanized iron is the latest addition to the list. The object of the bill is to change over from the policy of protecting by bounty, rather than by duty, and substitute absolute prohibition of imports, which does more to prevent healthy competition than even the highest tariff wall. The Minister was asked yesterday how long the embargo would last. He was not prepared to answer definitely, but he indicated that if the embargo were removed a substantial duty would be imposed in its stead. From that we understand that so long as the present Government is in office this galvanized iron monopoly will be protected either by an embargo or a very high duty, and instead of the primary producer and other users of iron being able, as in the past, to buy their requirements at a little more than the world’s competitive .rates, owing to the payment of a bounty, and the imposition of only .a very light duty, they will in future have to pay the full difference between Australian and overseas production costs. Why was the policy of bounties adopted by former governments as preferable to the imposition of duties on certain commodities? Why did the last Government prefer to pay bounties on fencing wire and wire netting instead of imposing a duty on the imports of those commodities, from Great Britain? Why did it provide for the payment of bounty on the production of sulphur -in lieu of a duty on imports? Why did it adopt the bounty system to assist the local manufacturer of galvanized iron and restrict the duty to £1 per ton? Obviously, this, policy was not adopted with the sole object of assisting Australian manufacturers of wire, wire netting, sulphuric acid, and galvanized iron. If only the manufacturers were to be considered the imposition of a duty would have been simpler and, from the Treasury point of view, preferable. The motive which influenced former governments to adopt the policy of protecting local manuacture of these essential requirements by a bounty rather than by duty, or by bounty and a small duty rather than a high duty, wes to enable the primary producers to buy these things at approximately world competitive prices. The principal users of those commodities are almost entirely primary producers. That is particularly true of fencing wire and wire netting, whilst sulphur is a constituent of superphosphate. Most roofs in rural areas, whether of houses or outbuildings, are covered with galvanized iron. Of all roofing materials it is the most easily transported. City dwellers are not concerned to the same extent about the cost of galvanized iron; most city and suburban houses are roofed with tiles or slates. The arbitrary action of the Government has hit the people in the country to a much greater extent than the urban population, and will probably drive many struggling settlers to revert to the use of bark for roofing purposes. The gap between the overseas and Australian cost of production has been bridged under the policy of former governments, not by means of increased prices imposed under cover of protective duties ; but by the payment of a bounty which enables overseas competition - at any rate that of Great Britain - to be met on practically a free-trade price level. No duty was imposed on “wire netting or fencing wire from Great Britain, and the duty on galvanized iron was limited to £1 per ton. These commodities must be cheap in order that the primary producers may be able to buy them, and they cannot do without them. To-day, bounties are unpopular and very difficult to provide, but, compared with duties on essentials, are the lesser evil. In the first place, with the bounty system, we know the exact extent to which the protected industry is being spoon-fed, and in the second place, the commodity can be sold at competitive levels instead of at inflated prices. Some months ago, the Government reduced the bounty on galvanized iron from £4 10s. to £3 10s. per ton, and increased the duty from £1 to £2 per ton. At about the same time, the price of galvanized iron was advanced - another proof that, when duties are em- ployed instead of bounties the consumer is required to pay an increased price. The Deputy Leader of the Opposition has already quoted statistics showing the tremendous extent to which the manufacturers of galvanized iron have already benefited by the reduction in the cost of some of their manufacturing requirements. For instance, since August, 1929, the price of spelter has dropped from £25 to £14 per ton. According to figures supplied by Lysaght; Limited that firm uses, annually 11,500 tons of spelter; on that quantity, the total saving at £11 per ton is £126,500. The prices of steel and coal also have fallen, and it is no exaggeration to say that the savings effected by tins company in respect of these three commodities are sufficient to enable them to carry on without the help of an embargo or a bounty. We have been told by the company that there will be no “ immediate “ increase in the price of galvanized iron. That word “ immediate “ is eloquent of the future intentions of the company.

Mr Forde:

– The honorable member may rest assured that if the company’s costs have fallen, no departmental accountant will recommend that it be allowed to increase its price.

Mr PATERSON:

– The embargo is totally unjustifiable. The Government has been hoodwinked by shrewd business men who have taken advantage of its known love of embargoes. I remind the House of the facts in regard to the closing of Lysaght’s works, of which mention has been made by a previous speaker. The’ company declared that the closing was necessitated by the imports of galvanized iron, which were still considerable, but offered to re-open the works and waive the bounty if imports were prohibited. The company has not denied the statement published in the press that in recent months it had been by far the largest importer of galvanized iron; indeed, the Deputy Leader of the Opposition, stated definitely that its importations amounted to over 10,000 tons.

Mr Forde:

– I shall prove that that statement is absolutely wrong. Because the company does not reply to every statement published in the press, honorable members have no right to assume that the statements are true..

Mr PATERSON:

– In failing to contradict so serious a statement, the manufacturers were not so alert to their own interest as they were when they interviewed the Minister. The world’s prices of galvanized iron have fallen owing to the drop in the prices of spelter, steel and coal, and Lysaght’s will he able, under the monopolistic conditions established by the Government, to sell their imported stocks at whatever price they choose to ask. It looks as if the firm had an eye to its big imported stocks rather than to its local production when it asked for an embargo on further imports. Apparently the Government has been carried away by its enthusiasm for embargoes. The company anticipated a drop in the price of imported iron, and was afraid that this would reduce the profits it hoped to make on the huge accumulations of imported iron which it held. Previously the primage duty and high exchange rate roughly compensated the Australian, manufacturers for the drop in the price of imported iron, so that they were able to meet the competition of iron from overseas without having to reduce their prices. It must be remembered that the Australian manufacturers of iron have had the advantage of reduced costs in common with the overseas manufacturers. Steel, coal, and spelter have cost them less, and while the fall in these things, in the case of the overseas manufacturer, has been offset by the new primage duties and high exchange rates, to t.ho local manufacturers they are all net gain.

Mr Forde:

– There has been no reduction in the cost of coal to Lysaght’s. I assert that definitely.

Mr PATERSON:

– If this company has fallen in to some extent, owing to the fact that it has signed a contract which compels it to take coal at more than the ruling price, surely it does not expect the Commonwealth Government to impose an embargo upon the importation of galvanized iron in order to compensate it for the losses it has brought on itself through lack of business foresight.

Mr Forde:

– The honorable member would himself be the first to condemn any suggestion that the company should repudiate its contract.

Mr PATERSON:

– Certainly I would. The primary producers in thi? country are, in the main, the purchasers of galvanized iron. They are at present suffering the effects of almost unprecedently low prices both at home and abroad. Normally, this reduction in the value of. exportable goods, such as butter, meat, wool and wheat would be at least partially offset by a reduction in the price of goods, coming into this country in the way of imports to pay for our own exports. The policy of the Government, however, has been to prevent any such compensation being obtained by the producers. As soon as any commodity, such as iron, becomes cheaper overseas the Government rushes in to prevent, the primary producer from getting the benefit of the fall in price. It does so either by increasing tariff rates or, as in the present case, giving one manufacturing company a monopoly which will enable it to maintain, and even, perhaps, inflate, the already artificial price. The only solution of Australia’s economic trouble is to allow deflation to cake place in Australia as rapidly and as painlessly as possible, in order that the proper relation between prices of primary products and manufactured goods may once again be established. The Government embargoes and prohibitive duties arc preventing any such adjustment from taking place. In effect, the Government is attempting to make the exporting producers bear the entire burden of the inevitable deflation, and, by its tariff policy, is permitting the existing level of prices to remain, or even further inflation to take place, in regard to manufactured goods. The logical conclusion of such a policy is the bankruptcy of every primary producer, followed by tlie collapse of protected and sheltered secondary industries which depend for their existence on ari equitable spreading of prosperity over all sections of the buying community. The drop in value of Australia’s exportable products has been enormous - more than some persons appear to realize. For instance, wool is worth only three-sevenths of what it was; wheat is less than half its former value; dairy products are down by 30 per cent, in price; and a reduction of about 40 per cent, has taken place in the price of metals. It is hardly an exaggeration to say that the value of Australia’s exportable products is little more than half what it would have been two or three years ago for an equal volume of goods. It is impossible to maintain existing prices for manufactured products in the face of this tremendous drop in the value of primary products upon which, after all, the secondary industries depend. Primary production may be compared to the blocks upon which a house is built. It is the foundation upon which the superstructure is erected. Unless the primary industries are doing well, unless prices are satisfactory, it is impossible for them to support a superstructure of secondary industries which demand high prices for their products. I am wholly opposed to this embargo. It means the creation of another monopoly, and will do a great deal to prevent the natural fall in prices. Therefore, I move -

That all the words after “ That “ be omitted, with a view to insert in lieu thereof the words - “ in the opinion of this House the proclamation prohibiting the importation of galvanized iron sheets should bc revoked and the bill should be withdrawn.”

Mr WATKINS:
Newcastle

.- When it was last proposed to increase the bounty on galvanized iron, I pointed out that, in my opinion, these continual increases in the amount of the bounty represented a bad form of protection to a firm which had already established its industry in this country. I am still of that opinion. When the Deputy Leader of the Opposition (Mr. Gullett) was addressing himself to this bill, he began by praising the firm of John Lysaght Australia Limited. He could not very well do anything else, because he was a member of the Government which induced that firm to begin manufacturing operations in Australia.

Mr Forde:

– The company was promised adequate protection by the last Government.

Mr WATKINS:

– Yes, and on the strength of that promise the company established its manufacturing business here. This firm has consistently tried to honour the arrangement it entered into with the Government. We have heard much from honorable members opposite to the effect that it has been a large importer of galvanized iron. It should be remembered, however, that prior to the establishment of the present factory in

Newcastle, John Lysaght Limited, of Great Britain, held practically a monopoly of the manufacture of galvanized iron for the whole world. While the industry was being established here, it was necessary for the company to continue importing in order to supply the Australian market, but it ceased to import when it was in a position to supply the market from its Australian mills. When it became necessary to restrict imports in order to correct our adverse trade balance, this company was one of the first to cease bringing imports into the country from overseas, with the exception of a few tons necessary to fill existing contracts.We have heard a great deal about the action of the company in closing down its works allegedly in order to force the issue. I wish I could believe that the works were closed down only for that reason. I know, however, that this business, and others associated with the iron and steel industry, are suffering only too severely from the general trade depression. Most of the employees of this and other firms are working only two weeks out of three. The company has fulfilled its promise to the Government, and is now in a position to supply all the galvanized iron Australia requires.

Mr Paterson:

– Let it, meet competition from oversea.

Mr WATKINS:

– Much has been said about reduced prices of coal, iron and spelter, but how long have the prices of these things been reduced?

Dr Earle Page:

– About a year.

Mr WATKINS:

– That is not a fact.

Dr Earle Page:

– The price of zinc has been reduced for nearly a year.

Mr Forde:

– The cost of zinc represents only 16 per cent, of the cost of manufacturing galvanized iron.

Mr WATKINS:

– That is so. The price of galvanized iron has been reduced by 50 per cent, since 1922.

Mr Gregory:

– War prices still prevailed in 1922.

Mr WATKINS:

– When the galvanized iron trade in Australia was controlled by importers the price was nearly twice as much as it is to-day.

Mr Gregory:

– In 1914 galvanized iron was only £16 a ton.

Mr WATKINS:

– Yes, but the price of everything has gone up since then. I understand that even agistment fees are higher than they used to be. I saw the surplus stocks of iron lying in the stores of Lysaght Limited, at the time the request was made for this bounty. Building after building I saw full of galvanized iron, and there was no sale for it.

Dr Earle Page:

– Was that imported iron ?

Mr WATKINS:

– I did not see any imported iron. If there were any, it would not be in the company’s storehouses in Newcastle. The eompany had ceased importing iron long before the embargo was imposed. It is somewhat surprising to find that honorable members who supported the Government which induced this firm to establish works in Australia for the manufacture of galvanized iron are now seeking to assist the importing firms to ruin it by enabling them to dump overseas galvanized iron in Australia. The Tariff Board inquired into this industry, and ascertained that protection was necessary to it. In reply to a question I asked the Acting Prime Minister (Mr. Fenton) I was informed that 4,600 tons of galvanized iron were being imported into Australia per month, apart altogether from the business of Lysaght Limited. It surely will not be argued that it would be fair to allow this competition to go on, seeing that Lysaght Limited were induced to establish works here by a governmental promise of adequate protection.

Mr Mackay:

– They were not promised a monopoly.

Mr WATKINS:

– Something drastic had to be done to prevent the huge imports of iron continuing. One thousand two hundred men are directly employed in this industry in Australia, and very many more are indirectly employed in the allied industries. Honorable members opposite seem to be totally opposed to the policy of providing work for Australian workmen. It appears to bc nothing to them that thousands of hungry men are walking our streets, and that many people are almost starving. The Deputy Leader of the Opposition said this afternoon that this was a most respectable firm, but he immediately went on to accuse it of doing diabolical things. He said in effect to the firm, “You are gentlemen, but I should like to shoot you.”

This firm is using Australian acids, spelter, iron and coal. In fact, if its requirements are obtainable in Australia it secures them here. Surely a firm which is giving expression to Australian ideals in this way merits every assistance.

I quite admit that unbridled monopolies are dangerous, whether the policy of a country be free trade or protection. People are no safer in the hands of an importing monopoly than they are in the hands of a local manufacturing monopoly, such as, say, a sugar combine. But it must be remembered that in the case of a local monopoly the money remains in the country, whereas in the case of an importing monopoly it goes overseas. It was not reasonable for the Government to allow the local manufacturers of galvanized iron to submit to ruin by importers of this article in view of the fact that the manufacturing was taken up locally under a definite promise of protection. Although this Government did not actually promise the protection, surely it was under an obligation to protect the firm from the annihilation which threatened it. When the payment of a bounty on locally produced galvanized iron was proposed I contended that it would be far better to increase the tariff, for I was satisfied that the industry had reached such a stage in Australia that all our requirements could be produced locally. If my advice had been taken on that occasion there would probably have been no need for the imposition of this embargo for importations had not then reached the serious proportions which they later assumed.

Mr Maxwell:

– Is the honorable mem ber in favour of giving this firm a monopoly ?

Mr WATKINS:

– I am in favour of protecting local manufacturers against the unfair dumping of goods from abroad. I do not know how long the Government proposes to maintain the embargo. That, I suppose, is a matter for investigation, but I do know that it was essential, in the interests of starving men and women, that some such action should be taken. Our local manufacturers have the capacity to produce almost double our requirements of galvanized iron, and we should not be prepared to allow other interests to rob them of their market in view of the fact that they have been responsible for reducing the price of galvanized iron in this country by 50 per cent.

Mr Paterson:

– The bounty paid to this firm has been greater than the amount it has paid in wages.

Mr WATKINS:

– I suppose that con- structional work had to go on. I am not an advocate of bounties. I believe in adequate protection for Australian induscries; If we can supply our own requirements in this and other directions we should be fools if we obtained them elsewhere. Surely honorable members do not suggest that we should import sugar ! Unfortunately, the previous Government permitted coal to be imported for the use of the navy, although we have larger coal deposits than any other country in the world. Overseas coal was dumped at Newcastle for £5 per ton by navy vessels. A Labour Government would not do that kind of thing.

Seeing that the price of galvanized iron has now ‘come down to normal level, honorable members opposite have very little ground for complaint. They are certainly not justified in calling for the closing down of this secondary industry on the ground that the primary producers are being penalized by it. Honorable members on this side of the chamber have always been the friends of the primary producers, and they will always be the friends of all producers.

I was one who urged the Government to impose an embargo on the importation of galvanized iron.

Mr Forde:

– And the honorable member knows that his requests were not acceded to until full inquiry had been made.

Mr WATKINS:

– The Government has made an arrangement by which the price of galvanized iron cannot be increased until after a thorough inquiry has been made. If such an inquiry showed that a reduction in price were justified I am sure that the local manufacturers, who have shown a willingness to allow their books to be examined, would not resist a fair reduction. One of our great troubles in this country is that we are not prepared to trust one another ; but our galvanized iron manufacturers were quite prepared to allow their books to be examined by an independent accountant. I do not know whether the Government intends this embargo to be a temporary expedient, or whether it is proposed to continue it for a considerable period, but, in my opinion, it has acted wisely so far in protecting an industry which was established in this country on the strength of promises made bythe previous Government.

Mr NAIRN:
Perth

.- No imputation of impropriety is made against Lysaght and Company, but there is good cause for complaint against the Government for allowing the company to make the bargain which it has effected with the Ministry. I do not object to any company or individual making the best commercial bargain possible by fair means; but, under the practice that has grown up since the present Government assumed office, the public interest may be endangered. The practice for many months has been for a manufacturer, if he has something which promises to give employment to a number of men, to go to the Minister and submit his proposals in a private manner. Manufacturers have been encouraged to do this, and provided they are able to show some prospect of employment for a number of men, they have been given advantage’s in the way of increased duties amounting often to prohibition, or, in some cases, actual prohibition. In three very important instances these prohibitions have been preceded by action on the part of manufacturers which, although perhaps not amounting to fraud, does, nevertheless, inflict a grave injustice on the consuming public.

Of the three notorious instances to which I have referred, the first is that relating to glass. An Australian glass company, which has never manufactured a foot of sheet or rolled glass, secured very great supplies of these commodities some months ago, and then induced the Government to impose what amounted to a prohibition on the importation of glass of that character. The second instance relates to timber.

Mr Cusack:

– Everybody could see through that.

Mr NAIRN:

– It was obvious that certain large timber importers had acquired big stocks of timber. We saw them lobbying in this House, and shortly after- wards an announcement was made relating to heavy increases in the duties on timber. The public had to pay for a monopoly created by the Government !

Mr Forde:

– The Queensland Country party and the Nationalist Premier of that State have since asked for further duties on all timber coming into Australia, because the present duties are not high enough.

Mr NAIRN:

– Shortly before the extra iuties were imposed, certain companies had acquired stocks of timbers, and, owing to the action of the Government, those stocks have increased in value to the extent of many thousands of pounds.

Lysaght and Company has been bringing into Australia large quantities of manufactured iron, and now it has induced the Government to impose an embargo on the importation of this commodity, with the result that the company will be able to obtain its own price for the imported iron. If it were not for this embargo the people of Australia would be able to enjoy the advantage of the enormous fall that has occurred in the price of galvanized iron. In older countries, the cost of this commodity is about half the price ruling in Australia.

Mr Forde:

– In what countries is the cost half that in Australia?

Mr NAIRN:

– In Great Britain, for instance, it is less than half.

Mr Forde:

– That is not the case.

Mr NAIRN:

– I object to any manufacturer being able to meet a Minister in private, and conclude private arrangements with them involving hundreds of thousands of pounds, the Government subsequently translating the agreement into legislation merely by the issue of a proclamation. Hitherto, we have had examples of errors of judgment, with the result that the public has paid, is paying, and will still pay for those errors. If that practice is permitted to continue, I am afraid that before long there will be more than mere errors of judgment. If the power is left in the hands of one

Minister, no matter who he may be-

Mr Forde:

– The power was not left in the hands of one Minister. The whole matter was taken to Cabinet, which dealt with it after departmental officers had made full inquiries.

Mr NAIRN:

– That may be true ; but the inquiry is made, probably, by one man, or perhaps by two or three, and the recommendation of the Minister is usually acted upon by Cabinet. The point that I am making is that these duties and prohibitions, which involve many hundreds of thousands of pounds, often bring ruin to many traders, and put hundreds of thousands of pounds into the pockets of others. They are imposed without anything in the nature of a public inquiry; they result from private negotiations and bargaining between manufacturers and the Government. Sooner or later, if this practice is allowed to continue,we shall see in Australia a system of graft similar to that which has developed in other countries. The practice of private bargaining with the Government should be absolutely forbidden. In my opinion, Lysaght and Company has been entirely spoon-fed.

Mr Forde:

– The honorable member should not judge others by his own standard.

Mr NAIRN:

– I make no personal reflection on members of the present Ministry. I do not suggest that there has been improper practice up to the Dresent time. But if an opportunity is afforded for rnal-practice in this respect, sooner or later, some one will be found clever enough to take advantage of it.

Bounty has been paid to Lysaght and Company for years. Last year the company received approximately £90,000, in addition to the enormous advantages derived from the duties on galvanized iron. All the materials for the manufacture of this commodity are to be found in Australia. The local manufacturers have a great advantage over firms abroad, owing to the distance between Australia and any country that manufactures iron on a large scale. Then, again, the local firm has the benefit of the exchange position. If the industry had been established as it should have been, it would have been able, after several years of assistance, to carry on in Australia without protection.

Mr Paterson:

– We have the richest iron ore in the world.

Mr NAIRN:

– Yes, and we have coal at our doors. There is plenty of zinc in Australia, and its cost has droppedby half of late. The cost of the zinc used comprises 16 per cent, of the costof manufacturing galvanized iron, and the fall in the price of zinc brought about a reduction of 8 per cent, in the manufacturer’s cost. The company should be able to carry on without a duty on the imported article, or, at least, with a very small duty; but under the scheme of the Government it will have a complete monopoly of the market. The consumers, and particularly people in the country who have to go to the world’s markets to dispose of their products, will have to pay excessive prices for galvanized iron for some years, and will be unable to take advantage of the fall in the price of this commodity abroad. In my opinion, the amendment should be supported.

Mr PROWSE:
Forrest

.- I regard the imposition of this embargo at the present time as a tragedy, and this is not the first political tragedy that has been perpetrated by the present Government. To my mind the statement of the Minister was unfair to the House. Speaking from memory, I think that be said that about £130,000 would be saved in bounty under the proclamation; but be did not tell us that the customs revenue hitherto received oh imported iron would fall to the extent of about £160,000.

Mr Forde:

– The Australian consumption this year will be about 70,000 tons, and the capacity of Lysaght’s mills will be S0,000 tons.”

Mr PROWSE:

– I thought that the Minister said that over 100,000 tons was consumed in Australia annually.

Mr Forde:

– That was before the company duplicated its plant. It then had to import iron from the parent company in Great Britain.

Mr PROWSE:

– The Minister did not refer to the shrinkage in customs revenue from imported iron; he seemed to be engaged in special pleading. I submit that it is not Lysaght’s that employ the 900 persons to whom the Minister referred. They are virtually employed by those who buy the commodities produced. Who buys the galvanized iron in Australia to-day? Certainly not members of the wealthy section of the community; their houses are covered with something superior to galvanized iron. This commodity is used on the shacks in the outback districts. It is found on the sheds that cover sheep, the wool, and the wheat. It is mainly purchased by those who are blazing the trail in our new wheat belts ; but the cables tell us to-day that the price of wheat was never so low as it is at the present time! The users of galvanized iron are persons with the lowest incomes, and with the greatest reduction in their incomes, and they are expected to maintain a high price for the product of a monopoly sheltered by the Government in one of the States of the Commonwealth. The primary producers will pay £500,000 per annum more for galvanized iron because of this embargo. I support the amendment, but, if Australia is unfortunately called upon to uphold this monopoly, 3 hope that the Government will, at least, see that each State is placed on the same basis with respect to the selling price of galvanized iron.

Mr Forde:

– That has already been agreed upon.

Mr PROWSE:

– Too frequently do those engaged in special pleading before the Tariff Board, and the Minister promise that they will not increase the price of this or that commodity in Australia. The same argument was advanced when the Tariff Board inquired into the making of jute goods in Australia. It was said then that the price to the consumer would not be increased. The wheat-growers and the wool-growers of Australia expect not only that the price of jute goods will not be increased, but that it will be reduced. We should not legislate to maintain a high standard for one section of the community at the expense of another section. Unfortunately, legislation of that nature has been enacted in the past, with the result that Australia’s credit has been almost destroyed. Every increase of customs duties has increased unemployment. That is a natural consequence. In this case 900 men are battening on the primary producers of this country.

Mr Forde:

– The price of galvanized iron has not been increased since the prohibition was imposed.

Mr PROWSE:

– As I have said, the primary producers expect not only no increase, but a reduction in the price of galvanized iron. With a fall in the price of coal and of spelter, with lower, though not less effective wages, it is only reasonable to expect the price of galvanized iron to bo reduced. 1 can understand the special pleading of the honorable member for Newcastle (Mr. Watkins) on behalf of an industry in his district, but the honorable member must know that this embargo will still further injure Australia’s credit. The honorable member urged that certain promises had been made to Lysaght Limited, and that these should be fulfilled. He is not so concerned that we should honour our obligations to those farmers whom we induced to settle on the land. How does the honorable member for Newcastle propose to find markets for their products? In its treatment of the primary producers the Government has been inconsistent. Some time ago the Government urged the primary producers of Australia to grow more wheat in order to rectify the adverse trade balance. As an inducement to them to do so, it proposed to guarantee them 4s. a bushel for their wheat. Were the Government sincere in its profession of concern for the wellbeing of the farmers of this country, it. would not place a heavy duty on the jute goods required by them, or continue to tax. their land on valuations fixed when land values were <at their peak. As it is clear that the Government’s professed desire to assist the primary producers is only so much political propaganda, the House would be well advised in the interests of Australia to support the amendment moved by the honorable member for Gippsland (Mr. Paterson).

Mr ARCHDALE PARKHILL:
Warringah

– This embargo is another instalment of the fiscal policy of the present Government which is one of the main causes of the present depression.- I say without hesitation that had the Government introduced tariff schedules which conformed with sound business principles the revenue of the Commonwealth would not have been so seriously depleted as has been the case, and consequently the drastic steps now proposed by the Government to balance the ledger would not have been necessary. Business has been disrupted because the Government has followed an unsound fiscal policy. The withdrawal of the bounty previously paid to the iron and steel industry merely means that the responsibility for paying it has been transferred from the general taxpayer to one section of the community - that section which is least able to bear it. In the interests of the community generally, the Government has urged the wheat-growers of Australia to grow more wheat, hut it has done nothing to reduce the cost of production without which additional wealth cannot be created. If Australia’s credit is to be restored, the costs of production must be reduced, so that those things which we export can compete in the markets of the world. The honorable -member for Perth (Mr. Nairn.) said that the cost of galvanized iron in Great Britain is practically one-half of its cost in Australia. The Minister challenged that statement. I remind him that the report of the Royal Commission on the Coal Industry shows that when galvanized iron cost £13 2s. 6d. a ton in Great Britain, and £16 6s. 8d. per ton in the United States of America, the price in Australia was £22 10s. a ton.

Mr Gregory:

– According to a telegram which I have just received the Australian price is £24 10s. a ton.

Mr Forde:

– When there was practically no duty on galvanized iron the importer was charging £40 a ton.

Mr ARCHDALE PARKHILL:

– I u that case what need was there for a bounty ?

Mr Forde:

– Since Lysaght’s Limited commenced the manufacture of galvanized iron in Australia the price has been reduced to half what it previously was.

Mr ARCHDALE PARKHILL:

– The fact remains that the price of galvanized iron in Australia to-day is almost double what it is in Great Britain. With a great show of pride the Minister claims that he had arranged that there shall be no immediate increase in the price of galvanized iron. Had he shown a proper concern for the primary producers of this country he would have insisted that, in consideration of the granting of a monopoly, there should be a substantial decrease in the price. The Australian company has not only the entire Australian market to itself, but also the benefit of reduced costs of its raw materials and of mass production. The Government is prepared to grant monopolies to certain interests, and to throw thousands of men out of employment in order to maintain high rates of wages for the limited number of persons employed in the industries concerned. Persons not fortunate enough to be employed in those sheltered industries are forced to fight a harder battle to make a living in order to enable a privileged few to benefit. It is not right that a favoured section of the community should be granted special privileges at the cost of other sections. A government’s first duty is to conserve the interests of the people as a whole. No Commonwealth government has ever done more to assist in increasing monopolies and in establishing new monopolies than the present administration. No government has over given to monopolies such charters to plunder the people as have been given by the present Government. In the absence of competition, those in control of these undertakings can charge whatever prices they like. They can make whatever arrangements they wish, and in order to pay their employees high wages can increase prices. Such arrangements are now made by those in control of these sheltered industries at the expense of the workers who are not engaged in them, or who are unfortunate enough to be out of employment. There seems to be a conspiracy between this Government, the unionists engaged in sheltered industries, and certain employers to keep up the wages of a limited section of workers and the profits of a limitedsection of employers. In many instances the employers and the workers in these industries are parties to a bargain, to get as much out of the general public as they possibly can.

I have always objected to the manner in which tariff schedules are introduced. These schedules become operative immediately they are tabled. As the result of the influence or investigations of, perhaps, one person, who may be intelligent or the reverse, a man may find that, within one night, his income has been reduced by one-half, or has entirely disappeared, while another may have made a fortune. That is the way in which the business of this country is being carried on. If investigations into tariff matters were conducted by competent persons, immune from temptation, there would be less objection to the present system. Investigations are now conducted by persons who are utterly incompetent, and who are influenced by officers anxious to do certain things. When tariff schedules are introduced as at present, favours are bestowed upon one section of the community, and misfortunes fall upon others. What redress have the representatives of the people? Tariff schedules become operative immediately they are tabled, and before the representatives of the people have an opportunity to discuss them the people affected are penalized. The members of this Parliament have not the opportunity to utter a single word in support of the complaints of their constituents, or ‘to obtain any information on tariff matters. For the past twelve months honorable members have been deprived of the right to ventilate their opinions of thenumeroustariff schedules introduced sincethisGovernment took office. Many duties which have been in operation for some months should be amended. The present method of dealing with tariff schedules is a blot on our parliamentary procedure; it is contrary to democratic government. In matters of such farreaching importance to the people honorable members should at least have an opportunity to criticize increased customs duties before they have been in operation for any time.

I am sympathetically disposed towards the iron and steel industry, because I realize its great importance to this as to any other country. How does Canada deal with its iron and steel industry? The opinions of its tariff authorities are not made subservient to those of the Minister, as is the case in Australia.

Mr.Paterson. - And Canada is exporting certain classes of steel.

Mr. ARCHDALE PARKHILL.Yes, under conditions less favorable than those prevailing . in Australia. In, Canada, instead of having one man, who possibly has never had any experience in business or industry, controlling the situation, as is the position here, an’ inquiry into the iron and steel industry was conducted for several months. In a perfectly frank way, the Canadian Government obtained evidencefrom the business interests in Canada, including those engaged in the iron andsteelin- dustry. As a result of the investigation that Government was able to formulate an iron and steel policy embracing all stages of iron and steel production. The Government of that Dominion decided What iron abd steel products could be profitably manufactured in Canada, and what could be imported at rates cheaper than those at which the Canadians could manufacture. They discriminated, and in such a way that with the assistance of a scientific tariff they were able to export certain classes of steel. They also decided that they should import some classes of agricultural machinery more profitably than it could be manufactured, thus enabling the primary producers to compete in the markets of the world. Under such a policy no . hardship was imposed upon the workers engaged in the iron and steel industry, and the whole community benefited. Honorable members opposite should compare that policy with the slip-shod, semi-confidential way in which our tariff policy is being controlled by the Assistant Minister. He has informed us that he has been in consultation with certain persons, and that officers of his department have conducted an investigation. Those engaged in this monopoly . have asked him to do certain things. I have no doubt that he made a perfectly bona fide statement, and that, the investigating officers made certain recommendations.

Mr Watkins:

-So did the Tariff Board.

Mr. ARCHDALE PARKHILL But the Assistant Minister has not said anything about the recommendations of the Tariff Board. Apparently this action has been taken on the feeble statement of the Minister, and upon ineffective and incomplete inquiries made, which have resulted in the imposition of a tremendous burden upon the primary producers of this country. Even if the Assistant Minister possessed the ability of the bestiron master in Australia, this proposal embodies an attempt to evade a thorough inquiry into the industry. Whatever investigation has been made, the results do not justify the introduction of this measure. A more effective and comprehensive system of handling tariff schedules should be introduced.

When the members of the present Government were in opposition, distant fields looked particularly green, and it appeared to them that if they succeeded in occupying the treasury bench, all they would have to do would be to draw their allowances. But in their present position they are experiencing a most worrying time. Many of them would be happier in attacking the Government than in facing the problems which are now confronting it. I sympathize with them; but they sought the position. In doing their utmostto defeat the late Government they were not particular about the methods employed. In some of the election propaganda issued by the Labour party it was stated that if a Labour Government were returned there would be constant work for everyone. A perusal of the unemployment figures to-day shows how far from the truth were the promises then made. When the Assistant Minister introduced his first tariff schedule he declared that it would be the means of providing employment for an additional 50,000 men. Later on when the inaccuracy of his assertion became apparent he said that if the schedule had not been introduced a greater number of men would be out of work. What has the Assistant Minister to say to-day when we find that, notwithstanding the introduction of additional tariff schedules and the imposition of embargoes, resulting in the establishment of commercial monopolies, the percentage of unemployment has increased from 12.1 to 13.1, to 14.6, to 18.5 per cent, until it has now reached the unprecedented figure of 20.5 ? Apparently this very high figure is likely to increase, as the Government is not making any effort to reduce it.

This proposal is unjust and unfair to the general public, and particularly to the users of galvanized iron. I have mentioned only the primary producers, who are seriously affected as a result of this embargo; but there are others. The weatherboard buildings in the newer suburbs of the cities of Australia are roofed with galvanized iron. Therefore the primary producers, and the workers of this country who cannot afford brick houses, will be obliged to pay excessive prices for their homes. The honorable member for Henty (Mr. Gullett) has pointed out that a monopoly has been given to the manufacturer of galvanized iron; that there is a virtual monopoly in the timber industry; and that the suppliers of glass also have a monopoly in the supply of that commodity. What is to prevent those monopolies from charging whatever prices they like for the commodities that are essential for workers’ dwellings? They cannot be prevented from doing so. A government that had any regard for the workers of this country would set up some tribunal to see that exorbitant prices were not charged.

Mr McTiernan:

– The Government has no constitutional powers to do so.

Mr ARCHDALE PARKHILL:

– Why leave the workers of this country at the mercy of greedy monopolists when there is not the power to prevent them from charging what they like?

Mr McTiernan:

– Why did the honorable member oppose the bill that was designed to give the Government greater trade and commerce powers?

Mr ARCHDALE PARKHILL:

– The honorable member for Parkes (Mr. McTiernan) admits that the Government has placed in the hands of monopolists the power to charge the workers whatever they like, and that no steps have been taken to see that their prices are not exorbitant. He has merely admitted what is well known to every honorable member, that prices have been raised on a wholesale scale as a result of the actions of this Government, but for which the cost of living would by this time have tumbled down to the extent of 25 per cent, instead of the 7£ per cent, by which it has fallen. The imposition of the sales tax, and the granting of monopolies to those who have the control of the necessaries of life, have arrested the downward trend, in the cost of living. The workers of this country are being ground in the dust by the taxation of a. supposedly working-class Government. Never in the history of Australia have the workers had imposed on them such harsh and grinding taxation as that with which they are being ground down to-day. What justification is there for handing out thousands of pounds to one industry, as will be done under this proposal? The action of the Government is utterly inexplicable The withdrawal of competition in this industry’ is unfair to the general public. The Government is taking no steps to protect the public from the rapacity of unscrupu- 10118 men, which can be exercised to the full under the privileges that are to be conferred by this Government’s tariff proposals.

Mr McTIERNAN:
Parkes

.- Some little while ago a bill was introduced into this House designed to enable a referendum to be taken to decide whether this Parliament should have vested in it increased powers to deal with trade and commerce. That measure proposed that the Constitution should be so amended as to enable this Parliament to pass legislation for the prevention of the abuses to which the honorable member for Warringah (Mr. Archdale Parkhill) has so vigorously referred. But his opposition to it was just as vigorous as has been his attack to-day upon profiteers. The honorable gentleman has exhibited an entire lack of consistency. Had he cooperated with and assisted the Government to pass that measure, and had the majority in the Senate, which is composed of his political friends, allowed it to become law, doubtless the referendum would have been carried, and this Parliament would now have the power to pass legislation to set up tribunals or to deal in any other way with the very evils he has mentioned. He opposed that bill, and hi3 friends in the Senate secured its rejection. Therefore, if the general public are at the mercy of the rapacious profiteers that he has attacked so vigorously, the responsibility rests with him and his friends in the Senate.

Mr GREGORY:
Swan

.- One does not often hear such an extraordinary statement as that which has just been made by the honorable member for Parkes (Mr. McTiernan). He wishes us to believe that the party which sits opposite desires to build up monopolies in this country and then to pass legislation to knock them down again. What really does the honorable member desire? One can only come to the conclusion that, knowing that the Government has not the power to deal with monopolies, he and those associated with him are determined to create them.

The debate on this measure has shown how difficult it is to deal in Canberra with such questions as those now under discussion, on account of its remote- nesa from the large centres of population. It is necessary to obtain from interested parties information as to the likely effect of legislation of this character, and that information is not readily accessible to us. I have had to despatch a number of telegrams seeking certain information. What is behind this rush legislation? Under the Tariff Board Act, alterations of duties must be recommended or reported upon by the Tariff Board. No report has been ‘ furnished with respect to this particular matter, and we have no knowledge of any investigation having been made into it. The Prime Minister (Mr. Scullin) is endeavouring to obtain concessions from the Imperial Government with a view to securing markets for our primary products. Is not the present, therefore, an inopportune time to pass legislation placing an embargo upon the entry of British galvanized iron to this country? It has been found necessary to give to the Minister for Trade and Customs the power to place an embargo upon the importation of certain commodities, but it was never intended that action along these lines should be taken. The importation of general merchandise should not be prohibited by the Cabinet without consulting Parliament. We have reached the extraordinary position that the Government of the day can, without consulting Parliament, alter the whole tenor of our tariff policy, and hand over to one corporation full control of the market for this particular product. The bill provides in regard to iron and steel products, that where a total or partial embargo is gazetted, no bounty will be paid. We know that bounties are being paid at the present time upon products other than galvanized iron. Are we to assume that in the near futture a similar demand for an embargo will be made in regard to fencing wire and wire netting. The practice may eventually embrace sulphur. The Government realizes the dreadful financial position into which we have drifted, and the need that exists for doing everything possible to build up production, particularly of exportable products. Why, then, does it introduce legislation giving to the Minister for Trade and Customs the power to impose embargoes upon the importation of differ- ent commodities, the result of which must be the creation of further monopolies at the expense of the primary producers of this country? It is beginning a most dangerous practice. As the Deputy Leader of the Opposition has pointed out, the party responsible for this proposal has loudly denounced in past years the creation of monopolies, and has expressed its determination to fight them grimly to the death; yet to-day it is building up one monopoly after another. These manufacturers of galvanized iron have been treated very generously by past governments. They are now being given an absolute monopoly of the market for galvanized iron in Australia. The Acting Minister should have received information from his department that Lysaght Limited had been importing large quantities of galvanized iron.

Mr Forde:

– Everybody knows that Lysaght Limited are the world’s largest manufacturers of galvanized iron, and that prior to the time that their plant was increased in Australia they were huge importers of the commodity.

Mr GREGORY:

– If the Acting Minister was aware of the fact, he should have mentioned it in his second-readingspeech. The Deputy Leader of the Opposition (Mr. Gullett) disclosed that Lysaght Limited imported huge quantities of iron just prior to the introduction of the embargo. They were manufacturing in Australia under a bounty, and even then could not hold the market in New South Wales alone. The parent company in Great Britain had continually to send out quantities of galvanized iron to meet local requirements. The whole thing is too “ thin “. This firm seems to have had a remarkable influence over the Government. They were able to obtain a bounty from the Federal Government, and then to induce the New South Wales Government to give them special freight rates on the railways of that State, lower than those charged for the carriage of British galvanized iron. Lysaght Limited are working up a huge monopoly and are not meeting competition fairly, as are most other traders in Australia. I have here a copy of an original letter from Lysaght Limited with regard to the sales of their product. It reads -

With the increased output of our Newcastle works we are now able to extend the distribution of our galvanized iron beyond the eastern States, and, from July, there will be a certain quantity allotted to Western Australia. In introducing Australian galvanized iron into the eastern States we have taken our merchant friends very much into our confidence and have thoroughly discussed with them the best means of continuing the distribution of our galvanized iron through them.

As you ure doubtless aware, we aru now constantly being called upon to quote buyers other than genuine distributors who consider that they are entitled to purchase from manufacturers direct, and it has become increasingly difficult to deal with such inquiries without finding ourselves reported to the Federal Government for refusing to supply. , With the hearty approval of our merchant friends in the other States we have introduced a system of deferred quantity discounts which it is considered, while giving them much the same in the way of discount as they formerly received in discount and deferred rebate, will amply protect their interests, and, finally, secure to them the total distribution of Australian galvanized iron in their respective States.

With regard to these deferred quantity discounts it is quite understood that distributors do not wish to wait for their profit on galvanized iron until the end of the year, and we shall, therefore, be prepared to accept contracts for annual quantities and allow discount monthly, based on cash quantities . . .

I understood that the Tariff Board would make some inquiries into the matter. That letter definitely points to a control of the galvanized iron trade. Lysaght Limited state that, owing to complaints made in this chamber, they would quote a price for the general public of Australia, but would give a special discount to all who were members of the Iron and Steel Association, so that they would be able to undercut competitors and still make a fair margin of profit. Those, are the people to whom the Acting Minister desires to grant a monopoly. I do not know what to think of the action of the Government, particularly after the revelations concerning timber duties imposed at a time when there were huge quantities of oregon in stock in Melbourne. [ recall, too, the Government’s action with regard to ,stained glass, when the Australian Glass Company bought up large quantities of glass on the Sydney market a few weeks before the new duties were brought in. Such happenings . cause an unpleasant impression. This embargo will not merely give Lysaght Limited a huge monopoly; it will also bring about a considerable increase in the price of galvanized iron to the people of Australia. The prevailing low price of spelter has already been mentioned. Out: may gather from the newspapers in the Library that the price of 24-in. gauge iron in England is at present £13 to £14 a ton. Surely, with a bounty, our heavy primage duty, high exchange, and the great cost of bringing galvanized iron to Australia, local manufacturers should be able to compete with importers? The Tariff Board stated that it approved of the granting of a bounty ‘to such an ‘extent as would enable the Australian manufacturer to capture more of the trade of New South Wales, Victoria, South Queensland ‘ and South Australia. The Board recognized that, with the conditions prevailing in Australia, the manufacturers could not compete successfully in Western Australia against the imported product. Now the people in the eastern States will ‘either have to be charged an extra amount for galvanized iron, or those of Western Australia will pay a still heavier price for it.

Mr Forde:

– The manufacturers will lose £1 per ton on galvanized iron sold in Western Australia, in order to give the people of that State the advantage of the price prevailing in. other capitals.

Mr GREGORY:

– Let me nut it this way. The manuf acturers will charge that additional £1 per ton to the people of the Eastern States, so that they shall lose nothing on their sales in Western Australia. It is absurd to imagine that they will sustain any loss. I quite understand why there should be a fixed price in. all the capitals, when a monopoly of this sort is created, otherwise” the constitutionality of the measure might be attacked. Western Australia is almost wholly an exporting State. and its products compete in the markets of the world. Already its people are passing through sufficiently arduous times. They are doing their .utmost to open up new country, and now they are to bear this additional impost. For every £1,000 that Westralians expend in opening up newlands they pay at least £400 more tha* they would if they enjoyed the advantage of an open market. The Minister claims that the imposition of this embargo will bring about the employment of. about 900 Australians. The approximate quantity of galvanized iron used in Australia in normal times is from about 110,000 to 120,000 tons per annum. Of that total John Lysaght Australia Limited have supplied from their Newcastle works from 20,000 to 25,000 tons. The capacity of those works has recently been increased, so that production will in future be approximately 60,000 tons per annum.

Mr Forde:

– The new works have a capacity of 80,000 tons per annum.

Mr GREGORY:

– The c.i.f. and e. cost at which first quality 26-gauge galvanized corrugated sheets of 100 per cent. British manufacture can be brought to Victoria to-day is £20 per ton, while the ci.f. and e. costs at which a similar commodity, manufactured ‘at Newcastle, can be brought to Victoria, enjoying the advantage of a bounty of £3 3s. per ton, is £23 per ton. It is safe to assume that with the withdrawal of the bounty the ci.f. and e… cost of Newcastle sheets will be increased to £26 per ton. The cost of landing English galvanized sheets, taking into account duty at £2 per ton, primage duty at 9s. 6d. per ton and wharfage, stackage and cartage charges at 12s. 6d. a ton, is £3 2s. per ton. That of landing Newcastle galvanized sheets, covering wharfage, cartage and stackage, is 12s. 6d. per ton. Thus thecost of landing English galvanized sheets is £23 2s. per ton, and that of Newcastle sheets, with a bounty of £3 3s., is £23 12s. 6d. per ton. Assuming the average annual quantity of galvanized sheets which will be used in Australia during the next three years tobe 80,000 tons, the total extra cost to the consumers on account of the embargo, and assuming that the duty of £2 per ton had been allowed to stand, will be £252,000; that is 80,000 tons at £3 3s. Without the embargo it is safe to assume that of the estimated average annual quantity of 80,000 tons approximately 25,000 would have been imported so that at the rate of £2 9s. 6d. per ton duty, and primage duty, the loss to customs revenue would amount to £61,875. That indicates that to keep 900 men in employment the cost to the country will be in the neighbourhood of £313,875, or an average of £348 per man per annum. Is it not timethat we began to consider whether it would not be wiser to pay pensions to those employed in many of our artificial industries?I remember that, when in 1920, we were dealing with the duties on cigars, statistics were prepared showing that, assuming that the people would continue to smoke the same quantity of imported cigars as was being made locally, it would be possible to pay £200 per annum to every man and woman who was employed in the local industry and still save £86,000 to the country. We have increased those duties so enormously in favour of the manufacturer and against the importer that it would be safe to say that we could now save at least £150,000 by pensioning off those employed in our cigar factories. A similar remark applies to the match industry. We could reasonably pension off all those engaged in dipping wood splints into sulphur and packing them into boxes - for that is what our match industry amounts to - and still be something to the good. This is a time when we should endeavour to obtain a little additional revenue, but the action of the Acting Prime Minister will in no wayassist towards that end.

I do not profess to know anything about the firm of John Lysaght Australia Limited; but we are entitled to know what actual capital has been put into the concern. It is claimed that the business is incurring an expenditure of £700,000 in building new plant. Where did that money come from - profits, or from new capital put into the business?

Mr.Paterson. - Has it materialized at all?

Mr GREGORY:

– I do not know. I have merely been informed that . a large sum of money is being expended in new plant. We should know how this company is being financed, and what was its original capital. For instance, although on its books the capital of the Broken Hill Proprietary shows at £2,600,000, the actual cash put into the company does not exceed £1,100,000.

Mr Prowse:

– And what assets has the company to-day?

Mr GREGORY:

– They are now valued at £8,000,000. Of course they have been built up by profits. The Broken Hill Proprietary will eventually be a marvellous concern; but only when things have s’’ red:; when the men will give a fair day’s work for a fair day’s pay, and when there is less interference with labour. The Australian manufacturers ought to be able to do as well as the Canadian. I should not be in order if I were to compare the Canadian customs duties with ours; but I may say, in passing, that while our3 are from 500 to 700 per cent, higher, wages generally, except in the case of unskilled labour, are much higher in Canada than they are in Australia. Yet, we cannot make the progress that Canadian manufacturers are able to make. There must be something wrong. In my opinion, the trouble is that there is too much political interference here; there is too much legislation, and too much parliamentary control over everything. And now it is proposed to permit monopolies to be built up. If we allow concerns like the Broken Hill Proprietary or the Oil Association to have monopolies, we shall lose that healthy competition which is the finest asset any country can have. Recently, I cited cases in which the Iron and Steel Association and the Oil Association refused to supply people who were not members of those respective associations. I have since received letters showing that as a result of inquiries made by customs officials following upon my complaints, people could obtain supplies from the corporations concerned. That is a set of conditions which should not be permitted in this country.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– I remind the honorable member that the alleged policing of these matters by the Tariff Board is “ all my eye “.

Mr GREGORY:

– It is all rubbish. If we are to build up a nation, and establish manufacturing and other industries we must have healthy competition, which is the lifeblood of all industry. Without it we lose the finest asset we could possibly have. It is a grave mistake to give one firm a monopoly of the manufacture and supply of galvanized iron in Australia, and we are not justified in passing this bill unless and until we have the fullest information about this firm’s operations and its need for further assistance. It is the duty of this Parliament to endeavour to prevent the passage of a bill which, if it becomes law, will enable the Minister immediately to declare an embargo on the importation of fencing wire and wire net ting. Those who represent country electorates should realize that possibility. In J 921, when the Government of the day announced that it would permit wire and wire netting to come in free of duty and galvanized iron at. a duty of £1 a ton, and that it would give a bounty on the manufacture of wire, wire netting and galvanized iron, it was felt that the bounty would more than compensate for the removal of the customs duties. At that time, the price of the raw material used by the manufacturers was high. Surely, now that there has been a world-wide reduction in the cost of everything required in the manufacture of galvanized iron, the existing bounty should more than compensate the manufacturers for the absence of any heavy protective duty, and should enable them to compete with those of any other country in the world. I hope that the House will support the amendment, and prevent the injustice which this bill will do if it. becomes law.

Mr WHITE:
Balaclava

.- 1 oppose the imposition of this embargo, and shall vote against the bill. There are evils which attend every embargo. Many of them have been pointed out by other honorable members. It goes without saying that an embargo leads to the creation of a monopoly.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– And also to the creation of vested interests.

Mr WHITE:

– Yes, and to the maintenance of inflated vage3, which seems to be the motive of the Government. Ministers are quite aware that the existing economic position is likely to force wages down ; but they are anxious to bolster them up. We know that the manufacturers of galvanized iron approached the Government and told them that they would have to close their works, and, in doing so, put off 900 men. Faced with big unemployment figures throughout Australia, that announcement appealed to the Government; but, instead of making an effort to distribute the loss of income over the whole of the people, and permit wages to drop to the economic level, Ministers have sought to maintain the existing wages level by means of an embargo on the importation of the commodity which these particular manufacturers were producing.

Another evil which attends upon the Imposition of an embargo is that of pricefixing. The honorable member for Swan (Mr. Gregory) has already told the House that firms which have been given the advantage of excessive protection or a total prohibition in the shape of .an embargo, will sell to certain customers only. Firms have come to Australia to set up industries, in some instances at the instigation of Ministers; possibly they whispered in the ear of the Acting Prime Minister (Mr. Fenton), when he was recently in Great Britain. At any rate, some have approached the Acting Minister for Trade and Customs, and, having established themselves here, proceeded to import large stocks of the commodities of the kind they proposed to manufacture in Australia. They thus established corners in their particular lines, and sold at their own prices. They refused to sell to others who would make the prices competitive. If the Minister wants the names of firms who have done that sort of thing, I can give them to him; but I am dealing for the moment with galvanized iron only.

I am not in agreement with Country party members who say that it would be better for Australia to pension the men engaged in the protected manufacture of galvanized iron, because workers in all industries are dependent for a market for their products on their fellow workers. The Australian’ wants work, and not a pension. There is too much easy money, and of doing nothing to earn it. It seems to mc that the policy of the Labour party - that of maintaining high rates of wages and shortening the hours- of work - is somewhat akin to the proposal to pension workers because they cannot be kept employed. Healthy industries are more likely to be stimulated by adequate and sensible protection than by the artificial stimulus of an embargo. If the Government would abandon its fanatical industrial outlook, and view the economic position in a business-like and commercial way, it would see that its policy, as enunciated to-day by the Acting Treasurer (Mr. Lyons) - that, for instance, of imposing a special class tax on civil servants whose salaries exceed £725 - is absolutely wrong. It is equally wrong for the Government to try to keep an industry alive by sheltering it from healthy competition. Honorable members of the Country party and some honorable members of the Nationalist party have shown how the > proposal of the Government in regard to galvanized iron hits the primary producer. Undoubtedly it does so, and it is universally admitted that it should be our policy to lessen rather than increase the burden of the wheat and wool producers of Australia.

I wonder if honorable members realize what an important part galvanized iron plays in the building trade, which I regret to say, has now reached its lowest ebb since the “ nineties “. Builders and others are waiting for the reduction of the cost of building material, for wages to come down, and for capital to be made available - not by the freedom of the note printing press, as advocated by some honorable members opposite, but by a healthy rehabilitation of trade, and a restoration of confidence; which the taxation proposals of the Government are not likely to bring about. Sales -taxes, prohibitions and super taxes serve to depress trade and reduce the capital available for investment in industry. This embargo will make less capital available for the building trade, and more men will be kept unemployed.. Is there any guarantee that the company to which this bounty is paid will re-employ the 900 men to whom reference has been made? The honorable member for Perth (Mr. Nairn) has told us that the Australian Glass Company, which was established on the promise of excessive protection, brought enormous quantities of glass to Australia, and decided to sell its imported stocks before embarking upon local manufacture. We are told by the Assistant Minister (Mr. Forde) that at the present time Lysaght’s have large stocks of galvanized iron on hand. Yet, they closed down, and the union and the employers joined in telling the Minister that the works would have to remain idle unless an embargo was placed upon the importation of galvanized iron.

Mr Forde:

– The honorable member has just given the reason for the closing down of the works. Because of the depression in the building trade there has been an accumulation of building material.

Mr WHITE:

– The honorable member for Swan (Mr. Gregory) has told us that Australia uses from 110,000 to 120,000 tons of galvanized iron each year. There should have been no need for these people to ask the Government for this concession. They should be able to build up stocks of from. 4,000 to 5,000 tons at any time.

Mr Forde:

– They had more than that quantity on hand at the time.

Mr WHITE:

– They have also played the same game with other companies in building up stocks of the imported line. Most of the debate to-day has been about corrugated galvanized iron. The embargo also shuts out galvanized iron sheets, which play a big part in Australian industry. Sheet metal workers and tinsmiths use large quantities of galvanized sheet. The effect of the embargo will be to penalize many small manufacturers. Possibly that point has not been considered by the Minister. I submit that this is a case entirely for the Tariff Board. The Nationalist party stands for reasonable protection, by means of which an industry may flourish despite competition from overseas. While we admit that the primary industries should be our first consideration, we also realize that it is essential that the secondary industries of Australia should be kept in a flourishing condition; but that will not be brought about by prohibition. Embargoes may make a few millionaires, and a few monopolists, but their general effect is to depress other industries. They may stimulate employment in some directions, but they bring about unemployment in others. We have on the Tariff Board a body of experts whose duty it is to hear evidence for or against applications for higher or lower duties. They have made no recommendation in this particular case. We are told that an officer of the Trade and Customs Department, after an investigation, has made a report to the Minister, and that upon his recommendation the Minister issued his proclamation to prevent further imports of galvanized iron. I do not consider that that was a proper way to deal with a matter like this, and I emphatically protest against it. If there is a. division, I shall vote against the bill.

Sitting suspended from 6.14 to 8 p.m.

Mr BERNARD CORSER:
Wide Bay

– We are considering a proposal to discontinue payment of the bounty on the manufacture of galvanized iron and to provide for an embargo on further importations, upon which the honorable member for Gippsland (Mr. Paterson) has moved an amendment which asks for the revocation of the proclamation relating to the embargo and the withdrawal of the bill for the very good reason that an embargo upon imports of galvanized iron will affect very materially the interests of all those engaged in rural industries. At the outset I wish to make it clear that 1 am not opposed to the principle of embargoes; but I consider that every proposal should be determined on its merits. Embargoes upon the importation of certain classes of goods have been of material assistance to some of our primary industries, particularly those in which Australian commodities have been marketed in competition with the products of black labour countries. The proposal now before the House is in a different category. It demands the earnest attention of every honorable member because it will create a monopoly which may prejudicially affect the interests of our primary producers. A few days ago the Acting Treasurer informed honorable members that the Government intended to reduce the payment of bounties by £120,000 as part of its economy proposals. Ministerial supporters applauded the announcement because they were well ‘aware of what lay behind it. Honorable members on this side, however, were uninformed of the real intentions of the Government. We now find that for the withdrawal of this £120,000 the Australian manufacturers of galvanized iron will be given a monopoly in the local market. In other words the Treasury is to be relieved of the payment of £120,000, and the burden placed upon the users of this commodity. In recent years there has been a steady decline in the overseas market price for all our exportable products - our wheat, wool, butter, beef, mutton, eggs, flour and fruit, and now the Government proposes further to handicap our producers by permitting Lysaght’s to have a monopoly of the Australian market for galvanized iron. This proposal is particularly unjust at the moment because the price of galvanized iron in other countries is falling. It so happens that Lysaght’s recently imported 10,000 tons of this commodity and being well aware of the effect which a declining market overseas would have upon that particular transaction, approached the Government for relief. The men and the firm have a joint desire to be put beyond competition.

Mr Forde:

– When did Lysaght’s import 10,000 tons of galvanized iron?

Mr BERNARD CORSER:

– During the last eleven months. Knowing that the price was likely to drop still further the firm mentioned considered that the time was opportune to bring pressure to bear upon the Government to come to its assistance. Accordingly, it closed its works for a few days in order to create a favorable atmosphere for the consideration of its claim. Representations were made to the Minister that 900 workers would be thrown out of employment permanently unless further assistance were given, and the Minister readily agreed to a suggestion that ah embargo should be placed upon importations. Our primary producers are, as I have said, the principal users of this commodity. They require galvanized iron for the erection of their dairies, wool-sheds, and buildings for the protection of grain, for the construction of dips, and, in the earlier stages of land settlement, for the erection of dwellings. In the larger centres of population, also, galvanized iron is indispensable for the erection of factories and workshops.

Mr Watkins:

– Which would the honorable member prefer - imported or Australian galvanized iron?

Mr BERNARD CORSER:

– Naturally I should prefer to see the Australian galvanized iron in more general use at a just price. I object to our primary producers being called upon to carry practically the whole of the burden of bounty and duty, because that is what die Government’s proposal means.

Mr Watkins:

– The price will be the same as during the period when the bounty was paid.

Mr BERNARD CORSER:

– Including bounty and duty value with the whole of the Australian market secured to the local manufacturer the price of galvanized iron ought to be lower. The price in other countries has fallen considerably. The payment of the bounty spread over the 900 men engaged in this particular industry represented £426 to every person employed in the business. If, with this generous measure of assistance, Lysaght’s could not produce at a profit in competition with manufacturers overseas, is it likely that the firm mentioned will do so when it has a monopoly of the Australian market without increased price ot reduced quality? Hitherto the users of Australian galvanized iron have been paying £5 10s. per ton more for this commodity than they would have been called upon to pay for imported galvanized iron duty free. This added COS is made up of £3 3s. bounty, £2 duty, and 7s. primage dues. The Minister told u? that, if Lysaght’s works were closed. SOO men would be thrown out of employment. He added that the firm mentioned was now producing sufficient for Commonwealth needs, which are stated at 70,000 tons. The extra charge of £5 10s. per ton on this production amounts to £385,000, which represents the additional burden that has been placed upon t.b»> users of the commodity.

Mr Forde:

– The honorable member might apply the same argument to peanuts or sugar, which are produced cheaper In other countries.

Mr BERNARD CORSER:

– The Minister probably is unaware that no. bounty payments are made in respect of sugar or peanuts.

Mr Forde:

– I am well aware of that.

Mr BERNARD CORSER:

– The payment of this huge sum of £385,000 per annum for the production of galvanized iron in Australia is equal to £8 per week to every man engaged in the industry. This is the price which the users of galvanized iron in Australia have to pay for the privilege of keeping Lysaght’s works open and insuring employment for 900 men. Is it to be wondered at that members of the Opposition, and particularly members of thu Country party in this House, are protesting against this iniquitous proposal? T do not blame the honorable member, for Newcastle (Mr. Watkins) for supporting the bill, because Lysaght’s establishment is in his electoral division. Naturally he favours tlie proposal. But I am considering the interests of our primary producers and other users of galvanized iron throughout Australia, and I feel sure that all honorable members representing country constituencies in this House will endorse what I have said. The Government’s proposal means relief to the Treasury in respect of the bounty hitherto paid for the manufacture of galvanized iron in Australia, but will place the whole burden upon the unfortunate purchasers. As I have stated, prices for galvanized iron in other countries have fallen during the last few months.

Mr Watkins:

– The price has been reduced by 50 per cent, in Australia, also.

Mr Paterson:

– Since the peak war period, I suppose!

Mr BERNARD CORSER:

– The honorable member for Newcastle appears to be unaware of the true position ; he is so far wrong in his estimate of the drop in the price qf galvanized iron that perhaps we can forgive him for the speech which he delivered this afternoon in support of the Governments proposal. The Minister made a mouthful of the statement that this particular firm had promised not to increase prices for the present. It is very evident that there is no need to increase prices while there are large stocks of British iron on hand. What is the price of galvanized iron in Great Britain to-day? The British producers who are competing with our own producers in respect of butter and other commodities are paying considerably less for galvanized iron.

Mr Watkins:

– And the British workmen are being paid a wage of about £2 a fortnight.

Mr BERNARD CORSER:

– It has been claimed that the price of butter sold for local consumption should be based on London parity, yet we find that the price of galvanized iron is in Great Britain £13 2s. 6d. a ton and in Australia £24 10s. a ton.

Mr Watkins:

– We pay more for our own butter than does the British consumer.

Mr BERNARD CORSER:

– That is quite correct, and you receive more wages than the British consumer. In proportion to wages you are getting butter too cheap at present. At the same time the Britisher pays £13 2s. 6d. a ton for galvanized iron and the Australian, because of the different conditions here, has to pay £24 10s. a ton. Honorable members will agree that private company monopolies at all times are dangerous. The Labour party has at all times been opposed to monopolies. In fact, it has a plank in its platform to that effect.

Mr Watkins:

– Except in regard to sugar.

Mr BERNARD CORSER:

– Sugar is not a monopoly. How can the sugar industry in Australia be said to be a monopoly when there are thousands of farmers and workers engaged in it? I oppose this particular embargo and I am rather disappointed that the Assistant Minister did not hesitate before granting it, particularly when we find that other commodities, such as pork products, have not been adequately protected. Before this Government took office, representations were made to the tariff board for an increased tariff or an embargo on imported pork products. Inquiries were instituted, but no reply has yet been given to those who represent the great co-operative pork interests throughout A!ustralia. Because there has been no increase in the protection given to that commodity, some of the leading firms in Sydney to-day are offering to the public Christmas hampers which are advertised to include “ the best New Zealand hams “. That position exists because of the Government’s failure to give greater protection to the co-operative pork interests, whose operations throughout Australia are to the advantage of the grower though it will give a monopoly to a manufacturer of iron.

Mr SPEAKER (Hon Norman Makin:
HINDMARSH, SOUTH AUSTRALIA

– I ask the honorable member to connect his remarks with the embargo on galvanized iron, which is the subject before the Chair.

Mr BERNARD CORSER:

– I think that you, sir, will agree that, in respect of the pork industry, iron is a very useful commodity. The Government has paid but slight attention to the need for placing on certain commodities- duties which would be of value to the- primary producers. On the other hand, right along the line, it has increased their burdens, unfairly in many cases, and particularly now when prices are low and likely to be still further reduced. I support the contention of the Leader of the Opposition (Mr. Latham) that the embargo on the importation of galvanized iron, as . a means of protecting the industry, should be. withdrawn.

Mr BELL:
Darwin

.- The measure before the Blouse amends the Iron and Steel Products Bounty Act by providing that a bounty shall not be payable in. respect of the manufacture of galvanized iron during the period in which the importation of galvanized iron is prohibited. This House has had no opportunity to decide whether there should be a prohibition placed upon the importation of that commodity, but it now has an opportunity to enter its protest against the manner in which this embargo has been imposed. T join with other honorable members on this side of the House in entering an emphatic protest against the imposition of this embargo. First of all, I view it as a gross misuse of the powers conferred upon the Minister under the Trade and Customs Act. It surely was never intended that the minister should have power to grant an absolute embargo, which amounts to a monopoly. No industry should receive such a great measure of protection without this Parliament being first consulted. When the Prime Minister (Mr. Scullin), early in the life of this Parliament, brought down a list of embargoes, he explained more than once that those embargoes had nothing whatever to do with the policy of the Government, which was to give adequate protection to Australian industries, but that they were imposed for the specific purpose of correcting the trade balance which, he said, was an imperative need. But the Assistant Minister has departed entirely from the policy then enunciated by the Prime Minister. An agreement has been entered into with Lysaght Limited, which gives that firm an absolute monopoly in respect of the manufacture and sale of galvanized iron in Australia. A proclamation was issued to that effect, although, at the time, the Prime Minister was asking the Imperial Government to grant preferences to Australian goods. We can easily imagine the position in which the Prime Minister was placed.

The manufacture of iron is on* of the chief industries of Great Britain, and it is not. surprising, therefore, that the British Cabinet turned a deaf ear to the advocacy of the Prime Minister for a greater preference for dominion produce entering Great Britain. It could only suppose that he was insincere in his pleading. I do not accuse the Prime Minister of insincerity, but I did not expect that the Assistant Minister in carrying out the policy of adequate protection enunciated by the Prime Minister before his departure overseas would impose any embargoes. This embargo has been imposed by executive act. I say that this Parliament has the right to decide what protection is adequate for a particular industry. This. is a dangerous power to place in the hands of a Minister. Parliament does not even know the terms of the agreement with Lysaght Limited. We do not. know what justification was advanced by the company. We do know that the Tariff Board was not consulted, as is required by the law before any alteration in the tariff takes place. The Assistant Minister, has, during the debate, shown resentment in respect of the suggestion that something improper has been done. While no one has suggested that he has done anything dishonest, I say, deliberately, that he has done something improper, because this Parliament and no other tribunal should decide whether any embargo should be imposed or any protection given to- a particular industry. This is a dangerous power to place in the hands of any Minister. It is well that we believe the Assistant Minister is honest, and we can only hope, that he and his successors in office will remain honest. But to place this power in the hands of a Minister is to take a risk that is too great for the Commonweal cb. A democracy such as ours will not long tolerate such a position. The effect of the prohibition on the importation of galvanized iron has been fully explained by the honorable member for Henty (Mr. Gullett). The Assistant Minister has informed us that Lysaght Limited have given an assurance not to increase their prices immediately. It is very evident that there should be a substantial reduction in the price of galvanized iron, and therefore Lysaght

Limited would have uo hesitation in giving such an assurance. In fact it is in. the same position as were Hugh McKay and other manufacturers when embargoes were placed upon the importation of certain implements manufactured hy them.. Any one who reads the lint of metal prices must realize that the prices of the component parts of galvanized iron have fallen considerably. I represent an electorate in which zinc is produced, and therefore I realize perhaps more fully than some other honorable members, the way in which metal prices have fallen. The price of zinc, which was £25 a ton last year, is to-day £14 a ton. That reduction has had a tremendous effect upon the cost of producing galvanized iron. I am opposed to this measure mainly because the will of this Parliament has been deliberately flouted. Parliament,, in its wisdom, decided that a bounty should be paid to encourage the production of galvanized iron as well as wire and other commodities, and that the protection given previously by means of the tariff should be withdrawn. The Assistant Minister has now deliberately flouted the determination of this Parliament by withdrawing the bounty and placing an embargo upon the importation of galvanized iron. Is that a proper thing to do? I suggest that the people of this country think otherwise. Parliament is the proper authority to decide this question. But the users are being penalized because of a threat that 900 men engaged in the production of galvanized iron would lose their jobs. I am not convinced that that would have occurred. Lysaght Limited, who were the largest importers of galvanized iron in the period immediately prior to the closing of their works, claimed that they could not carry on withoutfurther protection and offered to forgo the bounty if importation was prohibited. The Government yielded and the result is that the price of the commodity will be increased at the dictates of 900 men who have greater influence than the thousands of men who work in the fields and in the mines, and upon whose efforts the solvency of the country depends. Galvanized iron is used extensively in the dwellings occupied by the nien engaged in primary production, particularly of the minerals which are used in the manufacture of galvanized iron. Bricks are too costly, and galvanized iron has the double advantage of being less vulnerable to fire and less costly to transport than timber. The roofs of all house.v in country districts are of iron because the1 people cannot afford slates or tiles. On. the mines the roofs and walls of shedsand engine houses, as well as the dwellings of the miners, are constructed of iron, but tens of thousands of people are to be penalized because of a scare that 900 men engaged in Lysaght’s factory might los< their employment. The probable explanation of that threat is that the company, knowing the policy of the present Government, determined to use it to its own advantage. The Labour party advocated on the hustings adequate protection; the people declared their approval of that policy, and, therefore, I offer no protest against tlie Government giving effect to it. 1, too, have always supported what I considered adequate protection, but. unfortunately, all the legislation introduced by the present Government has the effect of keeping up prices. I am, however, opposed to prohibition, which gives a monopoly in any industry. I say deliberately that the chief causes of the present economic depression are high protection, fixation of wages, and the endeavour to maintain an artificial standard of living. The truth is that a high standard of living cannot be maintained by this means ; we cannot grow rich by charge ing high prices to each other. The onlyway to enjoy a higher standard of living than obtains in other countries is to keep down the costs. By its policy of increasing the cost of living this Government is deliberately lowering the standard of living. Unfortunately, this bill does noi afford the House an opportunity to declare whether the embargo should be continued or not. The Government has acted improperly, and on behalf of the users of galvanized iron, and to uphold regular procedure in this democratic Parliament, I enter my emphatic protest against the embargo. I do not know whether the carrying of the amendment will mean that the bounty must continue to be paid on the production of galvanized iron, notwithstanding that the prohibition on imports has been proclaimed, but as a protest against the measure and the flouting of Parliament, I shall support the honorable member for Gippsland.

Dr EARLE PAGE:
Cowper

– I protest in the strongest possible terms I am permitted to use against the betrayal of primary producers and consumers of galvanized iron by the Government. The Acting Minister for Trade and Customs (Mr. Forde) represents a great primary producing constituency in which large quantities of this commodity are used because the difficulties and cost of transport practically rule out the use of other materials for the covering of dwellings and out-buildings. Yet at the dictation of a monopoly, or of certain unionists, or of both, the Government has sacrificed all the consumers of galvanized iron. By a stroke of the pen and without seeking the approval of Parliament, the Ministry has radically altered a policy which has been in operation in Australia during the last eight years. It was first introduced by the right honorable member for North Sydney (Mr. Hughes) in 1922 when, in order to prevent the undue burdening of the primary producers by the protection of the iron and steel industry, he proposed that the whole of the taxpayers should share the .cost of establishing an industry which Parliament declared to be necessary for the safety and prosperity of Australia. Up to the present time that principle has never been challenged by any Government. Now, when the protection given to the industry by means of bounty and duties is. more adequate than ever before, because of the extraordinary circumstances of the times, the Minister has introduced this radical change. In December last he altered the bounty and the duties on iron products. Another alteration was made during the present year, and on both occasions the Government held that £5 10s. per ton, whether by means of bounty or duties, or both combined, was a sufficient protection for the galvanized iron industry. Since that time the price of spelter has dropped from £25 to £14 per ton, representing a saving to Lysaght Limited of approximately £127,000 per annum. The Minister says that spelter represents only 16 per cent, of the composition of galvanized iron. Even if that be so why should not that reduction be passed on to the consumer? At the present time exchange is approximately 9 or 10 per cent, in favour of local production, which means a substantial additional protection to every Australian industry. The present price of galvanized iron overseas is £14 per ton, to which must be added £2 10s. per ton for freight. A 10 per cent, exchange advantage on that gives an additional protection of about 36s. per ton. Yet when the natural “protection of the industry is greater than at any other time in its history the Government considers the time opportune to impose an embargo on imports of galvanized iron. The Minister has not yet given to the House or the country any adequate reason for the action he has taken. In January last, before the price of spelter had fallen substantially, and when the prices of coal and steel were higher than they are to-day, Lysaght’s declared that they would be able to keep their industry going if they were given a protection of £5 10s. per ton. Now, when they are getting substantially greater protection, for some occult reason they have persuaded the ‘ Government to proclaim a complete embargo on imports. At times there are good reasons for placing embargoes on certain goods imported into Australia, but it is wrong to take suN action in regard to an article of common necessity and utility without adequate and public inquiry. Something more is required than a secret understanding between the Minister, the manufacturer and the unionists concerned before such a grave departure from an accepted principle is made. What has occurred savours almost of political blackmail. A gun appears to have been held at the Ministry by the men engaged in the industry, and the Government has held up its hands, said “ Kamerad “ and surrendered. The Minister declared that the sugar embargo was on all fours with the embargo on galvanized iron. So far from that being the case, the fact is that the sugar embargo was imposed after long investigation, full discussion and open deputation, and upon the condition that the Queensland Government was to commandeer the sugar, which was to be sold at prices that could not be altered arbitrarily by any individual producer or even by a Minister.

Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP

– The price was fixed by the combine.

Dr EARLE PAGE:

– It was fixed by agreement between the Commonwealth and Queensland Governments and the representatives of the industry. Such action, taken openly on grounds of high national policy, publicly explained, and subject to challenge by members of this Parliament, is justified. So are embargoes on imports for quarantine purposes - on peanuts to prevent the introduction of the rosetta disease, on potatoes to protect the local industry from blight, and on maize as a safeguard against the corn borer. I notice the Acting Minister smiling. He has done nothing to protect the big industries of this country and nothing to prevent widespread devastation and destruction. It was a scandalous thing, in my opinion, to impose an embargo of this kind without any warning whatever, for it has placed a burden on every primary producer and the poorer people of Australia generally who need galvanized iron for roofing their houses in cities and country alike. This burden should be borne by the whole community and not by one section of it. The Acting Minister has not been able to justify in any way the action which the Government has taken in this connexion.

It is worth while putting on record the amount of protection that this industry is receiving from the Commonwealth. A bounty of £3 3s. per ton is payable on all galvanized iron manufactured here. In addition to that there is a duty of £2 per ton; a primage duty of approximately 7s. per ton, which would have been increased had it not been for the embargo; a freight protection of about £2 10s. per ton, insurance of 3s. 6d. per ton, and exchange costs which approximate £2 per ton. The total protection is, therefore, more than £10 per ton. We have been told that the overseas price of galvanized iron is about £14 per ton. It will thus be seen that the protection which this industry is enjoying is between 70 per cent, or 80 per cent. Surely that is generous protection in a country which has coal that can be more easily mined, and should be more cheaply mined, than the coal of almost any other country, and which has iron ore, which we boast contains a higher percentage of iron than the ore of almost any other iron producing country in the world. And yet we now have an absolute embargo.

There is a matter which should be explained in the interests of both the Government and the local manufacturers of galvanized iron. Why was it foundnecessary by this company, which has a monopoly, to import huge quantities of galvanized iron during the past year? The shipping manifests show conclusively that about 10,000 tons of galvanized iron have been imported into Australia on behalf of this company during the last twelve months.

Mr Stewart:

– It is to be hoped that the company is not using this iron under the protection of the embargo.

Dr EARLE PAGE:

– The Deputy Leader of the Opposition has pointed out that a certain company which manufactures glass imported a very large quantity of glass before the increased duty was imposed recently, and is making additional profits on it because of the heavier duty. In the interests of public morality and public decency the Government should completely elucidate this point. We have a right to know why galvanized iron was being imported by this company at the very time when it must have been negotiating with the Government for the granting of the embargo. On the 27th September the Sydney Morning Herald stated that industrial Newcastle had received its most severe shock for many months when it was announced that Lysaght’s works would be closed down the next day. Two or three days afterwards the Acting Prime Minister (Mr. Penton) said in Melbourne that the Government was considering the adoption of a “ plan placed before it by the union and the employers to prohibit the importation of all galvanized iron into the Commonwealth “. It is a very serious thing that heavy imports of ga.vanized iron should have been made by the company at the very time when the granting of an embargo was under consideration.

We have been told that the company has said that it will not immediately increase the price of galvanized iron. I desire to know from the Government why the company should not be called upon to reduce the price immediately.

Mr Forde:

– A qualified accountant, who has examined the accounts, has declared that the company could not carry on at a lower price.

Dr EARLE PAGE:

– We have heard some airy stories from the Acting Minister about the accountant of the department examining cases of this kind.

I have sent information of price increases following tariff revisions along to the Acting Minister at various times, and have been informed on every occasion i hut the accountant was satisfied that the prices are reasonable, although no one else in Australia was satisfied about it. It is extraordinary that, at a time when price levels for goods of this kind are falling in other parts of the world, it should have been found necessary in Australia suddenly to place an embargo upon the importation of thom. A recent issue of the Metal Bulletin shows conclusively that there has been a general downward trend in the price of galvanized iron; but this embargo has prevented the people of Australia from participating in the general fall in prices. This is a very serious state of affairs.

Practically the same kind of thing has occurred in connexion with agricultural machinery. It was said some time ago that, if an embargo were placed on the importation of certain agricultural machinery the Australian manufacturers would be able to reduce their prices immediately by 5 per cent. Official statistics published the other day reveal that the cost of living has fallen in Australia by an average of 11 per cent., and that concurrently with that reduction there has benn a reduction of the basic wage and of wages based upon the basic wage. But has there been a reduction of

II per cent, in the price of agricultural machinery following the general reduction in the cost ‘of living? I have not heard anything of it if there has been, nor do I know of any farmer who has heard anything about it.

Mr Stewart:

– We have heard of increases.

Dr EARLE PAGE:

– The sales tax has caused an increase of 6 per cent, in the price of one farming implement which has been brought under my notice. Seeing that there has been a general reduction of costs, there should be some reduction in the cost of agricultural machinery.

By granting a monopoly to this galvanized iron manufacturing company, the Government has prevented the people of Australia from taking advantage of the general downward trend of prices. It is absolutely essential for us to take advantage of these lower prices if we are to overcome our present difficulties. What is killing us at present is that, while the prices of our great staples have f allen on the world’s markets, the prices of our manufactured goods have been kept high artificially. This has meant that the purchasing power of our people has declined and the amount of unemployment in our midst has increased tremendously. During the last year the number of registered unionists unemployed in this country has almost doubled. The only way to cure our ills is to bring about a condition which will result in a continual fall in the price levels of manufactured goods; but such a condition cannot be created while a procedure is adopted which prevents outside prices from influencing Australian prices.

What is the position of this industry in relation to the general community? An examination of the facts reveals that during the last two or three years this company has produced about 53 tons of galvanized iron per employee. Ite employees now number 900, and on this basis of output would produce some 47,700 tons per annum. On this output a protection of £5 10s.- per ton - bounty and duty - amounts to £267,000 per annum, equivalent to £297 per employee, or nearly £6 per week each. Yet we are told that an embargo must be placed upon the importation of galvanized iron to enable them to continue operations. What I wish to have cleared up is whether it is necessary for us to make a gift to Lysaght Limited of practically £6 a week in respect of every one of their workmen and in addition to grant this embargo. What sort of a poultice is this to place upon the general public? The company has undertaken, as I have already remarked, that it will not increase the price of galvanized iron immediately. But we need a great deal more than that.

The Government selected the most inopportune moment that it could possibly have chosen for the proclamation of this embargo. At the very time that the Prime Minister was discussing with the British Government the desirableness of granting increased preferences to Australia, the Commonwealth Government was shutting out British goods. On the very day that the Imperial Conference opened, and upon which the Prime Minister made a speech asking for a greater ‘ measure of reciprocal trade between Australia and Great Britain, the Government here said in effect to Great Britain “You buy our zinc, our dried fruits, our butter, our wool and our wheat, and you give us a substantial concession in respect to our wine ; but we will not allow a single sheet of British galvanized iron to enter Australia, even under the high duty that is at present in operation.” The speech of the Prime Minister was therefore stultified at the very time of its delivery. Nothing could be more calculated to stiffen the determination of the British Labour Government to maintain its existing policy than actions such as this Government has taken in regard to galvanized iron. The British Government could be excused for saying “If that is the sort of thing you are prepared to do in regard to our manufactures, it is useless for us to discuss any trade proposals with you.” Great Britain is a large purchaser of our zinc and it seems to me that the Government would have been well advised to have taken into consideration an increase in the existing duty, although, as honorable members know, I am not an advocate of heavy duties on goods of this kind, or even an increase in the bounty. It certainly was not justified in sacrificing the interests of the primary producers, the small builders and the small householders of Australia simply because it was not prepared to reduce its expenditure in other directions. By this means it hopes to make a saving of about £120,000 id iron and steel bounties; but its method of doing so is objectionable in every sense of the word. We have had in operation in Australia in the last ten years a system of protection which has been generally accepted and which the primary producers have accepted even though it has placed heavy burdens upon them. But at a time when our producers bad received the worst blow of any that had fallen upon them in the last 50 years - T mean the low prices obtainable for their products - it was deplorable that the Government should have departed from the existing -policy. This embargo must have the effect of forcing many primary producers to do without improvements which they need on their farms, and of so seriously embarrassing others that they will not be able to carry on their operations.

Mr FORDE:
Acting Minister for Markets and Transport · Capricornia · ALP

– The speech of the right honorable member for Cowper (Dr. Earle Page) in criticism pf the’ Government’s action in seeking to save over £100,000 this financial year in the payment of bounty on locally produced galvanized iron was amazing. The ex-Treasurer was elected to this Parliament originally as an apostle (of economy. He urged .the cutting down of all government expenditure. Upon taking his seat on the cross benches of the House he continued to advocate the cutting down of expenditure. He became a Minister of the ‘ Crown through his condemnation” of the Government of the day for its extravagance^ and his promises to reduce expenditure. When he became Treasurer he OUtHeroded Herod. His actions provoked the present Deputy Leader ‘ of the Opposition (Mr. Gullett) .to describe him as “ the most tragic Treasurer Australia has ever known.” When the electors of Australia relegated him to political obscurity the accumulated deficit amounted to £5,000,000, the adverse trade balance to over £90,000,000, «while the London loan market was closed against Australia. He’ was Treasurer during Australia’s most affluent years; but he increased taxation, both direct and indirect, despite his boast that he would reduce costs. Under his administration expenditure increased by leaps and bounds. Money was handed out for one purpose or another unstintedly; the revenue of. the Commonwealth was squandered right and left. Instead of preparing for the inevitable rainy day, he acted as though the good times would last for ever. Having himself sown the wind, he now has the audacity, when the present Government is reaping the whirlwind, to criticize its action in making a saving of over £100,000. If; John Lysaght and Company Limited does npt play the game, the prohibition of the importation of galvanized iron can be removed.. The duration of the embargo is a matter for determination by the Government. Should it be found that an ‘ embargo .is not the best way of meeting the position, the Government can impose ‘duties on all galvanized iron that is imported. ‘ This ia a matter for the Government to determine: it is prepared to take the full responsibility.

Mr Latham:

– It is a matter for Parliament to determine.

Mr FORDE:

– A good deal has been said about Parliament not being consulted before this prohibition was imposed. 1 remind honorable members , that, when the right honorable member for North Sydney (Mr. Hughes) was Prime Minister during the war period, he took notion to prohibit certain imports on his own ‘ responsibility without consulting 1 Parliament. He exercised the power conferred on him by the Customs Act. It will be seen, therefore, that the Government has precedent for its action. The honorable member for Wide Bay (Mr. Corser) criticized the galvanized iron industry in Australia on the ground that in some countries galvanized iron could bc obtained for much less than it costs in Australia. He said that in England the material could be bought for £14 a ton, and that it was a shame that the people of Australia had to pay £25 10s. ti ton for it. ‘Would the honorable member say that, because sugar can be grown in Cuba, by black labour, for £6 a ton, it would be reasonable to ‘charge the same price for it in Australia instead, of the fixed price of £27 per ton? When the honorable member for Wide Bay advocated an embargo on the importation of peanuts, he did not contend that Parliament should first be,, consulted. Although it was pointed out by some of the opponents of that embargo that peanuts i-ould be bought for Jd. per lb. in some countries the honorable member for Wide Ray still clamoured for an embargo. The honorable member favours an embargo on the importation of sugar and peanuts ; hut, rather than place an embargo on the importation of galvanized iron and keep 1 ,000 men in employment in Australia, he would see them starve, merely because the material can be obtained more cheaply elsewhere. The inconsistency of the honorable member for Wide Bay is amazing.

It has been pointed out that by the pooling of exchanges in London, Australia has the first call on approximately £36,000,000 a year for interest and other charges in England. Notwithstanding the extent to which some people raigh i like to go on importing at the rate that the last Government imported-

Mr Latham:

– The late Government did not import.

Mr FORDE:

– lt allowed almost- unrestricted importations, with the result that hi seven years it built up an adverse trade balance of £90,000,000. Our exports this year are expected to amount to about £100,000,000. If from that amount we deduct the £36,000,000; previously mentioned, it will be seen that we cannot afford to import galvanized iron from the British firm of Lysaght’s, the biggest manufacturers of galvanized iron in the world, who have had the biggest share of the Australian market for the last 50’ years. We must restrict our imports and encourage local manufacture. John Lysaght Limited was induced, to establish a factory in Australia for the manufacture of galvanized iron when Mr. Hughes was Prime Minister.

Mr Paterson:

– Mr. Hughes favoured bounties as a means of protection.

Mr FORDE:

– In a letter to the Melbourne Argus of 8th October last, Messrs. John Lysaght Limited said -

Before the industry was established in 1921, n definite promise was made by the Federal Government that adequate protection would be given, and after the fullest consideration and inquiry ‘ by the Tariff Board, a recommendation was made for a total protection of £5 10s. per ton, either by duty or bounty, and this is what is actually being received at present, namely, duty and primage. £2 7s.: bounty, £3 3s. per ton.

Mr Gullett:

– Not an embargo.

Mr FORDE:

– Adequate protection would be equivalent to an embargo. When the company was induced to spend £700,000 in establishing its factory in Australia, it was promised adequate protection.

Mr Latham:

– It has received adequate protection.

Mr FORDE:

– That is not so. If the works had been adequately protected they would not have closed. This embargo was not decided on hurriedly as has been suggested. The matter was under consideration for a considerable time before the Government at last decided to place an embargo on the importation of galvanized iron. Yet. the Deputy Leader of the Opposition (Mr. Gullett) and the honorable member for “Wide Bay (Mr. Corser) have accused the Government of having instantly acceded to the request for an embargo. The honorable member for Newcastle (Mr. Watkins) knows that for months’ he interested himself in this matter. On the 27th August he sent to the Acting Prime Minister the following telegram: -

Can you ‘see deputation from Lysaght’s employees to-morrow afternoon; matter urgent that if no immediate decision is forthcoming works must close as stocks in hand are extremely large.

In addition he consulted with me and the other members of the Government. That the company was not of the opinion that the Government instantly acceded to its request is shown by the following extract from the Sydney Sun of the 26th September last: -

900 MEN TO BE IDLE.

Newcastle, Friday. - Lysaght’s Limited, galvanized iron manufacturers, will close down at noon to-morrow, throwing idle 900 men. This is stated by the management to be due to procrastination of the Federal Government ib coming to a decision on the request of the management and the Iron Workers Union regarding the placing of an embargo on galvanized iron.

That gives the lie direct to those persons who say that protection was given to the industry immediately it was asked for by the company. On the file dealing with this matter, there is a letter from John Lysaght Limited to the Minister for Trade and Customs, dated 8th October last in which the company states -

When the recent extra duty of 20s. and a primage of 2-J pur cent, was imposed on galvanized iron, this decreased our bounty by 27s.’ per ton.

To meet this we have so far only advanced our prices 20s. per ton gross, equal to 18s. 9d. per ton net, which leaves our prices to-day at 8s. 3d. per ton less than they need be.

On more than one occasion the Deputy Leader of the Opposition inferred that officers of the Customs Department had expressed disapproval of the action of the Government in tariff matters. I did not expect that of the honorable gentleman.

Mr Gullett:

– I have never suggested that.

Mr FORDE:

– Were it not that I have implicit faith in the officers of the department, such statement coming from the honorable member, who at one time administered the Trade and Customs Department, would shake my confidence in them. One can only infer from the honorable member’s remarks that officers of the department had told him something which they should not have told him. I am sure that is not so. Such statements are unfair to the officers of the department,- than whom no better are to be found in Australia. I desire to quote from a report from one of the departmental officers -

Lysaght’s have not passed on to the purchaser the whole of the recent reduction in bounty, and on the same principle they hope to find that they need not pass on the whole of any further reductions. The bounty .has recently been reduced by £1 7s. and corres’ponding import duties have been imposed. The amount by which prices have been increased is £1, less discounts, and equals an increase of 18s. 9d. net., as against the reduction in bounty of 27s.

It has been said that Lysaght’s should reduce the price of galvanized iron, notwithstanding the loss of the bounty of £3 3s. a ton on galvanized iron manufactured in Australia. That can only be done by reducing the wages of their employees, which is what honorable members opposite desire. One of the investigating officers of the Trade and Customs Department, who is a qualified accountant, made a report from which I quote the following extract : -

The financial records of Lysaght’s Newcastle Works Limited, have been examined with a view to ascertaining the effect of payment of bounty, and also to show the manufacturing profit or loss as the case may bc, if bounty had not been obtainable. The following figures for the past three and a half years have been extracted from the trading account: -

Mr Latham:

– What is the date of that report ?

Mr FORDE:

– It was submitted in October of this year, not more than a month ago. The report was made by an investigating officer of the Trade and Customs Department, who gives the gross trading profits of the company including the bounty, the amount of bounty, and the results, if the bounty had not been received, for different periods, as follows : -

He further states -

It will therefore be seen that under recent tariff schedules the company could not have carriedon without the assistance received from the bounty.

Notwithstanding the receipt of the bounty, the net profits derived from trading have been so small, that adequate provision could not bo made for depreciation on plant, machinery, and buildings.

From the investor’s point of view, the profits derived from the business have not been large enough to yield a fair return on the capital invested. This is borne out by the fact that no dividends were paid for the first five years, and from 1927 onward the distributions were: -

This absolutely disproves the accusation that the company has been profiteering, and that it should have reduced prices. I hold no brief for the company. I wish to be absolutely fair and to put the position as disclosed by the official file. The report further states.

From the abovefigures it will be observed that the only dividends received by Ordinary shareholders from 1921, when the company first commenced business to 1930 were 5 per cent. in 1928 and2½ per cent. in 1929. The capital is made up of -

Mr Hughes:

-What was the return on the capital invested ?

Mr FORDE:

– I have just quoted the figures. The departmental officer in summarizing the position states -

The records of the company show that but for the . payment of a bounty the company would have made a. loss, while the dividends received indicate the poor results obtained oven with a bounty.

It is necessary to place these facts on record as some honorable members opposite have described this firm as a huge commercial octopus strangling the primary producers, operating to the detriment of the workers of Australia, and one which has been aided and abetted by the present Government. Judging by the remarks of some honorable members opposite one would think that this matter had been settled in some hole-and-corner method by me personally. As a matter of fact deputations waited upon the Acting Prime Minister (Mr. Fen ton) and myself, and extensive inquiries were made by officers of the department. The whole subject was then fully considered by Cabinet when it was decided to withdraw the bounty and to impose an embargo on importations. The proclamation prohibiting the imporation of galvanized iron was signed by the Acting Prime Minister. At the time the works were closed down 900 men were thrown out of work; and if an embargo had not been imposed not only would that number have remained idle, but others engaged in the production of steel bars at Newcastle, in raising iron ore at Iron Knob in South Australia, and some of those employed at the Electrolytic Zinc Works in Tasmania would also have been thrown out of work. When this decision was reached it was anticipated that Parliament would not re-assemble for five or six months, and if the Government had waited until Parliament met to introduce an amending tariff schedule giving additional protection to the industry, importations from other countries would have continued.

Mr Watkins:

– They were coming in.

Mr FORDE:

– Yes. Galvanized iron can be produced cheaper in Great Britain and on the Continent than in Australia. Was a duty of £5 10s. a ton exorbitant? It represented only a duty of 25 per cent. on an ad valorem basis, which is comparatively small for an important secondary industry. In these circumstances, is it any wonder that large importations were taking place? The honorable member for Balaclava (Mr. White) said that John Lysaght Australia Limited could have continued building up their local stocks, but at the time the embargo was imposed the firm had accumulated stock of 4,500 tons of Australian iron, and it is only reasonable to assume that they could not obtain unlimited credit from the banks. One of the greatest difficulties confronting Australian manufacturers at present is in obtaining credit to enable them to build up large stocks. Manufacturers cannot afford to have money lying idle. During the seven years this bounty has been in operation, the Commonwealth has paid approximately £500,000 on the production of galvanized iron. Bounties are provided in the first instance to assist industries in the initial stages of production. We have been informed by the representatives of the Country party in this chamber that they do not favour the payment of bounties over indefinite periods. Surely seven years was a fair initial period in which to assist a struggling industry! In view of the state of the finances, the Government felt that it was justified in imposing an embargo. This company has displayed a good deal of commercial enterprise and foresight, as in addition to its original capital expenditure, it has spent £250,000 in duplicating its Newcastle plant.

Mr Gullett:

– All that was done under the old arrangement.

Mr FORDE:

– The plant was doubled during the last twelve months, but the plant was first established because of the promise of adequate protection given by the Government of which the right honorable member for North Sydney (Mr. Hughes) was the leader. Adequate protection is effective protection and not a duty which is not sufficiently high to prevent importations at a rate considerably below the Australian cost of production. In addition to its initial expenditure on plant and buildings, the company has since spent £250,000 in erecting eight more mills. This kept 100 men in constant employment in construction work for twelve months. With the exception of one large electric motor, which could not be manufactured locally, the whole of the plant and equipment was made in Australia. Further, John Lysaght Australia Limited has agreed to supply all those organizations which were importing galvanized iron at the time the embargo was imposed with Australian iron on such, terms and conditions as will enable them to keep their organizations intact. I understand that some of the large importers have agreed to this arrangement and are working amicably with the company. There is a mistaken idea in the minds of certain honorable members opposite that an increase in prices would have a terrible effect upon primary producers and the workers generally. Up to the present, there has been no increase in the price of iron as a result of the embargo, which has enabled 900 men to retain their employment at the company’s works and probably twice that number to be indirectly employed. If the price of galvanized iron were to be increased by £1 or £2 a ton it would not be the heavy burden upon the primary producers or upon home builders that some honorable members opposite would lead us to believe. As a matter of fact only about 15 cwt. of galvanized iron is required on a four-roomed cottage, and about 1 ton on an average home. In the country districts of Australia the life of galvanized iron is about 30 years. If the price were increased by £3 a ton the additional cost over a 30- year period would be only about 2s. per year. Those who pretend to be protecting the interests of the primary producers and the workers would assist in reducing their returns or wages by £40 or £50 a year, and would allow those who lend them money to fleece them to the extent of £50 or £100 a year by charging 7£ per cent, or 8 per cent, interest on overdrafts. But when it is a matter of paying perhaps 2s. a year to keep an industry in operation and retain in employment thousands of men, their political hearts bleed for the primary producers and the workers. In 1918, the price of galvanized iron was £63 a ton, but at that time we did not hear any complaints from honorable members opposite. The price to-day is approximately £25 per ton, as against the figure I have quoted for 1918.

Mr Latham:

– That was a war year.

Mr FORDE:

– I know that. The price reached £72 a ton and even higher for a brief period ; but in 1918, after the termination of tlie war, it was £63 a ton. Ten years ago it was £50 a ton, but to-day it is only half that price. In these circumstances, an increase of £1 a ton would not appear unreasonable if it were necessary to keep the industry going; but an increase has not been suggested.’ Such an increase would not ruin the primary producers or the Australian worker who wishes to build a home. Ten years ago, when galvanized iron was bringing £50 a ton, honorable members opposite did not object to the operations of dealers and importers who were gambling in this commodity. To-day galvanized iron is one-half the price at which it was sold when John Lysaght Australia Limited established their factory at Newcastle.

Mr Paterson:

– There is no connexion between those facts.

Mr FORDE:

– If John Lysaght Australia Limited had not been competing with overseas manufacturers the price would have been higher, as would be the case in connexion with other commodities I could mention. In 1927, Lysaght’s imported 78,670 tons of galvanized iron out of a total of 119,834 tons imported, and in 1928, 42,099 tons out of a total of 69,458 tons imported. I quote these figures deliberately. I do not deny that in the past John Lysaght’s have been the largest importers of galvanized iron in Australia. They have imported their requirements from the parent company in Great Britain, which is the largest manufacturer of galvanized iron in the world. In the future they are going to make this commodity in Australia from Australian materials, and with the employment of Australian workmen. In 1929, they imported 42,165 tons out of a total of 78,659 tons. During the last twelve months their importations have been as follow : -

October, 1929 - 2,328 tons out of a total of 5,014 tons.

November, 1929 - 2,460 tons out of a total of 5,539 tons.

December, 1929 - 3,307 tons out of a total of 6.005 tons.

January, 1930 - 1,590 tons out of a total of 4,533 tons.

February, 1930 - 753 tons out of a total of 3,314 tons.

March, 1930 - 1,973 tons out of a total of 4,293 tons.

April, 1930 - 2,208 tons out of a total of 4,438 tons.

May, 1930-1,882 tons out of a total of 3,832 tons.

June, 1930 - 908 tons out of a total of 2,006 tons.

July, 1930 - 390 -tons out of a total of 1,545 tons.

August, 1930 - 1,207 tons out of a total of 2,670 tons.

September, 1930 - 948 tons out of a total of 2,952 tons.

During the last twelve months they imported 19,874 tons, compared with- 78,670 tons in 1927, 42,099 tons in 1928; and 42,165 tons in 1929. It must be borne in mind that, in common with many other people, they did not foresee the prevailing depression in the building trade, and they ordered their supplies from- the parent works in Great Britain for a period ahead. They do not deny that it paid them better to import from their works in Great Britain, where wages are half what they are in Australia, where the working week is much longer, and where this commodity is produced for a world’s market. They admit that it would have paid them better to have supplied the whole of the Australian market from their English factory; but they were induced by the right honorable member for North Sydney (Mr. Hughes) to establish works here, and were given an undertaking that they would be afforded adequate protection. Neither I nor the Government make any apology for having given them that protection ; it is in accordance with the Government’s policy. The progress of this company will be watched, and if it does not play the game the embargo can be lifted. The Government has complete control, and will do what it thinks fit. It has no brief for either John Lysaght’s or anybody else; but it believes that, if there is to be a monopoly, one that is established in Australia and that gives employment to our own people is much better than one that is established in England, Germany, or the United States of America, because its operations can be controlled here in Australia. We have the whip in our hands. I believe that John Lysaght’s will give a fair deal. So long as they do so, neither they nor the taxpayers of Australia will have anything to fear.

Question - That the words proposed to be omitted (Mr. Paterson’s amendment) stand part of the question - put. The House divided. (Mr.Speaker - Hon. Norman Makin.)

AYES: 32

NOES: 21

Majority . . . . 11

AYES

NOES

Question so resolved in the affirmative.

Amendment negatived.

Original question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 and 2 agreed to.

Clause 3 -

After section six of the principal act the following section is inserted: - “ 6a. Notwithstanding anything contained in this act, bounty shall not be payable under this act upon any goods manufactured in Australia and delivered from a factory during any period during which the importation of those goods is prohibited by or under the law relating to the Customs, whether or not such prohibition is absolute or subject to conditions.”.

Mr LATHAM:
Kooyong

.- This bill deals with the whole of the iron and steel products that are dealt with by the Iron and Steel Products Bounty Act 1922-1929. The debate upon it has been confined to galvanized iron, and the only justification advanced for it has been founded upon arguments relating to that commodity. The Iron and Steel Products Bounty Act, however, relates also to fencing wire - which, according to the speech delivered yesterday by the Acting Treasurer (Mr: Lyons) it is proposed to deal with in another way - galvanized sheets, traction engines and wire netting. I think I am right in saying that, despite the multitude of words that have fallen from the lips of the Minister (Mr. Forde) no reference was made by him to traction engines or wire netting. Yet we are asked to confer upon the Government the power to abolish the bounties payable with respect to those commodities, and to substitute an embargo, with the very important result that any increased cost by reason of their manufacture in Australia, will have to be paid by the users instead of by the general public. That is a very important principle, as I am sure all honorable members realize. We have been informed of the position in regard to galvanized iron, but have been given no information in relation to any other iron product.

Mr Forde:

– Galvanized iron is the only product the importation of which has been prohibited. The reason for introducing the bill was to make the nonpayment of the bounty valid.

Mr LATHAM:

– On the Minister’s own statement, the bill obviously ought to be confined to galvanized sheets; but its wording enables it to be applied to all goods upon which a bounty may be payable under the act. Even though it be assumed that the proposals referred to yesterday in relation to fencing wire, which involve the imposition of a duty in substitution of a bounty, are carried, the matter of traction engines and wire netting will still be left open, and without any argument, or any suggestion that it is necessary to deal in this way with those two items, the committee is asked to allow the Government to get rid of the bounty by the imposition of an embargo. There may be a case for action of that kind in connexion with traction engines and wire netting; but we bave beard nothing of it. Accordingly, I move -

That the word “ goods “ first occurring be omitted with a view to insert in lieu thereof the words “galvanized sheets.”

If the amendment is carried, as I presume it will be, because it is entirely in accord with what the Acting Minister desires, I shall move later that the words “ those goods “ be omitted and the words “ such sheets “ be inserted in lieu thereof. Those amendments, if adopted,- would accomplish everything that the Minister says he desires.

Mr. FORDE (Capricornia - Acting

Minister for Markets and Transport) [9.46]. - I explained in my secondreading speech that this is a bill to legalize the withholding of a bounty on the manufacture of galvanized iron. Really, the Government need not have introduced the measure, because I believe that the undertaking given under the seal of John Lysaght Australia Limited that the bounty would not be collected if an embargo were granted would have been honoured both in letter and spirit. However, to legalize the matter, the AttorneyGeneral’s Department suggested that this bill should be put through Parliament. Itprovides that a bounty shall not be payable upon any goods manufactured in Australia and delivered from a factory during any period in which the importation of those goods is prohibited. I cannot accept the amendment of the Leader of the Opposition (Mr. Latham). There is no intention whatever on the part of the Government at this juncture to prohibit the importation of traction engines or wire-netting and fencing wire, but should the necessity arise in the future for such an embargo, which is very unlikely, I am confident that no honorable member would approve the granting of such a prohibition concurrent with a payment of the full rate of bounty. The provision contained in this clause is a wise one, and I am of the opinion that the hill should be passed in its present form.

Mr GREGORY:
Swan

– I am continually astounded by the blatant hypocrisy of those who are always advocating that the man on the land should grow more wheat and produce something in order to offset our adverse trade balance, and who at the same time do everything possible to increase the cost of production and make things more difficult for our primary producers. The amendment of the Leader of the Opposition (Mr. Latham) is precise and fair. As that honorable gentleman intimated, the Iron and Steel Products Bounty Act affects wire netting, fencing wire, and tractors, as well as galvanized iron. We have no assurance that some manufacturer will not come along to-morrow, tell a tale of hardship, threaten that he will have to put off a few men, and so precipitate the Government into granting him an embargo against one of those items. It seems that the Government have to obey their masters, a procedure which makes it impossible for any concern overseas to compete with Australian manufacturers. Why should all the sympathy be extended to our manufacturers? Surely there should be some for the man who is developing the country! In Western Australia our pioneers are opening up new country, and everything that they buy involves them in an additional cost of from 35 per cent, to 40 per cent, more than is paid in the eastern States. We have sworn evidence that agricultural machinery costs the Western Australian farmer .12 per cent, more than it does his Victorian colleagues. Those unfortunate men are mulcted in heavy freights and other charges. Why should the firm of Lysaght Limited get all this consideration when those who are assisting to develop the country and produce the wealth that is so essential are neglected? We ask that this bill shall apply specifically to galvanized iron. We are compelled to meet the Government in that regard. I hope that another place will take . care that not even that much is conceded.

Mr Watkins:

– Thank God for the Senate, eh ?

Mr GREGORY:

– Yes. I cannot understand why the Minister will not accept the amendment. It is all very well to say that we should trust the Government. Our duty is to try to protect the people. Since last November the Government, which professes to. believe in democracy and the motto that parliament should be supreme, has been taxing the people without giving the’ representatives of. the people any chance to utter a word of protest. I am justified in declaiming against the principle enunciated in this measure. When any customs tariff is brought down to tax the people, Parliament should have the right to debate it. I am not prepared to trust the Government with regard to this matter.

Mr Watkins:

– The bill merely removes a bounty.

Mr GREGORY:

– The honorable member and those representing country districts cannot get away from the fact that the amendment seeks to define the powers of the Government, and to restrict its action on this occasion to galvanized iron. The Acting Minister has assured us that the bill relates only to that product. Why does he not accept the amendment - a clear and honest request to the Government. It is disgraceful to think that the Government should seek to take to itself these additional powers. Just imagine the position of a wheat-grower, with the price of his product so deplorably low, who desired to fence his maddock, and who possibly found himself paying exorbitant prices because of an embargo introduced by the Government to provide employment for a few people.

Mk. Forde. - Under section 52 of the Customs Act, the Minister has power to prohibit the entry of any commodity, notwithstanding the contents of such a measure as this.

Mr GREGORY:

– The Government would not dare to impose wholesale embargoes and still pay the bounties.

Mr Maxwell:

– The trouble is that, even if carried, the amendment will not curtail the power of the Government to impose an embargo.

Mr GREGORY:

– It would not pre- . vent the imposition of an embargo, but it would restrict the action of the Government in this instance to galvanized iron. The Acting Minister should advance some justification for his refusal of the amendment.

Mr GULLETT:
Henty

– I trust that the committee will pass the amendment, and check this most impudent attempt on the part of the Acting Minister to increase his powers with respect to the tariff. As the position now stands the honorable gentleman cannot remove any bounty and substitute a duty without first coming down to Parliament.

Mr Forde:

– This refers to a prohibition, not duties.

Mr GULLETT:

– The Assistant Minister cannot either remove a bounty and substitute a duty, or remove a bounty and introduce a prohibition in its place without first referring to Parliament. He is merely splitting straws. The amendment of ‘the Leader of the Opposition (Mr. Latham) is a very proper check on the powers of the Minister. We have never previously had a government as arrogant over tariff matters as this Government has been. It has introduced hundreds of new duties, and increased duties or has brought in prohibitions, by proclamation, hurriedly and without giving honorable members any opportunity to debate its action.

The CHAIRMAN (Mr. McGrath).The honorable member must confine himself to the amendment.

Mr GULLETT:

– The only items that honorable members have had an opportunity to debate have been those which necessitated an alteration of a bounty. If this bill were to go through as it stands it would enable the Government to remove a number of bounties without reference to Parliament. A bounty represents an act of parliament, a measure agreed to by this chamber, and it should not be removed without the consent of Parliament. I tell the Acting Minister that this will not be allowed to pass through another place, and the Government is now merely wasting the time of the committee.

Mr PROWSE:
Forrest

.- I wish to support the amendment moved by the Leader of the Opposition (Mr. Latham). I dislike giving a blank cheque to anybody, particularly to a spendthrift. If the amendment is accepted the application of the bill will be confined to galvanized iron. If the measure is passed as it stands, the Minister or Cabinet will be able, without reference to Parliament, to issue a proclamation . and bring under its operation other items which are mentioned in the principal act. It is not right. Apparently the ^Government wishes to escape the necessity for submitting these matters for the consideration of Parliament. If it should seek to prohibit the importation of traction engines and wire-netting, it can do so under this provision. For that reason, I hope the Minister will readily agree to allow the clause to apply only to the galvanized iron which, he says, it is intended to apply to, and that he will not make it a drag-net provision.

Dr EARLE PAGE:
Cowper

.- I support the amendment. Embargoes can bc placed on the importation of articles by executive act, and Parliament has no opportunity to deal with them, unless they apply to items for which bounties are paid, in which case a bill has to be brought’ down in connexion with each item. In order to preserve the right of Parliament to say whether there should be an embargo or not, a bill should be brought down to deal with every individual item. Through the amendment moved by the honorable member for Gippsland (Mr. Paterson), on the second reading, we had an opportunity to discuss whether or not there should be an embargo on galvanized iron. The Minister says that the Government has no present idea of placing an embargo on wire-netting; but already it has changed its mind about wire-netting. A few months ago it thought it unnecessary to place a duty on this commodity, yet in the last schedule there is a duty of £2 12s. a ton, which of courseautomatically cuts out the bounty in-so-far as it operates at the present time. Furthermore, within the last twelve months, the Government has had ten different opinions on tariff matters. It h,as brought down ten different schedules, roughly one a month for tha months the House has been sitting. No one can tell, therefore, at the present time what the mind of the Government will be in regard to traction engines or fencing wire. Consequently, I urge that Parliament should be protected to some degree at any rate in this connexion. This Government’s state of mind varies on almost every question. For instance, after the agreement made at Melbourne with the State Premiers, there was an immediate change of opinion on the part of the Commonwealth Government. Some Ministers, as soon as they got away from the conference, were to be found denouncing the policy laid down by Sir Otto Niemeyer.

Mr C RILEY:
COOK, NEW SOUTH WALES · ALP; FLP from 1931

– We are not discussing that.

Dr EARLE PAGE:

– I merely use it as an illustration to show that the mind of the Government is in a continuous state of flux, and I do not want to wake up some morning to find that the Government’s mind has flowed so fast that it has placed an embargo on the importation of fencing wire, or traction engines, or any commodity covered by the bounty on iron and steel products, without Parliament having the opportunity to deal with the specific matter by means of a bill such as this. Of course, in regard to prohibitions for quarantine purposes; there is no alternative but for immediate action by the Minister. The suggestion made by the Leader of the Opposition (Mr. Latham) is an eminently reasonable one. The Minister is dealing with galvanized iron only, and surely the bill should be confined to that item only !

Mr BERNARD CORSER:
Wide Bay

– I protest against the drag-net nature of a clause which gives the Minister the right to cast, aside the decision of Parliament, and bring about government by regulation. It is a most objectionable form of government. The clause as it stands gives the Government the right at any time to include in its proclamation wire netting, galvanized wire, or fencing wire. It would be far better to adopt the amendment and exclude all items but galvanized iron, and thus provide that Parliament must be consulted before there is any extension of the embargo. In supporting his proposal to have government by regulation, the Minister said that when this particular embargo was signed it was anticipated that Parliament would not be sitting for five or six months. [Quorum formed.] According to the clause the proclamation was signed on 7 th October, 1930. The Lalor Daily of 3rd October, 1930, contained the following: -

Fenton has vital radio talk with Scullin.

Federal Cabinet’s long sitting.

Absorbing the workless.

The Federal Cabinet gave consideration to restore a proper balance in the Commonwealth revenue and expenditure.

The events of supreme consequence included the following: -

  1. The Federal Labour party will be called together on 27th October, and the Federal Parliament on 30th October.

Thus several days before the proclamation was signed Cabinet had decided that Parliament would be called together within a few weeks. The Labor Daily absolutely contradicts the Minister’s statement that, when the proclamation was signed, it was not known that Parliament would be sitting within the next six months.

Mr WHITE:
Balaclava

.- Ordinarily the Minister for Trade and Customs before issuing a proclamation prohibiting the importation of any commodity should come before Parliament, but if this clause is passed in its present form, he will, during a recess, be able, by proclamation, to include in the present embargo galvanized wire netting, barbed wire and fencing wire.

Mr Bell:

– He should not do so if there is a bounty payable on the manufacture of any article without consulting Parliament.

Mr WHITE:

– But he can issue proclamations in regard to other items. This method of transacting business seems to be an obsession with the Government. As regards the tariff it appears only to be necessary for a Minister or the Labour caucus to arrive at a decision and a new schedule is brought down. Parliament is ignored entirely. How can the business of the Commonwealth be carried on satisfactorily when parliamentary tactics of this description are tolerated? A manufacturer has only to whisper a request to a responsible Minister for the total exclusion of an imported commodity in the manufacture of which he is engaged, and the thing is done. This policy is bringing protection into contempt. It is extraordinary that the principle of protection, the object of which is to encourage the establishment of industries in Australia should be prostituted in this way by a Labour Ministry, for the purpose, apparently, of maintaining wages and labour conditions in industry at an unhealthy- economic level. I protest strongly against the unscrupulous and underhand attempt by the Minister to legislate in such important matters by proclamation.

Question - That the words proposed to be omitted- (Mr. Latham’s amendment) - stand part of the clause - put. The committee divided. (Chairman. - Mr. McGrath.)

AYES: 31

NOES: 18

Majority . . . . 13

AYES

NOES

The CHAIRMAN (Mr. McGrath).As far as I know, he is.

Mr.Archdale Parkhill. - A man with any sense ofdecency would not take part in the division in the circumstances.

Question so resolved in the affirmative.

Amendment negatived.

THECHAIRMAN. - The Chair can take no notice of remarks made whilst a division is being taken.

Mr LATHAM:
Kooyong

.- I am opposed to the clause. No reason whatever has been given by the Minister for the generality of its terms. He made on incoherent and incompetent speech in which he pretended to reply to the criticism of honorable members on this side; actually he did not deal with the real points that have been raised during the debate. Legislation is being passed, which evidently, from the Minister’s secondreading speech, the Government had no intention of passing. Apparently he had no idea that this bill related to any commodity other than galvanized iron sheets, and now when it is shown that it deals also with traction engines, wire netting and fencing wire, he is not prepared to take the necessary action. The division bells are rung and Government supporters, when they come into the chamber to vote, do not know what they are voting for.Thisiswhy I extend my remarks concerning the’ Minister to the Government of which he is a member. The Ministry has proved itself to be incoherent and incompetent in this, as in nearly all the other business which it has brought before this chamber.

Clause agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Mr FORDE:
ALP

– I ask leave to move -

That the bill be now read a third time.

Mr.ArchdaleParkhill. - I object.

Leave not granted.

page 137

SOUTH AUSTRALIA GRANT BILL

In committee (Consideration of Acting Governor-General’s message) :

Motion (by Mr. Fenton) agreed to -

That it is expedient that an appropriation of revenue hemadefor the purposes of a bill for an act to grant and apply out of the Consolidated Revenue Fund asum for the purpose’s of financial assistance to theState of South Australia.

Resolution reported ; report - by leave - adopted.

Ordered -

That Mr.Fentonand Mr. Blakeley do prepare and bring in abill to carry out the foregoing resolution.

Bill brought up by Mr.Fenton, and read a first time.

page 137

IMMIGRATION BILL

Second Reading

Debate resumed from 5th November (vide page 76), on motion by Mr. Blakeley -

That thebill be nowreada second time.

Mr LATHAM:
Kooyong

.- The object of this bill is to remedy a flaw which has been shown to exist in the law in relation to the provisions of the Immigration Act, dealing with onus of proof. The High Court has held that the provision in section 5 dealing with onus of proof does not apply to cases where the facts take the immigration before the date of 1924, when, I think, sub-section 3 of section 5 was passed in its present form. The policy of our Immigration Act is to place on an alleged prohibited migrant the burden of proof as to certain facts. Accordingly, the act contains a provision that where there is an averment that a prohibited migrant has evaded the officer, that allegation shall be deemed to be proved in the absence of proof to the contrary adduced on behalf of the prohibited migrant. It is, I think, desirable that this provision shall have a general application, and the object of the bill is to bring that about. It appears to mo that this is a mere matter of draftsmanship. The bill is in an awkward and inconvenient form, but that is a matter which must be left to the law authorities, so long as the bill accomplishes its purpose, which I believe it does. I have no objection to offer to it.

Question resolved in the affirmative.

Bill read a second time, and - by leave - passed through its remaining stages without amendment or debate.

House adjournedat 10.28 p.m.

Cite as: Australia, House of Representatives, Debates, 6 November 1930, viewed 22 October 2017, <http://historichansard.net/hofreps/1930/19301106_reps_12_127/>.

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