12th Parliament · 1st Session
Mr. Speaker (Hon. Norman Makin) took the chair at 3 p.m., and offered prayers.
List op Bondholders.
asked the Treasurer, upon notice -
Will he have prepared a statement (on the lines of a statement of Australian bondholdings published about the 10th November, 1930), showing as nearly as practicable the classes of institutions and persons in (a) Great Britain, and (b) America, who hold Australian bonds; and particularly showing the respective portions held by such institutions as banks and/or finance companies, trustees (if available) and small investors?
– It is to be regretted that the material necessary for the compilation of the desired information is not available.
asked the Treasurer, upon notice -
Mr.THEODORE (through Mr. Hol- loway). - The answers to the honorable member’s questions are as follow: -
asked the Minister for
Defence, upon notice -
Mr.CHIFLEY. - The answers are contained in the following table: -
asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follow: -
asked the AttorneyGeneral, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Minister for Transport, upon notice -
– The answers to the honorable member’s questions are as follow : - 1.No.
asked the Treasurer, upon notice -
In connexion with the Australian banking and exchange situation, can he state -
What was the buying rate per cent, for telegraphic transfers on London for - (a) March, 1930; (b) October, 1930; (c) January, 1931; and (d) June, 1931?
What was the selling rate per cent, for the same dates?
– The answers to the honorable member’s questions are as follow: - 1. (a) March, 1930 - 1st to 9th, £2 10s. per cent; 10th to 23rd, £3 10s. per cent.; 23rd to 31st, £6 2s.6d. per cent. (b) October, 1930- 1st to 8th, £6 2s. 6d. per cent.; 9th to 31st, £8 10s. per cent.; (c) January, 1931 - 1st to 5th, £8 10s. per cent.;6th to 12th, £15 2s. 6d. per cent.; 13th to 16th, £18 per cent.; 17th to 28th, £25 per cent.; 29th to 31st, £30 per cent, (d) June, 1931 - £30 per cent. 2. (a) March, 1930- 1st to 9th, £3 2s. 6d. per cent.; 10th to 24th, £4 2s. 6d. per cent.; 25th to 31st, £6 10s. per cent. (b) October, 1930- 1st to 9th, £6 10s. per cent.; 10th to 31st, £9 per cent, (c) January, 1931 - 1st to 5th, £9 per cent.; 6th to 12th, £15 10s. per cent.; 13th to I6th, £18 7s. 6d. per cent.; 17th to 28th, £25 10s. per cent.; 29th to 31st, £30 10s. per cent, (d) June, 1931 - £30 10s. per cent.
asked the Attorney-
General, upon notice -
Whether, in view of the fact that many offences under the Crimes Act have been committed by owners of industries, and this Governmenthas taken no action, does he propose to repeal the act with the object of safeguarding the workers against its use by some future government?
– It is not the practice to state the Government’s intentions as to proposed legislation in reply to questions.
Cost of Living Allowance
asked the Minister for Home Affairs, upon notice -
– The answers to the honorable member’s questions are as follow : -
– On the 20th May the honorable member for Wakefield (Mr. Hawker) asked the following questions, upon notice : -
I am now able to supply the honorable member with the following information, which covers only those classes of spirits on which additional duty is charged when chey are not bottled in bond : -
– On the 20th May the honorable member for Boothby (Mr. Price) asked the following questions, upon notice : -
I am now in a position to furnish the following reply : -
The following papers were presented : -
Arbitration (Public Service) Act - Determinations by the Arbitrator. &c. - 1 931 -
No. 7 - Commonwealth Public Service Clerical Association.
No. 8 - Australian Postal Electricians Union and Federated Public Service Assistants Association of Australia.
No. 9 - Commonwealth Public Service Clerical Association.
No. 10 - Amalgamated Postal Workers Union of Australia; Australian Postal Electricians Union; Australian Third Division Telegraphists and Postal Clerks Union; Commonwealth Medical Officers Association; Commonwealth Postmasters Association; Commonwealth Public Service Clerical Association; Federated Public Service Assistants ‘Association of Australia; Fourth Division Officers Association of the Trade and Customs Department; Fourth Division Postmasters, Postal Clerks and Telegraphists Union ; Professional Officers Association, Commonwealth Public Service.
No. 1 1 - Amalgamated Postal Workers Union of Australia; Australian Postal Electricians Union; Australian Workers Union; Commonwealth Legal Professional Officers Association; Commonwealth Public Service Artisans Association; Commonwealth Public Service Clerical Association; Commonwealth Temporary Clerks Association; Federated Public Service Assistants Association of Australia: Fourth Division Officers Association of the Trade and Customs Department: Line Inspectors Association, Com- monwcalth of Australia; Meat Inspectors Association, Commonwealth Public Service; Professional Officers Association, Commonwealth Public Service.
Defence Act - Regulations amended - Statutory Rules 1931, No. 00.
Navigation Act - Regulations amended - Statutory Rules 1931, No. 57.
Consideration resumed from the 5th June (vide page 2585), on motion by Mr. Forde -
That the schedule to the customs tariff be amended.
Division VI. - Metals and Machinery.
By omitting the whole of sub-item (a) and inserting in its stead the following subitem : - “ (a) Pig iron, per ton, British, 25s.; intermediate, 35s.; general, 45s.”
– Before discussing the individual items in this division, I shall make a general application to the goods dutiable under it. In the first place, an alteration of the duties on the basic raw materials - iron and steel products - involves the amendment of the duties on almost all of the finished products of which iron and steel form the raw materials. This statement needs qualification only where the finished product is not subject to protective duties. In considering the increased duties on such finished products as galvanized iron, iron and steel pipes and tubes, iron and steel channels, joists, girders, &c, rails, machinery of various kinds including motive power, electrical apparatus and appliances, bolts, nuts and rivets, and manufactures of metal of various kinds, the fact that increased duties have been imposed on the basic raw materials must not be overlooked. The duties imposed on most of the iron and steel products which form the raw materials of the engineering and allied industries are specific duties. Honorable members will no doubt be anxious to ascertain the ad valorem equivalent of these rates, and it will occasion some little surprise when it is known that the ad valorem equivalent of the existing duties under items 136 a, b, cl, 154 a, b,c, and 155 a, on a weighted average basis assessed on the importations from the United Kingdom, approximates only 27½ per cent. This rate cannot be considered very high when compared with that imposed under the tariffs of other iron and steel producing countries which have adopted the policy of protection.
The necessity for the imposition of increased rates of duty on iron and steel products will be realized when I have furnished honorable members with details of the wages and working hours obtaining in the industry in the United Kingdom and on the Continent of Europe, as definitely fixed as a result of a long inquiry into the industry. In Germany, the current average wage is 32s. 6d. for a week varying from 54 to 60 hours. In Belgium, the wage is 23s. 6d. for a nominal week of 48 hours, in connexion with which considerable laxity as to working hours is allowed. In France, the wage is 34s. 6d. for a nominal week of 48 hours, and there again considerable laxity prevails. In the United Kingdom, the wage is 61s. for a week of 48 hours, and this is strictly enforced. In the Commonwealth of Australia, the wage is 108s. 6d. per week, for a week which was a rigid 48 hours, but which may now be permanently reduced to 44 hours, which represents the working week in New South Wales in which State most of the work in connexion with the iron and steel industry of Australia is carried on. As honorable members know, there are large iron and steel works at Newcastle and other places in that State. In a report presented to the Imperial Parliament in June, 1930, a representative British delegation inquired into the wages, hours and conditions obtaining in the iron and steel industry throughout the principal manufacturing European States, and its report furnishes further evidence of the vast difference between the wages and conditions in the European States and those in Australia. The weekly wages paid in those countries, according to the report, are as follow: -
– What are the Australian rates ?
– I have already given the Australian rates?
– Are the Australian rates based on Australian currency?
– The wages paid in Australia are based on the value of the Australian £1. The rates applying in the countries which I have mentioned include additional payments for family allowance, and in some instances payments for overtime. The wage rates quoted are in respect of a working week of from 48 to 56 hours in France and Belgium, from 48 to 57 hours in Germany, and 48 hours in Czecho-slovakia. While dealing with the continental iron and steel industry, mention should be made of the “ Karte] “ system which has been organized in those countries. The method adopted is for the “ Kartel “ to sell in the home market, at a price much higher than that charged for export.
– We know something of ‘ that policy in this country.
– We adopt a somewhat similar policy in respect of many of our primary products, including butter, dried fruits, and sugar. The difference between the domestic and export prices for iron and steel base products ranges from £2 lis. to £3 ls. 6d. per metric ton, or on a percentage basis the domestic price is approximately 100 per cent, higher than the export price. Where an importing country does not possess an iron and steel industry, the “Kartel” allocates the market to its members, arid these charge a price according to the importing country’s capacity to pay. The possession of an iron and steel industry by a country, and the protection accorded such industry, constitute an assurance against exploitation by overseas combines. It has often been stated that if Australia did not possess an iron and steel industry it could import all its requirements of raw materials at the low prices quoted by the continental “Kartels”. Those who believe this are unduly optimistic, and need to be educated in respect of the methods of the overseas combines after they have entrenched themselves in a given market. Practically all the major iron and steel producing countries have found it necessary to adopt a protectionist policy. The action of Germany, France, and America in imposing duties which are definitely prohibitive, clearly indicates that these countries regard their home market as being absolutely essential to the development and maintenance of this key industry. In contrast with the protectionist policy adopted by these countries, the case of the United Kingdom may be instanced. The production of iron and steel in that, country during the last 50 years shows very little advance when compared with the increased production of iron and steel in France, Germany and America. Indeed, the policy of freetrade in the United Kingdom has had the effect of dividing this key industry into two clearly defined sections, namely, that which manufactures the finished article from iron and steel produced in the United Kingdom, and that which fabricates its products from iron and steel imported from the Continent. This latter section of the industry performs the finishing off process only. From the view-point of a nation’s welfare, the development of the fabricating section, which imports its raw material from foreign countries, cannot be regarded with equanimity. If such a development can take place in a country so favorably endowed with the necessary raw materials, - that is iron ore and coal, it proves that Australia cannot hope to become possessed of an important national iron and steel industry without adopting a wholehearted policy of protection.
Under a freetrade policy the iron and steel industry of the United Kingdom has suffered a marked decline. Imports of iron and steel products totalled 2,230,955 tons in 1913 and 2,908,347 tons in 1930.
Exports totalled 4,969,225 tons in 1913, and 3,157,925 tons in 1930. In presenting the report of the Civil Research Committee to the House of Commons in December, 1925, the then British Prime Minister stated apropos of the iron and steel industry -
The evidence revealed a serious situation; the pressure of foreign competition aided by long hours, low wages and depreciated currencies is being severely felt by our manufacturers and had His Majesty’s Government been able to deal with the iron and steel industry in isolation we might have regarded the case for inquiry as complete.
In February, 1931, the National Federation of Iron and Steel Manufacturers of Great Britain, alarmed at the low production figures for December, 1930, and at the increase in the excess of imports over exports, protested to the Government, and urged the necessity of the regulation of imports. The Federation stated that the control of imports was especially justified owing to the fact that imports were not only below the selling price in the country of origin, but actually below the cost of production. The authority for that statement is a report issued by the League of Nations on the metallurgical industry. These are the difficulties experienced by the manufacturers in the United Kingdom. When it is considered that Australian wages in this industry are 100 per cent, higher than those paid in the United Kingdom, it is obvious that there is need for adequate protection against the manufacturers of that country.
– Why are our wages 100 per cent, higher?
– The honorable gentleman knows that, for many years the Australian people have en-joyed a higher standard of living and better working conditions than the people of Great Britain in practically every industry.
– What about those who are out of work?
– Until the last couple of years we obtained peak prices for our wool and wheat, and those engaged in the pastoral and agricultural industries enjoyed substantial prosperity. There has been a decline in this prosperity in the last couple of years, due to the drop in world prices, with the result that those engaged in these industries - the people who have invested their money in them and also the people who depend upon them for employment - have had a very lean time.
It has often been stated that the imposition of protective duties has the effect of increasing prices to the consumer. A detailed analysis of the prices charged for iron and steel in Australia by the Broken Hill Proprietary Limited definitely disproves this assertion, yet those who advocate freetrade, or some other form of watered down protection, continue to use this argument.
– Galvanized iron is a good example of the truth of it.
– I shall discuss galvanized iron when we reach that item in the schedule. There is a perfectly good explanation of the present position in that regard. A comparison of the prices charged by the Broken Hill Proprietary Limited in 1920 - the year during which the tariff was imposed on iron and steel - with those charged in 1930, shows that substantial reductions in prices have occurred.
– Why take 1920? Will the Minister make his comparison with 1913?
– I have taken 1920 because that was the year in which the tariff was first imposed on iron and steel. It is quite fair to compare .that year with 1930, ten years later. The figures show that the following percentage reductions in prices have occurred: - the same comparison between British prices for 1920 and 1930?
– I will look up those comparisons. No doubt there has been a reduction in price levels in freetrade countries, but to listen to some honorable members opposite one would think that there could not possibly be any reduction of prices under a protectionist policy. The figures I have quoted show clearly that the reverse is the case. I could quote other similar figures, but honorable members must be convinced that I have made my point.
Had it not been for the depression, and the consequent dislocation of this industry, further reductions of selling prices would have been effected. ‘ Owing to the reduced output in this industry, the manufacturers have been passing through a difficult time. The reason for the substantial reduction in the 1930 prices, compared with those of 1920, is that the imposition of adequate duties has enabled the Broken Hill Proprietary Limited to capture the bulk of the Australian trade. This has had its reflex in lowered overhead costs. The purchasers of iron and steel goods have therefore been able to obtain their supplies at much lower prices than would have prevailed had the industry not been protected. Had there been no Australian iron and steel industry, the overseas manufacturers would have been able, under the kartel system, to charge what they liked for their products in Australia. The existence of a local iron and steel industry has led to the .building up of a large mining industry at Iron Knob in South Australia. The honorable member for Grey (Mr. Lacey), in whose electorate Iron Knob is situated, made arrangements for me to inspect the operations being carried on at that place. The ore is taken from Iron Knob by steamer to Newcastle where it is manufactured. At Newcastle Australian miners are engaged in mining coal. Many branches of the iron and steel industry are operating in New South Wales. Galvanized iron, for instance, is being manufactured there on a large scale. The iron and steel industry is truly a key industry. As I have indicated, during the past ten years there have been price reductions ranging from 23 per cent, to 47 per cent, in that industry. In most instances the actual expenses in 1930 show very little difference from those which obtained in 1920, hut the Broken Hill Proprietary Company Limited has been enabled to reduce its costs as a result of increased production and greater efficiency. “ Efficiency “ is the watchword of our secondary, as well as of our primary industries, despite certain assertions that emanate from honorable members opposite who are saturated with freetrade doctrines. Having been given an assured market, the Broken Hill Proprietary Company Limited has been able to make its plans accordingly, with resultant benefit to purchasers.
– This is questionable.
– We all have our opinions upon the subject. Mine are based upon facts, whereas those of the honorable member are supported only by fanciful theories. The Government bases its case for this industry on the report and recommendation of the Tariff Board, which spent some eighteen months in exhaustively investigating the subject in all its phases. Complete details are furnished in that report, copies of which have been circulated among honorable members. In many cases the board recommended that duties higher than are now proposed should be imposed on iron and steel products. I emphasize the point that this is not merely a secondary but also a most important primary industry, as it mines all its raw materials and transports them to ‘the manufacturing centre at Newcastle, where they are treated. It gives employment to a great number of people, and would be of inestimable value to Australia were our iron and steel supplies cut off, for instance, by a war. I feel sure that these items will have a speedy passage at the hands of the committee.
.- I believe that everybody will admit that the iron and steel industry is of great national importance, and that the people of Australia should do everything within reason to build it up. But the question of moment is, who is to pay the bill? When considering the relative advantages of high or low duties, it is surely worth while to contemplate their effect upon the industries and the people of Australia. If it is believed that any industry ‘ needs assistance, it is surely necessary to consider whether that could not best be given by means of a bounty, which would ensure that every person in the community paid his fair proportion towards establishing the industry.
Very properly, the Minister pointed out that this might well be termed a basic or key industry. It supplies the raw material for almost every other secondary industry in Australia. In the circumstances we must ask ourselves what will be the effect of increasing duties upon raw materials that are used by practically every manufacturer in the Commonwealth. The Minister gave the committee some particulars with regard to the percentage increase in the prices of these commodities in Australia as compared with those obtaining in Great Britain. According to the Economist, the price for pig iron in the Homeland is 58s.. a ton. The Government is imposing a duty of 25s. a ton on that commodity, which is considerably more than the 22 per cent, to 25 per cent, increase referred to by the Minister. The honorable gentleman drew attention to the good wages and conditions prevailing in the industry. It is necessary, however, to consider the effect of the duties on the people of Australia as a whole. According to the report of the Tariff Board, employees in the iron and steel industry are being paid £6 lis. a week. Yet we have hundreds of thousands of unemployed. Good conditions are given to a privileged few at the expense of the rest of the community. The only justification for giving tariff assistance to an industry such as this is that it creates wealth for the community. If duties result in excessive prices, and lessen the market for iron and steel products, our object is defeated, and the tariff simply causes additional unemployment.
The Minister talked about the reductions that have taken place in the price of iron and steel products since 1920. Nothing more stupid could have been said to a committee of intelligent men. It is common knowledge that from 1919 to 1922, prices generally soared to almost unbelievable heights all over the world. Since then they have fallen as spectacularly except for factory goods in Australia. How can we hope to establish artificially high prices for iron and steel products in Australia when very much lower prices rule elsewhere? How are our producers to export their products in such circumstances? For the information of the committee I shall quote a list of comparative prices of iron and steel commodities, in 1913 and 1931-
Even in Europe prices are now below what they were before the war. Our primary products must compete in the world’s markets notwithstanding that the costs of production are kept at high level by the favoured treatment meted out to selected secondary industries which are making huge profits. I would be prepared to assist in building up an industry of this kind if assistance were required, but I do not believe that it is. At any rate, no industry can carry on in an economically sound manner if it is subject to all sorts of socialistic interference, such as the fixing of wages and conditions for every process entailed in the manufacture of pig iron and steel. For all this the public has to pay the bill. The Minister spoke only of the Broken Hill company which is operating at Newcastle, but there are others. For instance, there is the big firm of Hoskins Limited, at Port Kembla. The Minister said that if these duties were not imposed the importers would combine to rob the community. Far from that being the case, we have definite proof that the local manufacturers are acting in restraint of trade and are forcing up prices. I have repeatedly urged the Minister to inquire into allegations that the Broken Hill company has refused to supply traders outside the trade ring. I have here a letter from one man stating that he was compelled to join the Iron and Steel Association, and the Oil Association, and that he is now making 15 per cent, more profit than before. Under the protectionist system we have trade combinations in a form as rotten as they can be. The Tariff Board ignores these things. If Australian manufacturers are to receive the assistance of the tariff they should be compelled to supply all retailers who are able to pay cash. The Broken Hill Proprietary needs no tariff assistance. But since great tariff privileges were granted to that firm in 1920 we have almost annual demands for more and still more protection. In 1927 I prepared a publication in answer to that issued by the company under the name of From Silver to Steel. . I pointed out that the company had begun with a capital of £1,109,888, and after making distributions to shareholders out of profits, the capital was £2,687,788, including £1,500,000 taken from reserves; leaving still in reserve an amount of £3,505,225. The paragraph from which I quote continues -
Reviewing their assets, the steelworks, from which enormous sums have been written off, and of which even that protectionist journal, the Bulletin, states, “ that it casts a dubious eye on the heavy sums spent on plant and improvements and charged to working account” thus hinting at hiding abnormal profits, are valued at £5,723,558, mining equipment and &c, £224,744, stocks, £608,577, bookdebts and investments, £1,816,458, a total of £8,373,337; while their total liabilities, excluding capital and reserves, are said to amount to £2,289,800, leaving a credit balance of over six- millions, a truly marvellous result for a little over ten years active operations.
I am glad that the company has done well, but I should be better pleased if it had done so without exploiting the community. Giving evidence before a select committee, appointed by the New South Wales Parliament, in 1915, Mr. Delprat stated that his company desired no assistance in any shape or f onn from the Government ; it required no duty, no bounty, and no help; that if it could not compete with the world it would not start operations. I strongly recommend the honorable member for Maribyrnong (Mr. Penton) to study the evidence given before that committee. About four years ago the General Manager of the Broken Hill company stated, after returning from a visit to the United States of America, that the Broken Hill works were as up-to-date, and the workmen as efficient, as those of the largest concerns in America. In the publication issued by the Broken Hill company, reference was made to the marvellous deposits of iron ore at the disposal of the company, and the General Manager giving evidence before the select committee, stated that the company could assemble at Newcastle iron ore, coke and lime stone, for the production of pig iron at a lower cost per unit than could the United States of America Steel Corporation. In the book, From Silver to Steel, the amount of ore necessary to produce 1 ton of pig iron in the various iron-producing countries of the world is given as follows: -
The company boasted in a prospectus which asked for the public’s support for the debentures it was issuing, that 2 tons of ore were required to produce in Great Britain as much iron as could be produced from 1 ton of ore in Australia. When we realize that iron and steel are the raw materials of so many other industries, the high price at which they are selling here becomes a very serious matter. A recent applicant for tariff assistance stated before the’ Tariff Board that raw material for the manufacture of scoops would cost him 100 per cent, more in Australia than the price for which his competitors could buy similar material in Great Britain. The Broken Hill Proprietary Company has every natural advantage; its works are situated close to coal-mines, and deep-sea vessels can unload ore right at the works. Nevertheless, the company asks for and receives these enormous protective duties. There is at present sitting in Melbourne a conference which proposes to demand sacrifices of all sections of the community except the manufacturers. Old-age pensioners, soldiers, and those who have lent money to the Government are to make sacrifices, but the manufacturers are to be allowed to continue selling their products at exorbitant rates. We have built a sort of fiscal wall of China around Australia to protect the local manufacturers from every form of outside competition. We seem to forget that we are dependent for our national income upon what we receive for the products we export. Just now I am reminded of some of the old mining towns of Western Australia. When the mines closed down, many of the people stayed on and lived on each other - by taking in each other’s washing, presumably. The inhabitants of our cities are fast reaching that condition, and they will have to pay the penalty; but in.the meantime they are destroying those great primary industries that gave them their past prosperity. The income of the primary producers has fallen away, in many cases practically to nothing, and the dwellers in the cities are only now finding how much they are dependent on those in the country. On the 22nd April, 1915, the Chairman of the Tariff Board, speaking of the iron and steel industry, stated -
I see nothing in the evidence to justify the assumption that some form of fiscal assistance will be permanently inevitable. On the contrary, the richness of Australian ore deposits compared to those of other countries - the Iron Knob ore yields 08 per cent, of iron as against 30 per cent, profitably worked in Germany -
Germany is producing iron and steel at lower rates than in 1913, when the Australian prices were from 60 per cent, to 70 per cent, lower than they are to-day. The statement continues -
And the freight charges borne by our nearest competitors make it probable that Mr. Delprat’s original view that the industry can stand on its own footing in Australia will prove right, once output is secured, and, with it, low production costs.
The exchange on heavy imports such as Cleveland pig iron, which is sold at 58s. per ton, amounts to about £1 per ton, and the freight up to 60s. per ton. Some smelters have no occasion to import pig iron, but special classes of iron and steel have to be obtained abroad, and the proposed extra duties necessarily build up the costs of production in Australia.
I gave figures, some time ago, showing that a large mining plant, that would cost about £520,000 in Australia, could be built for £350,000 in the “United States of America, and the provision for amortization of the liability would be much less in the United States of America than, in Australia. A mining proposition that would show a profit in the former country could only be worked here at a loss. If we insist on imposing increased duties on every item of machinery, every scrap of rolling-stock, all the rails needed for the State and Commonwealth railways, and every tool that the artisan requires, we must, inevitably, seriously increase the costs of production. Surely it is time to think of crying a halt, for we have gone too far. I move -
That the item be amended by adding after sub-item (a) the following: - “And on and after the 11th June, 1931 -
The raw materials required by manufacturers of iron and steel goods should be admitted into Australia at as low a rate as possible, and I have proposed that we reduce the present duties to the rates previously imposed on pig iron. Should my proposal be successful I would desire a reduction in the duties on all classes of iron and steel production. The Canadian tariff of 1929 admitted pig iron at 6s. 3d. per ton and bar iron at 17s. 9d. per ton, while we impose on this item a duty of 80s. per ton. I appeal to the Broken Hill Proprietary Company, and to all big iron and steel manufacturers, to endeavour to rid Australia of the wretched economic conditions that are preventing all possibility of our competing with other countries. The Minister did not tell the committee that in 1920 we were exporting iron and steel to Great Britain. A magnificent deposit of iron ore is being worked by the Broken Hill Proprietary Company, and why should we not ask that company, as we have asked the wheat and wool growers, and the miners, to take a share in building up the national wealth? Why should that company, because it has a big population to supply, and a large voting power in this chamber, receive particularly favorable treatment? I hope that the committee will remember the nature of the times in which we are living, the heavy sacrifices being made by most sections of the community, and the urgent necessity for keeping duties as low as possible in order to reduce the costs of production so that primary production might hope to live.
.- The speech just delivered by the honorable member for Swan (Mr. Gregory) is a hardy annual, which I have heard for the last sixteen years.
– Will the honorable member reply in terms similar to those employed by him for a like period?
– No; my remarks will be brought up to date. In discussing other items in the tariff, the honorable member for Swan suggested that the natural industries of this country should be assisted.
– I added that they should be assisted by all the people.
– All are not engaged in one or two industries. The honorable member reminded us that the first manager of the Broken Hill Proprietary Company said that it could get along without duties. That is true; he tried to manage without tariff protection, but as a result the works had to be closed down for, fifteen months. In no industry with which the tariff schedule deals have such searching inquiries been made as in connexion with the basic industry of iron and steel production, and the galvanized iron industry.
– When was that inquiry made?
– In 1927.
– That is nearly five years ago.
– There is all the more need, at the present time, for increased protection for this industry, because iron and steel imports play a big part in the payment of German war reparations. The former duties did not. benefit British manufacturers or British workers, but assisted Germany, with whom we were engaged at war a few years ago.
The honorable member for Swan has made a speech of a general character, and I do not intend to follow him in all his arguments. He was unfair to Australian manufacturers who provide work for Australians; and the provision of work in this country is what honorable members on this side are mostly concerned about. It was not until the beginning of the war that the Newcastle steel works became established on a fairly large basis, and secured the contract for the supply of rails for the transcontinental railway. During the war the importers of galvanized iron - a commodity which was not then being made in Australia - increased prices up to £90 per ton, but although the Broken Hill Proprietary Company had complete command of the Australian market, it did not vary its prices.
– Nevertheless, the company secured very high prices for its products.
– The honorable member is wrong. It is true that there was some slight alteration in the cost of iron, but that was due largely to an increase in wages costs. The honorable member for Swan (Mr. Gregory) has charged manufacturers with taking full advantage of the protection afforded to secondary industries by this Government. He has omitted to mention that, prior to the imposition of these duties, the importers worked together in the strongest combination possible for the sole purpose of keeping up prices. The Minister has shown that certain reductions have already been made in the prices charged for iron and steel products. An examination of price lists for 1923 and the rates ruling to-day bears out fully all the Minister has said. The following price quotations on this point are instructive : -
Prices for heavy rails have been falling for some years from £17 10s. per ton. It may not be generally known that the Newcastle heavy rails are subjected to 22 tests as against four tests in the case of rails manufactured in America and other countries. They are acknowledged to be the best rails in the world.
– If prices for steel products have been reduced, why is the company asking for higher rates of duty?
– Except for one or two items, the tariff is not higher than formerly. For nine of the principal items the duties imposed are from 5s. to 10s. lower than those recommended by the Tariff Board.
– Nevertheless, the duty in the item under discussion is 5s. above the Tariff Board’s recommendation.
– Any one who expects to get a cheaper rail than that produced at Newcastle, really does not want anything that is made in Australia. It should be remembered also that, some years ago, this company was entitled to certain bounty payments on production, but did not make application for such payments.
– It was interested in the bounty on wire netting.
– ;The honorable member misled the committee about that matter. He declared that the local manufacturers declined to supply wire netting to certain distributing agents, but did not state that the storekeeper, who made the complaint, had advertised imported wire netting for sale, and intimated that he also had on hand Australian wire netting, which he could not recommend. The Australian firm concerned was a Victorian concern which, naturally enough, declined to supply a distributor who decried the Australian product. There has been a reduction in the price of black wire of 22 per cent., and in the case of galvanized wire, of 26.34 per cent. The price of 8-gauge black fencing wire is £15 12s.
– The wholesale quotation to me is £18 5s.
– I am quoting uptodate prices supplied by Rylands Brothers. Thanks to the invention by an Australian boy of an improved machine, the best wire netting in the world is produced in Australia, and the price has dropped 22.1 per cent, since 1922. Mr. McDougall said that he was willing to ship rods to Western Australia and draw the wire there in order to save the cost of the freight on the finished article.
– Why did be not do that?
– He received no encouragement from the Western Australian people; apparently he was not wanted there. The manufacture of wheels and axles is another subsidiary industry, but when tenders were called by the Western Australian railway department, the contract was given to an overseas firm, although the price was only a fraction below that of the Australian manufacturer. Only a few days ago I forwarded a letter to the Trade and Customs Department, regarding an order placed abroad by a Western Australian mining company for three refrigerating machines required for ventilation purposes. Although the Australian tender was lower the contract was given to Americans. The honorable member for Swan (Mr. Gregory) said that he regarded the iron and steel industry as one worthy of fair treatment, and as being in a category different from that of some of the other secondary industries that are protected by the tariff, but he complained that the duties on iron and steel increase the prices of the raw material for other industries. If he refers to the Tariff Board’s report, he will find that the duties on machinery were regulated according to the duties recommended in respect of pig iron and bars.
– Why did the manufacturers close down their works for nearly a year?
– For two reasons; one was the absence of adequate protection.
– They could not get coal.
– I advised Mr. Delprat to buy into coking coal-mines as a precaution against being held up for supplies, but he said that he already had enough to attend to, and in any case he had made contracts for supplies of coke and coal.
– Because the price of coal was increased, he required higher duties.
– That is not so. The honorable member’s mind is always looking for evil. He is suspicious of all manufacturers, but there have been no revelations regarding them that are comparable with the deplorable state of affairs which Mr. Kingston disclosed in connexion with the importing business. He brought 20 charges against one firm alone. The Labour party stands for the adequate protection of Australian industries because it believes in good labour conditions, and is convinced that the workers ‘are better off when two jobs are offering to every man than when two men are competing for one job.
– Do not the workers in the United Kingdom also believe in high wages ?
– Probably; but they cannot get high wages because the United Kingdom imports so much from cheaplabour countries. I have already pointed out that advantage is taken of the preference we give to the United Kingdom to buy goods from the foreigner and reship them to Australia as British. Throughout the war period some British firms were trading with Germany. We on this side of the chamber have always said that our main concern is to provide work fer our people at fair rates of remuneration. The honorable member for Swan (Mr. Gregory) complained that the employees in the iron and steel industry earn high wages. Has he ever toiled before a steel furnace, protecting his eyes with green glasses from the scorching heat ? He objects to £6 a week being paid to men who sweat from start to finish of their daily toil. Nearly every man in this industry is paid on piece rates; that should appeal to the honorable member. If the range of duties in this division had been increased, I could understand the opposition to them. We know, however, that the instruction has been given to honorable members opposite that the duties in this schedule must be reduced by 25 per cent. The honorable member says that he would not object to the fostering of a big national industry, but he opposes every protective duty, whether it applies to buttons or steel. No country that is unable to supply its requirements of iron and steel has achieved greatness.
– Why has this industry continually asked for more protection since1920?
– The Broken Hill Proprietary Company has not asked for more protection ; indeed, on its nine main items it has not been given that protection which the Tariff Board recommended.
– Why not?
– I do not know. The duties are from 5s. to 10s. below those recommended by the board.
– Will the honorable member accept the board’s recommendation on galvanized iron?
– I will.
– When I move an amendment to that effect will the honorable member support it?
– I am not to he drawn by interjections. In every country, including the United Kingdom, the iron and steel industry has had high protection in its infancy. The honorable member for Swan (Mr. Gregory) asked why the industry could not carry on under the bounty system, yet when the Tariff Board recommended the payment of an increased bounty on galvanized iron the honorable member opposed it with the same arguments he is using to-day.
– Where are the iron and steel works situated?
– It affects every State except Western Australia. One fact of which we should be proud is that the Broken Hill Proprietary Company’s works are managed and operated by native-born Australians. How many other industries can make a similar boast? If Australia is to be developed on sound lines employment must be found for our people in secondary as well as in primary production. We hear much talk regarding the burden which these duties place upon the primary producer, but outside of the country towns the man on the land uses not more than 5 to 10 per cent, of the galvanized iron produced in Australia.
– On what does the honorable member base that computation?
– On the sales statistics. The honorable member for Swan (Mr. Gregory) is interested not in the primary producer but in some agent at Perth or Fremantle who hopes that by crippling the local manufacturer he will have a greater profit for imports. When the honorable member said that the local manufacturer of fencing wire had refused to supply a Queensland agent, I was able to refute his statement by producing the agent’s advertisement, which contained the statement that the firm could supply its customers with Australian fencing wire, but did not recommend it. As I said in my opening remarks, the iron and steel industry must be established in Australia.For one thing it is the first industry that has engaged in the production of by-products from coal.
– What by-products are produced by the Newcastle works ?
– They are already producing sulphate of ammonia and benzol.
– There is a big duty on sulphate of ammonia.
– The honorable member spoke slightingly of the profits of the Broken Hill Proprietary Company on a capital of £2,000,000. Out of its profits it has spent, I suppose, £11,000,000 on the extension of its works, and, recently, it has established a by-products plant at a cost of over £1,000,000, and, according to the honorable member for Swan (Mr. Gregory) and others, this is doing an injury to Australia. The honorable member would wipe out the steel industry, but the steel works at Newcastle will be in full swing long after the honorable member is no longer in this House.
– In .the consideration of the protection afforded under item 136, several important factors must not be lost sight of. In the first place the iron and steel industry is undoubtedly one of Australia’s essential industries, and, as such, must be fully protected. Another important factor we must not forget is that the increased protection afforded in the schedule now under consideration has been given only after full investigation by the Tariff Board. During the discussion of the tariff schedule, I have endeavoured to be reasonably consistent. I have steadfastly maintained that the only sound method of determining whether protection shall be given, or increased, is first to have a full investigation made into the industry concerned, by an independent board. In this country we have a tariff board to make such investigations. That fundamental condition, I am of opinion, has been observed in respect of the iron and steel industry. I do not know that I have read any other report of the Tariff Board bearing evidence of a more searching investigation into the conditions under which an industry has been carried on in Australia, than that made in connexion with the iron and steel industry. Honorable members, no doubt, have read it, and I have no need to take up their time by quoting from it. The honorable member for Newcastle (Mr. Watkins) has alluded to another important factor which cannot be overlooked: that many of the duties on iron and steel in the schedule before the committee are lower than those recommended by the Tariff Board.
– Conditions have altered somewhat since then.
– I was about to refer to that fact. It may be contended that if the iron and steel industry has been able to carry on in the meantime - and evidently it has been able to do so - duties as high as those recommended by the Tariff Board are not necessary. It is gratifying to me, however, to know that the. industry was fully inquired into by the board, because I maintain that no duty or increase of duty should be given without such preliminary inquiry.
– The schedule contains nine items in which the duties are lower than those recommended by the Tariff Board.
– I have already said that the schedule contains a number of items with duties lower than those recommended by the board, but we must remember, as I was reminded just now by the honorable member for Swan, that the Board’s inquiry was made in the early months of 1926, and there is a possibility that the conditions under which the industry is conducted to-day, five years later, are not such as to warrant, the measure of protection then recommended by the Board.
– There has been a big fall in prices all over the world.
– That is so. We must also recognize that excessive protection may have exactly the opposite result to that which is intended. It may so increase the price of the product of an industry that sales will be considerably retarded and eventually almost completely stopped. That would mean the eventual destruction of the industry. It is essential, therefore, to consider most carefully the measure of protection that should be given to this great basic industry. It is certainly the most important of our secondary industries. Item 136 covers the raw material in various stages of manufacture used by practically every other industry, either directly or indirectly. Consequently the duties immediately under consideration affect very definitely those which are necessary if effective protection is also to be given to many other industries, dependent upon this basic industry for their raw material. An increase in the one would lead to a demand for increases in the others. Experience has shown that a duty must be increased, the further the completed article is removed from the first protected stage.
The public inquiry into the iron and steel industry was conducted by the Tariff Board during January, February and March of 1926. Many witnesses appeared for and against the request for increased duties on various products of this industry; certainly far more witnesses were heard against, than in support of the increases. The Board reported that it was a matter of great surprise that many who were expected to give evidence, particularly persons engaged in the machinery and metal-working industries, would not give evidence until after repeated requests from the board to do so. [Quorum formed.’] One of the main grounds upon which the request for increased duties was based was that of the disparity between the wages obtaining in the industry in Australia and those paid in the industry in overseas countries with which the Australian producers are called upon to compete. In that connexion the board was not prepared to accept the statements placed before it, but called in the services of a certified accountant. Mr. W. , E. Cooper was attached to the board for some time making investigations, particularly in connexion with industrial conditions in New South Wales. One of the most important points raised by those who opposed an increase of duties was the measure of protection which it was claimed the local industry enjoyed in the form of natural protection, particularly in regard to freight and charges. The board went fully into that aspect of the matter. It was not prepared to accept the figures submitted by witnesses, but set up a full and independent investigation into the matter by departmental officers.
I should like an assurance from the Minister in connexion with this moist important item, because whatever duties are imposed under it affect practically all the other duties in this division of the tariff. As I have already said, I have tried to be more or less consistent in regard to the tariff. I have said definitely that I believe in a measure of sound protection for industries which can be carried on effectively in Australia. But before definitely stating my attitude in regard to these iron and steel duties, in view of the fact that five years have passed since the Tariff Board made a report on this industry, I should like the Minister to say whether he will give an undertaking that there will be another report within, say, three months, upon the industry as it is to-day, taking into consideration the reduction in the cost of coal and the considerable reduction in wages that have come about since the board made its last report.
– It is difficult for me to give a favorable reply. The last investigation of the Tariff Board into the iron and steel industry occupied eighteen months and was costly, not only to the industry, but also to the Commonwealth Government. Furthermore, many of the duties in the schedule are not so high as the Tariff Board recommended, and were adopted by the Government only after a searching examination by officers of the Trade and Customs Department. It would be a matter for the deepest consideration whether another investigation should be instituted which might possibly occupy eighteen months and involve a huge expenditure at a time when there is every need for economy.
– I certainly regret that the Minister will not agree to my suggestion. The cost of an inquiry by the Tariff Board would not, in the long run, be so great as the cost to Australia of protection, if it is too high for the particular industry to which it is given.
– The honorable member for Newcastle (Mr. Watkins) said, in the course of his remarks, that no country in the world can become great without the aid of an iron and steel industry. I fully agree with him and so, I believe, does every other honorable member. We on this side of the chamber are just as anxious to bring about the development of the iron and steel industry in Australia as is the honorable member for Newcastle. We, however, like to take into consideration the additional cost which every new in-, dustry started in this country imposes upon those who have no means of passing that increased cost on to others. The honorable member for Newcastle apparently differs from us, because he thinks that it does not matter at all what this protection costs us so long as the work is done in Australia. The honorable member also said that every country which has an iron and steel industry aided that industry at its inception by the imposition of duties. That is not the case, even in Australia. The firm of Hoskins started the iron industry in New South Wales when that State was under freetrade, and for many years carried on very successfully. That tremendous undertaking in
Western Australia - the laying of 350 miles of iron pipes between Kalgoorlie and the coast, to provide water to that town - was carried out by the Australian firm of Mephan Ferguson. That work was done entirely within Australia, and under freetrade conditions. I repeat that we on this side of the chamber are keenly interested in the development of the iron and steel industry, which we regard as a key and a very necessary industry. But what we regard as wrong is the tremendous difference between the prices of steel products in this country and those of the products of other parts of the world. The Minister, in the course of his speech, compared the conditions of the Australian industry with those obtaining elsewhere. He said that the wages cost in Great Britain was 61s. per week, as against 108s. per week in Australia. But we have to remember that that great disparity is partially offset, at present, at any rate, by the tremendous exchange rate of about £31 per £100 which is imposed upon imports. That exchange imposition must be taken into consideration when we are comparing Australian and overseas rates of wages. If that is done, we shall find that the British wage of 61s., when 31 per cent, is added to it, becomes 80s. per week according to Australian values. So that actually the difference between the wages paid in Great Britain and in Australia, is only about 35 per cent. I submit that, in respect of pig iron and these various other items, the ocean freight, marine insurance, wharfage charges and so forth, amount to considerably more than 35 per cent, of the f.o.b. value of the product. So that these two things alone, the exchange as it stands to-day and the natural protection of freight and other charges, do more than offset that difference in cost, and there is really no necessity at all to-day for this industry to have anything more than this protection and exchange.
Mi-. GREGORY - Assuming that here and abroad the industry starts from scratch. The price of ore must be taken into consideration.
– That is so. The Australian industry does not start off scratch in its competition with the British industry in regard to the cost of raw material. We have a tremendous advantage over Great Britain, because of the extreme richness of our ore. We have actually exported some of our ore to both Europe and the United States of America. Therefore it seems to me extraordinary that this industry should need any tariff protection at all. The rates of duty in Canada, were, eighteen months ago, 6s. 3d. per ton British preferential, and 10s. 5d. general. The rates that we are now imposing - 25s. British preferential and 45s. genera) - are, in the case of the British preferential tariff, exactly four times those of Canada, and in the case of the general tariff, a little more than that. Further, exchange gives us additional protection, because our rate is much further from par than is the rate on the business done between Canada and Great Britain. This increased duty is being imposed, not only in respect of item a, on which this discussion is principally centred, but also of item b - ingots, blooms, slabs, billets, puddled bars and loops. The duties on such manufactures have been increased by 10s. In addition, the duties in respect of item c - bar, rod, other than wire rod in coils, angle, tee, bars of fancy pattern - have been increased from 70s., 100s., and 120s., to 80s., 110s., and 130s. In respect of item d - plate and sheet - although the same rate applies as formerly, the thickness of the iron manufactures to which the duty applies has been increased from 1/16 inch to $ inch. All these increases in duty appear to be quite unjustifiable, particularly as the product is so heavy and so comparatively low in cost that the ocean freight represents a much higher proportion of its value than is the case in respect of almost anything else. On some things which are imported into this country, such as a bale of silk or a box of tea, the ocean freight represents a comparatively inconsiderable part of the value. But pig iron is different, and the natural protection given to the local industry is so enormous as to make tariff protection quite unnecessary. I shall certainly support the amendment of the honorable member for Swan (Mr. Gregory), which is exceedingly modest. The honorable member has moved that the duties under item a - 25s., 35s., and 45s. - revert to what they were in 1928 - 20s., 30s., and 40s. Pig iron is the foundation of many manufactures in Australia, and anything that we do to restrict external competition, thus enabling the local manufacturers of it to raise the price, must have the effect of increasing the cost of the manufactured articles of which pig iron is the base. Items b, c and d specify several sizes of plate and sheet iron not produced in this country, to which are applied these increased duties. That means that to some extent this is a revenue tariff on things which are the raw material of many of our industries. We shall have to change our policy in regard to our great iron and steel industry if we are to overcome Australia’s difficulties. It is not enough merely to overcome our immediate financial troubles; we shall never obtain a marketfor the products of our secondary industries until something is done to reduce the tremendous gap between the prices of the products of these industries and those of the products of our great exporting primary industries. That gap is greater to-day than at any other time since federation. The index figures show to-day that primary products are, on the average, only 17 per cent, dearer than they were in 1911 ; in fact some of them are actually cheaper. Whereas, the average price of the manufactured goods has increased by 88 per cent, in that period.
– What years is the honorable member taking?
– I am comparing the present time with 1911.
– Was the iron and steel industry established in Australia then ?
– I maintain that, by increasing the duties on a product which is the raw material of many of our manufactures, we are helping to maintain the excessively high cost of Australian manufactures. Taking, as a starting point, the average prices in 1911 of both primary and secondary products as 100, and comparing the price of primary products and manufactured goods to-day, we find that now the average price of primary products is 117, and that of manufactured goods 188. The principal cause of that tremen dous disparity is this enormous tariff, which the Minister has been largely instrumental in foisting on Australia.
– Has the honorable member compared the increased cost of our primary products with that of imported articles ?
– I fail to see that that has any bearing on this subject.
– It is quite probable that, in respect of farming machinery, for instance, the price of the imported article to-day is more than that of the Australian article.
– I shall not be led off by the Minister excepting to say that I saw to-day some interesting figures which show that for agricultural machinery of equivalent sizes the prices in the United States of America and Canada are considerably lower than the prevailing prices in Australia. [Quorum formed.] I do not know the price of pig iron to-day; but a few weeks ago it was £3 5s. a ton in Great Britain and £6 10s. a ton in Australia. At Iron Knob, Australia has the richest deposits of iron ore in the world. So rich are they that from three tons of ore it is possible to produce two tons of iron or steel, whereas in most European countries only one ton of iron or steel can be manufactured from a similar quantity of ore. Ore from Iron Knob has actually been beaten into horse shoes at Port Augusta without having been smelted. Only a short rail journey is necessary to convey that ore to the seaboard. In view of such tremendous natural advantages, why is it that pig iron in Australia costs double what it does in Great Britain?Until something is done to close that gap between primary products at 117 and secondary at 188 we shall not emerge from our present economic difficulties, yet by adding brick after brick to an already high tariff wall the Minister is making wider the gap between Australian and overseas prices for manufactured goods. I shall support the amendment moved by the honorable member for Swan (Mr. Gregory).
– Although I listened with deep interest to the remarks of the honorable member for Gippsland (Mr. Paterson), I was not convinced by his arguments. The honorable member did not advance one sound reason why the committee should not agree to the Government’s proposals in regard to this item. I sympathize with, the honorable member in his desire to assist Australian primary producers, but I remind him that they have to look to the home market for the disposal of 54 per cent, of their products. If we can so develop our secondary industries, particularly those using iron and steel, that they will absorb large numbers of persons who are at present unemployed, and thereby give them a purchasing power which they do not possess to-day, we shall also assist our primary industries. The honorable member mentioned a number of things in connexion with this item which he regards as objections. He overlooked one or two fundamental matters which I shall now place before the committee as reasons for supporting the Government’s proposals in connexion with this item. First, I desire to quote from the report of the Tariff Board on the iron and steel industry -
Evidence tendered to the board shows that in order to successfully compete with imported pig iron, the local manufacturers have been under the necessity of selling their product at prices which do not provide a reasonable margin of profit, and there are indications that the prices of the imported iron will further decline, necessitating a further reduction in the price at which the local product can be sold.
The iron and steel industry in Australiais faced with very keen competition from overseas countries, particularly the United Kingdom, because many finished products which are imported from there have as their raw material iron and steel from other European countries where long hours and low. wages are the rule.
– “We on this side do not object to the heavier duties on those articles.
– I do not think that any honorable member desires that the conditions which obtain in industry in lowwage European countries should be introduced into Australia.
– Conditions not much better already exist in connexion with many of our primary industries.
– It is true that the proportion, of labour and materials necessary to entitle goods to enter under the British preferential tariff, has been increased from 25 per cent, to 75 per cent.; but owing to the certification on the invoice sheets not having to be subscribed to by principals, but by “ any other person “, the door is opened to irresponsible declarations. That is a sound reason why we should accept the Government’s proposals. The honorable member for Gippsland compared the wages paid in other parts of the world with the Australian wages in this industry.
– I took the Minister’s own figures.
– In The Ministry of Labor Gazette, of March, 1931, it is stated that the national federation of iron and steel manufacturers gives the average earnings in four different weeks for blastfurnace men at £3 3s. Id., and for men engaged in steel melting and rolling, £3 ls. per week. Allowing for the difference in hours, the wages in this industry, taking 100 as the figure for the United Kingdom, are, Australia, 180; Germany, 67; France, 50; Luxemburg, 49; Belgium, 47, and Czechoslovakia, 42. In the face of those figures, it is easy to see how the Australian industry is handicapped in competition with goods manufactured in Britain from raw materials obtained from those countries.
– Those goods do not get the British preference.
– The same issue of The Ministry of Labor Gazette, to which I have referred, gives the percentage increase of weekly time rates, or wages, in the United Kingdom at the 31st December, 1930, in comparison with prewar rates of 1914. The increase in wages in the iron and steel industry is 59 per cent, in the United Kingdom, as against only 51 per cent, increase in Australian rates during the same period - a difference of 8 per cent. In the light of those figures, honorable members must agree that wages should not be taken into consideration in this connexion.
– In that case, the duties should be lower instead of higher.
– Not when we offset the disability arising from the competition of articles made in Britain from raw materials obtained from low-wage countries. The report of the Tariff Board on the iron and steel industry also states -
It is only too well known that during the war, owing to shortage of supplies of iron and steel products, the prices of these products from overseas became abnormally high. It would, of course, have been possible for the local producers to have increased the prices of their commodities in keeping with those of the imported, but such action was not taken, and, in this way, it is estimated on reliable information, that on the supply of rails and fishplates to the Commonwealth and various State Governments during the period 1915 to 1920, a saving of over two million pounds (£2,000,000), was effected to Australia. On the whole of the Australian material supplied for local needs during the same’ period, Australia was saved four or live million pounds.
If those things could be done when the nation was at war without objection being raised, why should there be any objection if they are done now in a time of peace?
– The price of wheat is much lower now that it was then.
– In view of our capacity to produce–
– “What about our capacity to purchase?
– I believe in Australians buying Australian-made goods. At present only 25 per cent, of our total productive capacity in the iron and steel industry is being utilized. “While 75 per cent, of our plant lies practically idle, huge shipments of imports continue to come into this country. In those circumstances, I submit that the Government is fully justified in prohibiting the importation of goods which can be satisfactorily manufactured in Australia.
– “What does the honorable member mean by satisfactorily manufactured?
– The honorable member for Warringah (Mr. Parkhill) cares nothing about the conditions of the workers in industry so long as goods are produced cheaply. I stand for Australian artisans being given (the right to work and to enjoy a decent standard of living. The Broken Hill Proprietary Company Limited, which is only one of many companies which are prepared to produce the articles covered by this item, uses 8,000 tons of pig iron a week in its Newcastle plant. The works also use 2,400 tons of scrap steel, 1,200 tons of limestone, 250 tons of magnesite, and 250 tons of dolomite. If the works were operating continually at full blast they would consume annually 800,000 tons of ironstone, 500,000 tons of coke, 193,000 tons of limestone, 26,000 tons of silica rock, and 3,000 tons of phosphate rock. When we take into consideration the large number of men who could be employed in the production of iron and steel if Australian manufacturers were supplying the whole of the Australian market, it is quite evident that the Government is justified in seeking t-.j impose these duties. I support the Government, and intend to vote against the amendment.
.- I think that every honorable member will admit that the iron and steel industry must be regarded as one of the key industries of Australia, and, in spite of what the honorable member for Lang (Mr. Long) said about persons with an un-Australian outlook, it is generally recognized that this industry is entitled to a certain amount of support. In giving this support, however, we must consider how other industries are likely to be affected. We must take into consideration what effect this extraordinary amount of protection will have on. the great mass of the people who are the consumers of this industry’s products. We should inquire into the industry in all its ramifications, paying due attention to its raw materials: iron ore, coal, limestone, &c, and the conditions under which they are produced. It will be found that the production of those materials is affected detrimentally by existing labour conditions. Coal is essential to the iron and steel industry, and every one knows what is taking place with regard to coal. Labour conditions have become such thai the production of coal is no longer an economic proposition. The same applies to iron ore. There is not a better deposit of ore in the world than that at Iron Knob, in South Australia. The trade unions, however, completely control conditions there. Despite the statement of the honorable member for Newcastle (Mr. Watson), it is a fact that primary producers are very large consumers of the products of the iron and steel industry. They now find, however, that the price of all the commodities they need has ‘ been raised against them. This applies to galvanized iron, wire netting, fencing wire, and barbed wire. So dear have these commodities become that farmers are not able to buy all they need..
Even the iron used for shoeing horses has become so much more expensive that the price of shoeing a farm horse has risen from 5s., at which it stood a few years ago, to 10s. Galvanized iron is dearer than it was. Those on the land who are engaged in developing Australia need large quantities of galvanized iron. In the first place, they need it to erect their dwellings; then, most likely their sheds, and even their fowl houses, are constructed of this material. I recognize that it is of little use debating this subject, but I could not allow the item to pass without entering a protest on behalf of those primary producers who are so greatly in heed of this commodity. Evidently prices are to be kept at the 1920 level, with no regard to the general economic situation. If that is so, what is to become of the equality of sacrifice, concerning which a great deal has been said at the Conference of Ministers, which is now being held at Melbourne? Evidently certain favoured sections of the community are to be protected at the expense of the consumers who are expected to make the sacrifices. I protest against the Government’s proposal, and support the amendment of the honorable member for Swan (Mr. Gregory).
.- In attempting to justify the duties imposed in this item the Minister asked honorable members to remember that, owing to the tariff, the cost of the raw materials required in the industry had increased. That is a good example of the detrimental effect of the tariff, and surely a reason why the increases proposed here should not be agreed to by the committee; because iron is the raw material of a wide range of subsidiary industries. The Minister quoted figures showing the difference between the wages paid in similar industries in Australia and other countries. He said that in the iron and steel industry the average wage in Great Britain was 61s. a week; in Germany 68s. a week; while in Australia it was 108s. a week. Later on he said that the wage paid in Australia was 100 per cent, higher than that paid in similar industries in other countries. It must be evident that if we are to go on increasing the measure of protection to our secondary industries as fast as the wage-fixing tribunals raise the wages in those industries, and vice versa, protection can get us nowhere. It ceases to be protection. That, 1 firmly believe, is one of the chief reasons for the difficulty in which we find ourselves to-day, and is obviously responsible for a great deal of our unemployment. Before an industry begins operations in Australia it receives a promise of protection. The workers, or their representatives, thereupon claim that they are entitled to a share of the benefits conferred by protection. They make an application to the tribunal which fixes the rates of wages, and immediately these have been raised, those controlling the industry ask for more protection. That has been going on for the last ten or fifteen years. In the end the protectionist policy breaks down entirely, because it ceases to be of any value. Its only effect has been to increase costs, not only in the particular industry to which it may be applied, but to all other industries which are dependent on it for their raw material. It is grossly unfair that the users of iron and steel products should have to pay excessively high prices in order that the industry might enjoy excessively high wages and profits. The honorable member for Newcastle (Mr. “Watkins) said that the primary producers used only 10 per cent, of the iron and steel goods manufactured, but I do not think that any. other honorable member in this chamber will accept his figures. It is .generally recognized that the primary producers are the chief users of iron and steel products. I am sure that they use much more than 5 per cent, of the galvanized iron consumed, although the honorable member for Newcastle gave that figure to show that the high price of galvanized iron was of little importance to those engaged in rural industries, but even if the excessive protection does not bear especially heavily upon the primary producers, it still remains true that its cost has to be borne by the community as a whole, and particularly by the workers in every other industry, even by those in the city. This protection is reflected in the higher cost of the raw materials of other industries, and of the finished article as well. Probably the honorable member for Newcastle regarded as primary producers only those engaged in producing wool and wheat; he referred particularly to them, forgetting those engaged in other primary industries, especially the mining industry. If excessive protection increases the cost of production in this country, it must detrimentally affect the mining industry, te which it is impossible to extend protection, because its products - tin, zinc, silver, copper, &c. - have to be sold at world prices in the world’s markets. High protection increases the costs of the tools of trade necessary in the mining industry - not only those needed for delving -into the earth and bringing up the ore, but also those employed in treating and refining the metal. The men engaged in the mining industry have had to accept lower wages because those in the iron and steel industry have been able to keep up theirs to the previous high level. This has happened in the mining industry, where wages are fixed by Arbitration Court awards; but in the great primary industries - agriculture, grazing, &c, wages are not fixed by any tribunal, because that would be impossible. Immediately anything of the kind was done the whole system would break down. If an attempt were made to fix the wages of the primary producers on an equitable basis as compared with those paid in the protected secondary industries, the fallacy of a widely-applied system of protection would become evident, and the whole thing would collapse. At present the highly-protected iron and steel industries and others of the kind are enabled to survive, or, at any rate, to make their huge profits and pay high wages to their workers, at the expense of those engaged in other industries. So much must be self-evident.
The honorable member for Newcastle (Mr. Watkins) accused honorable members on this side of the House of unfairness in making comparisons between the wages paid in Australia and in other parts of the world, and particularly between the wages paid in the iron and steel industry at the present time, and those paid in 1913. He, himself, however, was not fair when comparing prices of iron and steel products as they stood in 1923, and as they are to-day. For instance, he said that the price of fencing wire was now £15 12s. a ton. As a matter of fact, the wholesale price to-day of No. 8 guage wire is quoted at £19 18s. 6d. a ton, and that of No. 10 gauge at £20 10s. When I challenged that statement by interjection the honorable member said that that was the price at the works.
– No; that is the price at every port.
– That is not so. As I have said, the wholesale price is £19 18s. 6d. The honorable member compared the price which he quoted, which is the price at the works, with the price of imported wire, which is the retailers’, price. It is evident, then, that he was unfair in his comparison, whether deliberately or not. It is not fair to compare the price of a product at the works with that of another such product supplied! by the retailer. As a matter of fact, the honorable member’s figures were wrong. It is impossible to buy wire at the prices he quoted anywhere in Australia.
– The price of this material is the same in every port.
– I did not challenge that statement. I said that the quotation of £15 12s. a ton, mentioned by the honorable member for Newcastle, was incorrect, because the material cannot be bought at that price.
– The honorable member misunderstood the honorable member for Newcastle.
– If that is so, the comparison made between the price ruling in 1923 and that charged to-day is misleading, as the margin is not so great as he suggested. It is idle for honorable members opposite to suggest that the highlyprotective policy which they are supporting is in the interests of the workers. Although it may be of advantage to one section of the workers, it cannot be denied that it operates to the detriment of a very large number of persons engaged in other industries. In the present circumstances the wages quoted by the Minister (Mr. Forde) cannot economically be paid. As a matter of fact, the users of the commodities covered by this sub-item who are engaged in mining, agriculture, and other pursuits, are not now receiving the wages quoted by the Minister, and, in fact, have never done so. The Minister also stated that the wages paid to the operatives in this industry in Great Britain are £3 ls. a week; but even that rate is not paid in other industries in this country, particularly in our primary industries. The cost of the machinery and tools of trade used by those engaged in primary production has been increased for the benefit of a small section of workers engaged in secondary industries. I intend to support the amendment moved by the honorable member for Swan (Mr. Gregory), which provides for a reduction of 20 per cent, in the rates proposed in the schedule to bring it back to the rate that had applied for many years, a protection under which this industry has flourished. If we are to have equality of sacrifice, concerning which we have heard so much of late, it is useless to suggest a reduction in invalid and old-age pensions, Public Service salaries and wages, and the interest paid to bondholders, unless we get down to the root of our economic and financial difficulties by removing the burden of costs from those engaged in production all round. The figures quoted by the honorable member for Gippsland (Mr. Paterson) show a difference of 70 per cent, between the price of the products of the secondary and primary industries to the advantage of those engaged in the former. It is the responsibility of the Government to reduce that margin, as by so doing it would be helping to solve the economic difficulties with which Australia is now confronted. This can be done only by an equality of sacrifice. Instead of placing the whole of the burden upon the primary producers, who are doing the real hard work, and conferring further benefits on those who are privileged to work in the secondary industries in the capital cities, the Government should distribute the burden equitably. At the conference of Commonwealth and State Ministers now sitting in Melbourne, it has been suggested that there should be a reduction in pensions, the salaries and wages of public servants, and the interest paid to bondholders; but, necessary as that may be, it is useless to make such reductions in an endeavour to restore financial stability unless reductions are also made in other directions. particularly with respect to customs duties imposed on commodities such as those now under consideration. It is ridiculous to suggest that a reduction of 20 per cent, on the rates now in’ operation would compel this industry to close down. If the wages of the men at present engaged in this industry, who, according to the honorable member for Newcastle, are now receiving £6 or £7 a week, were to be reduced by 20 per cent., they would not be thrown upon the dole. There are scores of thousands of workers in this country who would be glad to work for £4 a week and less. We all believe in the payment of high wages when that is economically possible, but a policy of equality of sacrifice should apply to allOne section of the workers should not beplaced in a privileged position merelybecause they happen to be well organized,, while the interests of other large bodies; of workers who do not happen to be sofavorably circumstanced are totally disregarded.
.- I recognize the utter futility of debating this or any other sub-items in the schedule. From the view-point of endeavouring to amend the schedule it is a sheer waste of time. We are now considering “Division VI. - Metals and and Machinery”. As the representative of an agricultural constituency, I know that the duties imposed under this division have the effect of seriously increasing the price of agricultural machinery, fencing wire, galvanized iron, and other such commodities used in primary production. I rose particularly to deal with the point raised by the Minister (Mr. Forde), who said that the iron and steel duties have been increased because the wages paid in the industry in Australia are 100 per cent, higher than those paid in the iron and steel industry in Great Britain, and on that account the Australian .workers should be protected against the importations of commodities produced under rates lower than those prevailing in Australia. In reply to an interjection, the Minister said that the Australian workers are enjoying a higher standard of living than that of the workers in Great Britain. That raises a very important point in connexion with the imposition of these and other duties. We have to determine whether workmen in this or any other Australian industry are entitled to a higher standard of living than is enjoyed by the workers of Great Britain. Surely the people of Great Britain believe in the maintenance of as high a standard of living as is economically possible. The trade unionists of Great Britain are not one whit less enthusiastic in seeking better living conditions for themselves than are the trade unionists of Australia.
– Many workers in Great Britain are on the dole.
– There are 350,000 Australian workmen at present unemployed, many of whom do not even receive the dole. We must ask ourselves if the Australian workmen are entitled to a higher standard of living on a lower rate of production than British workmen. That is a simple question which has not yet been answered. I would have no objection to the workers in the iron and steel or any other industry receiving a weekly rate of 108s. provided a similar rate could be paid to the workers in other industries, including, of course, the primary producers who, with due humility I submit, should be permitted to enter the charmed circle.
– We regard the primary producers as workers.
– If that is so, I suggest that it would be only fair to provide that those engaged in primary production should receive the same rate of wages and the same high standard of living as is available to those engaged in secondary industries. Is it contended that those engaged in secondary production are entitled to a higher standard of living than their fellow-workers engaged in primary production? No one has attempted to justify the difference which now exists. No one likes to advocate a lower standard of living. If it were economically possible I should like every worker in this country to receive at least £10 a week.
– Why is it not possible?
– I shall tell the honorable member. The unanswerable argument against the maintenance of the standard of wages provided in this industry lies in the fact that such wages can not be paid in other industries such as those mentioned by the honorable member for Darwin (Mr. Bell) in an excellent and well-reasoned speech. The Minister said that the wages paid in the industry are £5 8s. a week, but the fallacy of his policy is shown by the fact that such wages cannot be paid to those engaged in other industries, particularly our primary industries. We hold up our hands in horror at the thought of taking British iron and steel, but when our coffers are empty we reach out with both hands to take money provided by Great Britain, where the standard of living is much lower than it is in Australia.
– We do not get money. We get credit, with which goods are obtained and imported.
– The honorable member is getting deeper and deeper into the mire. He admits that when we borrow money we, in effect, borrow goods, and we must pay for them with our own products. Does not the honorable member realize that we must exchange our goods for those we import on a world’s parity basis. That being so, those who produce the goods that we exchange must be put upon the level of the producers of the commodities that we import.
– That is so if the goods are similar.
– Not necessarily. If we import fencing wire, we must pay for it with wheat, wool or butter.
– How can we make the conditions similar when two different industries are concerned? How can the honorable member compare the grower of wool in Australia with the producer of wire in Britain ?
– That question opens up the very big and well-debated subject of the economic wisdom of nations producing commodities for which they are not economically fitted to produce.For instance, we produce dried fruits, which we export to Great Britain on a preferential basis-
– Has this Parliament ever refused to help the dried fruits industry?
– It is true that the growers receive an Australian price for that portion of their produce whichis consumed in this country, but that represents only between 12 per cent, and 15 per cent, of their output, while they pay a 100 per cent, protectionist price for every article that they require to produce their crops. I know that the honorable member for Newcastle (Mr. Watkins), with his characteristic generosity, would distribute largesse to everybody, and would ‘ even give lOSs. a week to every wheat-grower in Australia.
– Yes, if it could be done.
– I suggest, with all humility, that it cannot be done-
– Why not?
– The honorable member for Corio (Mr. Lewis) is of a very inquisitive turn of mind, but he interjects with greater facility than he thinks. The answer is obvious. Annually we have to send overseas goods to the value of £36,000,000, to pay interest on our obligations.
– Including exchange, it now amounts to about £48,000,000.
– That is so, but I am dealing with the position during normal times. In addition, we must send overseas goods to pay for the commodities that we import because we cannot produce them, for instance, petrol, kerosene and tea. In the circumstances, is it possible for us to put all. sections of the community in Australia upon the same rate of wage or standard of living?
– Yes, if you cut out all the parasitical growths that batten on society.
– Probably the honorable member has in mind inflated land values and similar items, topics upon which the chairman would not permit me to dilate. The honorable member for Lang (Mr. Long) made an observation that is expressed too frequently. He termed honorable members of the Country party and other sections of the Opposition who oppose the indiscriminate imposition of these duties “ un- Australian.” That is very unfair. Those to whom he refers are merely endeavouring to put in a word for the great number of good Australians who having left the comforts of civilized life to pioneer the outback, face drought, fire and flood, to establish a home in the bush. Surely, if any section of the community is entitled to the compliment of being termed good Australians, it is that one. I am proud to stand here as one of that community. It comes with very bad grace from honorable members opposite to suggest that that the motive of myself and others in opposing these duties is unpatriotic and, in the circumstances, it is most presumptuous for honorable members opposite who support _ these duties to claim that they are actuated by patriotic, motives.
I shall conclude as I began, by recognizing to the full the futility of debating, this or any other item in the schedule. With monotonous regularity, irrespectiveof the trend of the debate or the facts adduced, each item goes through.
– That is not so. The duties on cotton wool were withdrawn.
– I think that the item was postponed.
– If the Russian Government endeavoured to dump Soviet wheat in this country, would not the honorable member, as a good Australian, be one of the first to suggest the imposition of protective duties?
– If the wheatgrowers of Australia were given the right to sell their goods in the markets of the world and purchase other goods in return, untrammelled by exorbitant duties, they would not fear any dumping on the part of Soviet Russia. I shall not delay the committee longer. I again remind the advocates of extreme protection that it is impossible to apply to all of the workers in all of the industries of Australia, the standard of living upon which they insist for the workers in our secondary industries. If that were attempted, the system would collapse. It is ridiculous, while we borrow overseas money in the form of goods from the workmen of other countries, to sneer at the standard of living of those workers. For us to do that is to behave like a man who was running a Rolls-Royce motor car on money borrowed from the owner of a Ford, and sneering at him because he used the less expensive vehicle.
– My principal argument will be on behalf of the Australian worker, who has, by organizing, attained the position that he enjoys to-day. I suggest that the persons represented by the honorable member for Wimmera (Mr. Stewart) might follow the example of the industrial workers of Australia and do something to organize themselves.
– I agree with that.
– The honorable member was a supporter, and for some time a Minister, of a government that did not concern itself very much about how much or what Australia imported, with the result that a very formidable adverse balance of trade has been built up against this country. The least that that Government could have done was to balance its ledger when times were prosperous. I submit that the wages paid to the industrialists of Australia did not in any way tend to bring about our adverse balance of trade, which is due wholly to the shortsightedness and extravagance of preceding governments.
We are continually told that the unfortunate position of the primary producers is due to the demands of organized labour. There is a factor, however, which many have conveniently overlooked. I have before me the Sydney Daily Telegraph, of even date, in which appears the following paragraph:-
600,000 LB. OF COFFEE DUMPED IN SEA.
The National Coffee Council has dumped 600,000 lb. of coffee into the sea for the purpose of assisting the market. Several more shiploads will be destroyed in order to rid the country of its huge surplus.
When in Sydney I usually reside at Manly, and I remember that,on one occasion, when travelling across to that suburb by ferry, I saw great quantities of apples being washed up on the sand near the jetty. They had been jettisoned for a purpose similar to that described in the paragraph that I have just read - to keep up prices to the detriment of the consumers. I cannot remember any protest being made by honorable members opposite or the people that they represent, against the destruction by the market brigands of large quantities of valuable food. The wages that are paid to the workers in the iron and steel, as well as in all other secondary industries, have been awarded by the industrial tribunals of this country. I am a believer in the system of wage fixation. I do not know whether or not the workers in Great Britain are content with a poorer standard than that which obtains in Australia ; but I assume that in a general sense their conditions are not inferior, because the cost of commodities in that country is less than it is in this. [Quorum formed.]
The honorable member for Barker (Mr. Cameron) said this afternoon that trade unionists had made it unprofitable and uneconomic to produce iron ore on an island off the southern coast of Australia. I am credibly informed by some honorable members who represent South Australian constituencies that to-day there are practically no unionists on that island, and that iron ore is being exported from it to the United States of America. But even if the conditions were as the honorable member has suggested, the fact cannot be denied that they were awarded by the Arbitration Court; and that court has been extremely careful at all times to avoid awarding too high a remuneration for the work that is done by the toilers. I again assert that if the primary producers were to do something for themselves instead of depending upon their so-called friends, who generally represent the people who rob them effectively, their position would be better than it is at the present time. In Queensland, every primary industry works under the pooling system, which was instituted and carried on by a Labour Government, with the result that the primary producer there is in a much better position than in any other State. The same fortunate position would obtain throughout the Commonwealth if the primary producers were to do something for themselves.
– The honorable member’s friends have done them for a good deal more. They are the people who have done well at the expense of the primary producer.
The honorable member for Darwin (Mr. Bell) has said that the Arbitration
Court does not fix wages for the primary producers. The wages that they pay do not affect them very much. The honorable member for Darwin, and those who are associated with him, would reduce the rates below the present level. But if the reductions were of general application, the primary producers and other employers would not employ one additional man, no matter what wage they had to pay, because they engage labour only as they require it. I suppose that I would do the same were I in their place. An employer would not give a man work merely for the sake of employing him. If 50 men were sufficient for the work that was offering, and the wage of each was £5 a week, an employer would not engage an additional number if the wage were reduced to £2 10s. a week. I see no reasonable chance of escaping from our difficulties under either protection or freetrade conditions. Sooner or later the .hours of labour will have to be reduced, and there will have to be a general all-round re-organization of every industry, so that the toilers may have an opportunity to obtain a livelihood, not only in this but in every other country. The present trouble is largely due to the use of machinery in production. My honorable friend the member for Warringah (Mr. Parkhill) will probably say, “You wish to go back to the old days.” That is not so. But I do contend that those who are responsible for enlarging the productive capacity of the world are entitled to some of the benefits that thereby accrue. The improvements that have been effected in machinery have been conceived in the brains of the toilers.
– We ought not to have the anomaly of a world over-supplied with goods and millions of people on the verge of starvation.
– Starving millions” side by side with over-production of the necessaries of life is an anomaly that needs to be rectified. A complete alteration of the system under which we live is the only means whereby that will be brought about, and sooner or later it must come.
– Reduce customs duties.
– If customs duties were abolished, that would not bring about any alteration of the prevailing conditions.
– Reduce prices so that the people can afford to buy.
– The 400,000 people in Australia who are unemployed cannot afford to buy anything. Freetrade countries are in a position as unfortu nate as that of Australia. In Great Britain there is an enormous army of unemployed, many of whom have been living on the dole ever since they reached the employable age. The unemployed youth of to-day becomes the unemployable man of to-morrow. If a reduction of the number of men employed results in a lowering of the spending power of the people, the consequence must be a lessened productive ‘capacity, and;, incidentally, greater chaos than exists at the present time.
– Production must be increased by 50 per cent, to enable us to pay our overseas interest bill.
– The time will come when we shall not be able to meet our obligations, even though we increase our production by 100 per cent. That reorganization is necessary is undeniable. I shall support these duties, despite the sneers and innuendoes of honorable members opposite. We fortify our actions with convincing arguments, but they advance no argument at all. When they sat on this side, and were able to take what action they liked, they operated a protectionist policy, or a revenue tariff policy, that enabled their Treasurer to swell his revenue by millions of pounds. The honorable member for Wimmera (Mr. Stewart) was thus afforded an opportunity to spend millions wastefully in the provision of a capital city for Australia.
.- There is no doubt that the manufacture of iron and steel is one of Australia’s greatest industries. During the world war it was not properly established in Australia, and its absence was very severely felt. Now that it is established on a sound basis we should do everything that we can to prevent it from retrogressing. If it can he assisted by means . of the tariff, that assistance should be given to it.
I intend to deal on its merits with each of the items in the tariff schedule, and to determine whether the industry concerned is worth preserving, or whether the benefits that it is said to confer are merely the product of the Minister’s imagination. Undoubtedly this is a great industry ; but it is questionable whether the high costs that operate in it at the moment ought not to be inquired into. The Tariff Board held an inquiry into the industry in 1927, and made certain recommendations.I quote the following paragraph from its report : -
The board considers that the method adopted by it finds supportin the fact that all the principal factors entering into cost of production are -
The efficiency of plant;
The efficiency of management;
The efficiency of the labour engaged in production.
Having regard to all these factors, in the board’s opinion, the industry in Australia, as presented by the Broken Hill Proprietary Limited, is equal, if not superior, to the industry in the United Kingdom. The board has specially selected the Broken Hill Proprietary Limited as a standard of comparison, because it has concentrated its investigation chiefly on that company, and because the company’s standard of efficiency is second to no other industry of any kind in Australia. So that any recommendation the board may make will have been based upon the most, and not the least, efficient representative of the industry in Australia.
Thatis very fine testimony to the value of a fine undertaking. But the duties recommended at that time by the Tariff Board were not applied by the Government; in fact, the report of the board was never discussed in Parliament. The duties at present operating go back only to November, 1929. These duties are, to a considerable extent, in accordance with the recommendations of the board, which made it clear that the request for increased duties should he acceded to in regard to a number of items, particularly those covered by sub-items a, b,c, andD of item 136. The following table gives the details of the duties recommended by the board and those at present operating: -
Out of a very representative group of twelve items or sub-items- those that I have already mentioned and sub-items f and g of item 136, item 147, sub-items a, b,c, and d of item 154, and sub-item a of item 155- - the duties in seven instances are substantially less than those recommended by the Tariff Board; in two instances they are only slightly in excess of the duties recommended; in the remaining three instances’, the duties recommended by the hoard were approved. The Broken Hill Proprietary Limited can claim with justification that it is entitled to some consideration. Nevertheless, it must be remembered that we are considering a basic industry, the products of which are of great importance to all our primary industries and many other secondary industries. In view of the fact that the price of coal is excessive and that labour conditions have been built up through our trade union system which have caused heavy increases in the cost of production, particularly in the cases where a 44-hour week is in operation, as in New South Wales, the costs of the Broken Hill Proprietary Limited have been heavier than they should have been. This is a matter which merits earnest consideration. In my opinion, the time for another inquiry into this subject is overdue. I shall support the validation of these duties, for they have been in operation about eighteen months, but I hope that the Minister will give an undertaking that another inquiry will be made. The circumstances are ripe for a second inquiry. Since the Tariff Board, made the report to which I have referred, costs have come down in many directions.
– Let us have the inquiry at once.
– There is no need for a lengthy and costly investigation. I hope that the Minister will agree to this request.
– I have already replied to & similar request by the honorable member for Brisbane (Mr. D. Cameron) . The last inquiry cost £10,000, and the Government does not consider that it would be justified in incurring that expense, or probably an expenditure of £15,000, in another inquiry at this stage.
– I have no doubt that the £10,000 included a good deal of the expense to which the company was put. At any rate, the people would be put to a much greater expense than this if they were obliged to continue to pay high prices for their iron and steel requirements if it can be shown that production costs have fallen. The national emergency conference, which is at present sitting in Melbourne, is proposing reductions of costs in many directions, and there is no reason why the position of the iron and steel industry should not be investigated. If an inquiry were made forthwith, it need not be on the same comprehensive scale as the inquiry of 1927.
– An officer of the department has already made an investigation into the position.
– Then the Minister should make his report and recommendations available to the members of the committee.
In its last report the Tariff Board made a number of comparisons between the wages paid in this industry in Australia and in continental countries. This industry is in its infancy in Australia, and it should be protected. I think it was Gladstone who said that to speak of making steel in America was as ridiculous as it would be to talk of growing pineapples in England. He went on to say that pineapples could be grown in England, but only in hothouses. America replied to that statement by producing steel almost as good as British steel, and to-day holds a big proportion of the world’s -export market; but the industry had to be given adequate protection. In. dealing with the wages payable in this industry overseas, The Tariff Board reported -
In Germany the current average wage ia 32s. 6d. for a week varying from 54 to CO “hours.
No one desires that such long hours -should be worked in the industry in Australia. We have a different living standard in this country, but, as the honorable member for Wimmera (Mr. Stewart) pointed out, our standard does not apply to everybody, and so long as we have to borrow money from countries with a lower standard of living than our own, we should not despise them. The board dealt with the wages payable in certain other countries in the following terms : -
In Belgium the wage is 23s. Od. for a nominal week of 48 hours, in which considerable laxity as to working hours is allowed. In France the wage is 34s. Cd. for a nominal week of 48 hours, where again considerable laxity prevails. In the United Kingdom the wage is 61s. for a week of 48 hours, which is strictly enforced. In the Commonwealth of Australia the wage is 108s. 0d. per week for a week which was a rigid 48 hours, but which now may be permanently reduced to 44 hours.
In these circumstances, I ask the Government to give earnest consideration to the position of this industry in Australia. It must be realized that economically it is not on a sound basis. It should not be necessary for us to impose heavy duties in order to enable an industry to pay wages which otherwise could not be considered. There must be some co-relation between the wages in one industry and those in other industries ; and there must also be a greater degree of co-operation between employers and employees. On this point, the Tariff Board issued the following warning: -
From considerations such as the foregoing the Tariff Board is strongly of opinion that the industrial unions of the Commonwealth should be induced to realize the critical position into which the Commonwealth is drifting, and the absolute necessity for preventing the wages gap from becoming still wider between the United Kingdom, the continent of Europe, and the Commonwealth, otherwise the Tariff Board, placed as it i3 in the position to take a comprehensive and intimate view of all Australian industry, can see nothing but economic disaster ahead, and that at no very distant date.
Those weighty words of the board were prophetic. The economic disaster which was then forecast is almost upon us. We are very near the crash.
I shall vote for the ratification of these duties, because they have already been in operation for about eighteen months, and I do not think it would be fair to the industry or the men engaged in it, to withdraw the protection at this stage.
But in view of the reduced costs in certain directions, the whole position should be reviewed.
Sub-itemc of item 136, “Bar, rod, angle, tee, &c.” has a bearing upon the galvanized corrugated iron industry, because the Broken Hill Proprietary Limited supplies Lysaghts with the bars for rolling into sheets and is largely dependent on their business in this line; but I shall have something to say on that subject when that sub-item is under consideration. I am not pleased with the position in the galvanized iron industry. If Lysaghts are unable to carryon without heavier duties, they should close down the manufacturing side of their industry and become importers again.
I ask the Minister to give earnest consideration to my request for another inquiry into this industry with a view to having the duties brought into line with existing conditions. There has been a fall in values in many directions which should result in a fall in the cost of producing iron and steel.
Sitting suspended from 6.15 to 8 p.m. [Quorum formed.]
.- It has been mentioned that the iron and steel industry of Australia was established in New South “Wales under freetrade and did not require protective duties to enable it to flourish. I have followed the progress of this industry fairly closely. Ever since my boyhood I have had a good deal to do with the importing and indenting of iron and steel. I remember that Mr. Sandford was the first to endeavour to establish the industry in Australia; but he was unable to do so owing to the lack of the necessary legislative assistance in the form of tariff protection. It is hardly necessary for me to discuss the merits of the iron and steel industry, because the honorable member for Newcastle (Mr. Watkins) has dealt with it fairly comprehensively. But I realize how easily honorable members may he misled owing to the way in which indentors and importers camouflage their profits. On one occasion, I indented goods of the same class and quantity through two different firms, and when they reached me I was surprised to notice the disparity of the charges. One of the firms was new to the business and, probably, did not know enough about it to attempt to fool its customers; but the other firm charged me 10 per cent, or 15 per cent, more than its competitor. On another occasion, when a duty on iron was contemplated, although it was not actually imposed, many firms had imported heavily in order to anticipate the duty, and although the customers of those firms were led to believe that they were getting iron on the basis of about 6 per cent, above the landed cost, it was found that, since the duty had not been imposed, iron could be purchased at about 25 per cent, less than the old rates. That showed that those firms were trying to unload their stocks, and that they had been making very large profits. I well remember the prices that were charged in those days for iron and steel. Although these commodities were manufactured cheaply in other countries, the benefit of the low prices abroad was never passed on to the Australian people.
A good deal has been said about the costs of production, and the wages paid in Great Britain. Those wages do not affect Australia much, because most of our imports of iron and steel are from the United States of America. To-day one can buy steel more cheaply from that country than at the time when we imposed no duty on it, and springs, and articles of that kind, are cheaper now than they were when they were admitted duty free. Honorable members who have been trying to deceive the farmers by making them believe that freetrade would be in their best interests, know that butter can be bought cheaply overseas; but they do not suggest that Australians should buy imported butter instead of the local product. While those members always favour protective duties for primary industries, they begrudge protection to the secondary industries. When the sons of farmers grow to manhood, many of them go to the cities because the policy of protection has fostered manufacturing industries, and employment is obtainable in such industries there. Often these men are more successful in their employment than they would be if they had remained in the country. I realize, of course, that much depends on the success of our great primary industries ; but they have their limitations, and we must not overlook the value of a policy that provides a home market for our producers, as well as employment in the cities. I believe that some honorable members opposite would not pay for a shave in Australia if they could obtain one overseas. They do not like to see several thousand persons employed in the tonsorial industry in Sydney. Apparently, they do not want Australians to obtain employment at all.
I think that Messrs. Hoskins and Company are getting rather more advantages under the tariff than they are entitled to. They do not pass on those benefits to the extent that I think they should; but I would prefer to have an exploiter and a monopolist operating in Australia rather than in New York or Chicago. In Australia he would probably invest his profits in war bonds, and the country would get something out of him by that means. Then, when he died, the Government would take 50 per cent, of his whole estate in probate duties. But the country would derive no benefit from the death of a monopolist in the United States of America. Australia is a remarkable country in many respects. At Burbong not far from Canberra, some of the richest iron ore in Australia is to be found. The deposit is too far removed from a coal field to make it payable to work the ore, but coal may eventually be found within reasonable distance of it.
The iron and steel industry deserves every encouragement. There could be no better preparation for the defence of this country than the development of the great iron and steel industry, so that Australia may eventually be in a position to build ships and armament. It is better to spend money in achieving that result than in maintaining schools for cadets, and the other appurtenances of the orthodox system of defence. It is unnecessary for members on this side to elaborate the advantages of the iron and steel duties. If any perspicacity had been displayed by honorable members opposite, they might have voted immediately on the item before the committee. I realize that nothing that I may say will dispel their obtuseness on fiscal matters. They desire to fool the farmers for a little longer. One honorable member opposite spoke about horse-shoes, and said that it costs more to shoe a horse to-day than formerly. That is because so few horses are used nowadays that farriers are unable to make a decent living, and have found it necessary to increase their charges. A farmer may now purchase horse-shoes practically ready to be placed upon his horse’s hoofs. Cheap and wellmade horse-shoes may be easily obtained to-day, owing to the development of the iron and steel industry in this country. For the last 40 years I have been in business having to do with horse-shoes and nails. It is vitally important to foster this industry, and any honorable member who declines «to support the item before the committee is recreant to his duty to his country.
.- Iron and steel manufacture should be one of the leading industries of Australia, for we have natural facilities for its successful development. We have the raw material in plenty, and unlimited coal deposits, while we have the facilities of sea-borne freight. But the high protective policy of Australia has almost killed the industry, and has prevented it from being of great financial value. Had we concentrated on a few secondary industries that are natural to Australia, there would have been infinitely less unemployment than there is to-day. We might have made a great success of our iron and steel and implement-manufacturing works if we had given them our main attention, and had not attempted to manufacture numerous comparatively unimportant articles that might well have been imported from other countries in the ordinary course of international trade. Mr. Delprat meant what he said when, at the inauguration of the Newcastle steel works, he declared that the industry would not require protection. Why did he subsequently find that fiscal help was needed? Simply because Australia began all kinds of tiddly-winking industries, and because the Arbitration Court awarded high wages to the workers in those industries. This resulted in high duties, and increased the cost of living. Of course, the Broken Hill Proprietary Company had to pay these high wages, and that involved the granting of tariff protection against the iron and steel goods manufactured abroad.
The honorable member for Newcastle (Mr. “Watkins) said that he was chiefly concerned about the provision of work for Australians. I, too, desire that work shall be provided for the people, but I think that it should be done legitimately. The Minister for Trade and Customs (Mr. Forde) referred to the wages received in other countries, and admitted that the wages paid in the iron- and steel industry were 100 per cent, higher than those obtaining in similar avocations in other countries. Can we afford to protect the iron and Steel industry to’ this extent in order that it may pay to its employees wages 100 per cent, higher than are paid by its competitors in other countries? This high impost is a direct burden upon our export primary producers, who are unable to obtain any concession by way of tariff protection for their production. The Minister declared this afternoon that the Broken Hill Proprietary Company was in a better position when high prices were being realized for our wheat and wool, because then our farmers, who are large users of iron and steel products, were able to purchase more largely of the output of the company. He now offers” the excuse that because wool and wheat prices are down business with the Broken Hill Proprietary Company has declined to such an extent that additional protection is required. How is it possible for our primary producers, whose incomes have declined so seriously, to continue to purchase iron and steel products at present high costs? Do not honorable members opposite realize that our farmers are at their wits’ end to carry on, and do not they think it grossly unfair that additional protection should be given to this sheltered iron and steel industry? The right honorable the Prime Minister (Mr. Scullin), the Treasurer (Mr. Theodore), and the Leaders of the Opposition in this Parliament are now engaged in a most important conference in Melbourne the object of which is to devise means to reduce costs in Australia, and yet the Minister for Trade and Customs (Mr. Forde) is submitting to this Parliament proposals the effect of which will be to increase’ the cost of production on, all farms throughout Australia. The iron and steel industry ought to be a key industry, supplying the essential requirements of our primary producers at a reasonable cost. Instead of being in a position to do that, it has been spoonfed with tariff protection to such an extent that it has now become an incubus. Its products are at a prohibitive price. No one will seriously argue that Commonwealth or State railway authorities can afford to pay the high prices charged for rails for new construction. Even under existing conditions most of our railway systems are a heavy charge on the Consolidated Revenue. Some years ago the Commonwealth Government placed an order with Thompson Brothers, of Castlemaine, for the construction of a number of railway engines for use on the Port Augusta to Oodnadatta line at a price £60,000 in excess of overseas tenderers. The interest upon that transaction represents a definite charge, for all time, of about £3,000 per annum against the Oodnadatta railway, and since that section of the Commonwealth railway system is not showing a profit, this charge is borne directly by the taxpayers of Australia. I say, therefore, that this higher protection to the iron and steel industry will mean more unemployment throughout Australia. The honorable member for “Werriwa (Mr. Lazzarini) informed us some time ago that the purchasing power of the English pound was seven times greater in Japan than in the Mother Country. In Australia the purchasing power of the same pound is about one-half that of its buying power in England. Our objective should be to increase the purchasing power of wages. It is an anomaly that, with 300,000 or 400,000 unemployed in Australia, an attempt should be made to maintain a high standard of living for a limited number of employees in a sheltered industry. It would be better for all concerned if we came down to a reasonable economic level, so that all sections of the community could make an equal contribution to the salvation of the nation. The honorable member for Swan (Mr. Gregory) pointed out, earlier in the debate, that a few years ago we had an export trade in iron and steel products. We should still be exporting if we had not raised the industry to an uneconomic level. The Government is about to make a nation-wide appeal to bondholders and all sections of the community to help to extricate the nation from its present financial and economic difficulties. In the circumstances, it is anomalous that additional protection should be given to the iron and steel industry which so vitally affects all farming costs. Sacrifices must be made by all sections if we are to overcome the difficulties that confront us. The honorable member for Newcastle (Mr. Watkins) made an earnest appeal this afternoon on behalf of the Newcastle steel works, but there was not an ounce of common sense in all that he said. I listened to the honorable member very patiently. The iron and steel industry has proved of disservice to the people of Australia. In New Zealand, with a tariff of 15 per cent., the manufacturers of iron and steel are able to sell their products in Australia, and in other countries. No doubt they would like a greater measure of protection, but they have the good sense to realize that, if the tariff wall were raised unduly the industry would become uneconomic, so they are content with 15 per cent. The industry in Australia is amply protected by heavy freight charges, the present high rate of exchange, the lower cost of living, and the consequent reduction in’ wages costs. I, therefore, fail to see why additional protection should be given to it. These tariff burdens fall ultimately upon our farmers, who are already in a desperate plight. The only thing which this Government has done for them has been to place heavier burdens upon their shoulders by giving high protection to a number of sheltered secondary industries. The iron and steel industry is old enough to stand on its own feet. I, therefore, support the amendment moved by the honorable member for Swan.
.- I endorse all that the honorable member for Newcastle said on behalf of the iron and steel industry. The honorable member for Forrest (Mr. Prowse), made several references to what he termed minor and- unimportant industries, the encouragement of which, he declared, was not in the best interests of Australia. Can the honorable member name one such industry?
– Yes; the match industry.
– That industry provides employment for a large number of male and female operatives. It is true that the unemployment problem in Australia is very acute, but the same conditions obtain in freetrade England as well as in other European countries. No industry is deserving of greater protection than the iron and steel industry. I should like to see it under government control. Because of the operation of the industrial plan in Russia, the iron and steel industry of practically every country will have still greater difficulties to face in the near future. Whatever may be said against the Soviet policy, we must admit that the originators of it had in view the interests, not of a certain section of the people, but of the nation itself. In Australia, despite a bountiful season, we are faced with a very difficult unemployment problem. We have had a record crop of wheat which we have been obliged to dispose of at unremunerative prices, and overseas prices for all our exportable products are at a low level.
We have all the means of production at our disposal, but unfortunately the financial cog in the machinery of production is not functioning satisfactorily. The producer is the man on the land,, the worker the man with the shovel and the plough. The tariff gives to the man on the land a home market, for his goods, and his principal trouble to-day is that the “purchasing power of many who would otherwise be consumers has disappeared. Production may be bountiful, but the essential complement of consumption is greatly diminished. Honorable members opposite say that the farmer is practically bankrupt. That is not due to the tariff, because the principle of protection isadmitted even by opponents of this, schedule. On this issue the only difference between the Government and theOpposition is as to the extent to which the protective policy should be carried. The Government believes that such dutiesshould be imposed as will give to industries -a chance to get on their feet. The iron and steel industry has been established for a comparatively short time. A great deal of capital is invested in it, and it requires a big market to enable it to pay overhead charges. The honorable member for Swan (Mr. Gregory) referred to the wages paid to the employees in the industry. The higher the wage the greater the purchasing power of the worker, and the better for the farmer. After all the farmer who is utilizing his laud to make a living for himself and his family employs very little labour, particularly since appliances for the saving of time and labour have come into general use. The wheat that is sold overseas gives a little employment to the wharf labourer. Some honorable members complain of difficulty in making ends meet with the allowance they receive; how much harder must be the lot of a man maintaining a wife and children on £3 7s. a week, or of a person receiving a dole of a few shillings a week! The further we decrease wages the deeper the country gets into difficulties. High duties are not the cause of unemployment, and the duties proposed by - the Government are not unduly high when compared with the following rates in other countries: - United States of America, £4 7s. 6d.; France, £4 6s. 9d. ; Italy, £9 13s. 6d.; Argentine, £7 12s.; Brazil, £7 15s.; India, £5; Canada, British 15 per cent, and foreign 25 per cent.; South Africa, British free, foreign 3 per cent. The Australian iron and steel industry is protected by duties of about 29 per cent., but it is, I suppose, of more recent origin than similar industries in the other countries I have mentioned. It requires time to get on its feet.
– When will it get on its feet ? ,
– Its development was retarded by the fact that, for sixteen years the Nationalists and kindred parties were in office in this Parliament. The fact must be remembered also that the iron and steel industry throughout the world is experiencing a depression. The honorable member for Forrest (Mr. Prowse) complained of the margins of 70 per cent, and 90 per cent, for skilled and i unskilled labour respectively. He says that the high wages paid in protected industries detrimentally affect the farmer; but if dairy labour were available for nothing cows would not give more milk. In a favorable season like the present they yield more milk, and the return to the farmer is better than in a droughty season when butter prices are high. The Australian worker is paying under the Paterson scheme and the Queensland pool a high price for butter in order to maintain certain standards in the dairying industry. The community is paying more for Queensland sugar than it would pay for the product of Java, but it is making that contribution towards the maintenance of the White Australia policy and high standards of living. It is the duty of this Parliament to increase employment whenever possible. The losses on the railway systems are due, not to the cost of locally-produced rails, or to the wages paid to our workers, but rather to over-capitalization and the long mileages through unproductive areas held by speculators who hope to reap the benefit of community-created values. Parliament should compel the land along the railways to return to the Government its full economic value. It is better to use rails produced in Newcastle than rails made in other countries. We are at least utilizing our own raw materials, and providing employment for our people. Why are so many people unemployed in this young country, having regard to the fact that a few years ago the Bruce-Page Government was promoting extensive schemes for development and the absorption of migrants from overseas? What has become of those schemes ?
– This Government has frightened capital out of the country.
– The honorable member surely does not intend that remark to be taken seriously. When this Government came into office there was not even a cracker in the cupboard. What capital was left in the country had not enough feathers to fly away. The honorable member for Swan (Mr. Gregory) spoke of the export of coal. I remind him that that ‘trade has fallen off largely because many of the ships that now come to Australian shores have been converted into oil liners. The steel industry, however, provides a good local market for coal.
.- I was very disappointed with the Minister’s presentation of the case for these duties. There is no more important industry in Australia than the production of iron and steel, nor one that hears more heavily on other industries. The committee might reasonably have expected from the Minister a fuller explanation of this proposal, the effect of which is to increase the duties upon the raw materials of all iron and steel manufacturers. Briefly, the position is that if we make a mistake in connexion with this item by imposing a duty at all excessive we definitely place a restrictive tax upon every other industry and a penalty upon every home in Australia. As this raw material is cheap or costly so will all engineering products be cheap or costly. Therefore, while the protection of iron and steel within Australia is of first-class importance the country would be better off without the iron and steel industry if its cost were excessive.
– Could- the country be better off without the iron and steel industry?
– In certain circumstances, yes; because an essential industry, which is at the very base of all manufacturing costs in a country, and is the foundation of every form of production in that country is desirable only if it can be established at a cost which the country can afford to pay.
The party to which I belong was responsible for the establishment of the iron and steel industry in Australia, and I think we are all exceedingly proud of the part we played in that regard. The industry cannot complain of any lack of consideration by this Parliament. Not only was it brought into being, and fostered, but in order to provide an outlet for its products this Parliament has also brought into being and fostered a great many subsidiary industries in iron and steel manufacture. The extraordinary bearing that these duties have upon other industries was indicated by the Minister when he said that if we accept these increases we must, as the schedule is further considered, expect to find a great many other increases in connexion with iron ‘ and steel products.The increases shown in this item are only the beginning of a great many increases affecting every kind of iron and steel manufacture in Australia; and as the item is of such special importance, we should have had from the Minister a far more complete case than that which he has thought fit to present to the committee. He said that the total duties, including the increases now being put on, amounted to an all-round ad valorem duty of 27-J per cent. I do not agree with his figures.
– That is the weighted ad valorem average.
– I am unable to see how the Minister brings the weighted ad valorem average as low as 27£ per cent., but in any case, it is only the beginning of the actual protection which the iron and steel industry is enjoying at the present time. For instance, to the 27i per cent, we must add the existing rate of exchange,- which is 33 per cent., and primage duty which is 4 per cent.
– The high exchange rate is only temporary.
– I shall make a proposal in connexion with that presently. Adding the exchange and primage duty to the 27i per cent, weighted average the real protection afforded to the iro’n and steel industry is now 64£ per cent. If the Minister holds that 27i per cent, in normal time is sufficient for this industry I submit that even without the increase now proposed, the exchange rate and the primage duty should be sufficient to enable it to get along very well indeed. It is true that no one can foresee how long the present high rate of exchange will endure, hut I think it is generally accepted that it is likely to continue for at least a year or two. If it should not a duty like this can be tabled by the Minister at any time the House is sitting. A schedule could be drafted and placed on the table in a few minutes. In connexion with an industry of so far-reaching importance as that of iron and steel, the very high rate of exchange prevailing at the moment should certainly be taken into consideration. On top of that of course we have the natural shelter due to transport charges. Then there are other considerations which favour the industry to-day. For instance, coal is very much cheaper than it was a 4 year or two ago, wages are substantially lower than they were, and everything points to a further fall in the cost of living which, in itself, will in turn reduce wages and cheapen the cost of production. I have, therefore, been very disappointed that the Minister did not accept the very fair suggestion made by the honorable member for Brisbane (Mr. D. Cameron) that if these increases are supported by honorable members of the Opposition - I do not say it is a condition to the support of a number of them - the Minister should order an immediate further inquiry by the Tariff Board or some other authority into the present-day costs of the iron and steel industry. The Minister said that because the last Tariff Board inquiry had occupied eighteen months and had cost the Government and the companies concerned a great deal of money, another investigation should not be asked for at the present time. I am sure that the honorable member for Brisbane did not suggest, nor do I, that there should be an exhaustive inquiry of the kind held five years ago by the Tariff Board. What we want for the committee at the present time is really an accountant’s investigation into certain costs of the companies. In the Trade and Customs Department there are skilled accountants who could do all that was necessary within , two or three weeks.
– They would need to inquire into the profits and balance-sheets of the companies.
– An investigation by an accountant should indicate the position, of the companies with regard to fuel and wages costs as compared with a few years ago, and what advantage is enjoyed because of the exchange position. Above all, we should have placed before us the present financial position of the great iron and steel companies of Australia* To me it is impossible to ask the committee to increase the cost of the raw’ material required by our engineering industries and trades, from the greatest manufactories down to the smallest garages, at the request of one or two millionaire corporations, without the Minister acquainting us with the financial position of those companies. That we should have that information is imperative. I speak as one who is sincerely anxious to support these increases if they can be justified. I have no greater wish at this moment than to see these great companies which have pioneered the iron and steel industry in Australia put on a basis to enable them to make satisfactory progress. But my responsibility to my electors and to the people and industries of Australia generally will not permit me blindly and in complete ignorance of the position of these companies, as I am at the present moment, to support these increases. It is a simple thing we are asking. We are told that these companies have not been prosperous in recent years. But what companies in this country have been prosperous within the last year or two? As I have already said during these debates, we cannot be expected to make a tariff to cover a period of depression. It would be obviously absurd for this Parliament to set out to prop up this or that industry at the expense of Australia, impoverished as it is at the present moment. We cannot take the immediate depression into our consideration.
We have not had a word from the Minister about the financial position of these great iron and steel companies. If he had told us of the capital employed, and given us a sketch covering the finances of these companies over the years and their profits and losses; if he had told us something about their efficiency and the relation of past costs of wages’), coal, and exchange to present-day costs, those who are friends of this industry would have been in a position to give an intelligent vote upon this item. But in the absence of such information we cannot do so. I shall not vote for any item on an insufficient case. If the Minister will change his mind and give an investigation, not a prolonged one, but one that will enable honorable members to- be in possession of the facts about the present costs and the financial position of the companies, the position will be quite different. I find it most unpleasant nol to be able to support these increases, justifiable though they may be. My difficulty is that I do not know that they are justified. There is nothing before the committee to enable me to form a judgment. We all have the very deepest respect for such ‘ companies as the Broken Hill Proprietary and the Australian Iron and Steel Company because of their enterprise and courage and first-class efficiency. I do not believe that they would come to this House with requests that could not be justified, and
I am led to that conclusion in a sense by the very modesty of these increases compared with other increases put before the committee by the Minister. Nevertheless, in the absence of reasons justifying these increases, I am unable to support them.
To-day the Minister made reference to the 44-hour week which is in operation in New . South Wales. It is no part of our duty at any time to make a tariff to fit in with any fantastic wage and hour alterations brought about by any State politician. The 44-hour week which is now the law in New- South Wales, to the great misfortune of many manufacturers in that State, was the outcome of a very rampant electioneering promise; but the Federal Parliament, in its tariff-making, will not chase changes in working hours or in anything else. At least I do not propose to do so, and I trust that other honorable members will adopt the same policy. It would be quite impracticable for us to keep on altering our tariff to meet changes of that kind. I am in complete agreement with those honorable members who point to the impossibility of rural Australia, which is a heavy purchaser of iron and steel products, being expected to maintain metropolitan or manufacturing industries that are paying a wage in engineering works and factories at least twice as much as rural industries can afford. We shall never return to full production at reasonable cost - a cost at which our great primary industries can compete successfully overseas - until there is some relativity between rural wages and wages in secondary industries. I do not suggest that manufacturing wages should be brought down to the level of rural wage.s, but I do say that there should be a point at which those wages should relatively meet, and until that is established this country -will never prosper as it should. To me it is no argument to say that wages in this industry in Australia are lOSs. 6d. a week of 44 hours, that in the United Kingdom the wages are 61s. for a working week of 48 hours, that in Prance the wage is 34s. 6d. a week, and in Belgium, 33s. 6d, I do not wish this country to pay the wage that is paid to the workers in Belgium, but, on the other hand, I do not wish to see our rural workers unnecessarily crushed in order to bolster up a fancy wage for our urban workers. I say that, although I represent an urban constituency. I repeat the offer made to the Minister that if he will promise an immediate inquiry into the C03ts of this industry to-day, as compared with two or three years ago, I shall support the increased duties under this division. I ask, not for a full inquiry by the Tariff Board, but for full information of comparative costs which can easily be gained by the accountants in the Customs Department.
.- The honorable member for Henty (Mr. Gullett) is one of those honorable members who hungered for the Government to bring down this tariff schedule so that they might have an opportunity to discuss it, but strange to say the whole tenor of his speech was a plea for postponement and further delay. Apparently, procrastination is the only thing that will please the honorable member at this moment. The duties on most of the items in this division are as they existed previously. Only a few minor items are subject to increased duties. I find myself in accord with the Minister’s proposals. It has been pointed out by the honorable member for Newcastle (Mr. Watkins) that most of the duties which are now under discussion are considerably lower than those recommended by the Tariff Board in respect of the iron and steel industry. Both the honorable member for Wimmera (Mr. Stewart) and the honorable member for Forrest (Mr. Prowse) spoke in opposition to these duties. They apparently would have us believe that the plight of our primary producers is entirely due to the operation of the Labour party’s protectionist policy, but they failed to give a single instance of a country that is not confronted with a problem similar to that facing Australia to-day. Take for instance the United States of America, one of the wealthiest countries in the world. There the farmers are in a predicament similar to that of the primary producers here. As a matter of fact, an. examination of the statistics relating to agriculture in the United States of America shows that during the last ten years the farmers in that country have been leaving their holdings at the rate of 30,000 per annum, the total number of those who have abandoned their farms being over 300,000. A journal called The Parliaments of the Empire contains a report of a debate which took place in the Parliament of Northern Ireland, and it shows conclusively that that country is faced with a position exactly similar to that confronting Australia to-day. The honorable member for Wimmera has said that the farmers qf Australia would be prepared to face competition from Soviet Russia, or any other country, if only they were relieved of the tariff burden which, he says, is crushing them to-day. He knows full well that he can give that undertaking without any sense of responsibility because no country in the world that has adopted a protectionist policy. is likely to remove entirely its protectionist tariff. Therefore, there is no point or force in the statement of the honorable member that the primary producers of Australia would be prepared to face unfettered competition if tariff restrictions were removed from them. The debate that took place in the Parliament of North Ireland dealt with the importation of Russian oats.
– I remind the honorable member that he has not yet touched upon the item of pig iron, which is now under discussion.
– The honorable member for Wimmera (Mr. Stewart) and the honorable member for Forrest (Mr. Prowse) used these arguments, and I am simply replying to them.
The TEMPORARY- CHAIRMAN.But those honorable gentlemen did make reference to the industries affected by these duties.
– That is quite true. The honorable member for Wimmera contended that if the primary producers were relieved of tariff restrictions, they would be prepared to face unfettered competition from overseas. It is extremely unlikely that this country would discard its protectionist tariff. We know from experience that the primary producers, when faced . with outside competition, immediately seek some measure of protection. I need only mention New Zealand butter, South African maize, and onions.
The TEMPORARY CHAIRMAN.I ask the honorable member to connect his remarks with the item under discussion.
– I shall do so. The honorable member for Forrest contended that the export trade in the iron and steel industry has dropped considerably because of the fostering of a number of other industries by means of a protectionist tariff. He said that if these heavy duties were removed, the industry would once again flourish. But I should like that honorable member to explain the position of Great Britain, whose export trade has fallen considerably. In January, 1929, the value of British exports was £66,000,000, but in January, 1930, it was only £37,000,000. None of the handicaps which the honorable member assumed are hampering the development of the iron and steel industry in this country are at the present time operating in Great Britain. Yet, notwithstanding all the advantages that that country is supposed to enjoy in respect of manufacturing, we find that its export trade has fallen nearly 50 per cent.
– That is absolutely incorrect.
– The figures that I have quoted are taken from the New Leader, which is available to the honorable member in the Library. That reputable journal shows that for the month of January, 1929, British exports were valued at £66,000,000, and for the month of January, 1930, at only £37,000,000.
– For purposes of comparison, the honorable member should take a full year and not one month in a year.
– I am unable to give the complete figures for those years. Perhaps the honorable member will be able to explain the reason .for this considerable drop in British exports. The iron and steel industry is one of the basic industries of this country. It employs a considerable number of workers, and unless it receives adequate protection at the hands of this Government, we may lose what is, at the present time, a valuable industry to Australia. The conditions which hamper the development of this industry are not peculiar to Australia.
They operate throughout the world. There has been a general falling off in the export trade and the internal trade of every country. The financial and economic depression is world-wide. A report of the Inland Revenue Commissioners of Great Britain shows that the high cost of production is due not so much to the wages that are paid in industry as to other circumstances.
– All the preceding speakers on that side of the chamber have said that it is a matter of wages.
– That is not so. The report of the Inland Revenue Commissioners for Great Britain, shows that the number of persons in that country chargeable with income tax in 1929-30 was 50,000 in excess of the number for the previous year, and also that in the year mentioned, over 130,000 estates, of a capital value of £538,000,000, were liable for death duties. The estates of 15 millionaires, valued at £32,000,000, were liable to pay duty in that year. Those are record figures for the Old Country. The rent of lands and houses, which in 1920 amounted to £182,000,000, reached a total of £260,000,000 in 1929-30. In ten years the net capital value of the estates passing at death increased from £327,000,000 to £538,000,000. No fewer than 127 millionaires died in that tenyear period, 1920-30.
Notwithstanding the depression in Great Britain there are still industries’ in that country which are being carried on with profit. Indeed, in many instances the profits are greater than ever before. It is not because of any inefficiency on the part of Australian workers that there has been a decrease in the volume of production, nor would any increase in their efficiency lead to the employment of a greater number of workers. In a statement made in the British House of Commons, the Lord Privy Seal, dealing with the conditions in the coal-mining’ industry of Great Britain, said -
In ten years the output of coal in America has gone up by 40 per cent, per head, while the number of workers has decreased by 7 per cent. Rationalization we cannot stop; we do not seek to go back to Ludditeism; we must have efficiency and must develop our economic resources.
The honorable member for Wimmera (Mr. Stewart) asked why the workers in this country should enjoy a higher standard of living than that of the workers of other countries. Australians claim the right to a higher standard of living, first, because their forebears left their native land to seek in a new country better economic conditions and greater opportunities than were possible in the older lands; and, secondly, because the immense resources of this country, as yet largely unexplored and undeveloped, together with the industry of its people, have enabled us to produce, per head of the population, more wealth than any other country. Since, by their labour, the workers produce and create that wealth, they are entitled to participate in the values thus created to a greater extent than are the workers in other countries, whose natural resources are not so great, and in which the industry of the people does not yield equivalent results. The honorable member said that while the people of Australia belittled other countries they were prepared to borrow money from them. We have gone to other countries for money because we have been opening up and developing this country and have not established secondary industries to supply the needs of our people. Those other countries, with their longer industrial experience, have been able to accumulate immense financial resources not possible in a country still in its initial stages of development. When our iron and steel industry has been so developed that we shall be able to supply our own requirements in the case of manufactured goods, there will be no need to import such goods from overseas, or to seek financial assistance outside Australia.
According to the London Statist of the 2nd May, 1931, there were 236,000 tons of idle shipping in British waters in 1929. That idle tonnage had increased to 892,000 tons by 1930. This year it totals 1,560,000 tons. The development of our iron and steel industry should enable us to engage in ship construction in this country. It is true that in Australian waters there are vessels lying idle, but that is no reason why Australia should ‘ not, in time, become independent of foreign vessels for the transport overseas of the things which we produce for export. We are justified in encouraging the shipbuilding industry in this country in the hope that before long the carriage of cargoes to and from Australia will be carried in ships’ bottoms constructed in Australia.
– At double the British price.
– That may be so, but I have yet to learn that the difference between the prices of vessels constructed in Australia and Great Britain is due to the difference between Australian and British wages. I think that it was Admiral Clarkson who, when giving evidence before the commission which inquired into shipping and freight charges, stated that the wages paid on the “ Bay “ line of steamers would not increase the freight more than 2s. 6d. a ton above that charged by vessels not on the Australian register.
– I was referring to the cost of the ships themselves, not to the wages paid.
– If every person employed on the vessels gave his services free the freight charges for the carriage of goods between England and Australia could not be reduced by more than 2s. 6d. a ton.
– I remind the honorable gentleman that we are discussing item 136 - iron and steel - not shipping.
– The Government is amply justified in submitting these duties to us for our endorsement, first, because in respect of at least nine of the items there has been no increase on the former rates; secondly because in anumber of instances the duties now under discussion are lower than those recommended by the Tariff Board after a full inquiry; and, thirdly, because the increases which have been recommended are necessary to protect this industry against the cheap importations from other countries. Honorable members on both sides have admitted that the iron and steel industry is the basic industry for a number of other subsidiary Australian industries.
When we have made ourselves independent of overseas importations, we shall be able to find profitable employment for large numbers of Australian workers.
It is not possible for our rural industries, or our natural industries, to find employment for all the people who inhabit this continent to-day. In every country in the world, both agricultural and industrial, it requires fewer persons than ever of the total population to produce the foodstuffs required by the nation. Primary industries find employment for the people of a country only when their product is used as the raw material for manufacturing industries. It is our bounden duty to find employment for our people; and the only way in which we can profitably discharge that duty is by the encouragement of secondary industries which will convert our raw materials into manufactured articles for consumption in Australia. The honorable member for Wimmera (Mr. Stewart) also said that on our primary industries was laid the burden of meeting our overseas obligations, amounting to £36,000,000 per annum, and that anything which hampered those industries made it more difficult for us to meet our obligations. Our overseas position is difficult to-day because the Bruce-Page Government adopted a policy by which our adverse trade balance was greatly increased. We piled up such enormous obligations overseas that our credit became exhausted, and consequently we are not now in a position to meet our immediate obligations.
– Was not the New South Wales Government responsible for a great deal of the indebtedness ?
– The New South Wales Government has been a contributor in the same way as have the others. That brings me to the point raised by the honorable member for Forrest (Mr. Prowse), who said that increased duties on this item, would increasethe price of steel rails’, thus imposing an additional burden on the finances of our railways. He added that there was no railway system in Australia paying its way at the present time. The honorable member forgot, however, that by far the greater part of the New South Wales railway system was laid down while that State was following a freetrade policy. The capital expenditure was incurred at a time when the New South Wales Government was able to buy raw material, such as steel rails, rolling-stock, &c, at world prices in the world’s markets. That, however, has not prevented New South Wales from piling up a greater railway deficit than any other State in the Commonwealth.
– How long ago is it since New South Wales enjoyed freetrade?
– Only about 30. years.
– The fact remains that only after federation did New South Wales enjoy the benefit of a protectionist policy.
– The honorable member’s time has expired.
, - I realize that it does not matter much what any one says on this or any other item so far as the voting is concerned. The Minister is at the head of an army of voters who will presently troop into the chamber, and carry this item for him. Evidently discussion on these items is unwelcome, and is regarded as unnecessary.
– Then sit down, and let us get the item through.
– The Minister for. Home Affairs (Mr. Blakeley), who is gracing the chamber with his presence for a few minutes in order to see how things are going, is restive because any one speaks to the item at all. He wants to bring in his voters and settle the matter straight away, without even the make believe of a preliminary discussion. I realize that that is what the Government wishes, but I do not propose to give a silent vote. I realize that this is a national industry; that it should be assisted. An industry of this nature should be built up and developed. It is a national and natural industry, and is entitled to just and reasonable treatment; but equal care must be taken that it should not be developed to the detriment of other industries. In considering this item, we have to ask ourselves whether the measure of assistance granted by the last Government was sufficient. I am of opinion that it was, and that no further assistance is necessary than was granted in the 1921-28 tariff. I am convinced that the industry can be developed and maintained with that degree of assistance, and that any further assistance may only tend to retard the progress of Australia. The Minister admits that the inquiry on which these proposed increases are based took place five years ago. The Tariff Board’s report is dated 1926. I ask honorable members to pause and consider what tremendous changes have taken place during the last five years. Are they prepared to concede that the conditions which existed five years ago should be taken as the basis upon which assistance is to be granted to the iron and steel industry to-day?
– Was the 1926 report submitted to the House at the time?
Mr. ARCHDALE PARKHILL.Yes.
– The honorable member is mistaken ; it was never submitted.
Mr. ARCHDALE PARKHILL.Although I answered the honorable member’s interjection, I am bound to say that I do not see its relevancy to the matter under discussion, because the Minister has already admitted that the proposed increases are based on the 1926 report, and he prides himself on the fact that, in framing the duties, he has not gone so far as the Tariff Board recommended. Another inquiry should be instituted at once. Whenwe realize that the iron and steel industry provides the raw material for a great many other industries, and that its products enter into the manufacture of thousands of necessary commodities, we should not hesitate to spend a few pounds in the conduct of such an inquiry. The prosperity of the country is bound up with the iron and steel industry, and we should endeavour to arrive at a fair working arrangement which would do justice, not only to the iron and steel industry, but also to other industries which are dependent upon it. Compare the attitude of this Government and this Parliament to the iron and steel industry with that adopted by the Parliament of Canada to the industry as carried on in that dominion. Here the discussion is being carried on in a half empty chamber, with the Government’s supporters quite uninterested in the proceedings. In Canada a most searching inquiry was made into the industry in all its ramifications. The investigators learned what could be economically manufactured in the country, and what it would be better to import from Great Britain. A schedule was then drawn up in which a duty was placed on the ordinary commodities which could be made by mass production in Canada as cheaply as they could be imported. Then, in a separate schedule, were placed such things as rolled steel, for which there was only an occasional demand, and it was arranged that they should be imported from Great Britain on” preferential terms. In the preparation of this report, assistance was obtained from those government departments interested in the production of iron and steel for railway purposes, from accountants and experts of the various firms concerned with the iron and steel industry, and from the importers of iron and steel commodities. In this way a national report was obtained which should remain applicable to the industry and its needs for many years to come. Again, compare that with the way in which the matter is dealt with in this chamber. The Minister comes forward and reels off a few details supplied to him by departmental officers, but refrains from giving to the committee any reasoned statement concerning the industry or its prospects. In effect, he throws the items on the table, and says, “ There they are “ ; and he gets his supporters to come in and vote “them through.
We were told during the great coal stoppage that if the men would return to work at a lower rate of wage, and if the price of coal could be reduced by 5s. a ton, the cost of producing iron and steel would be greatly lessened. We were further told that if a 48-hour week were worked, and an alteration made in the Workers Compensation Act as it applied to those working underground, production costs would be still further reduced to the benefit of the iron and steel industry. Most of those things have now been done, but with what effect on the industry? The increased exchange rate has placed its competitors under a further grievous disadvantage, and wage rates generally have been reduced. There has been a general reduction in the cost of living, which affects the iron and steel as well as other industries, and in the payments under the Workmens Compensation Act with respect to silicosis. In these circumstances it is un- reasonable for the Minister to expect the committee to agree to the imposition of higher duties. The iron and steel industry cannot and does not expect all other industries in this country dependent upon it to pay tribute to it, and I am not prepared to support higher duties merely on the evidence submitted by the Minister. The Broken Hill mining industry is the only industry closely related to the iron and steel industry of which I have anything resembling an intimate knowledge. Like the Minister, I have had the privilege of visiting the Broken Hill mines, and I frankly admit that I was struck with the extraordinary efficient manner in which that industry is being conducted. During my visit I inspected the plants over which this company holds patent rights throughout the world, and I also saw men from our own universities actively engaged in the most highly scientific branches of its activities. In these circumstances, I do not hesitate to express my admiration of the way in which that industry is carried on. I also had the privilege of inspecting the modern works at Port Pirie, in which, I am proud to say, 98 per cent, of the workmen are British, and which is under the direction of a managerial staff whose average ages do not exceed 38 or 40 years. In this branch of the industry there are also young engineers and other professional men from Australian universities, who are successfully carrying on the important scientific work upon which they are engaged. In view of these circumstances, I am anxious to assist the industry, but I wish to be in possession of reasons other than those submitted by the Minister before supporting the imposition of such high duties on the products of the iron and steel industry. I believe that the industry can be conducted in the “highly efficient manner in which it is now controlled without these additional duties. This industry has made very rapid progress in this country, and has reached a stage of development which is not excelled in any other country. It has huge works in Australia, its activities extend to other countries, and in some respects its products compete at world’s parity prices. Notwithstanding this, the Minister would have us swallow these schedules without further explanation. Honorable members opposite have referred to the action of previous governments; it is necessary to remind them that the industry has reached its present stage of development under the protection afforded by previous governments. As a matter of fact, the present tariff has been operative for only several months.
– For eighteen months.
– Does the Minister say that for eighteen months Parliament has been prevented from discussing these duties, and that during the whole of that time this industry has, so to speak, been under the control of his department? During the. time the present Minister has been in control of the department, the number of employees in many industries may not have decreased ; but, generally it is a fair thing to say that it will be found that during the regime of the Scullin Government more men have been thrown out of employment than have been provided with work. The Minister’s refusal to agree to a further inquiry is altogether unreasonable. In view of all the circumstances, I suggest that a further investigation should be made. A good deal has been said with respect to the payment of high wages. I am not opposed to the payment of high wages if they are earned. I do not care how much a man is paid provided he earns what he receives. But we have to remember that wages in an industry such as this can be fixed at an unnecessarily high rate, with the result that the costs of commodities are increased to such a point that there is no sale for them. High wages have resulted in excessive costs.
– Which are due to exorbitant profits.
– The honorable member for East Sydney (Mr. Ward), like other honorable members opposite, is prepared to support every high duty placed before the committee. He has no more idea of the profits made in the iron and steel industry than the man in the moon. There has been no inquiry into the industry for some years, and the Minister does not think that such an inquiry is necessary. He has tabled this schedule knowing that the supporters of the Government will vote for the duties whatever they may be. The manufacturers of Great Britain have to compete with the products of continental countries, the borders of which are only 26 miles from Great Britain. Continental manufacturers are in a most favorable position in the matter of securing orders, and are able to leave Great Britain with a great army of unemployed. The honorable member for Corio (Mr. Lewis) quoted the exports of Great Britain for one month in one year and one month in another year; a more puerile way of submitting statistical information has never before been adopted. In a review of Britain’s economic condition, The Index, a publication of the New York Trust Company, concludes that - ,
It is clear that Britain’s post-war achievement has been much more considerable, and that her fundamental economic strength so much greater than her pessimistic critics allow. . . On a per capita basis Britain is still the foremost exporting country in the world, and if real, rather than nominal, values are taken into account, possibly the wealthiest.
When we hear honorable members such as the honorable member for Corio decrying Great Britain and speaking about her as a country where so many persons are on the dole-
– I rise to a point of order. I regard the remark of the honorable member for Warringah that I was “decrying Great Britain “ as offensive, and I ask that it be withdrawn.
– If the honorable member for Corio regards the remark as offensive it must be withdrawn.
– Do I understand that I am to withdraw the word “ decrying “ because it is unparliamentary ?
The TEMPORARY CHAIRMAN As the honorable member for Corio regards it as offensive it must be withdrawn.
– I withdraw it. It is all very well for the honorable member for Corio and other honorable members to criticize Great Britain and to animadvert upon the payment of the dole as evidence of Britain’s decline. The late Lord Balfour and Mr. Winston Churchill described the position of Great Britain in the way it is explained in the article from which I have read a brief quotation. The payment of the dole in Great Britain is misunderstood. Many of the men on the so-called dole are simply receiving payment from a national unemployment insurance fund to which they are entitled. The honorable member for Corio said that as we produce great wealth in this country those engaged in its production are entitled to high wages. He referred to those men who had left older countries to settle in this new land because of the greater opportunities it offers. Statements of that kind may be all right on the Yarra bank, but they are of no consequence in a deliberative assembly. The point is that we do not produce sufficient wealth in this country to pay these high wages, liberal pensions, and generous social services that have been handed out so indiscriminately. To combat the argument that favours the continuance of the existing high wages in the iron and steel industry, irrespective of the consequences, I draw the attention of the committee to the excessive cost thus imposed on all associated industries which prevents their competing with world’s parity, and precludes their paying a reasonable wage.
The honorable member for Herbert (Mr. Martens) claimed that the introduction of machinery is responsible for many of the labour difficulties that confront modern civilization. I submit that that is an unsound hypothesis. If we went in for massed production on a large scale there might be something in the contention, but at present our use of machinery in industry has not the effect he claims. As no evidence has been supplied by the Minister in support of this increase, and as the duties granted in 1928 were to my mind sufficient to establish the industry satisfactorily in Australia, I do not intend to support this item.
.- As I listened attentively to the opening remarks of the honorable member for Warringah (Mr, Parkhill) I began to take stock of myself, and wondered why I was supporting something to which the honorable member appeared to be prepared to give his support. There was, however, as usual, a “ but “ in the business ; the honorable member went on to say that the duties should be made what he termed to be “ reasonable.” I point out that the duty now granted by this Government is not as liberal as that recommended by the Tariff Board in the report that it submitted to the BrucePage Government in 1925. Why did not that Government act upon those recommendations? Incidentally, I do not think that the honorable member for Warringah knows very much about the iron and steel industry. I am confident that he does not know what pig iron is, or how many “ hams “ come out of a ton of that commodity.
The iron and steel industry deserves every possible encouragement. It is the lifeb’lood of Newcastle and the surrounding districts, and employs approximately 4,000 persons when it is in full swing. Further, it uses approximately 1,000,000 tons of coal per annum. The BrucePage Government, in conjunction with the New South Wales Government, headed by Mr. Bavin, and the South Australian Government, led by Mr. Butler, urged that the industry should be assisted by a reduction in the price of coal, to be borne only by the workers in the latter industry, in the form pf a reduction in wages. In its report of the 30th June, 1925, the Tariff Board said -
In the Tariff Board Report of 30th June. 1.925, page ]3 - In anticipation of dealing ultimately with the request for increased duties by the iron and steel industries of the Commonwealth, which -was then before them to be dealt with at a later stage, said by way of comment -
It is obvious that any alteration in the upward direction in the duties on the basic manufactures of iron and steel would necessitate a similar recasting of the duties already fixed on the whole of the engineering and allied interests.
Accepting the principle here laid down and taking into account that the long and very complete revision of the duties which were fixed in the Tariff Revision of 1920-21 had established a proper relationship between the basic iron and steel duties and the engineering and allied interests.
We were in a position to show the results on all the items the iron and steel industry sought duties upon (but thought two examples would suffice).
The anomaly then created, we thought, should be adjusted and subsequently it waa by the schedule of duties under the present customs tariff.
The relationship of the duties on “ Basic Metals “ and the “ Engineering and allied interests “ were profoundly disturbed as from 3rd September, 1925, as the following statement, submitted at the time disclosed.
It has to be noted that the end result of the statement “ Pig Iron “ comes out at 34s. 5d. per ton (British preference) as against 25s. per ton under the existing tariff and on “Merchant Bar” 74s. 9d, per ton (British preference) as against 80s. to-day.
The industry of Lysaghts Limited, manufacturers of galvanized and sheet iron, is subsidiary to our great iron and steel industry, and ‘its application for adequate protection is referred to in the report of the Tariff Board of 1925 as follows : -
The applicants have asked for an increase in duty to £5 per ton against the United Kingdom and £7 against other countries. While the board is in favour of further protection of this industry, it is against increasing the present duty unless by so doing, the local manufacturer will undertake to supply requirements outside of New South Wales, as well as within that State. It would be unfair, in the opinion of the board, to users in Western and South Australia to be saddled with a higher duty on a necessary commodity unless supplies could be locally secured.
When the Australian manufacturers have laid down a plant competent to reasonably cope with the requirements of the Commonwealth, the Tariff Board will be prepared to recommend that an adequate duty be substituted for the present and suggested bountycumduty protection.
Lysaghts Limited extended their plant so that it is capable of manufacturing 80,000 tons of galvanized iron ; but it is now found that there is only sufficient work to keep it going half time, with an output of 30,000 tons per annum. That firm has fulfilled all the conditions laid down by the Tariff Board. A duty of £5 10s. a ton was promised in 1921, but later the Tariff Board recommended that that should be reduced to £4 10s. a ton. The employees in the subsidiary industry number 964. Then there are 640 men working on iron bars at the works of the Broken Hill Proprietary Limited. Directly and indirectly, taking into consideration those who are engaged in Tasmania and South Australia, 2,500 men are affected by that industry. The Electrolytic Zinc Corporation in Tasmania disposes of 20 per cent, of its output to the industry; and its iron ore supplies are obtained from South Australia. Thus the industry either benefits or caters for the requirements of every State inthe Commonwealth.
In the amount of protection granted to the industry, Australia compares unfavorably with other countries, where the rates of duty for galvanized iron are as follows : -
South Africa - Free British, 3 per cent, foreign ;
Canada - 15 per cent. British, 25 per cent. foreign ;
India- -£5 per ton.
Brazil - £8 15s. per ton;
Argentine - £7 12s. per ton;
Italy - £9 13s.6d. per ton.
France - £46s. 8d. per ton;
United States of America - £4 7s.6d. per ton.
It should be pointed out that South Africa, which does not manufacture galvanized iron, allows the British product to enter free of duty. There should, therefore, be no complaint regarding the rates which a young country like Australia has imposed in order to build up a secondary industry. It is apparent to me that some honorable members opposite are more concerned about building up industries overseas than in Australia.
That the manufacturers are not taking advantage of the consumers, as the honorable member for “Warringah (Mr. Parkhill) and other honorable members would suggest, is shown by the following comparative prices in 1920 and 1930: -
Those reductions are considerable, and they prove conclusively that the manufacturers are endeavouring to cater for the requirements of Australia at reasonable’ rates. The amendment of the honorable member for Swan (Mr. Gregory) should be rejected by the committee, and the item agreed to.
– This is one of the protected industries from which South Australia derives some benefit that offsets the cost to her of other protected industries, and on that account I consider that it is necessary for me to place on record my reasons for not being able to support the increased duties proposed by the Minister.
There are several reasons for the industry being particularly suitable for Australian conditions. All the materials that it uses are Australian, and the cost of the finished article represents practically the cost of labour only. The industry does not use materials which, if not worked up locally, would be exported. It is an industry which leads to almost entirely new production. Yet I am not able to support the increased duties, because I believe that it is not fair to ask the community to bear them in view of the relative standards of prosperity that are enjoyed in different parts of Australia to-day. Another reason is that if the duty is used by the manufacturers to increase prices, the effect must be to restrict the use of iron products in Australia, when the reverse process of increasing employment is desired. Some honorable members opposite have said that they do not believe that if wages were very greatly reduced a larger number of men would be employed. This industry has proved how easy it is to demonstrate that the reverse is the case. One of the principal products of the industry is galvanized iron. Unemployment is probably as great in the building trade as it is in any trade in Australia. On account of the high rate of exchange, a good deal of money is being left in Australia by oil companies and other overseas firms which trade with Australia; and if building costs were lower, some of that money would undoubtedly be used in the erection of buildings in this country for the accommodation of those firms.
In some cases that is actually being done with costs as they are. To-day one of the principal building jobs in Adelaide is the big building for the Shell Company on North-terrace. Unfortunately, owing to the high costs and other circumstances, there is little prospect of big companies investing their money in Australia in extending their plant and buildings, even when they are holding funds here, because of the exchange rates. We must make the conditions reasonable before this will be done.
The cost of iron and steel products is important to farmers and graziers. It is not fair that the requirements of these people in this direction should be made more expensive because of unnecessarily high duties. The Australian producers of iron and steel have secured practically the whole market for ordinary iron and steel products. In connexion with galvanized iron, for instance, the Tariff Board reported as follows at page twelve of its report on this subject : -
Outside tlie “Steel agreement” the ‘Broken Hill Proprietary Company Limited recently made a further reduction of 4s. per ton in the price of steel to Lysaghts on account of the lower production costs resulting from reductions in the price of coal at the termination of the recent industrial dispute on the coalfields.
It will be seen, therefore, that the position of the Australian producers, in comparison with the position of overseas manufacturers, is relatively better to-day than it was some time ago. It is true that the manufacturers may not increase their prices if the higher duty is approved; but when there is no need to increase the duty we should not increase it. On the whole, I believe that the iron and steel manufacturers have given the Australian public a fair deal; but the fact that there has been no abuse in relation to prices in the past is no justification for granting additional protection when the conditions are relatively better than they were some time ago.
Much has been said during this debate about the effect of the price of galvanized iron on the man on the land, and particularly on the man who has recently settled in new country. In this connexion I quote the following extract from evidence given by Professor Richardson before the South Australian Disabilities Commission : - generally, farmers in the Mallee districts are men with limited capital, who are unable to provide shelter for their implements, and must necessarily accept an increased depreciation charge rather than a higher capital cost. If the price of galvanized iron is high the new settler is very seriously handicapped, for he cannot properly protect his implements.
The excessive price of iron and steel also has a serious effect upon the price of implements as the following letter, published in the Argus in March of last year, will show : -
“IS PROTECTION OVERDONE?”
Sir, - We recently imported 10 tons of mild steel to make agricultural implements. The costs of the steel at the factory where it was manufactured amounts to £6 1 5s. a ton. The customs duty at Melbourne was £6 10s. a ton; sea freight and other shipping charges, £3 3a. a ton; rail freight and cartage to country station, £1 7s.7d. a ton, making the total costs at our factory £17 15s. a ton for raw material, valued at £6 15s. at the foreign factory. - Yours, &c,
Country Manufacturer. 7 th March.
As there is about a ton of steel in the more expensive farming implements, it is clear that protection of the kind we are now considering has the effect of seriously raising the cost of farming implements. Our manufacturers have secured practically the whole of the local market for the common types of iron and Steel, and this extra duty will affect principally a few sizes not yet rolled in Australia. In a time when there is general depression throughout the country it is not fair to increase duties. The effect of doing so will be to hit the man on the land, and to protect certain shel tered and favoured industries. If these duties are necessary for any reason, it is because of the extravagant policy followed by Mr. Lang in New South Wales. Some industries operating in country districts, of which honorable members opposite, who represent rural areas know a good deal, are paying almost contemptible wages in comparison with the wages being paid in the iron and steel industry. The people in steel industries should not have their already low standard still further depressed in order that Mr. Lang may maintain a 44-hour week, child endowment and many other privileges in New South Wales.
– Does not the honorable member believe in those things?
– They are highly desirable if the country can afford them; but they are all wrong when they have to be paid for by industries which are operating on wages only about one-third of those paid in the iron and steel industry.
– The honorable member believes in paying our interest abroad whether we can afford to pay it or not.
– I believe in reducing our interest rates in a proper way. The honorable member for Newcastle (Mr. Watkins) and the honorable member for Hunter (Mr. James) gave us some important figures in regard to the Canadian iron and steel industry, which the Minister omitted from his statement. Wages and conditions in Canada are at least as good as those in Australia; but their iron and coal deposits are not as good as ours. Moreover, the Canadians are closer to the competition of Europe and America than we are. Yet their iron and steel industry, which is considerably bigger than ours, is able to carry on with a 15 per cent, duty against British competition, whereas we are being asked to agree to a duty 60 per cent, above the 15 per cent, of Canada - that is to say 25 per cent. The increase in the duty is not great compared with that on most items of this schedule but it applies to some of the most essential commodities required by other industries. The increase is not vital to the continuance of the iron and steel industry, and I cannot support this extra impost on the general public, and, particularly, on the primary producers. I hope that, at any rate, some of the honorable members opposite who represent primary-producing districts will have a sufficiently keen appreciation of the true interests of their constituents to vote for the amendment.
Question - That the amendment (Mr. Gregory’s) be agreed to - put. The committee divided. (Temporary Chairman - Mr. Keane.)
Majority . . 13
By omitting the whole of sub-item (c) and inserting in its stead the following sub-item: - “(c) (1) Bar, rod other than Wire rod in coils, angle, tee; bars of fancy pattern in the state in which they leave the rollers, per ton, British, 80s. ; intermediate, 110s.; general, 130s.;
(2) Wire rod in coils, per ton, British, 44s. ; intermediate, 65s. ; general, 80s.”
– I move -
That the item be amended by adding, after item (c), the following: - “And on and after the 11th June, 1931 -
(1) Bar, rod other than wire rod in coils, angle, tee; bars exceeding one-eighth of an inch in thickness, of fancy pattern rolled direct from the billet bar or rod and in the state in which they leave the rolls, per ton, British, 80s. ; intermediate, 1 10s. ; general, 130s.
The proposed amendment is purely departmental. The intention was to admit fancy bars, provided no processes other than rolling from the billet bar or rod had been effected. The present wording, however, leaves it open for sheet metal to be moulded to a shape, and admitted under this item. The proposed wording will ensure that the intention will be carried out.
.- When important amendments are to be proposed, the Minister ought to have them circulated among members of the committee.We are entitled to at least half an hour’s notice of such amendments.
Amendment agreed to.
Motion (by Mr. Brennan) proposed -
That the House do now adjourn.
– I should like to know if inquiry has been made to ascertain the reason for the higher cost of explosives in Australia as compared with prices overseas. This is a matter which I raised the other night and the Attorney-General then promised to have the matter investigated.
– Inquiries are being made and I hope to be able to furnish the necessary information at an early date.
Question resolved in the affirmative.
House adjourned at 10.42 p.m.
Cite as: Australia, House of Representatives, Debates, 10 June 1931, viewed 22 October 2017, <http://historichansard.net/hofreps/1931/19310610_reps_12_130/>.