House of Representatives
16 September 1931

12th Parliament · 1st Session

  1. House of Representatives
  2. 12th Parliament
  3. 1931

The House ofRepresentatives met at 3 p.m.

Mr. Speaker (Hon. Norman Makin) took the chair, and offered prayers.

page 3

DEATH OF THE HONORABLE HUGH MAHON

Mr SCULLIN:
Prime Minister · Yarra · ALP

. -by leave - Since honorable members last assembled in this chamber the Hon. Hugh Mahon, a member of the first Parliament, died in Melbourne, on the 28th August last.

The late honorable gentleman was elected in 1901 as the representative of the division of Coolgardie, in Western Australia; he subsequently became the representative of Kalgoorlie, in the same State, and was a member of the Commonwealth Parliament for a period of fourteen years. He first attained ministerial office in 1904 as Postmaster-General, and held office in subsequent governments as Minister for Home Affairs, Assistant Minister for External Affairs, Minister for External Affairs, and Acting Attorney-General. As a Minister of the Crown, his very wide experience and knowledge were of great value to the Commonwealth. It is, therefore, fitting that an appreciation of the public services which the late honorable gentleman rendered to his adopted country should be placed on record by the House. Mr. Hugh Mahon was held in high personal regard by a wide circle of friends, of all shades of political opinion. His private life was exemplary. He brought to bear upon the work with which he was entrusted a very great intellect, and rendered inestimable service to the community during the period in which he represented the public in the National Parliament of Australia.

One by one, Mr. Speaker, the foundation members of this Parliament are passing away, and it is sad, indeed, to have to record the death of another. I sent a message of condolence to the late Mr. Mahon’s widow immediately on hearing of his death; and now, in the Parliament of which he was one of the first members, I move -

That this House expresses its deep regret at the deathof the late Honorable Hugh Mahon, a former member of the House of Representatives and Minister of the Crown, places on record its appreciation of his meritorious public service, and tenders its profound sympathy to his widow and family in their bereavement.

Mr LYONS:
Wilmot

.- I second the motion. Although the late Mr. Hugh

Mahon has not within recent years taken a part in the political life of this country, arid was not personally known to many of us who have recently entered this Parliament, his name, will remain in the memory of the people of Australia. He showed outstanding ability as an administrator, and demonstrated qualities of loyalty to his colleagues. However much some may have disagreed at the time with views expressed by the late honor.able gentleman, all must give him credit for outstanding courage in the expression of the principles he espoused. In their defence he was prepared to make any sacrifice, and to incur any penalty. The work that Mr. Mahon performed as an administrator will stand to his credit for all time. I join with the right honorable the Prime Minister in expressing on behalf of this House our deepest sympathy with Mr. Mahon’s widow and family in their bereavement.

Mr HUGHES:
North Sydney

.- I desire to associate myself with the tribute that has been paid to the late Hugh Mahon by the right honorable the Prime Minister and the Leader of the Opposition (Mr. Lyons), and with the expression of regret and sincere sympathy with his widow and family in their bereavement.

I knew Mr. Mahon very well. During more than fourteen years he and I were members of the same political party, and for many of them we were ministerial colleagues. I had, therefore, ample opportunity to judge of his capacity and character. He was a man of high ideals and of great capacity. As a parliamentary debater he stood in the front rank. As an administrator he was not excelled by any man with whom I have had dealings. No man could state a case with greater clarity, lucidity, and cogency than he. His mind was logical, and his arguments convincing. He was a man of strong convictions, and with him love of country was an all-absorbing passion. In the long years of our association it sometimes happened that we did not see eye to eye, but even when our differences had. reached their climax, I did riot cease to respect and to admire his many great qualities. I join with the previous speakers in expressing deep regret at his death, and in extending to his widow and family deep and sincere sympathy.

Mr CURTIN:
Fremantle

.- As one of the representatives of the State in which the late Mr.- Mahon lived for many years, and in which were situated the constituencies: that he represented in this Parliament, I feel that I shall fulfil the desire of the people of that State in associating myself with the motion that has been moved by the right honorable the Prime Minster.

Mr. Mahon was not only a foundation member of this Parliament, but, in a very real sense, can be described as one of the foundation advocates of the federal spirit in Western Australia. He took a prominent part not only in the work of this Parliament in the initial years of its existence, but also in the public activity which resulted in its being brought into existence. He was held in the highest esteem by both his political friends and those who differed from him. In Western Australia he was known as a strongminded man. Doubtless, he excited fierce criticism because of the definiteness of his views; but he was distinguished for his courage, and in Western Australia he won the respect of the whole community. Personally, I valued his friendship very highly. I found him one who could be relied on to help in any difficulty. Not only on behalf of the State of Western Australia so far as I can speak for it, but also on my own account, I express very deep sorrow at his passing.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

.- 1 am aware that in the course of my remarks I shall depart from what has been the customary practice of this House. There is an old saying, de mortuis nil nisi bonum. The late gentleman, although for a considerable number of years he represented a proportion of the electors of Western Australia, adequately, and possibly, well, ultimately fell foul of Australian sentiment. I feel under some restraint in making these remarks. With their general knowledge of the deceased gentleman, honorable members can themselves decide whether this Parliament should place on record an expression of its appreciation of his public services, in view of the fact’ that he #was expelled from this House. I regard it as my painful duty to draw attention to this matter.

Mr Scullin:

– The honorable member was not compelled to do so.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– I consider it to be my duty.

Mr Scullin:

– A mistaken sense of duty.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– I do not desire to initiate a debate on this matter, but considering the circumstances-

Mr James:

– These remarks are in very bad taste.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– I ask honorable members opposite not to make my task more difficult than it is. I know that my action in expressing an opinion different from that indicated in the motion submitted by the right honorable the Prime Minister (Mr. Scullin), and seconded by the Leader of the Opposition (Mr. Lyons), is unusual, but, personally, I must dissociate myself absolutely from the motion. Notwithstanding that the deceased gentleman was formerly a member of this House, I do not desire to be associated in this expression of regret.

Dr EARLE PAGE:
Cowper

.- I associate myself, and all the members of the party that I have the honour to lead, except the honorable member who has just spoken, with this expression of regret at the death of the late Mr. Mahon, who was undoubtedly a distinguished member of this House. He was, too, a prominent servant of the public, having engaged for many years in vigorous public activities. His fame as a writer and his prestige as an administrator are well known. He is entitled to the thanks of the community for the services he gave to it. The deceased gentleman fearlessly made his views known, and, as a result of that expression of opinion this House took certain action. Now that the fell hand of death has been laid upon him, it is not for us to raise again a question that has long ago been dealt with. For. whatever he may have been censurable, he has suffered. Whether he was right or not is now but a matter of opinion.

Question resolved in the affirmative, honorable members standing in their places.

Motion (by Mr. Scullin) agreedto -

That Mr. Speaker be requested to transmit the foregoing resolution to Mrs. Mahon.

page 5

QUESTION

FINANCIAL POSITION

Conference of Commonwealth and State Ministers

Mr LYONS:

– Does the Prime Minister intend to make a statement to the House conveying to honorable members the results of the recent deliberations of the conference ofCommonwealth and State Ministers in Melbourne, and will he make available the report of the Unemployment Secretariat, summarized reports of the budgetary position, and other material presented to the conference?

Mr SCULLIN:
ALP

– I propose to make a brief statement to the House on the matter to-morrow, and regret that owing to the absence of certain details I am not ready to make that statement to-day. As soon as I am able to get copies of the two reports referred to, printed or roneod, they will be made available to honorable members.

page 5

FINANCIAL EMERGENCY ACT

Wages and Conditions

Mr.BEASLEY.- Will the Minister for Defence (Mr. Chifley) inform the House about, or supply a list of, the arbitrary cuts in wages or alterations in conditions of employment, that have been made by him or the Government under the Financial Emergency Act?

Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP

– Most of the reductions made as the result of the power delegated to me under that act have related to allowances and travelling expenses. It would probably take some time to prepare a list, but I shall endeavour to supply the information.

page 5

QUESTION

WOOL TRADE

Dr EARLE PAGE:

– Has the Prime Minister noticed in to-day’s press that Japan is transferring its purchases of wool from Australia to South Africa, and if so, does the Government propose to take any action to retain the valuable trade hitherto done with Japan?

Mr SCULLIN:
ALP

– I have noticed the report in the press. I cannot vouch for its accuracy, and I do not know whether the right honorable member can do so. If he can offer any suggestion to enable us to safeguard Australia’s interests in this matter, the Government’ will be glad to act upon it.

page 6

HEALTH CONFERENCE

Maternal Hygiene and Children’s Welf a re.

Mr.CURTIN. - Have arrangements been completed for the holding of a conference to consider maternal hygiene, and what bodies is it proposed to invite to such a conference? Have any arrangements been made to reimburse the delegates for their expenses, and is it intended by the Commonwealth Health Department to make a recommendation to the conference for an amendment of the Maternity Allowance Act?

Mr McNEILL:
Minister for Health · WANNON, VICTORIA · ALP

– The department had under consideration the calling of a conference to discuss maternal hygiene and child welfare, and to draw up a programme to enable eminent medical men and professors to discuss those important subjects. Invitations were sent to upwards of 100 persons interested in children’s welfare, such as representatives of the Bush Nursing Society, the British Medical Association, and the Mothercraft Society, as well as many eminent medical men and professors. It was felt that a conference of that nature would have beneficial results. Our great bush nursing scheme has borne good fruit, and the delegates representing the societies to which I have referred, in attending such a conference, would have the benefit of hearing the opinions and advice of the best medical experts in Australia. The Government decided to proceed with the conference; but, unfortunately, it was found that certain delegates living in outlying parts of Australia could not attend at the present time. It has therefore been decided to postpone the conference temporarily. The conference cannot be held this year, but it will probably take place early next year. At this stage, no promise can be given that the fares of delegates travelling to the conference from distant centres will be paid by the Government.

page 6

QUESTION

CONVERSION LOAN

Mr LATHAM:
KOOYONG, VICTORIA

– Is it the intention of the Prime Minister to present to the House a statement showing the total amount of loans unconverted in connexion with the recent conversion proposal, and, in particular, the amount of federal loans unconverted, showing in detail the amount of each federal issue unconverted and the several dates of maturity ?

Mr SCULLIN:
ALP

– All the information regarding unconverted loans that the Government can gather will be made available to honorable members as early as possible.

page 6

QUESTION

STATE SAVINGS BANK OF WESTERN AUSTRALIA

Mr LAZZARINI:
WERRIWA, NEW SOUTH WALES

– Will the Treasurer make available to the House the full text of the agreement under which the Commonwealth Bank has absorbed the Government’ Savings Bank of Western Australia ?

Mr THEODORE:
Treasurer · DALLEY, NEW SOUTH WALES · ALP

– When available, a copy of the agreement will be tabled for the information of honorable members.

page 6

QUESTION

POTATOES FROM TASMANIA

Mr GUY:
BASS, TASMANIA

– In the Melbourne Herald of the 12th September, the following statement appeared : -

POTATO BAN LOSES WORK FOR 100

£12.000 Factory Idle.

Plant to be Sold saysManager.

Sydney, Saturday.

Smith’s Potato Crisps Ltd., after spending £12,000 inerecting a factory in Melbourne which would have given employment to 100 persons, finds that it cannot proceed with the project because the potatoes it requires cannot be imported from Tasmania. The cha irman of the company (Mr. Craig) stated to day that the only potatoes suitable for the firm’s machinery and to give the necessary standard of product, were Tasmanian brownells. “ Very Unfortunate.” “ The company,” he said, “ went to the expense of erecting the factory, but later it was advised by the Victorian Agricultural Depart ment that these potatoes could not be imported, apparently by some arrangement between the Victorian and Tasmanian Govern ments. Although there seems to be no published embargo, these potatoes cannot be obtained in Victoria. There is nothing left to do but to dispose of the plant as bestwe can.It is very unfortunate not only forthe company, but also for the people who would have been employed.”

TASMANIA’S VIEW.

” All Precautions Would Be Taken.”

Hobart, Saturday.

Mr. C. W. Grant, Honorary Minister, who returned from Melbourne yesterday, said that Tasmania would do everything possible to pre vent the introduction of any potato disease into Victoria. The Victorian Department of Agriculture, however, would not agree to an arrangement. “ The Victorian Government will gain nothing by this deadlock,” said Mr.

Grant, “ because Victorianswho would have received employment will be kept out of work through the closing of the factory.”

In view of the refusal of the Victorian Government to admit Tasmanian potatoes into Victoria, because of the alleged presence in them of a disease known as “ Corky or powdery scab “ will the Prime Minister ascertain from the scientists attached to the Council for Scientific and Industrial Research the significance of that disease?

Mr SCULLIN:
ALP

– The Department of Markets is in communicationwith the Victorian Department of Agriculture in this matter. There is a fear that the disease mentioned may be transmitted from Tasmania to the mainland if Tasmanian potatoes are admitted into Victoria. In the interests of the whole of Australia such a possibility must be investigated. The policy of the Commonwealth Government is that trade shall flow freely between the several States, unless there are good reasons for restricting it.

page 7

QUESTION

ELECTORAL BOUNDARIES

Mr JAMES:

– Has the Government decided not to take any further action with regard to the re-alignment of electoral boundaries? If not, when does it propose to proceed with the work of redistribution?

Mr SCULLIN:
ALP

– I shall refer the honorable member’s question to the Minister for Home Affairs (Mr. Blakeley).

page 7

QUESTION

WAR SERVICE HOMES

Mr GULLETT:
HENTY, VICTORIA

– I understand that a deputation from the War Service Homes Purchasers Association of Victoria waited on the Minister in Canberra recently, and urged that, on account of the diminished incomes of those occupying war service homes, there should be a reduction in both the capital and the interest payments on such homes. Can the Minister say whether consideration has been given to those representations, or has he any information on the subject to give to the House?

Mr CUNNINGHAM:
Assistant Minister · GWYDIR, NEW SOUTH WALES · ALP

– The subject referred to by the honorable member has been referred to a sub-committee of Cabinet. The Prime Minister and the Treasurer have been very busily engaged at the recent Premiers Conference, and it has, therefore, not been possible to come to a decision in this matter.

page 7

PUBLIC SERVICE

Five-Day Week

Mr.BEASLEY.- Has the Government arrived at a decision regarding the application of the five-day week to all branches of the Taxation Department? If so, and the decision is unfavorable to the introduction of the new system, will he lay upon the table the report of the Commissioner of Taxation on the subject?

Mr SCULLIN:
ALP

– Wherever possible, the five-day week will apply to all departments. It will be necessary, however, to keep a skeleton staff to meet the convenience of the public.

Mr BEASLEY:
WEST SYDNEY, NEW SOUTH WALES

– Will the Treasurer inform me what are the sections of the Taxation Department to which the fiveday week principle has been applied, and will he explain why it has not been generally applied?

Mr THEODORE:
ALP

– The Prime Minister has stated that this matter is under consideration, and that so far as practicable the five-day week will apply in the Federal Taxation Department. I am unable, however, to tell the honorable gentleman at present to what branches of the department this arrangement will apply. Generally, it will apply to the whole of the taxation staff except such officers as it may be necessary to retain on Saturday mornings to attend to the requirements of the public.

page 7

QUESTION

ASSISTANCE TO WHEAT INDUSTRY

Mr STEWART:
WIMMERA, VICTORIA

– Is the Prime Minister in a position to say whether a definite decision has been arrived at regarding, the granting of assistance to those engaged in the wheat industry?

Mr SCULLIN:
ALP

– I hope to be able to include an answer to the honorable member’s question in the statement which I propose to make to-morrow.

page 7

QUESTION

VISIT OF MR. GEPP TO THE EAST

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

-On behalf of a number of my constituents who recently waited upon me, I desire to know in what capacity Mr. Gepp will go to the East; the nature of any experience, if any, which he has had in the East’; and further, what salary and allowances he will draw during his absence from Australia !

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

- Mr. Gepp is not being sent to the East, by the Government. He is making a private visit to Eastern countries. I may add that because of the numerous requests which I have received for ari investigation into the possibility of Australia participating in timber contracts in China, I have communicated with Mr. Gepp, and asked him to look into that matter while he is abroad. For his services in that connexion Mr. Gepp will he paid a small limited fee, full particulars of which I shall give to the honorable member.

page 8

QUESTION

PETROL DUTIES

Mr ARCHDALE PARKHILL:
WARRINGAH, NEW SOUTH WALES

– Has the Government received a report from the Tariff Board regarding the proposed variation of petrol duties, and if so, when is it proposed to make it available to honorable members?

Mr FORDE:
Minister for Trade and Customs · CAPRICORNIA, QUEENSLAND · ALP

– Reports have been received from the Tariff Board on a number of matters. I hope to make them, and the annual report of the board, available to honorable members in the course of a few days.

page 8

QUESTION

FIDUCIARY CURRENCY

Australian Labour Party’s Resolution

Mr LAZZARINI:

– Is it a fact that the Federal Australian Labour Party Conference, when sitting in Melbourne, directed the Government to give effect to’ the policy of making a fiduciary issue, and, if so, does the Government intend to carry out the wishes of that conference ?

Mr SCULLIN:
ALP

– It is not a fact.

Mr LATHAM:

– I ask the Prime Minister, first, whether the Australian Labour Party conference recently held in Melbourne, passed a resolution including, inter alia, the following decision : - “ That the conference re-affirms the policy agreed upon at the March special interstate conference at Sydney “ ; secondly, whether the March interstate conference at Sydney passed a resolution embodying as a third plank of a platform, this decision: “Immediate efforts to stimulate industry to absorb unemployment bv Commonwealth and State public works, the fiduciary currency to finance thosworks. to be pushed forward determinedly,” and, thirdly, whether the Prim,Minister himself was a party to the resolution passed in Melbourne?

Mr SCULLIN:

– I am just as much entitled to ask the honorable gentleman what negotiations took place last week or yesterday, in Sydney, between t.b«Nationalist party and the Al] for Au> tralia League.

page 8

QUESTION

AIR LINER LOVE BIRD

Mr WHITE:
BALACLAVA, VICTORIA

– Will the Minister for Defence lay on the table of the House the report of the Air Investigation Acc dents Committee into the accident to tillair liner Love Bird. at Temora?

Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP

– I shall arrange to have the report, made available.

page 8

QUESTION

FEDERAL BANKRUPTCY ACT

Mr COLEMAN:
REID, NEW SOUTH WALES · ALP

– Has the attention of the Attorney-General been directed to complaints concerning cases of hardship arising out of the operation of th Federal Bankruptcy Act? By way ot explanation, let me state that one cas* brought under my notice is that of a mail possessing assets worth £500,000, whos< debts amount to £200,000. His debtor* were prepared to give him an opportunity to meet his commitments, but one debtor has served upon him a bankruptcy notice in connexion with a debt of £60. No doubt this case is typical of many others. Has the AttorneyGeneral given consideration to the need for modifiying the act in view of thiextraordinary economical and financial position of industry in Australia? 11 the Bankruptcy Act cannot be amended in that direction, could not a federal moratorium act be introduced?

Mr BRENNAN:
Attorney-General · BATMAN, VICTORIA · ALP

– Close consideration lias been given to the operation of tinBankruptcy Act, especially having regard to the present trying times. It has been suggested that in certain cases the operation of the Bankruptcy Act should b( suspended, or that the act as a whole should be substantially modified to meet the requirements of certain classes of people. We have given consideration to the matter, and have decided that it is not practicable to suspend the operation of the act to meet particular cases. The act must have general application. While it does not seem to be constitutionally practicable to pass a federal moratorium act, there is, so far as my knowledge goes, no disability preventing the States from passing legislation to meet effectively the hardship to which the honorable member has referred.

Mr COLEMAN:
REID, NEW SOUTH WALES

– Many creditors evade the State Moratorium Act by instituting bankruptcy proceedings.

page 9

QUESTION

EMPLOYMENT ON THE BRISBANE WATERFRONT

Mr BAYLEY:
OXLEY, QUEENSLAND

– Has the AttorneyGeneral received any report dealing with employment on the waterfront at Brisbane, and if so, has he given consideration to the irritating tactics adopted by Mr. Andy Brown, the Secretary of the Waterside Workers Federation of Queensland, towards the returned soldiers there?

Mr BRENNAN:
ALP

– I have kept myself well informed about the conditions on the waterfront at Brisbane. I have had no report to-day, but so far as I know I have up-to-date information respecting the position there. I am not aware of any irritating tactics being pursued by Mr. Brown.

Mr Bayley:

– The Minister has been informed of the matter.

Mr BRENNAN:

– It is undesirable that a statement of that kind should be made unless it is capable of substantiation. While in Brisbane I came into contact with all the interests associated with the waterfront, and I found, on the whole, u conciliatory spirit prevailing. I interviewed the employers, the employees, and also the representatives of the returned soldiers. I am hopeful that as a result of the consultations between us, good feeling and a practical working policy will bc maintained on the waterfront. I found that Mr. Brown was reasonable, and desirous of doing the best for the men in the circumstances.

page 9

QUESTION

RUSSIAN TIMBER INDUSTRY

Dr EARLE PAGE:

– I desire to direct the attention of the Minister to a statement of Mr. G. K. Radygin, who describes himself as the official Soviet representative in Australia, to the Tariff Board yesterday, and to ask him to take certain action. The statement of Mr. Radygin was to the effect that the production charges in the Russian timber industry were negligible. Will the Minister, before the Tariff Board’s inquiry is completed, take steps to have that statement fully investigated, and make certain that the conditions obtaining in the Russian timber industry are not tantamount to slavery?

Mr FORDE:
ALP

– This subject is now being considered by the Tariff Board, and I think that we- can safely leave it to the judgment of the gentlemen on that board to make a full investigation into the whole subject. It is unwise to prejudge this matter, and we shall await with interest the Tariff Board’s report.

Mr BERNARD CORSER:
WIDE BAY, QUEENSLAND

– Will the Minister for Trade and Custom* announce the terms of reference to the Tariff Board in respect of its inquiry into the importation of Russian timber into Australia?

Mr FORDE:

– I hope to be able to give the honorable member that information after to-day, but I assure him that the terms of reference are sufficiently wide to enable the Tariff Board to obtain, all the necessary information so that the Government may make a just decision.

page 9

QUESTION

FRENCH DUTY ON BARLEY

Mr HAWKER:
WAKEFIELD, SOUTH AUSTRALIA

– Is the Minister aware that during the recent recess the French import duty on Australian barley was raised by 100 per cent.? Will he make inquiries, if he has not already done so, to ascertain whether that was done in retaliation for increases in the Australian tariff?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– I am looking into that subject, and will consult the Minister for Trade and Customs in regard to it.

page 9

QUESTION

POSTMASTER-GENERAL’S DEPARTMENT

Dismissal of Returned Soldiers

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– Will the Prime Minister make a statement concerning the’ notices of dismissal given to certain cleaners in the Postmaster-General’s Department, under the scheme of the Government for getting rid of returned soldiers generally from the Public Service? What is the position in that regard at present?

Mr SCULLIN:
ALP

– When an honorable member asks for information, he should not include in his question an accusation which is false. If I were to do the proper thing in this case, I would refuse to answer the question. I deny definitely thai it is the policy of the Government to get rid of returned soldiers from the Public Service. The record of the Government shows that the contrary is the the case. The notices to the cleaners referred to, have been withheld, and they will be withdrawn when the Government can make the necessary rearrangement of staff. The Government has gone to considerable lengths to make special provision for these men. We have been carrying men for some time for whom there was no work, with the object of placing them in proper employment.

page 10

QUESTION

INVALID PENSIONS

Mr JAMES:

– Is the Treasurer aware that the officers of the Pensions Department are cancelling invalid pensions in cases where the income ofany person in the home averages £78 per annum for each individual in it? For example, if a father with an invalid daughter or son is in receipt of an income of £234 per annum the pension payable to an invalid member of the household is being cancelled, although it may have been in force for ten years. Has the Treasurer issued an instruction to the department that that policy shall be adopted?

Mr THEODORE:
ALP

– I shall make inquiries into the practice of the department in such cases, and furnish the honorable member with a reply at a later date.

page 10

SALARIES OF HIGH COURT JUDGES

Mr WATKINS:
NEWCASTLE, NEW SOUTH WALES

– Seeing that some members of the High Court bench have agreed to accept a reduction of salary, I should like to know what action the Government proposes to take in regard to the other judges, who have been appointed to their positions for life, but have refused to accept a reduction of salary, so that they also may be brought within the scope of the economy plan.

Mr SCULLIN:
ALP

– The only thing that the Government could do in the matter was to write to the judges and invite them to accept a reduction of salary. The salaries of judges are fully protected under the Constitution, and cannot be reduced by act of Parliament.

page 10

QUESTION

PRIMARY PRODUCTION COSTS

Mr ARCHDALE PARKHILL:

– Is the Prime Minister willing to remit to the Tariff Board for investigation the subject of the costof production in primary industries, and to ask the board to make an early recommendation ofways and means of reducing costs?

Mr SCULLIN:
ALP

– The honorable mem ber might also have asked whether I would ask the board to make recommendations as to what tariff increases may be necessary to give effect to his suggestion. The subject of a general investigation of that kind is a matter for consideration.

page 10

QUESTION

SHALE OIL INDUSTRY

Mr LAZZARINI:

– Will the Prime Minister inform me whether any portion of the £93,000 made available for the assistance of the shale oil industry has been spent in buying an interest in any shale oil company now operating in New South Wales?

Mr SCULLIN:
ALP

– I am not aware that any of the money has been spent in that direction. If the honorable member will make a definite statement to me in that regard I will have inquiries made into it.

page 10

QUESTION

TRACTION ENGINE ATTACHMENTS

Mr HAWKER:

– Has the Prime Minister received any request to refer to the forest products section of the Council for Scientific and Industrial Research, or any other appropriate body, the subject of inventing attachments for traction engines and the engines of heavy duty lorries, with the object of enabling them to be run on producer gas generated from wood or charcoal fuel in place of petrol? If no such request has been made, will the right honorable gentleman give favorable consideration to it?

Mr SCULLIN:
ALP

– I understand that this subject has been investigated. I will obtain the available information in regard to it for the honorable member.

page 11

QUESTION

INTEREST PAYMENTS BY NEW SOUTH WALES GOVERNMENT

Dr EARLE PAGE:

– Will the Treasurer make a statement of the exact position in regard to the arrears of interest payments due by the New South Wales Government ?

Mr THEODORE:
ALP

– I shall give the right honorable member full information on the subject a little later.

page 11

QUESTION

RETIRING AGE OF MEMBERS OF PERMANENT MILITARY FORCES

Mr WHITE:

– Will the Minister for Defence inform me whether representations have been made to the Government with the object of securing exemption for members of the permanent military forces from the instruction of the Government that officers of the Public Service due to retire at 65 years shall take their furlough prior to retirement? In explanation I may say that the retiring age of certain members of the permanent military forces is lower than that of officers of the Public Service generally?

Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP

– No representations of the nature referred to have been made to me. As the honorable member has indicated, the retiring age of certain members of the Navy and Air Force is somewhat lower than 65. No new instruction has been issued in regard to the retirement of these officers.

page 11

QUESTION

DISCLOSURE OF CABINET COMMUNICATIONS

Mr LATHAM:

– Has the attention of the Prime Minister been directed to a press report of the evidence given by the honorable member for West Sydney (Mr. Beasley) in a certain inquiry to the effect that he could see no objection to the disclosure of certain Cabinet communications. Was any application made to the Prime Minister for liberty to disclose any Cabinet communications, and if so, what reply was given ?

Mr SCULLIN:
ALP

– I do not know exactly what words the honorable member for West Sydney used in giving evidence in the matter referred to; but no application has been made to me for permission, to disclose Cabinet communications.

page 11

QUESTION

ANGLO-GERMAN LEGAL CONVENTION

Mr WHITE:

asked the Prime Minister, upon notice -

  1. Does the Government propose to accede to the convention between Hia Majesty and the President of the German Republic regarding legal proceedings and commercial matters; if so, when ?
  2. If the Government does not propose to do so. what arc its reasons, in view of the fa,ct that the refusal constitutes a grave disadvantage to Australian citizens in respect to legal proceedings wherein evidence is required to be taken in Germany?
Mr SCULLIN:
YARRA, VICTORIA · ALP; FLP from 1931; ALP from 1936

– I refer ‘ the honorable member to the information, furnished on the adjournment on the 6th August (vide Hansard, page 5127), in reply to a question without notice by htm on that date. All the States with the exception of Queensland have now taken the necessary action to give effect to the convention, and further advice in the matter is awaited from that State. It is hoped that the Commonwealth will be in a position to accede to the convention at an early date.

page 11

QUESTION

WIRELESS BROADCASTING

Censorship of Programmes

Mr LATHAM:

asked the PostmasterGeneral, upon notice -

  1. Does the Postmaster-General regard it as one of the functions of th§ Postal Department to prevent the broadcasting by any, and, if so, what, stations, of matter regarded as controversial by himself or the officers of the department?
  2. According to what principles and by what persons is it determined for broadcasting purposes what matter is controversial?
Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– The Wireless Regulations give power to the Postmaster-General to exercise censorship on all broadcast programmes. The principle recognized is to accord the station management the’ greatest freedom, consistent with a recognition that the service i3 partially monopolistic in character, and programmes must be supplied in the interests of listeners as a whole, avoiding items which could reasonably be regarded as in bad taste or offensive to any particular section of the community. It will be obvious that a precise definition of things admissible or otherwise cannot be formulated, and to a large extent the position must be governed by the good sense and discretion of the management. It is not in the interests of any broadcasting authority to do those things which may give rise to public resentment, and as a rule there is little complaint from this stand-point. The broadcasting of political speeches is occasionally contentious, but the official attitude is to afford, as far as possible, equality of treatment and to seek to avoid those things which may be harmful to the national interest.

page 12

ASSENT TO BILLS

Assent to the following bills reported : -

South Australia Grant Bill 1931.

Western Australia Grant Bill 1931.

Commonwealth Public; Service Bill 1931.

Federal Aid Roads Bill 1931.

Income Tax Assessment Bill 1931.

Income Tax Bill 1931.

Sales Tax Assessment Bill (No. 1) 1931.

Sales Tax Bill (No. 1) 1931.

Sales Tax Assesment Bill (No. 2) 1031.

Sales Tax Bill (No. 2) 1931.

Sales Tax Assessment Bill (No. 3) 1931.

Sales Tax Bill (No. 3) 1931.

Sales Tax Assessment Bill (No. 4) 1931.

Sales Tax Bill (No. 4) 1931.

Sales Tax Assessment Bill (No. 5) 1931.

Sales Tax Bill (No. 5) 1931.

Sales Tax Assessment Bill (No. 6) 1931.

Sales Tax Bill (No.6) 1931.

Sales Tax Assessment Bill (No. 7) 1931.

Sales Tax Bill (No. 7) 1931.

Sales Tax Assessment Bill (No. 8) 1931.

Sales Tax Bill (No. 8) 1931.

Sales Tax Assessment Bill (No. 9) 1931.

Sales Tax Bill (No. 9) 1931.

page 12

QUESTION

WAR PENSIONS ENTITLEMENT APPEAL TRIBUNAL: REPORT

Mr. McNeill presented the report for the year 1930-31 of the War Pensions Entitlement Appeal Tribunal appointed under the Australian Soldiers’ Repatriation Act and moved -

That the paperbe printed.

Mr LATHAM:
Kooyong

.- Would it not be cheaper and equally effective to have copies of this report made by “ Roneo “, rather than to have it printed?

Motion agreed to.

page 12

PAPERS

The following papers were presented : -

Arbitration (Public Service) Act - Determinations by the Arbitrator, &c. - 1931 -

No. 16 - Amalgamated Postal Workers Union of Australia.

No. 17 - Australian Third Division Telegraphists and Postal Clerks Union.

Nos. 18 and 19 - Commonwealth Storemen and Packers Union of Australia, Commonwealth Storemen and Packers Union and the Commonwealth Naval Storehousemen’s Association.

No. 20 - Amalgamated Postal Workers Union of Australia, and the Commonwealth Public Service Clerical Association.

No. 21 - Amalgamated Postal Workers Union of Australia.

No. 22 - Commonwealth Telephone Officers Association.

Debt Conversion Act - Regulations - Statutory Rules 1931, No. 103.

Inscribed Stock Act - Regulations amended - Statutory Rules 1931, No. 102.

Lands Acquisition Act - Land acquired at Corowa, New South Wales - For Defence purposes.

Naval Defence Act - Regulations amended - Statutory Rules 1931, No. 97.

Navigation Act - Regulations amended - Statutory Rules 1931, No. 95.

New Guinea Act - Ordinances of 1931 -

No. 22- Supply (No. 2) 1931-1932.

No. 23 - Claims by and against the Administration.

No. 24 - Prisons.

Public Service Act - Regulations amended - Statutory Rules 1931, Nos. 108, 109.

Science and Industry Endowment Act - Report by the Auditor-General on the Science and Industry Endowment Fund as at 30th June, 1931.

Seat of Government Acceptance Act and Seat of Government (Administration) Act-

Ordinances of 1931 -

No. 13- Meat.

No. 14 - Mortgagors’ Interest Reduction.

No. 15 - Liquor (No. 3).

Building and Services Ordinance -

Regulations amended (Electric supply).

Meat Ordinance -

Regulations.

Regulations amended.

Public Health Ordinance -

Regulations ( Meat ) .

Regulations amended (Meat).

Seat of Government (Administration) Act -

Statement of Receipts and Expenditure of Federal Capital Territory for 1930-1931.

page 13

QUESTION

TARIFF

Customs Duties

In Committee of Ways and Means:

Consideration resumed from the 6th August (vide page 5121), on motion by Mr. Forde -

That the schedule to the CustomsTariff be amended -

Division 6. - Metals and Machinery

Postponed item 145 -

By omitting the whole item and inserting in its stead the following item: - “ 1 45. Iron and steel plate and sheet, viz. : -

Corrugated galvanized, galvanized not corrugated, and corrugated not galvanized, per ton, British, 110s.: intermediate, 130s.; general,150s.”

Mr GULLETT:
Henty

.- I ask the Prime Minister (Mr. Scullin) to use his influence with the Minister for Trade and Customs (Mr. Forde) to induce him to make a statement upon thisextraordinary change in the duties on this very important item, before we proceed further. Members of the committee should not be called uponto debate the change in duties until the Minister has advanced his reasons for it.

Mr Forde:

– I shall address myself to the item in due course. I desire first to listen to any objections that may be raised to it by honorable members.

Mr GULLETT:

– This is one of the most important items in the schedule. If agreed to, the proposed duties will undoubtedly impose an added burden on users of galvanized iron, who are principally our country settlers. It is almost inconceivable to me that the Government should have selected a time when our rural industries are in such a distressed condition to impose an additional burden upon them. The onus is upon the Minister to defend and explain this startling increase in duties, to which I am opposed, and which I intend to move shall be reduced by £1 per ton. That would bring the duties into line with the recommendation of the TariffBoard.

I wish to make it clear that I am not opposed to a reasonable and adequate measure of protection to the manufacture of galvanized iron in Australia. I belong to the Nationalist party, which was responsible for the establishment of this industry in the Commonwealth in 1918, when the right honorable member for North Sydney (Mr. Hughes) was leader of the party. In September, 1922, the total protection afforded to the industry - and I shall deal only with the British rate, because our principal importations of galvanized iron are from Great Britain - was£3 10s. per ton, made up of £1 British preferential duty, and £2 12s. bounty. From the 1st January, 1928, the bounty was increased by £1, making the total protection £4 12s. per ton.

Mr WATKINS:
NEWCASTLE, NEW SOUTH WALES · ALP; FLP from 1931

– Why does not the honorable member complete the story?

Mr GULLETT:

– The honorable member will have an opportunity to reply later. Representing, as he does, the electorate of Newcastle, I do not expect him to be other than favorable to the increase. The present Government has advanced the total amount of protection to this inindustry to a duty of £5 10s. per ton. In my opinion, the Minister cannot make out a case for this substantial increase in duty. Indeed, it would be a much easier matter to-day to make out a sound case for a reduction of the existing duties, because of the falling costs associated with the industry. We all know that the price of coal, which is largely used in this industry, has fallen considerably. Wages have been reduced, and the prices of iron and steel, which are basic commodities in the industry, have also come down. The same thing applies to spelter. In August, 1929, the price of spelter was £25 a ton; to-day it is about £11 a ton, so that Lysaght Limited, on this item alone, is able to save about £150,000 on a normal year’s operation. Therefore, if any change is to be made at all, the logical thing for this committee to do would be to reduce the present duty; but I do not propose to go so far as that. I am prepared to stand by the recommendations of the Tariff Board. I cannot recall any other instance in which a government has endeavoured to impose a higher measure of protection than that recommended by the Tariff Board. There have been several cases in which the board’s recommendations have been entirely ignored, and there have been others in which a lesser measure of protection than that recommended by the board has been granted. The board, of course, has taken into consideration the falling costs of production associated with the1 industry, a’nd has, in my opinion, very properly ignored the plea of the company and its supporters that Parliament . should so frame its tariff legislation as to enable every industry^ or anY particular industy; to carry on prosperously through this season of depression: The company^ in a letter to me, arid in the course of its representations before the Tariff Board, tirged; in effect, that because the demand for galvanized iron in Australia had fallen off, and because its output had become relatively small Parliament should, through the tariff, enable it to charge a pride for its diminished output sufficient to enable it to pay interest on its capital. If Parliament once accepted that principle, we should immediately have to proceed, by bounty and so 04 to put every depressed industry in the country, including the wheat-growing and wool-raising industries, on a profitable basis, that, of course, would be impossible. It is quite unfair - in fact it is an outrage at this period of Australia’s affairs - to ask Parliament to put Lysaght Limited on to a normal, dividendearning basis. The tariff was never intended to be used in that way.

I recommend all honorable members to examine the Tariff Board’s report on this matter, and I challenge any of them to read it with an impartial mind, and still support the duty proposed by the Minister. The board’s report is one of the strongest, most convincing and most logical documents of its kind which has ever been submitted to this Parliament. The report touches upon one aspect of the company’s affairs to which I desire to make particular reference. It is stated that the capital of the company is £936,000.

Mr Hughes:

– Is that paid-up capital?

Mr GULLETT:

– No ; that is the nominal capital. Of a nominal capital of £936,000, no less than £600,000 was issued in paid-up shares to the parent company in Great Britain for various patent and other rights associated with the manufacture of ganvanized iron.

Mr Paterson:

– So that the company expects to make interest on capital which docs not exist?

Mr GULLETT:

– It expects to make interest on £500,000 which has never gone into the industry in this country. It is an outrageous thing that the company should, under cover of the tariff, raise the Australian price to a level which will permit it to pay interest on £500,000 paid-up shares held by the parent company outside Australia. The original company pleaded that, as it was sacrificing its export trade to Australia, it was entitled to load the Australian company with £500,000 worth of nominal capital But the company cannot have it both ways. Obviously, it began manufacture in Australia because it believed that it could make larger profits here than it could do if it were to continue to manufacture in Britain, and to export to Australia.

The Tariff Board recommended a protective duty of £4 10s. a ton, hut only on the condition that the wholesale price should not exceed £25 a ton. I cannot understand why the Minister departed from a specific recommendation of tha* kind. The Minister represents a rural constituency in which a great deal of galvanized iron is used.

Dr EARLE Page:

– Not now.

Mr GULLETT:

– His constituents would use more of it if they could get it at a reasonable price. The board was asked to impose a duty of £5 10s. a ton, but was content to recommend a duty of £1 a ton less. The board’s report was issued in April last, when the price of galvanized iron was £28 10s. a ton, or £3 10s. a ton more than the price which’ the Tariff Board believed to be sufficient to enable the company to show a fair profit. According to to-day’s issue of the Sydney Morning Herald, the price of galvanized iron now is £29 10s. a ton, or £4 10s. more than the price which the Tariff Board regarded as reasonable. Upon a number of occasions I have urged the Government to abolish the Tariff Board, which is a fairly expensive institution, on the ground that it has been consistently ignored by the Minister. There is complete justification for its abolition in the case that has been submitted by the Minister. I do not know whether the honorable gentleman intends, when he speaks, to depart from the

Government’s proposal in the schedule, or whether the postponement of the item is in any sense significant. In the light of the constant boast of the Government that” it is interested in the welfare of the primary producers of Australia, and that it has as much concern for the people on the land as for the trade unionists of this country, it is remarkable that the Minister should bring down a proposal of this nature.

Lysaght Limited claim to have doubled their plant in this country as a result of a previous recommendation by the Tariff Board that there should be imposed a British preferential duty of £5 10s. a ton, or that protection equivalent to that amount should be afforded. The Minister may be impressed by such a statement, but I certainly am not. If it be true, it discloses a lack of business sense which to me is incomprehensible. Everybody knows that a Tariff Board’s recommendation amounts to nothing until it has been accepted and acted upon by both Houses of this Parliament. I cannot accept the company’s statement, or believe that either this Government or this Parliament is under any obligation to it because of the doubling of its plant in Australia. The effect of that action, now that the depression has come upon Australia, is that the company is hopelessly over-capitalized ; and it will remain in that condition so long as the depression continues. But we are not responsible for that. I invite any honorable member to point to an industry in Australia that to-day is not over-capitalized.

I am very much hampered, as must be all honorable members, by the extraordinary silence of the Minister. The honorable gentleman is the only Minister for Customs who, in my experience or recollection of tariff debates, which extends back to 1902-3, has endeavoured to smuggle item after item through this chamber without discussion. He observes silence, apparently in the hope that the different items will be put by the Chairman and carried by the committee before honorable members realize what is being done. A few items may have been passed in that manner, but such progress will be arrested before this Parliament has disposed of the schedule.

It is time that the Minister took some slight notice of the opinion in regard to this tariff that is held throughout Australia, and refrained from proceeding with the schedule; because it is perfectly clear that there is arising in this country the strongest revolt that has occurred in our political life for many years, and that revolt is directed against this schedule. Its effect will be to sweep this Government out of office.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– Why not wait and see what is the effect?

Mr GULLETT:

– It will sweep away, not only the Government, but the Minister who represents the constituency of Hume (Mr. Parker Moloney). He will have to explain to his electors the reason for the substantial increases of duty on galvanized iron and other requirements of the farmers. If honorable members doubt my statement, let. it be tested. This ridiculous schedule will operate for a time; but it will never become the law of this country. I predict that it will not survive this Parliament; but, if it does, it will certainly not survive the next general election.

Mr FORDE:
Minister for Trade and Customs · Capricornia · ALP

– I listened to the honorable member for Henty (Mr. Gullett) very carefully, so that I might learn whether he had any sound objection to offer to the duty which the Government has imposed for the purpose of protecting a great Australian industry; but I listened in vain. It would appear, since other honorable members may intend to follow the line of debate that has been initiated by the honorable member for Henty, that I should state a few reasons for the decision of the Government to impose this duty.

Mr Stewart:

– And why the amount recommended was exceeded.

Mr FORDE:

– I shall deal with that point, very effectively I hope. Honorable members have been anxious for me to give an explanation of the matter, and I appeal to them to bear with me while I deal with the case exhaustively. I admit that it is a rather complicated and intricate one.

The history of the galvanized iron manufacturing industry is furnished in detail in the Tariff Board’s report on the subject, which, I presume, has been read with a good deal of interest by all honorable members. The industry was established at the behest of the Commonwealth Government shortly after the war period. Messrs. Lysaght were given definitely to understand that, if the industry were established in the Commonwealth, adequate protection would be afforded to it. The then Commonwealth Government gave such direct encouragement to the establishment of the industry on account of the difficult situation which was created by the serious shortage of galvanized iron during the war period. The company, therefore, has every reason to assume that a very definite obligation devolves upon the Commonwealth to ensure that its manufactures are adequately protected against competition by overseas manufacturers.

Mr Stewart:

– Surely not for all time !

Mr FORDE:

– If protection were afforded for a year or two, and then withdrawn, the industry would be wiped out, and a great injustice would be done to the .1,000 workers who are directly employed in the iron and steel works. Very serious effects would be felt, also, by those works, as well as by the coalmining industry, and the Iron Knob mine in South Australia, from which the iron ore is obtained.

Mr Latham:

– No one is suggesting the removal of all protection.

Mr FORDE:

– I shall show that the protection which the Government is giving is necessary to carry out the promise that the Commonwealth would give adequate protection to the industry.

Mr Gullett:

– Who made that promise ?

Mr FORDE:

– The honorable member for Henty claims that past governments are entitled to credit for having established the industry. The promise to which I have referred was made by a past government, and we are now honouring it. The protection that was afforded to the industry prior to the present Government assuming office was £4 12s. a ton.

That was a bounty-cum-duty form of protection, the amount of duty being £3 12s. a ton aud the bounty representing £1 a ton. As from the 1st January, 1930, the bounty was increased by 18s. a ton, thus increasing the effective protection to £5 10s. a ton. The duty proposed in the tariff resolution now before the committee is £5 10s. a ton . British preferential, £6 10s. a ton intermediate, and £7 10s. a ton general. That is equivalent to the effective protection which was afforded by the bounty-cum-duty method in force as from the 1st January, 1930.

Mr Curtin:

– -Is that on the Australian production, or on the total quantity consumed in the Commonwealth?

Mr FORDE:

– It is equivalent to a protection of £5 10s. a ton on all importations from Great Britain. That is only 18s. a ton more than the effective protec- tion which obtained immediately before this Government assumed office. The rates proposed are also identical with those recommended by the Tariff Board in 1926. Honorable members will realize that the bounty and the bounty-cum-duty forms of protection are designed to protect an industry in its initial stages, when it is not in a position to cater for the full requirements of a country’s market. The bounty-cum-duty form of protection is admirable in those circumstances, as the duty collected provides the funds wherewith to pay the bounty. That is what has happened iu the past with respect to the galvanized iron industry. With the development of the local industry to the point at which it can manufacture the whole of the requirements of Australia, the bounty-cum-duty form of protection must be replaced by straightout protection. That action is proposed by the Government in the present tariff schedule, and I consider that it should be agreed to by the Parliament. In its report of the 15th April, 1931, the Tariff Board recommended that, if assistance was to be given to the local industry by the imposition of a duty on importations of galvanized iron, the rate should be 90s. a ton British preferential, 110s. a ton intermediate, and 130s. a ton general The board also stated -

Sufficient protection is at present being afforded by the high rate of exchange between

Australia and London. The board considers, therefore, that duty should be imposed only if the local manufacturer undertakes that prices will be reduced immediately to the basis of a gross list price of £25 per ton for 20-gauge orb galvanized corrugated iron (quantity discounts and conditions of sale remaining unaltered), and not increased unless high costs of production warrant such action.

The rates recommended by the board arc 20s. per ton all round lower than the rates of duty proposed by the Government. The board recommended that these rates should not be imposed unless an immediate reduction in the selling price to £25 per ton was effected by the company. Lysaght’s present selling price of 26-gauge “ Orb “ galvanized corrugated iron is £28 10s., less discounts, or £3 10s. per ton higher than the price which the Tariff Board considers reasonable. The Tariff Board, in deciding that a reasonable selling price is £25, made its calculation on an output basis of 60,000 tons per annum. It is unfortunate that the board should have adopted this figure as a basis, as very little value can now bc placed upon its conclusions. Indeed, the board has built an elaborate fabric upon such faulty foundations that its contribution to the present consideration of this item is not of much value, and in certain respects must be almost entirely disregarded.

In arriving at the conclusion that local requirements of galvanized iron would enable Lysaght Limited to manufacture at a yearly rate of 60,000 tons, the board based its estimate on the sales effected by the company during 1930. These totalled 30,811 tons for the first half year, and 23,64S tons for the second half. The board concluded that, if this company could sell 54,4.59 tons during 1930, it should be possible for the local manufacturer to produce 60,000 tons per annum, particularly with exchange remaining as at the present time. The board evidently attached no importance to the fact that sales were showing substantial reductions, and that the second half year’s figures were considerably lower than those of the first half. The position has so developed that during the first four months of the current year the company’s sales have totalled only 9,987 tons. This is equiva lent to an annual sale of 29,961 tons, and with the accentuation of the present depression, it. is even possible that this figure will not be realized. Honorable members will realize that the costs of production in manufacturing on a basis of 30,000 tons would be greater than if 60,000 tons were manufactured. Naturally, upon receipt of the board’s report, it became necessary to have the matter further investigated, as the board’s recommendation was based on an output which does not seem possible of realization for some time, and although the board’s report will be of value when the output of 60,000 tons is realized, it. does not assist in the consideration of the present duties. I, therefore, referred the board’s report to an accountant in the Department of Trade and Customs, and to an audit inspector, both of Sydney, asking them to study the board’s report in the light of the actual conditions, and particularly with regard to questions of capital, depreciation, and profit, and to offer their comments.

Mr Archdale Parkhill:

– What are their names?

Mr FORDE:

– The auditor is Mr. Smith, and the accountant is Mr. Cooper.

I shall now proceed to a detailed consideration of the costs of manufacture, as furnished by Lysaght Limited, and by the Tariff Board, together with the comments of the accountant and audit inspector on the board’s estimates of costs of production on the basis of 60,000 tons manufactured per annum. The costs for the following items submitted by Lysaght Limited on a basis of an output of 33,000 tons and the Tariff Board’s report of 60,000 tons are in agreement: - Zinc, factory overhead; defectives; selling commission ; and Sydney charges. The costs included by both Lysaght Limited and the Tariff Board for wages and other materials are also practically identical. The board’s estimate is 5s. lower than the costs submitted by Lysaght Limited. These costs do not require close analysis, as it is admitted that the lower costs would operate on a 60,000 tons production basis. The two principal items on which the board submits lower costs than thoi* submitted by Lysaght Limited are “Steel (Sheet Bar)” and “Depreciation “. I should also mention that the board’s statement includes an amount for profit which is higher than the amount which Lysaght Limited are at present earning.

With regard to the price of sheet bar, the board adopts a figure of £81s. 3d. per ton of galvanized iron, while Lysaght Limited submit a figure of £9 13s. per ton of galvanized iron. On this item alone the board’s figure is £111s. 9d. lower than that of Lysaght Limited, who stated that their actual costs were for the costing period reviewed by the board. Now the board, in arriving at the figure of £81s. 3d., calculated the cost of sheet bar at a percentage of the selling price, which is the present basis of the sales made by the Broken Hill Company to Lysaght Limited, less quantity allowances and the 4s. per ton special coal allowances. It will be recognized that the Tariff Board’s assessment is an arbitrary one, calculated on the board’s price of £25. If the board had determined a fair selling price of, say, £20, the cost allowed for sheet bar would have been proportionately lower. The board evidently did not go into the question whether it would be profitable for the Broken Hill Company to supply Lysaght’s at £81s. 3d. per ton, and I think that honorable members will agree with me that before the board adopted the figure of £81s. 3d. per ton it should have satisfied itself that there was an irreducible minimum. As a matter of fact, the price which the Broken Hill Proprietary Company would receive for sheet bar under the Tariff Board’s recommendation would be approximately £1 10s. per ton lower than the cost of English sheet bar delivered free of duty in Australia, if exchange were taken into account. LysaghtLimited, in submitting their cost of sheet bar to the Tariff Board, estimated that they would be able to take advantage of the 10s. quantity allowance. As a matter of fact, on account of the lessened demand for galvanized iron, and the smaller quantities now being manufactured, Lysaght Limited cannot take advantage of the 10s. quantity allowance; therefore, the actual present-day cost of sheet bar is £10 per ton. Moreover, the board’s estimate also includes a further quantity allowance of 2s. 6d. per ton, which Lysaght Limited cannot qualify for on their present output. The difference between the board’s estimate and the actual present cost to Lysaght Limited on sheet bar per ton of galvanized iron is, therefore, £2 2s. 3d., made up of the amounts of £111s. 9d. and 10s. 6d. In explanation, I should mention that the 10s. per ton for sheet bar which Lysaght Limited cannot qualify for becomes approximately 10s. 6d. per ton of galvanized iron. The report of the accountant and audit inspector verifies the statement of Lysaght Limited that £10 per ton is being paid for sheet bar.

The next important item which the board submits should be considerably lower than the figure returned by Lysaght Limited is depreciation. The difference between the two sets of figures is 39s. The board contends that in view of the annual charges made for renewals of plant and equipment, and also the charges made for maintenance, the amount allowed by Lysaght Limitedfor depreciation is excessive. The board, therefore, adopted a sum which represents 5.5 per cent. of the book value of the plant, machinery, &c., as at the 30th December, 1930. It then divided this amount by 60,000, in order to arrive at an amount per ton for depreciation.

Mr Curtin:

– It is not overseas competition which is now responsible for the lessened demand for Australian galvanized iron.

Mr FORDE:

– No. The board’s assumption that the local manufacturer can obtain a market for 60,000 tons is, of course, not supported by actual facts. Even adopting the total amount which the board decided to allow as reasonable depreciation, and dividing it by 30,000 tons, which amount more closely approximates the quantity likely to be manufactured during the current year, an increased charge of 8s. 4d. per ton would result in and above the board’s allowance.

On the subject of depreciation, the departmental accountant and the audit inspector report as follows: -

Dealing with the question of depreciation, the board expressed itself in the following manner : -

Viewing the proposed provision for depreciation in conjunction with the charges included in production costs for renewals of wearing parts of the machinery, maintenance materials, and maintenance labour, the board is of the opinion that it is unnecessarily high.

Referring to the appropriations of profits for depreciation for the past two years the board stated -

It was apparently not considered necessary in those years (when dividends were being paid) to make provision in such a large amount as was suggested at the inquiry.

The amount allowed by the board for depreciation is 8s. 4d. per ton on an output of 60,000 tons per annum. John Lysaght (Aust. ) Limited in reply stated -

The company considered that a much larger appropriation should have been made and this course has been from time to time recommended by their auditors, but the very small average profit made has prevented them from making provision for this item upon the lines submitted in evidence at the inquiry.

The amount mentioned at the inquiry was £1 7s. 4d. per ton, which is the amount included in the detailed costs of production of Lysaght’s Newcastle Works Limited. The board has reduced this to 8s. 4d. on an output of60,000 tons per annum, a reduction of 19s. per ton, which is equivalent to a reduction of69 per cent. We cannot support the Tariff Board’s view that because allowances were made for renewals and maintenance of the plant, &c.,the present rate of depreciation should not be allowed to provide for the reduction in value of plant and machinery, &c., or to provide for obsolescence. Neither do we concur with Lysaght’s Limited statement that, because the profits were small, adequate depreciation could not be made. We consider that the asset value of plant, machinery, &c, should be reduced annually by reasonable depreciation irrespective of whether profits are earned or not.

Output is an important determining factor in arriving at the amount of depreciation per ton of galvanized iron. We are quite satisfied that, on presentoutput, £1 7s. 4d. per ton is not excessive. The method adopted by the company in retaining the original cost of plant, machinery, &c., in its balance-sheets and appropriating out of profits, when available, sums to cover depreciation, and placing such amounts to a depreciation reserve, although frequently adopted,is not recommended. It would be preferable to show the reducing value of those assets each year after allowing for depreciation. This would reduce the amount of depreciation required each year, and the cost of production would be proportionately reduced in respect of that item of cost.

The departmental accountant and the audit inspector state that they are quite satisfied that the amount of £1 7s. 4d. included in the statement of Lysaght Limited for depreciation is not excessive. The company’s own auditors have written to the company in the following terms : -

Sydney, 27th April, 1931

Dear Sirs,

Referring to our report of the 14th instant, in which we recommend that you consider the question of substantially increasing the depreciation provided on your Newcastle works, we have to state that, in our opinion, it is desirable that such depreciation should average 10 per cent. per annum on the cost value as reduced each year by the amount written off. It is, however, recognized that the profits of the company do not always permit of that rate being adopted.

Yours faithfully,

Perry & Johnson,

Chartered Accountants. (Australia)

A 10 per cent. depreciation as recommended by the company’s own auditors on the value of the plant, equipment, &c, used by Lysaght Limited in. the manufacture of galvanizediron would represent a larger amount than the £1 7s. 4d. a ton in the statement of Lysaght Limited.

Another item regarding which the board assesses a lower figure than that submitted in the company’s statement relates to discounts. The board’s figure is 3s.8d. per ton lower than that of Lysaght Limited, the difference being caused by the board adopting a selling price of £25 as a basis on which to calculate discounts. The board submits lower costs for freight and packing to the extent of 7s. a ton. That the actual costs to Lysaght Limited are 7s. a ton more than the board’s estimate has been verified by the departmental accountant and audit inspector. It must be borne in mind that the board worked on the costs appertaining to the six months’ period ended the 30th November, 1930. Since that date the costs to the local company, apart from sheet bar, have also increased on the following items to the extent shown : -

I shall now present to honorable members a statement reconciling the difference between the present selling prices and the

Tariff Board’s estimate of an amount of £24 9s. 5d. a ton : -

Mr FORDE:
ALP

– I shall give the honorable member the price of sheet bar per ton presently. I am now dealing with the increased cost of zinc, cases, and administration.

A profit of 9s. 3d. a ton on a total production of 30,000 tons per annum would amount to £13,875. This represents 1.85 per cent. on the actual cash capital of £746,342 invested in the industry, which amount does not take into account the £500,000 charged by John Lysaght, of Bristol, for goodwill, patents, trade marks, brands and processes, but only includes the actual cash invested in the industry.

Mr Curtin:

– On those figures the industry is uneconomic.

Mr FORDE:

– At the present rate of consumption of galvanized iron in Australia, it would be impossible for the industry to operate unless it were given adequate protection, but as soon as the consumption in Australia reaches 60,000 tons per annum instead of only about 30,000 tons as at present, the overhead costs will come down, and cheaper galvanized iron will be made possible. Indeed, lower costs will operate before the 60,000 tons stage is reached.

Mr Curtin:

– The first charge will be a proper return on the capital invested.

Mr FORDE:

– We cannot expect any company to invest capital in an industry and not hope to receive a return from it. It is reasonable to assume that the company expects a reasonable return from its investment.

The sum. of £13,875 is considerably lower than the £47,250 which the Tariff Board considered would be a reasonable profit on a slightly lower capital, and is sufficient evidence that the local company is bearing its share of the present depression. While dealing with the subject of profits, I wish to point out that the profit earned by the Newcastle works of Lysaght Limited, for the year ended the 30th December, 1930, represented 4.88 per cent. on the actual capital employed in the industry. Since the inception of the company in 1920, the total dividends paid amount to only £132,704. That amount has been paid at the expense of providing adequate cover for depreciation. On the subject of the dividends paid since the formation of the company, the investigating accountant and audit inspector, comment as follows: -

This cannot be regarded as a satisfactory return on such a large amount of capital involved.

Summarized, the position with regard to costs and selling prices may be stated as follows: - (1) The Tariff Board states that the price of galvanized iron should not exceed £25 a ton, less discounts; (2) the board’s determination is based on an output of 60,000 tons, which is impossible of realization in present circumstances; (3) the present price of £28 10s. a ton, less discount, does not, in the opinion of the departmental accountant and the audit inspector, return the local company a reasonable profit on its capital; (4) Messrs. Lysaght state that they will close down their works before they will sell at £25 a ton.

Mr M CAMERON:
BARKER, SOUTH AUSTRALIA · LP; NAT from 1925; UAP from 1931

– Let them do so.

Mr FORDE:

– The board comments freely on the amount of £500,000 included in Lysaght’s capital account for goodwill, trade marks, brands, patents, and processes. The board’s suggestion is that that amount should be disallowed in considering the return on capital, for the reason that the shares in the local company are almost entirely owned by the parent company in England, and that while such company is interested in the disposal of its products onthe Australian market, the amount representing goodwill, &c., should not be taken into account in calculating the return on capital. While I do not wish to express any definite opinion on this matter, I propose to present to honorable members Lysaght’s side of the case.

In the first place, Lysaght’s established their works in Australia at the behest of the Commonwealth. That necessitated the purchase of additional plant for installation in the Newcastle works.. The capacity output of that plant was about 24,000 tons of galvanized iron per annum.

Mr Gullett:

– Lysaght came here to make a profit.

Mr FORDE:

– The company established its works in Australia at the request of the Commonwealth Government of the day. No one would expect it to establish a factory in Australia to run at a loss year after year.

The effect of the establishment of works in Australia was to restrict the output of the English works by approximately the quantity manufactured in Australia. As new markets could not be found for the quantities previously supplied to Australia, part of the English plant remained idle. With the extension of the Australian plant to a manufacturing capacity of 80,000 tons per annum the whole of the parent company’s galvanized iron plant at St. Vincent, in England, has had to be scrapped; it is now being sold for what it will bring. In addition, other plant used for the manufacture of black steel sheet at the parent company’s works at Newport will be rendered idle. As the book value of the plant at St. Vincent runs into some hundreds of thousands of pounds, the parent company will incur considerable loss on its disposal. The English company takes the view that as the Australian company is now in a position to cater for the whole of the Australian requirements the Australian market is definitely closed to it, and that it is entitled to charge the Australian company for the loss which has been incurred through plant remaining idle, and also for losses which will be incurred when the surplus plant is disposed of. The Tariff Board also emphasized the point that, while the parent company was supplying the Australian market with large quantities of galvanized iron, a charge for goodwill should not bo allowed. At present the local company is in a position to supply the whole of the Australian requirements, and, therefore, importations from the parent company should not take place.

The second point made by the local company with regard to the amount of £500,000 is that it also covered trade marks, brands, secret processes, goodwill, &c., and that, at the time of the establishment of the works in Australia, it could have obtained a much greater sum from any outside company.

Mr Gullett:

– Yet the Minister is the representative of Labour!

Mr FORDE:

– I am not taking a onesided view of this subject. I have endeavoured to explain the whole of the conditions and circumstances surrounding this industry. I assure the honorable member that I did not accept the word of Lysaght Limited. I took it upon myself to appoint two accountants - selected, not by myself, but by the Department of Trade and

Customs - to inquire into the whole subject, and they submitted a report to me. I am entitled to be guided more by their recommendations and report than by the views of people who are absolutely prejudiced against this Australian industry, or who, with their tongues in their cheeks, speak for party political propaganda purposes.

The board also refers to the exchange position. It states that the operation of the present exchange rate between Australia and London affords sufficient protection to the industry. Ou the point of exchange I wish to draw attention to the practice adopted by many overseas companies of allowing their credits to accumulate in Australia, in order to overcome the necessity for paying exchange, lt is within my knowledge that many companies are at present adopting this course. The board’s assumption that the present exchange rate should constitute sufficient protection to the local industry bas within it that grave weakness. In any ease it is my opinion that tariffs should not be framed on an exchange rate which may, and does, alter from month to month.

Quite apart from the possible effect of the Tariff Board’s recommendations on Messrs. Lysaght’s business, serious consideration must be given to the possible effects on the operations of the Broken Hill Proprietary Company, inasmuch as the Tariff Board points out in its report that the total amount paid in wages in the production of sheet bar is in excess of that paid in the actual manufacture of sheets. In view of the fact that Messrs. Lysaght have indicated that a reduction in duty will lead to the closing down of Lysaght’s Newcastle works, the effect on the Broken Hill Proprietary Company’s operations may be viewed from these two aspects - (1) The serious reduction in -the price of sheet bar which would result from the board’s recommendation that the price of sheets be fixed at £25 per ton; (2) the seriousness of the loss of business which would result from the closing of Lysaght’s Newcastle works.

It should be noted that the Tariff Board does not suggest in any part of its report that the price of sheet bar has bee,n excessive. In fact, it states that the Broken

Hill Proprietary Company’s proportion of the proceeds of sheets closely approximates the proportion received by the manufacturers of sheet bars in England, and, in passing, it raises the question whether the Broken Hill Proprietary Company could afford to supply bar at £8 ls. 3d. The Tariff Board points out that the present price of sheet bar in England is unduly low owing to competition from heavily subsidized continental steel. To give an instance of the extent to which German sheet for export is subsidized, let me quote the following German prices from The Mining Journal of 6th December, 1930: - Sheet bars (inland), £6 ls. 6d. per ton; sheet bars (export), £3 9s. per ton.

Mr White:

– Not to Australia.

Mr FORDE:

– Germany cannot now export to Australia, but she can export to England in sheet bars and thence to Australia in the form of the finished product. It will be noted that the home consumption price is 75 per cent, greater than the export price. Notwithstanding the low prices ruling in England, due to this continental competition, the price of sheet bar in Australia to-day is almost identical with that at which these low priced British bars could be landed here duty free. The price which the Broken Hill Proprietary Company would receive for sheet bar under the Tariff Board’s recommendation would, if the exchange were taken into account, be approximately £1 10s. lower than the cost of English sheet bar delivered duty free in Australia. While on this point, it is only fair to say that the Broken Hill Proprietary Company, in pursuance of its policy of refraining from exploiting duties, has consistently reduced the whole of its prices to consumers, and when introducing this division of the tariff, I showed that reductions had been made in the prices of iron and steel products over a period of ten years, ranging from 23.11 per cent, to 47.25 per cent. I further explained that the weighted average duty over all steel products when reduced to an ad valorem basis was a surprisingly moderate one. Under normal circumstances, sheet bar represents approximately one-fifth to one-sixth of the production of the Newcastle steel works, and while under such conditions reasonable reductions in the price of sheet bar might not prove serious, it will readily be realized that such a substantial reduction of approximately £1 10s. a ton, or £2 a ton if quantity allowance is taken into consideration, must seriously affect the industry under present-day conditions,, particularly when it is explained that owing to the depression in the building trade, and the inability of governments to carry out normal maintenance work, and to there being much less new construction, the steel works are producing only about 25 per cent, of their normal output, and sheet bar represents upwards of 33 per cent, of this greatly-reduced tonnage. The reduced return to the Broken Hill Company on sheet bar alone would amount to approximately £1,000 a week, or over £50,000 per annum on a £1 10s. reduction in price basis. With the present abnormal costs due to greatly reduced outputs in all departments, the loss of this amount could not be other than a serious matter.

As to the effect on the steel works of the closing down of Lysaght’s Newcastle works, the following figures, furnished to the Tariff Board by the Broken Hill Proprietary Company, in reply to specific questions, after the inquiry had closed, speak for themselves. The number of men directly employed by the Broken Hill Proprietary Company in the production of sheet bar during the half-year ended 30th November last - the last half-yearly period. - including mining and carriage of ore, coal and other raw materials - amounted to 610. Those indirectly employed in dependent industries, other than bricks and coal, as a result of the manufacture of sheet bar by the Broken Hill Proprietary Company numbered 269 men, or a total of 879 men. In addition, there would be a large number of people employed supplying stores and services to the 879 directly and indirectly employed. Their number it is, of course, impossible to determine with any degree of accuracy. The estimated average increase in the cost of production and overhead on all steel, including rods for drawing of fencing wire and manufacture of wire netting, as a result of the loss of the sheet bar business under present conditions - taking January figures as a guide - amounts to £2 15s. 4d. a ton.

This, however, is a calculated figure, and does not reflect the full effect on operations. The loss of sheet bar business ai this time could be regarded only with grave concern for the reason that the various plants have already reached their minimum economic limits, and that the withdrawal of one-third of the already greatly diminished tonnage, would so dislocate operations as to render it quite impossible to produce with any semblance of efficiency. .

I am sure that honorable members will agree that this is not a time to penalize further such a great national undertaking as the iron and steel industry.

Mr Gabb:

– Like the wheat industry.

Mr FORDE:

– Unfortunately, the wheat, like every other industry in Australia, is to-day in a bad way, and it is the duty of the Government in power to help it. At a time when so many men are out of work, we should take no step to add to the large army of unemployed. This is no time to penalize further such a great national undertaking as the iron and steel industry, particularly when it is remembered that the price of sheet bar has, from time to time, been substantially and voluntarily reduced in an endeavour to assist in the extension of the sheet industry and in anticipation of increased business, which would result from such extensions - which anticipation, owing to the depression, has not been realized. -

Mr Maxwell:

– Was the view of Lysaght Limited placed before the Tariff Board before it made its recommendation?

Mr FORDE:

– Surely the honorable member does not think that the Tariff Board would carry out an investigation into the galvanized iron industry without taking evidence from the only manufacturer of the products concerned.

Mr Latham:

– It appeared that Lysaght Limited did give evidence.

Mr FORDE:

– To give just one instance of the desire of steel-makers to keep prices as low as possible, regardless, of duties, let me say that the Broken Hill Proprietary Company passed on to Its customers the full benefit of last year’s reduction in the price of coal. This reduction, in the case of sheet bar, amounted to 4s. per ton. The cessation of the galvanized iron industry would mean loss of employment to approximately 2,000 men, and honorable members will fully appreciate what this would mean at this particular period.

Mr Gabb:

– We do not wish the industry to close down altogether, but we wish to prevent the company from getting a rake-off.

Mr FORDE:

– No one wishes the company to get a rake-off. These duties may be reduced from time to time, and if it is found, upon investigation at some future date, that the company is making exorbitant profits the duties will have to be reconsidered. The closing down of the Newcastle galvanized iron works would not only affect employment in Lysaght’s works, the Broken Hill Company’s works and coal . mines in Newcastle, but also seriously affect employment in South Australia and Tasmania. The iron ore used in the manufacture of steel products is mined at Iron Knob, South Australia, and transported to Newcastle, while the large quantities of zinc used in the manufacture of galvanized iron are obtained from the Electrolitic Zinc Works of Tasmania.

Before passing from the Tariff Board’s report I desire to comment on that portion relating to the cost of protecting the local industry. In this connexion I would sound a note of warning to honorable members who have .accepted the board’s figure of £300,000 as representing the cost of protection, and who intend to adopt this figure to give point to their criticism of the proposed duty. The board first of all states that the annual cost of protection to the local industry during the last three years has been -

The board then proceeds to an analysis of the 75 per cent, qualifying percentage for British preference and on a basis of an increased cost of 17s. 6d. a ton, in order that the British manufacturers may qualify for the British preferential tariff, it adds an amount of £98,546. These amounts total £300,027, which the board, states is the cost of the industry to Australia, subject to the qualification that the actual duty payments, no doubt, relieve the community from taxation to a similar amount by other methods. The board then goes on to state -

As already stated, the result of this total cost (£300,027) was to have only 2:j per cent, of total requirements manufactured in Australia.

A careful analysis of this section of the report shows that the board has committed a grave error in adding together the amount collected in duty and the amount paid in bounty in order to arrive at the cost of protection. This cost should include only bounty payments,

PluS the equivalent of the duty included in the price of the Australian iron. As an illustration, I shall quote an example of the industry operating under a bounty only, and then change the method of protection over to a bounty-cum-duty form of protection. The average annual importations and local manufacture of galvanized iron is stated by the board to be 87,416 tons and 25,208 tons respectively. In the case which I propose citing I am adopting the board’s figures, with the exception of the duty paid at the foreign rate, which amounts to £3,077 -

On the above-mentioned consumption figures, the industry cannot, under any circumstances, cost more than this amount. If the local industry attempted to exact higher prices, importations would immediately replace the locally manufactured goods. I now take the same consumption figures to prove that, under a bounty-cum-duty form of protection, the industry cannot cost more than the amount of £110,988 per annum.

The gain to the community can be proved by subtracting the actual bounty payments from the duty collected. The amount which would have been collected on the above-mentioned figures would have been £87,416, whilst bounty payments amounted to £S5,7S0. Deducting i he latter figure, we get the £1,636 referred to as representing the gain to the community. On the actual figures quoted by the board the gain to the community also included the £3,077 representing duty paid at the foreign rate, which gives a figure of £4,713.

These illustrations prove that in assess- - ing the cost of protection, the board, in its first section, over-estimates such cost by £90,493, This amount cannot be regarded as a cost of protection, because^ what the users pay in duty the Treasury receives, and there is no community loss. But by reason of the duty; the local industry was enabled to charge £25,208 more to local users. This, then, is the first portion of the local industry’s excessive demand price. In addition to this £25,20S, the industry also required from the Treasury a further sum of £85,780 as the price of its continuance. This is the bounty paid. Thus the total cost of protection is £110,98S.

I now pass to the additional cost assessed by the Tariff Board through the adoption of the 75 per cent. British preference qualifying condition. The board assesses the cost at 17s. 6d. a ton. This 75 per cent, qualifying percentage was imposed by the previous Government in order to ensure that the legitimate British manufacturer would be protected against those manufacturers in the United Kingdom who merely performed finishing-off processes. It also had the effect of assisting the Australian manufacturer in meeting competition from the finishing-off manufactories in the United Kingdom. Now the same effect, from the Australian industry’s point of view, could have been achieved by paying an additional bounty of 17s. (6d. a ton without amending the preference eoiditions This 17s. 6d. a ton would have enabled it to meet the competition of the manufacturers of the United Kingdom who could qualify only to the extent of 25 per cent, of the value of labour, and/or materials. Had an additional amount of 17s. 6d. a ton bounty been paid, it would have cost the Australian community an additional* £22,057: but the legitimate. United Kingdom manufacturer would not have benefited, and he could not have met the competition of other manufacturers in the United Kingdom who used continental sheet bar. To have obtained a part of the Australian market he would have been compelled to do likewise. In other words, the 7o per cent, preference condition enabled the legitimate United Kingdom manufacturer to use British iron and steel, coal, spelter, &c, and also to employ more British workmen in the production of such materials. For observing these conditions, the Commonwealth, in effect, gave the British manufacturer a rebate of £2 per ton in duty. The 17s. 6d. a ton additional charge on the quantities imported did not benefit the local industry, other than by allowing it to charge an additional amount of 17s. 6d. on local production. The 17s. 6d. included in the price of the imported iron is of direct benefit to the United Kingdom, enabling it, as it does, to use British materials, and to employ British workmen. This 17s. Gd. a ton on importations, therefore, becomes a direct charge to British preference. The local industry did not benefit beyond the amount of £22,057 already referred to. .

The total cost of the protection accorded to the galvanized iron industry hi Australia is, therefore, £110,9SS, plus £22,057, totalling £133,045 per annum, as against the £300,027 assessed by the board. This £133,045 can also be checked by adding together the bounty, £3 8s., equivalent of duty £1 and 17s. 6d. - additional charge which manufacturer makes on account of preference conditions - and multiplying the sum by the quantity produced, namely, 25,208 tons. The cost of protection, amounting to £133,045, is equivalent to an annual cost of £66 10s. for each employee engaged in the industry. There are at least 2,000 employees engaged.

When the difference in wages paid in the United Kingdom and in Australia is taken into consideration, honorable members will realize the efficiency of the local industry and of the Australian workmen, who can produce such a large quantity of galvanized iron at an additional cost of only £133,000. The following table shows the wages paid in the United Kingdom and in Newcastle, Australia: -

In some of the skilled trades associated with this industry in Australia, the wages to skilled workers are much higher than those quoted ; but I am ignoring that. On the average quoted above, the cost of employing 2,000 men per annum in the United Kingdom amounts to £253,000, while the cost in Australia would amount to £456,000. The excess cost in wages alone in Australia is, therefore, £203,000, while the cost of protection is only £133,000. It is a tribute to the efficiency of the workmen and of the industry in Australia that the cost of protection is £70,000 per annum less than the increased wages would justify the industry charging.

The error in the board’s report in assessing the cost of protection, and also the fundamental weakness on the part of the board in basing its. report on an output of 60,000 tons, gives point to my many statements during the course of this debate that the Tariff Boardis an advisory body, and that the Government is not compelled to accept its findings. Previous Ministers, including the late

Hon. H. E. Pratten, announced in Parliament, when chided for not accepting the board’s recommendations, that the board was purely an advisory body, that it was not above Parliament; and that Ministers were not bound to accept its reports, but might use them for their information if they were found to be correct.

I shall now deal with other aspects of the duties. The main opposition to the fostering of the galvanized iron industry in Australia is based on the ground that that will unduly penalize primary producers. It will occasion some little surprise when it is learned that of the galvanized iron sold in Australia the major proportion is not sold to primary producers. I have had inquiries made from galvanized iron distributors in the Commonwealth as to what percentage of their sales they estimate have been made to primary producers. In response, the following figures were submitted to me : -

A reliable average appears to be 25 per cent. I have also had estimates made as to the total cost to a farmer of the duty forgalvanized iron used in erecting farm buildings, on the assumption that an amount equivalent to the whole of the duty is included in his purchase price. For this purpose I have taken a wheat farm of 960 acres, with the following buildings : -

Six-roomed house.

Machinery shed -66 ft. x 24 ft. open 66 ft. front.

Stable- 70 ft. x 20 ft. open 70 ft. front.

Mouse-proof barn - 40 ft. x 20 ft.

Chaff house - 25 ft. x 20 ft.

Two mouse-proof stack enclosures - 66 ft.x 24 ft.

Cow shed - 16 ft. x 12 ft. open 16 ft. front.

Garage or buggy shed - 18 ft. x 16 ft.

Fowl house - 20 ft. x 12 ft.

The tonnage of galvanized corrugated iron required to cover and wall in these buildings is 7½ tons, although the provision for them may be regarded as an extreme case. In actual practice it would be found that this quantity of iron would not be required and would not be found on a farm of 960 acres. Multiplying the 7½ tons by £7 10s., the general tariff rate per ton gives a figure of £56 5s. The annual amount required to liquidate this debt over a period of twenty years, which is a very conservative estimate of the life of galvanized iron, is £4 10s. 3d., after allowing for interest at 5 per cent. on reducing balances. Assuming that 320 acres only are cropped every year; and that a 12 bushel to the acre crop is grown, the increased cost of the galvanized iron would amount to . 84 pence per bag of 3 bushels. The substitution of the straight-out duty for the bounty-cum-duty form of protection has, however, increased the duty on galvanized iron to £4 10s. per ton. Adopting the same basis as previously outlined, the increased cost to the farmer amounts to½d. per bag of 3 bushels or . 166d. per bushel, which represents the difference between the old and the present duties in both the British preferential tariff and general tariff, that is £4 10s. per ton. I cannot imagine any one contending that this amount could be regarded as a serious factor in a farmer’s success or failure. As it appears to me, the real trouble with the man on the land is that when yields were plentiful and prices high, instead of providing against normal or lean years, the additional returns were capitalized into land at inflated prices, so that we now see the spectacle of the farmer having to meet ruinous interest charges and taxes assessed on inflated values.

In conclusion, I wish to emphasize that this committee has to face actual realities and not the theoretical assumptions adopted by the Tariff Board. The committee must determine whether this industry should be abandoned or not. If we give effect to the board’s recommendations itwill mean the closing down of the galvanized iron works, and the throwing out of employment of 2,000 men in New South Wales, South Australia, and Tasmania. Moreover, users of other iron and steel products will be saddled with increased costs because of the loss of trade experienced by the Broken Hill Proprietary Company Limited. The results of my investigation confirm the board’s finding that increased output will mean reductions in cost of manufacture. When the industry is in a position to produce 60,000 tons of galvanized iron annually it will not require the same rate of duty as is now proposed. I, therefore, move -

That the item be amended by adding the following proviso: - “ Provided that if at any time the Minister notifies in the Gazette that in his opinion the Australian requirements for the goods specified in this item for any period of twelve months after the first day of September, 1931, have exceeded 60,000 tons, the rates of duty on such goods shall, on and from the date of the gazettal, be per ton, British, 90s.; intermediate, 110s.; general, 130s.”

Any honorable member whose criticism rests on the assumption that the Tariff Board was correct in its finding will admit that, as production has fallen below 30,000 tons per annum, it would be unfair to accept figures based on a production of 60,000 tons per annum. As my amendment proposes to reduce the duty to the basis recommended by the Tariff Board as soon as production again reaches 60,000 tons per annum, it should have the unanimous support of the committee.

Mr PATERSON:
Gippsland

.- The Minister has lost himself in the maze of figures supplied to him in the manufacturer’s brief with which he has regaled the committee for the past hour or so. It is interesting to see the honorable gentleman in the role of defender of monopolies, of big business, of the capitalistic system. The Minister went so far in his defence of monopolies as to say that a big business of this nature must necessarily receive full interest on its invested capital, even though its customers are unable to make any interest on theirs. The honorable gentleman spoke very disparagingly of the report of the Tariff Board on galvanized iron. That report appealed to me as being exceptionally comprehensive. It indicated that the Tariff Board had gone to very great pains to get to the root of the matter, to leave nothing to chance, so that it could be perfectly certain of its facts before submitting any recommendation. It is an admirable effort, upon which I congratulate the Tariff Board. I read the report, although lengthy, from beginning to end with interest and pleasure.

I agree with what was said earlier this afternoon by the honorable member for Henty (Mr. Gullett), whom we are all pleased to have back with us, restored to health. I appreciate the courtesy of the honorable member in standing aside to permit uie to give notice of an amendment, copies of which I have had circulated, which is in substance very much what the honorable member would have moved had he felt himself free to do so. I give notice of my intention to move -

That on and after the 17th September, 1931, the rates of duty on. tarin” item No. 145 be - British preferential, 90s.; intermediate, 110s.; general, 130s., provided that when the gross list price of 20-gauge Australian “Orb” galvanized iron, as certified by the Tariff Board, exceeds £25 per ton, the rates of duty shall lie - free, 20s., 40s.

The Minister declared that the Tariff Board had understated certain costs, and had in some instances got a long way below those set out by Lysaght Limited as being correct. If honorable members turn to the report, they will see at page 8 that the board was anxious to do the right thing by this firm when it provided for 5s. per ton above the costs set out by Lysaght Limited. In dealing with the extra cost of 26-gauge iron, as generally used in Australia, compared with 24- gauge iron, as generally used in Great Britain, the report gives the following figures, which were supplied by John Lysaght Australia Limited : -

This, according to Lysaght Limited, is the

Amount involved in selling 26-gauge iron in Australia, in addition to the price charged in England for iron of a thicker gauge and lower quality, packed in bundles. Invoices from exporters other than Lysaght Limited showed the following differences -

The Tariff Board, in order to be as fair as possible, took the mean of the two totals, which was £3 5s., and gave that as a reasonable sum to add to the published English price in order to arrive at the f.o.b. price of iron comparable with the Australian standard. The board deliberately allowed 5s. per ton more under this heading than Lysaght Limited asked it to allow. This is evidence that the board was anxious to do the fair thing in regard to the figures placed before it.

The Minister also had a good deal to say about the amount which Lysaght Limited considered reasonable to allow for depreciation. The Tariff Board gave very close consideration to this point, as is shown by the following extract from its report : -

Viewing the proposed provision for depreciation in conjunction with the charges included in production costs for renewals of wearing parts of the machinery, maintenance materials and maintenance labour, the board is of tlie opinion that it is unnecessarily high.

The Minister said nothing at all about that aspect of the subject. I therefore stress the fact that Lysaght Limited make a very substantial allowance annually for the renewal of wearing parts of machinery, maintenance materials, and maintenance labour. It will be admitted that when in an industry a great deal is spent upon the maintenance of the machinery at a certain standard of efficiency and repair, the amount necessary to be set down for ordinary depreciation should not be as high as it would otherwise be. In connexion with our railways, we involve ourselves iri definite charges for keeping the permanent way in first class order by the renewal of sleepers, rails and so on, and would, therefore, be justified in putting down a comparatively low amount for depreciation. The Minister totally disregarded this aspect of the subject in his argument ; but we would not be justified in overlooking the point.

The honorable gentleman also referred at some length to the statement of the Tariff Board that the annual cost of the protection of this industry to Australia had been about £300,000. If I understood the argument of the Minister correctly, it was that it was’ not correct to put down the full amount of the duty as the cost to Australia of protecting this industry. Surely the Minister must, realize that it is an economic axiom that, if locally-produced goods have tobe sold at, say, £1 a ton less than the price of the imported goods, plus the duty, in order to obtain the market, it follows that, even if there were no duty, the local producer would still have to sell at £1 a ton less than the price of the imported article in order to beat the importer. If certain goods could be imported into this country for £20 a ton, and the duty brought the price up to £25 per ton, the local industry, in order to obtain the business, might have to sell its product at £24 a ton. If it were necessary for the local industry to undercut the imported article, plus duty, by £1 a ton and sell for £24 a ton, I submit that if the imported article were brought in duty free at £20, it would be just as necessary to sell the local product at £19. In those circumstances the difference between the prices for both local and imported goods is equal to the full amount of the duty, and I consider the Tariff Board’s calculations as to the cost of protecting this industry are sound.

Mr Stewart:

– The Minister assumed that if there was no duty there would he no local industry.

Mr PATERSON:

– That is so. The Minister’s brief apparently made out, in some laborious fashion, that the actual cost of producing galvanized iron in Australia was greater than that stated by the Tariff Board. The brief, apparently, showed that £28 0s. 9d. was the cost of galvanized iron, and that the selling price of £28 10s. allowed a profit of only 9s. 3d. Even assuming that the figures quoted by the Minister were correct, the gross list price of the iron is £29 10s., and not £28 10s., so that the aggregate profit is three times greater than that stated by the Minister.

The Minister also dealt at some length with the charge made for goodwill, trade marks, and secret processes. Apparently, John Lysaght Limited, Bristol, obtained shares to the value of £500,000 in John Lysaght Limited, Australia. As the Tariff Board points out in its report, if John Lysaght Limited, Bristol, had sold its trade marks, secret processes, and goodwill, to an entirely dissociated firm, it might have been reasonable to make a charge of £500,000; but surely it is unreasonable for John Lysaght

Limited, Bristol, to charge £500,000 to John Lysaght Limited, Australia, for trade marks, secret processes, and goodwill, when the sale was from themselves to themselves.

Mr Curtin:

– They increased the holding company’s profits by diminishing the profits of the company actually manufacturing the goods.

Mr PATERSON:

– That is almost exactly the position. Another point that might be taken against the speech of the Minister is that he said, in moving his amendment, that he was prepared to reduce the duty by £1 all round when the output of Lysaght Limited reached 60,000 tonsper annum. Apparently, the Minister considers that it is reasonable that while this firm is in the trough of depression its profits should be safeguarded by allowing it to make an additional charge for its products under shelter of a higher duty. The honorable gentleman seems to forget that every business in Australia to-day is in the trough of depression. Would it be reasonable for drapers to charge more for their goods simply to enable them to maintain their profits? Every business enterprise has to be satisfied to-day to make smaller profits on a lower turnover than formerly. There is no justification for allowing this firm to maintain profits by means of an excessive duty excluding all competition. Every industry should be willing, under existing conditions, to make smaller profits so that the price of goods might be reduced to stimulate consumption and hasten the return to normal conditions.

The Minister also said that about £56 was the extra cost in which the average farmer would be involved for the building of a dwelling-house, sheds, and outbuildings, because of the additional duty on galvanized iron. The honorable gentleman made a laborious calculation with the object of showing what this amount would represent per bushel of wheat spread over a number of years. But he entirely overlooked that the farmer would be obliged to find this additional £56 capital at the very beginning of his operations, and at a time when it would mean a very great deal to him. In many cases farmers would be obliged to go without necessary buildings, because they could not afford this additional expenditure, and it would mean that their stacks must be left unprotected against mice and other pests.

It is only a few years ago since the galvanized iron industry was being protected by means of a bounty. The Minister” spoke of the bounty-cum-duty system, and set out what he considered to be the reasons why the previous Government preferred the bounty to the duty system of protecting the industry. But the reasons were not exactly as he gave them.. A bounty was granted upon the production of galvanized iron because it was regarded as desirable, particularly from the defence point of view, to establish this key industry in Australia. It was felt that as the industry might be valuable to the community as a whole, it was fair that all the people should hear a fair share of the cost of protecting it. Protection by means of a bounty instead of a duty meant that their product had to be, and could be, sold at a price which bore a comparison to practically freetrade importations from Great Britain. In the case of galvanized iron, the price was £1 a ton above that of freetrade importations. But the time has arrived when the Government can no longer find the money. to bolster up this particular industry at the expense of the whole community, and it has therefore decided that it shall be bolstered up by one section, which is still less- able to bear the extra cost than is the whole community.

We have heard a good deal as to who are the users of galvanized iron. I admit that it is used throughout Australia by all classes of occupations. The Tariff Board has a word to say on the point at page 5 of its report. It there says -

In many country districts in Australia, galvanized iron is an essential need, as it lias no satisfactory substitute. It is particularly suitable for the requirements of new settlers in out-back districts. Its strength in relation to its weight, the speed with which it can be erected, its comparatively low price, and its capacity for catching and storing water, combine to make galvanized iron of fundamental importance to the ‘pioneer settler. Men engaged in primary industries throughout the Commonwealth are at present struggling for their existence and are earnestly appealing for reductions in costs. It is of the utmost importance, therefore, that so essential a commodity as galvanized iron shall be made available at as low a price as possible.

It might also have said that galvanized iron is used for the protection of stack? against’ the ravages of mice, if the farmer can . afford to pay for such protection. I believe that the board approached this problem very fairly from the point of view of the. industry which produces galvanized iron. Its manner of approach is set out at page 19, where it says -

The board considers it desirable that the local manufacturers should be given protection adequate to maintain the industry on a profitable basis without giving them such immunity from competition as will enable them to charge unduly high prices. This objective could be achieved if the imposition of the duty suggested were made dependent on Lysaght’s Newcastle Works Limited, giving a definite undertaking to reduce- present prices to the basis of £25 per ton for 20-gaugc “ Orb “ galvanized corrugated iron and not to increase them unless higher costs of production necessitate such action. This would safeguard consumers during the period of high exchange rates. When the exchange rate falls to normal, the duty suggested by the board would effectively protect the local manufacturer, while the risk of external competition would tend to regulate prices and so safeguard the consumers.

The Minister has said that the exchange rate may not always remain as it is. That is perfectly true. I point out, however, that if the committee were to pass the amendment of which I have given notice, while the duties would not be operative at the present time as a means of raising prices - they would not be necessary - they would automatically take effect as the exchange rate fell, and those who are producing galvanized iron would be in an infinitely better position than is the primary producer, the prices of whose products fall “as the exchange rate drops. The price of galvanized iron could still be maintained at £25 a ton because, as the exchange rate fell, the duties which the board has recommended would immediately begin to operate. The board has pointed out that British galvanized iron of the same quality as that used in Australia, and packed in skeleton feltlined cases as is done in Australia, would be worth about £15 a ton f.o.b. It has also shown that freight, insurance, wharfage, &c, amount to £3 Os. lOd. a ton. It has allowed only 2 per cent, for exchange, because, when its calculations were worked out originally, that was the rate of exchange. I have allowed 10 per cent, for primage and £30 10s. for exchange. With those alterations, the figures are, £15 a ton f.o.b., £30s.10d. for freight, insurance, and wharfage, and £1 13s. for primage, a total of £19 13s. 10d. landed cost without duty. The exchange amounts to £5 10s. on the c.i.f. value, bringing the cost to £25 3s.10d. The board has allowed £1 a ton for importer’s profit. The addition of that sum raises the total to £26 3s. 10d., which is 74 per cent. above the f.o.b. price. If that is not sufficient protection, I do not know what is. The board strongly held, and expressed, the view that with exchange where it stands at present the industry does not need the protection of a duty against British iron. It says that British iron cannot be imported at less than something over £25 aton without duty, and that the sale of Australian manufactured iron at that figure would return a reasonable profit to the manufacturers. If gave consideration to the question as to whether a duty should be granted at all, and came to the conclusion that a duty should be granted only provided that the price charged was £25 a ton gross list price, from which the usual trade discounts were deductible, for galvanized iron packed in skeleton feltlined cases. That is the reason why my amendment contains the following proviso : -

Provided that, when the gross list price, as curtificd by the Tariff Board, of 20-gauge Australian “Orb” galvanized iron packed in skeleton felt-lined cases, exceeds £25 per ton. the rates of duty shall be free, 20s., and 40s.

I wish to quote one or two further extracts from the board’s report to which the committee might very well devote a few moments’ consideration. At page 20, it sets out the proviso which should accompany the tariff rates, and at page 22 makes the following statement: -

Sufficient protection is at present being afforded by the high rate of exchange between Australia and London. The board considers, therefore, that duty should be imposed only if the local manufacturer undertakes that prices will bo reduced immediately to the basis of a gross list price of £25 per ton for 20-gauge “ Orb “ galvanized corrugated iron.

Then at, page 16 it says -

With these data the board has arrived at £24 9s..5d. per ton as a reasonable gross selling price at interstate stores of 20-gauge “ Orb “ galvanized corrugated iron packed in skeleton felt-lined cases.

It has allowed for a little more than that - £25 a ton. I have already pointed out that, while the duty would be latent at the present time with the priceat £25 a ton, it would immediately become operative asthe exchange rate fell, or if importations of British iron came down in price. The Government’s proposal provides for a duty of £1 per ton in excess of the rate recommended by the Tariff Board.

The CHAIRMAN (Mr. McGrath).The honorable member’s time has expired.

Mr CURTIN:
Fremantle

.- I intend to support the recommendation of the Tariff Board. It appears to me that, of all reports that have been submitted to this Parliament, that which is the least open to criticism on the ground that it contains theoretical assumptions is that relating to the item before the committee. The Minister’s speech in criticism of the board’s recommendation would suggest that he would have great diffidence in submitting any new matter to the board for investigation and report. His remarks are tantamount to a direct suggestion that the board has failed to consider essential points in making its inquiry, and has not made a comprehensive survey of the position of the galvanized iron industry. I gather that the present difficulties of the industry are not said to be attributable to overseas competition, and, therefore, it appears to me that it would be entirely fallacious to assume that the difficulties of the industry can be overcome by a measure of fiscal reform. I cannot see that the increased duty to be given to the industry under the Government’s proposal would be equitable. If this is an essential national industry, it would not be right to develop it by means of taxes levied solely upon the consumers of the product of the industry. A question that might well be asked is whether this industry, because of its relation to the Broken Hill Proprietary Company, some of whose raw material it consumes, thereby becoming an important link in the development of the iron and steel industry in Australia, is to receive preferential treatment over other industries. I would beprepared to examine that question, I hope, reasonably, and I would be quite willing to give the galvanized iron industry proper assistance because of its connexion with what may be regarded as a national instrumentality for the economic defence of the country. But fairness demands that the nation as a whole, not merely the consumers of galvanized iron, should he called upon to contribute proportionately towards whatever assistance may be necessary to give this industry a reasonable chance of development.

It appears to me that the proposed duty indicates a departure from the spirit and purpose of what is known as the Premiers’ rehabilitation plan. I was not, and am not now, a supporter of that plan; but I believe that the present policy of the Ministry in connexion with this item represents an attempt to stabilize a peak price for galvanized iron under economic conditions in which deflation is regarded as imperative and inevitable. I cannot accept such plain contradiction in regard to a fundamental policy without at least placing my opinion on the matter before the country. The rest of the community, for various reasons, many of which result directly from governmental policy, are less able than formerly to purchase the products of any industry. It, therefore, seems incompatible with the Government’s general policy that it should seek to maintain a peak price per ton for galvanized iron, and at the same time proclaim that, because the national income has fallen, costs generally must come clown, and the return to each individual must inevitably fall.

Mr Watkins:

– This is a fair duty.

Mr CURTIN:

– It could only be regarded as fair if its purpose were to avert unfair overseas competition; but, at the present time, the galvanized iron industry has no such competition to meet. If I am to construe the Minister’s argument as being that the present slump constitutes a reason for disregarding the Tariff Board’s finding, because the production of the company has fallen from 60,000. tons per annum to a considerably smaller quantity, I can only say that it is then our duty to revise all the items under this tariff, in order to draw a proper distinction between those duties which are of an emergency nature, and those which are to have general application. I can see nothing in the report of the Tariff Board which justifies the rate at which this product is proposed to be sold to the other industries of Australia being determined in accordance with the output of the company. Of course, when the output falls, the profits become less and the cost per ton for management and for a number of other charges included in the cost of production must increase; but this industry has already had the advantage of a considerable reduction of wages. Wages generally have fallen as the result of decisions of the Commonwealth Arbitration Court. The wages costs of the Broken Hill Proprietary Company have been reduced. The cost of sheet iron to Lysaght and Company, and the cost of coke and coal has fallen. There have been considerable reductions, I have no doubt, in the cost of other subsidiary articles, such as oil, which are used in the galvanized iron industry.

Mr.Forde. - Wages in this industry have not fallen. The company works practically under State awards.

Sitting suspended from6.15 to 8 p.m.

Mr CURTIN:

– The whole contention of the company relates to a dispute with the Tariff Board as to a reasonable selling price for galvanized iron in Australia. The company says that the price of £25 a ton suggested by the Tariff Board is so impracticable that it could not carry on if forced to sell its product at that price. In my opinion, the Tariff Board took into account practically every important factor in arriving at its estimate of a reasonable selling price for galvanized iron in Australia., having regard to the fact that the company has virtually a monopoly of the Australian market. Objection is taken to the Tariff Board’s estimate on the ground that it is founded upon an annual production of 60,000 tons of galvanized iron. In dealing with the tariff are we to fix the price of each commodity so that it will ensure to the company manufacturing it an adequate return for the capital invested, irrespective of the demand for the commodity? If we are to undertake that responsibility, it is obvious that we shall have a tariff which will vary in proportion to the company’s output. In that case, there will be no limit whatever to the imposts which this Parliament will be asked to levy on consumers. The important consideration in this instance is that the maintenance of the price fixed by Lysaght Limited for galvanized iron is unquestionably out of proportion to the general movement of commodity prices iu Australia. We have to consider to what extent we are justified in giving special consideration to special industries. As I mentioned before the dinner adjournment, should Parliament believe that this industry is essential to Australia’s development, then the proper course to pursue is to pay to the company out of the Consolidated Revenue a bounty based on its output. That would be preferable to increased levies, and therefore additional costs to those industries which consume it.

Although I come from Western Australia, I am not opposed to a policy of protection for Australia. On the contrary, I have made it clear, time after time in this chamber, that there are certain national industries which this country should possess and which, therefore, ought to be protected. The right course to pursue in connexion with those industries is to treat them nationally, so that whatever assistance we render to them will not mean that a special levy will be made upon certain sections of the people. Unfortunately, in the case of galvanized iron, the manufacturer’s price is not the only determining factor in the cost to the consumer. Freight charges on galvanized iron are heavy because the commodity is heavy and awkward to handle. Although the company has agreed to a uniform price of £28 a ton in each of the capital cities of the Commonwealth, it is extraordinary that galvanized iron of from 18 to 24- gauge costs £30 12s. 6d. a ton in Perth as against £28 5s. a ton in Sydney. There is this further anomaly that, whereas in Sydney the price mentioned includes delivery in the metropolitan area, in Perth and Fremantle cartage is an extra charge. I know that I shall be told that that extra charge is levied by the dealers, and that, therefore, it does not come under the control of this Parliament. For that reason I draw attention to an extraordinary fact, which is not referred to in the report of the Tariff Board, namely, that the supply of galvanized iron wholesale in Australia is practically confined to those dealers who are members of recognized hardware associations. Firms which do not belong to those associations are placed at a disadvantage when dealing with galvanized iron. I am not opposed to organization but I object to these hardware associations laying it down that one of the qualifications for membership is acquiescence in a list price. That price is usually determined by the large firms whose premises are located in the heart of the city where rentals and overhead charges are high. Should a new competitor wish to start in business in a suburb, where land is cheaper and expenses generally are less, he cannot join the’ association unless he agrees to charge the price fixed by it. His acquiescence in that condition means that, both he and the consumers lose the advantage of his suburban position, with its cheaper rental and lower overhead expenses. Thus, it will be seen that the tariff imposed by this Parliament is only one of a number of factors which result in the present high price of galvanized iron in Australia. In that respect Lysaght Limited are practically identical with the Broken Hill Proprietary Company. The report of the Tariff Board sets out what this Parliament should do in order to give this Australian company a reasonable chance of competing against galvanized iron imported from other countries. That ‘is the only question that should be taken into consideration in dealing with the duties on galvanized iron; we have only to decide what is a fair measure of protection to give this company against the product of overseas manufacturers of this commodity. It is extraordinary that one of the principal exporters of galvanized iron to Australia is the holding company in the company which is the only manufacturer of galvanized iron in this country. I cannot understand why it is necessary that the difference between the price quoted for galvanized iron overseas and that which the Australian company says is necessary should he so great. The only possible explanation is that the amount of capital invested in the Australian company is out of all proportion to that which is necessary in order to provide Australia’s requirements of galvanized iron. The company’s works are equipped to produce 80,000 tons of galvanized iron per annum. Over a period of years the total Australian consumption of that commodity has averaged about 112,000 tons.

When this Parliament first fixed the duties- on galvanized iron it was thought that there would be a considerable expansion in the demand for the Australian product as the result of the disabilities imposed on the imported article; but, unfortunately, our expectations have not been realized. That, however, is not due to the inadequacy of the protection afforded to the Australian manufacturer. That state of affairs is no more characteristic of the galvanized iron industry than of other “manufacturing industries in this country. I am not prepared to vote for what 1 consider to be an altogether extortionate duty - one which will do no more to keep out unfair competition than that recommended by the Tariff Board. Even the potential threat of competition from abroad has its effect in keeping down the price of commodities, whereas the existence of a monopoly tends to increase prices unfairly to the public. In dealing with this matter I must have regard to two considerations - first, whether this company i3 likely to have unfair competition if the duty recommended by the Tariff Board is imposed. To that I must answer “ No.” The second consideration is whether, if the Government’s proposal is accepted, there will be no possibility of even the threat of competition being held out against this company. Seeing that the only producer of galvanized iron in Australia is virtually producing that commodity under monopolistic conditions, it appears to me to be wrong to buttress up the industry artificially by imposing an extortionate duty which will render impossible any form of competition whatever.

Mr HAWKER:
WAKEFIELD, SOUTH AUSTRALIA · NAT; UAP from 1931

.- In his speech of 70 minutes’ duration, the Minister quoted many figures and read extensive extracts from a memorandum prepared by Lysaght Limited - a copy of which I have in my hand.

Mr FORDE:

– I did not quote from any memorandum prepared by Lysaght Limited.

Mr HAWKER:

– Even if the Minister himself did not quote from a memorandum prepared by Lysaght Limited, hi3 officers, whoso names he was good enough to give us, were evidently in close touch with that firm, because the statement read by the Minister contained in place* almost identical phraseology with that of the memorandum prepared by John Lysaght, and circularized among members of this Parliament about the time that the Tariff Board issued its report on galvanized iron.

Mr Forde:

– Two accountants were appointed to go through the firm’s books.

Mr HAWKER:

– Not only did the Minister read statements similar to those in the company’s memorandum, but he also read a letter from, the firm of accountants which audita Lysaght’s books - a letter which was printed in the firm’s memorandum - advising that greater provision should be made for depreciation. That letter has been used by the Minister as evidence to show that the Tariff Board was wrong in its references to the amount allowed by the firm for depreciation.

Mr Forde:

– I have never seen the circular which the honorable member has in his possession.

Mr HAWKER:

– This information has been fed to the Minister; he has avidly swallowed it, and is now asking this committee to swallow it with equal avidity.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– In other words, the Minister knows nothing. He merely reads the information that is supplied to him.

Mr HAWKER:

– He has read a long and involved brief which has been prepared for him. Although it is vastly longer than the memorandum which has been circulated by Lysaght Limited, its arguments are practically identical, and it3 phraseology much the same. The Minister also made a statement which, although literally true, was in effect somewhat misleading. He said that the agreement which had been made between the suppliers of steel and John Lysaght Limited, fixing the price of steel on a sliding scale, could not have been honoured by the suppliers of steel because the price charged would have been below the cost of production. The Minister tendered that statement on behalf of the suppliers of steel. I do not query the truth of it. The company has such a high standing that I do not believe ‘it would give false information. The Minister stated, truthfully enough, that there was no financial connexion between these two companies, and, so far as I know, and the report of the Tariff Board shows it, there is no such connexion. I accept that statement without qualification. But the Minister in making it did not mention the fact that a high executive officer of one company is a. director of the other. Therefore, if there is no financial connexion between the companies, there is at least a close working alliance. The Minister’s statement, although literally true, was certainly misleading. In view of the way in which he has. piled up these duties, and has swallowed any tale told to him, I certainly think that the committee should decide this issue independently of the Minister’s special pleadings. It should be decided on its economic merits.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– The Minister has listened to the manufacturers, to the exclusion of all other evidence.

Mr HAWKER:

– He has read the brief of the manufacturers, and nothing else. The statement which was prepared for him by his officers, or by the manufacturers, shows that this duty will, over a period of years, directly increase the cost of producing wheat by at least id. a bushel. The Minister has given no thought to those in the building trade who will be thrown out of work because of the operation of this duty, which has been imposed merely to meet the wishes of the manufacturers. The Minister has ignored the able report of the Tariff Board, which is composed of independent members representing various interests; men with different points of view with regard to the protectionist policy. This well-equipped and efficient body of experts have inquired with particular care into this and other industries, and because, in this instance, its recommendation did not suit the policy of the Minister, he appointed two departmental officers, taking virtue to himself because of the fact that they were not from the central office. On their report he is asking this committee to take an action contrary to that recommended by the Tariff Board. The amendment of the Minister that the duty be reduced by £1, when he has certified in the Com.monwealth Gazette that, in his opinion, the output of the company has reached 60,000 tons a year, contains no safe guard that when that output is reached the department will take steps to prevent the consumer from being exploited. Even if the duty is reduced by £1, the company would still be able to charge £2 10s. a ton in excess of the price at which the Tariff Board, upon inquiry, has ascertained that the company can profitably supply galvanized iron. The board recommended that the company should be. protected to an extent which would ensure _ to it the Australian market provided that it did not use that protection to bleed the consumer. The Minister, in making provision to diminish that protection without taking steps to prevent the consumers from being exploited, is merely bluffing, and making an adroit attempt to try to secure a point in the game of tactics. He pays no attention to the needs of the consumer and the man to whom an increase of id. a bushel in the cost of production is a tremendous consideration in these days. The Minister is not thinking of the nien in the building trades who are out of work because the price of building materials is so extravagantly high as a result of the operation of this duty. We have only to examine the Minister’s speech to ascertain that increased protection to one industry imposes a burden on another.

The Minister submitted a list of additional costs incurred in connexion with the price of galvanized iron compared with costs existing at the time the Tariff Board made its inquiry. A certain portion of the extra cost is due to the increased cost of spelter caused by the exchange premium on exports. That is independent of protection. But another is the cost of casing, which has been increased by higher timber duties. That is not a big item, being only 2s. 6d. a.ton. But this additional cost, although it benefits one industry, is being passed on to others which cannot pass it on Although in this instance the direct increased cost of galvanized iron to the farmer may not seem to the Minister to be very great, the duty also affects him indirectly. He has to pay more for all the materials required for his own use. This additional duty will increase the price of galvanized iron to every industry in the .country. It will bring in its train higher prices for all buildings. Rents will be increased, which factor is taken into consideration in fixing the basic wage. This additional duty will thus increase the basic wage if the existing standard of living is to be maintained, and it will increase the cost of nearly everything that is made in Australia. Because of the additional cost, of living the income of the man working under awards will most likely be increased by the Arbitration Court. The people engaged in most industries will increase their incomes by increasing their prices. So the increased duty will pass from one industry to another until it finally falls upon our big exporting industries, including the farming industry, whose prices are fixed by world conditions. The farmers and graziers will pay this duty twice. They will pay once on the galvanized iron which they purchase for their own requirements, and which the Minister has said is equal to .S4d. per bag, or over id. a bushel. He will pay again indirectly. In that way this duty will ultimately fall upon the export industries, which are to-day just about down and out. On whose behalf is this duty being levied? The answer is contained in the statement of the Minister. He began by referring to what was a fair return to Lysaght Limited for establishing this industry in Australia. He said that the Tariff Board had fixed 7 per cent, as an, adequate profit “for the company in these time3. That, he said, was little enough. It might be little enough in good times; but, in these days, when nearly every industry is making a loss and not a profit, it is not fair to grant to this company, which is being given practically a monopoly, and, even on the Tariff Board’s recommendation, is to be secure iri that monopoly provided that it does not abuse it, the right to take extra toll from the community in order to maintain a. dividend in excess of 7 per cent. The Minister made a statement in defence of the company in regard to its watered capital. I do not propose to discuss that matter in detail, because it has been fully dealt with by the honorable member for Fremantle - (Mr. Curtin). The Minister referred to the report of the Tariff Board of 1926, but let me state that, when that report was made, the board did not know that the company had watered its capital. Lysaght

Limited, in its memorandum, and ako the Minister, in his statement, have shown to what extent its capital has been watered. The company expanded its capital by £500,000. The Tariff Board was not aware of that fact in 1926 when it made its report, - a report which the Minister seems to consider to .be superior to the board’s report of this year. The company has every right to keep its books in the manner which it deems best, but it certainly has no right to expect this Parliament to place a permanent charge upon the primary producers and those engaged in the building trades just to enable it to maintain a dividend on capital which really represents a bookkeeping transaction between an English company and its branch in Australia. The Minister, in putting the case for the company, said that the Tariff Board had not made adequate allowance for depreciation, and he quoted, not actually from the memorandum circulated by Lysaght Limited, but from the statement furnished to him by his officers, to the effect that the company had been advised by its accountants to allow for a higher rate of depreciation. The Tariff Board actually allowed for a greater depreciation than the company itself allowed for when it was making profits and paying dividends to its shareholders. No company should be paying dividends until it has adequately safeguarded its fixed assets. On the question of depreciation the Tariff Board at page 14 of its report, said -

The board, therefore, proposes in its estimate of a reasonable selling price based on an output of 60,000 tons per annum to allow for depreciation a sum which is 66g per cent, higher than the average amount appropriated per annum during the last two years and 25 per cent, higher than the amount appropriated for this purpose in the year when provision for depreciation was higher.

Yet the Minister is so solicitous for the welfare of this big manufacturing company and so indifferent to the welfare of the section of the people which is having the hardest struggle to maintain operations, that he has actually asked the committee to approve of a duty which will enable the company to provide for a much higher rate of depreciation than it provided for when it was prosperous and was paying dividends to its shareholders.

The Minister also made a plea for another section of the community which, from the point of view of honorable members, was much worthier of consideration than the plea made for the shareholders of the company. I refer to the workers in this industry. “We were informed that the average rate of wages paid to skilled workers in this industry was 87s. 9d. per week, which was much higher than the average rate paid overseas, and that the average rate for unskilled workers was 77s. 6d. per week. The comparison of the wages paid in the industry in Australia and overseas is a fair one, but it, is not the only comparison that should be be made. A comparison should also be made between the wages of these workers and the income of the people who are being bled white in order to make such wages possible. This is another case in which a certain section of the community is being placed in a better position by placing other sections in a worse position. The primary producers, and the users of galvanized iron generally, are being pushed still deeper into the trough of despair in order to maintain the conditions which have hitherto prevailed in the galvanized iron industry. Very few primary producers, wheat-farmers, or graziers have enjoyed an income, either this year or last year, equal to the wages of the unskilled labourers in this industry, and I do not expect that they will enjoy such an income next year. No one can say when their conditions will be restored. As a matter of fact, a great many of these people are slipping faster and faster into insolvency.

Then there is the building trade -to be considered. Three quarters of the men engaged in our building industry are out of work to-day and onn factor which is keeping them unemployed is the price of galvanized iron. Every one who moves about among the people freely knows that there is a great demand for second-hand galvanized iron.

Mr Lewis:

– There is also a great demand for second-hand motor cars.

Mr HAWKER:

– That is so; but we are not discussing motor cars at the moment. If new motor cars were cheaper there would not be such a great demand for second-hand cars. That is also true of galvanized iron. In our country dis tricts, and particularly in the newlyopened areas, there is a, brisk demand for second-hand galvanized iron. No one can doubt that if the price of new galvanized iron were reasonable a great deal more of it could be sold.

Comparisons of wages should not be limited to the workers of Newcastle with the men who are out of work in the building _ trade, or with the farmers and graziers. They should also be made with the wages of workers in other industries. Comparisons should also be made between the basic wage at Newcastle and the basic wage elsewhere in New South Wales, and in the other States of the Commonwealth. lt is entirely unfair to expect honorable members to agree to bleed the users of galvanized iron white ‘in order that wages may be maintained at a higher rate in Newcastle than elsewhere in Australia. In times like these the people everywhere should share and share alike. Conditions should be made as equitable as possible right throughout Australia. If this were done the people would be able to buy more than they can buy at present, and the stream which is now flowing towards unemployment would be turned and many men who are out of work to-day could be put into useful employment once more.

The Minister not only made a plea for the shareholders in this company and for the workers engaged in this industry, but he also dealt at length with certain other phases of the subject. He criticized the statement of the Tariff Board as to the cost to the consumers of maintaining this industry. By changing the word “ consumers “ into “ community “ he endeavoured to create an impression that the Tariff Board had not stated the case fairly. The board, however, added a note to its statement in this connexion that the amount of duty which is calculated as revenue was not a loss to the community. The Minister built up a specious argument on that point in an endeavour to show that the industry was really profitable to the community. That may, or may not, be the case - in my opinion it is not. But it cannot be denied that the consumers of galvanized iron are being obliged to pay a very heavy price for their requirements. Even if the amount collected in duty on galvanized iron has saved the Government from imposing additional taxes on the community, the duty is an unfair revenue tax upon those sections of the community which use galvanized iron.

Another point which has been fully dealt with by the honorable member for Gioosland (Mr. Paterson) and the honorable member for Fremantle (Mr. Curtin) is that it is quite unreasonable to expect us to save this industry from the effects of the depression simply because the Minister has taken a fancy to it. In my opinion, the Minister delivered a one-sided and biased speech. His arguments should not be received with any favour outside of Newcastle. I represent a South Australian constituency, and South Australia is vitally concerned in the success of the iron and steel industry of Australia. The iron ore is quarried in South Australia at Iron Knob, in the division of Grey, and that industry is an appreciable element in the productive wealth of South Australia. It is in the interests of all sections of the community that this industry should be developed, but it should not be developed at the expense of other industries. The iron ore deposit at Iron Knob is not quite the richest in the world, but it is easily worked, and the quality of the ore is so, good that before the depression overtook us large quantities of it were being exported overseas. A little is being sent abroad even under existing conditions. Our coal deposits are among the richest in the world, and are easily worked. Both iron and coal are situated near the seaboard. It is easy to bring the iron to the coal. An industry which is favoured by nature in this way should become a prosperous asset to the country, and should not be allowed to degenerate into an alms-begging parasite which sucks the life-blood out of other industries. I believe that if the industry were given a genuine chance by the Government of New South Wales, instead of being dragged down with the connivance of the Minister for Trade and Customs (Mr. Forde), it would soon become a highly successful enterprise.

The CHAIRMAN (Mr. McGrath).The honorable member’s time has expired.

Mr WATKINS:
Newcastle

.- It was said at the beginning of this debate that the item which we are discussing is one of the most important in the schedule. I propose to treat it as such, and to speak accordingly. I do not intend to cover the ground which the Minister covered in his lengthy speech ; but I hope that my short address will be to the point, and that it will fairly set ont the facts of the case. Prior to the establishment of the galvanized iron industry in Australia, the importers were bleeding the Australian farmers to the extent of £80 per ton for their requirements, and not a complaint was made by honorable members who are now sitting opposite.

Mr Bernard Corser:

– That was during the war.

Mr WATKINS:

– -It was also after the war. It was under those circumstances that the right honorable member for North Sydney (Mr. Hughes), who was then Prime Minister, appealed to the English manufacturers of galvanized iron to establish a branch of their industry in Australia.

Mr Prowse:

– That was done under the War Precautions Act.

Mr WATKINS:

– The industry was established in Australia at the requestof a Nationalist Government. No other industry affected by the items of this tariff schedule has been subjected to so much inquiry, taunting, abuse, and scrutiny at has this industry. The officers of the Customs Department would, I am sure, freely admit that if the representatives of other industries had been as honest as John Lysaght Limited in submitting statements for tariff purposes they would be well satisfied. The firm came to the Commonwealth to form an Australian branch, with a capital about which then has been a good deal of conjecture in this chamber to-day, but which amounted approximately to £500,000.

Mr Stewart:

– Was it really £500,000?

Mr WATKINS:

– The honorable mem ber will have an opportunity to debate the subject. I think that the Minister intimated that it was approximately that amount.

Mr Prowse:

– Was the Minister correct in his statement?

Mr WATKINS:

– The attitude of the honorable member is typical of that of the people of Western Australia, who will neither help themselves nor allow themselves to be helped. If the price of imported galvanized iron were the same as that of the local article the people of his

State would buy the foreign article. I instance the case of the engine undercarriage wheels that were bought by his State from abroad. The product of John Lysaght (Australia) Limited is wholly Australian, and that is what troubles some honorable members opposite. The honorable member for “Wakefield (Mr. Hawker) declared that this industry benefited only Newcastle. The activities of Lysaght Limited are so comprehensive that they benefit all of the Australian States. The firm draws its zinc spelter from Tasmania, its acids from Queensland and Victoria, and other raw material from different States. The firm has fulfilled every promise that it has made” to different governments, and has increased its- plant and. its programme. Some honorable members have talked of giving a bounty to the industry. Bounties are intended only to assist an industry to become established. It is worth noting that those who oppose these duties also opposed the granting of a bounty to the industry, declaring that it should not be helped by grants from the Commonwealth revenue. John Lysaght (Australia) Limited steadily increased its activities until it reached an output of 60,000 tons of galvanized iron a year, and employed 1,000 hands directly, also 1,500 indirectly, in the production of zinc, acids, coal and other necessary raw materials. The livelihood of those 2,500 men and their dependants entirely depend upon the continuance of the galvanized iron industry in Australia.

Mr Bernard Corser:

– Who prepared the honorable member’s brief?

Mr WATKINS:

– I know the subject inside out, and need no brief, as does the honorable member when defending the sugar industry. However, I give him credit for his endeavours in that respect.

The report of the Tariff Board on the galvanized iron industry and on one or two other subjects almost convince me that I must support the honorable member for Henty (Mr. Gullett) in his desire to abolish the Tariff Board. This body has constituted itself a price-fixing board, an arbitration court, and, generally, has exceeded its duties.

Mr Gabb:

– Every arbitration court should have the right to fix the prices of commodities

Mr WATKINS:

– Before that can be done all sides must bc heard, including the employees. The Tariff Board has recommended a British preferential tariff of £4 10s. a ton on galvanized iron. 1 have noticed that one paragraph in it* report has been carefully avoided by those who are opposed to the duty proposed in the schedule. It reads -

A reduction of 10 per cent, in the wages paid in the galvanized iron industry would result in a direct saving of 9s. per ton on an output of 00,000 tons per annum. . . .

It is upon an output of 60,000 tons per annum that the board bases its recommendation.

Mr James:

– What does the’ board mean by “ a reduction of 10 per cent, in the wages paid “ ?

Mr WATKINS:

– lt is constituting itself an arbitration court, and has dealt with this industry differently from ‘any other. The Tariff Board was not created to act in this manner.

The honorable member for Wakefield (Mr. Hawker) referred to the Broken Hill Proprietary Company Limited, which obtains its iron ore from South Australia. Is the honorable member aware that, because of the limited output of that company, it would have to close down if Lysaght (Australia) Limited became inoperative? The closing of the one would ruin the other. Had every industry that established itself in Australia been subjected to a scrutiny similar to that applied to Lysaght Limited, the Tariff Board would not have been able to cope with the work. First there was a Tariff Board inquiry in 1926, followed by a number of customs inquiries, and then came this final exhaustive inquiry by the board.

Mr Gabb:

– Surely the honorable member does not object to industries being subjected to scrutiny by the board ? Government assistance is dependent upon a satisfactory examination of their activities.

Mr WATKINS:

– Certainly I do not object; but I contend that no other industry has been subjected to similar scrutiny. The honorable member for Fremantle (Mr. Curtin) talked at considerable length about the alleged disadvantages under which the Western Australian people labour through having to buy Australian galvanized iron. John

Lysaght (Australia) Limited has gone out of its way to meet the people in that State by making the price of its product the same in each capital. I know that the company is losing money through its Western Australian activities; but it is prepared to do so in order to keep faith with the people of that State. The honorable member for Fremantle said a good deal about selling agents. It is the custom for big manufacturers to have their selling agents. Some time ago the honorable member for Swan (Mr. Gregory) drew attention to the efforts of certain firms to corner the wire market in Queensland, an endeavour that was frustrated by this Parliament. I point out that Lysaght Limited have adopted a scheme which enables any persons purchasing a specified minimum amount, approximately 2 tons, to obtain the commodity at the same price as that charged to an agent. That privilege may be enjoyed by farmers, builders, or anybody else.

Those honorable members who contemplate breaking faith with overseas firms which have been induced to invest considerable capital in Australia are not playing the game. Their only desire appears to be to obtain the imported article at a cheap price. We on this side of the chamber are concerned with the people engaged in the industry. Certainly, we do not believe in the making of huge profits. John Lysaght (Australia) Limited has averaged only 5 per cent. since it began operations here. When we endeavoured to secure an adequate measure of protection for this industry some years ago, we were told that these great steel works would never close down ; but they did close down for fifteen months, and the employees were faced with actual starvation, because Parliament would not come to their rescue. So small is the trade being done at the present time in all branches of the industry, that if one section is injured, all must suffer; and the effect will be felt, not only in New South Wales, but also in all the States of the Commonwealth, with the possible exception of Western Australia.

Mr Maxwell:

– Since the honorable member is such an expert on these matters, will he please enlighten the committee by explaining the Minister’s explanation ?

Mr WATKINS:

– The matter is too serious to be treated with levity. If the honorable member agrees that this is one of the most important items in the tariff schedule, he will vote to support an Australian industry against importations from Germany and elsewhere, such as he was complaining of a little while ago. This is an Australian industry, and is employing Australian workers. . I shall leave the matter there, confident that the committee, animated by an Australian sentiment, will support the proposed duty, and thus do its part towards developing Australia for Australians:

Mr STEWART:
Wimmera

.- At the representative of a primary producing constituency, I join with those honorable members on this sideof the House, and with at least one honorable member on the other side - I refer to the honor able member for Fremantle (Mr. Curtin) - in protesting against this proposed increase in duty. None of us can doubt the earnestness and sincerity of the honorable member for Newcastle (Mr. Watkins) in defending this industry which he so ably represents. In the course of his speech he referred to the discount allowed by the company to purchasers of galvanized iron. It is true, as he said, that lots of two tons and over will be supplied to any purchaser at the list price, but the company allows discount at varying rates on purchases of more than 25 tons. I quote from Lysaght’s own list, supplied to me by a representative of that firm, and it sets out the prices and conditions in the following manner : -

The minimum quantity supplied will be 2 tons in unbroken containers (i.e. in 10 cwt. cases ) .

Terms. - Net, subject to annual quantity discounts as follows: -

Under 25 tons per annum, no discount.

Between 25 and 50 tons per annum, 3 per cent. on the whole quantity.

Between 50 and 100 tons per annum, 4 per cent. on the whole quantity.

Between 100 and 200 tons per annum, 5 per cent. on the whole quantity.

Between 200 and 500 tons per annum, 6 per cent. on the whole quantity.

Between 500 and 1,000 tons per annum, 6¼ per cent. on the whole quantity.

Between 1,000 and 1,500 tons per annum, 6½ per cent. on the whole quantity.

Between 1,500 and 2,000 tons per annum, 6¾ on the whole quantity.

Over 2,000 tons per annum 7 per cent.on the whole quantity.

It is obvious, therefore, that a farmer or small dealer would receive no discount at all. The difficulty in connexion with this duty is that only one firm is engaged in the manufacture of galvanized iron in Australia. It has a complete monopoly within the country, and, owing to the exchange, is not even subject to external competition. The Government has taken this particular company under its wing, and proposes to shelter it from what every other firm, and particularly every other individual, is being called upon to bear, namely, the effects of the prevailing depression. The primary producers, the workers who have lost their employment, or who have had their wages reduced, the pensioners, and those who receive interest on money lent, have all been called upon to make sacrifices; but this one company, apparently, is to be immune from all the hardship, all the deprivations, and even all the ordinary risks associated with business undertakings. That is the outstanding feature of this proposed duty, and the one to which I take such strong exception. The reason given for this extraordinary generosity on the part of the Government is that the company was requested to start manufacturing in Australia.

Mr.R. Green. - By whom?

Mr STEWART:

– By a Nationalist administration, it is alleged. I do not propose to debate that point; possibly it is true. It must not be forgotten, however, that during the years immediately following the war industry throughout the world was dislocated. Prices were everywhere increasing, and the cost of iron and steel in particular soared to unheard of heights. For a year or two after the war there was considerable difficulty experienced in Australia in obtaining sufficient supplies of iron and steel. Even the prices of such primary products as wheat, cotton, wool, dried fruits, sugar, &c., all went to unprecedently high levels. In those circumstances; the Government of the day - mistakenly, in my opinion - made an appeal to Lysaght Limited to begin manufacturing in Australia, promising it in return certain concessions. It is now contended that we should continue to honour that promise. This contention raises the question whether, because a certain administration, as a matter of party policy, made certain promises to a particular company over a decade ago to induce it to establish a factory in Australia, all future Parliaments should regard themselves as bound by the undertaking then given; whether we should continue for all time to grant this company specially favorable conditions not enjoyed by any other section of the community, with the exception, perhaps, of those engaged in the sugar industry, and one or two other undertakings. I should be the last to defend the extreme protection afforded to the sugar industry, but it does at least export a portion of its product overseas, and it. has that much in its favour.

The Minister, in his long and detailed statement, put the case for the industry as well as it was possible to put it. He had the figures made available to him by the officers of his department, men skilled in research, and the company hasno reason to complain of the earnestness of the defence advanced by the Minister and by the honorable member for Newcastle (Mr. Watkins), whatever may be said for its effectiveness. After all, however, the case for the consumer has a right to be heard. The Minister quoted figures indicating that three-quarters of the galvanized iron produced and used within Australia is used in the capital cities. According to his figures, even allowing for the fact that the rural population of Australia is slightly greater than the city population, only 25 per cent. of the iron used goes to the country districts. Is there one honorable member possessing any knowledge of conditions in the outback who believes that?

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– Not one.

Mr STEWART:

– I agree with the honorable member. I suggest that the Minister should ask the officers who supplied him with his figures how they arrived at that extraordinary conclusion. Let me explain the position as it exists in my own constituency. At the moment, we are suffering from a visitation of mice in my district, and I understand that the same conditions prevail in the western part of New South Wales, as well as in South Australia, with the result that great damage has been done to the haystacks. During the drought which lasted for three or four years, farmers depleted their fodder reserves. Last year there were fairly good crops, and the farmers cut large quantities of hay in an endeavour to build up their fodder- reserves -against future droughts. -The3e stacks, have now been attacked by mice. On my own farm we have suffered considerably. The stacks were built, and the farmers felt that they ought to shelter them with galvanized iron, but wheat was cheap, money was scarce, and iron was clear, with the result that we took the risk. I, in common with other farmers, recognized that we ought to take adequate precautions, but because galvanized iron was costly, we did not buy it. On my own farm I have stacks falling down as a result of the ravages of the mice, so that I speak_ feelingly on this matter.

When the officers of the Customs Department are assessing costs, a favourite method, which never seems to grow old, is to take the duty on a particular commodity, and work it out on a consumption basis down to the final unit of consumption, be it a bushel of wheat or even a single egg, and then point out that the cost of the duty as applied to that final unit does not, after all, amount to very much. It does not sound very much when the Minister, with great facility, quoting from a document that lias been supplied to him, shows that on a most generous assessment of values and quantities this item represents only Jd. a bushel. But the honorable gentleman did not finish the story. There must also .be taken into account the extra duty on reapers and binders, agricultural machinery generally, and all the other “items that intimately concern the primary producers. Taking each individual item, and adding the additional cost of each, it will be found that the burden is greater than would appear from the honorable gentleman’s speech. It is about time that the Minister informed the officials of the Customs Department that that game is played out, when they approach him with figures showing that the extra cost is on.l.y id. bushel or some other fractional amount. He should refuse to fill the pages of Hansard with matter of that description. It cuts wo ice, and convinces on one. When the farmers of Australia, particularly the wheat-formers, who are suffering economic hardships greater than those of any other section of the community, find that their haystacks are falling down because they have not the protection of mouse-proof iron, and they read in the newspapers that this National Parliament is engaged in the task of raising the duties on this essential commodity, it will take more than the calculations with which the Minister is supplied for quotation in this House, to convince them that they are not being unfairly treated. This is one- of the most important items in the tariff schedule. It is of particular importance to the pioneers outback, and to the primary producers. I appeal to the Minister not to use or to attempt to use the party whip in connexion with this particular item. He has- done the fair thing by the company in having ably, forcefully, and fully put their case. I suggest that the matter should now be left to the unfettered vote of honorable members on all sides of the committee. Let them be unhampered in deciding whether or not these duties shall be imposed, and whether the principle of changing from a bountycumduty to a duty solely shall be given effect or not. I hope that if the matter is left to the free and unfettered vote of the committee honorable members, in their wisdom, will reject the proposal submitted by the Minister. I am opposed to this duty, lock, stock and barrel, on the principle that, at this particular time, at any rate, it gives shelter and protection to a monopoly, and that it gives to one particular company privileges that it should not enjoy and that are not enjoyed by any other section of the community.

Mr LAZZARINI:
Werriwa

.- Listening to the enthusiastic and strenuous defence by the Minister of .the manufacturers of this particular item, one could not help feeling that it was a pity that the interests of the workers were not occasionally defended as strenuously and as well by Labour Ministers of this Government. The attitude adopted by thcMinister bears out what I said in my opening remarks in the debate on the tariff, that the Labour party in this Parliament to-day has degenerated into a protectionist party. That is practically all that it can call itself. It is prepared to protect the manufacturer even though he moves the Arbitration Court to slash wages to a lower level, and to make the working conditions worse than they arc. That state of affairs, I assume, operates in this case as well as in others. I also could not help thinking, when the Minister airily brushed aside the report of the Tariff Board, that it would be a good thing if the Government would brush aside the reports of other boards - for example, the Commonwealth Bank Board. When that board dictated to the Government and laid down certain conditions, it would have been a good thing had the Government ignored its decisions as it has those of the Tariff Board. I advise the Minister never to support the appointment of Sir Robert Gibson to the Tariff Board. He would not be able to brush aside his reports as airily as he has those of the present board. The honorable gentleman has said that the Government will reduce this duty and will give all sorts of guarantees provided that the company’s returns reach a certain figure. In that respect the Minister intends to accept the report of the board, because it was based on the cost of producing 60,000 tons a year. But the board has had the audacity to suggest in its report that there should be a 10 per cent. cut in the wages of the workers in the industry ! It states that, although at the moment the cut has not been made, it should carry out its investigations on the basis that it would be, because it has already been applied to other industries. Any decent Labour Government would have sacked the board. It should be sacked immediately. It has had the audacity to enter realms that it has no authority to enter. If this Government had the self-respect that a Labour government should have, it would tell the board that it had exceeded its duty and, therefore, should no longer function. If it is necessary to have a Tariff Board, let another be appointed. The Minister has given no guarantee that the Government will fight any proposal to cut wages by 10 per cent. He has not said that if the cut is made he will lower the tariff protection. The worker is never considered in these matters.

Mr Stewart:

-The workers’ wages are going down and the tariff is going up.

Mr Archdale Parkhill:

– No; in this case the workers’ wages are protected by arrangement between the two parties, at the expense of the consumers.

Mr LAZZARINI:

– The honorable member for Warringah (Mr. Parkhill) has in his bonnet the bogy of syndicalism. The honorable member for Fremantle. (Mr. Curtin) favours the report of the board. Does he support its suggestion that there should be a 10 per cent. cutin the wages of the workers?

Mr Curtin:

– That was not made as a recommendation ?

Mr LAZZARINI:

– It was made as a recommendation. The board has based its calculations on a 10 per cent. cut.

Mr Curtin:

– It has said what would be the effect of a 10 per cent. cut.

Mr LAZZARINI:

– The effect would be a further protection to the extent of 10 per cent. The report reads -

The recent decisions of the Federal Arbitration Court reducing the wages in many industries by 10 per cent. suggest the possibility of an extension of this method of affording relief to other secondary industries. Whilst not anticipating the reduction of 10 percent. in wages in the galvanized iron industry, the board has, however, considered the effect on prices if such a reduction should be made in the future.

The next paragraph but one reads -

A reduction of 10 per cent. in the wages paid in the galvanized iron industry would result in a direct saving of 9s. per ton. on an output of60,000 tons per annum, and there would be a consequential reduction in the price of sheet, bars. The total reduction would amount to 15s. 6d. per ton of galvanized iron.

Does the honorable member for Fremantle contend that that paragraph does not contain the suggestion that it would be a good thing for the industry if the 10 per cent. cut were made? No one in this chamber has a better knowledge than he of the meaning of language.

Mr Curtin:

– It will be found that the wages will come down in any event, and that thus increased protection will be given to this monopoly.

Mr LAZZARINI:

– That is the point at which I am driving. Will the Minister give the assurance that, if a 10 per cent. cut in wages is made, the tariff will be reduced correspondingly?

Mr Forde:

– I shall have that aspect fully considered.

Mr LAZZARINI:

– If the honorable gentleman does not give me that assurance, he will not get my vote, whether it is of any valueto him or not.

Mr Forde:

– The costs of production will be reviewed.

Mr LAZZARINI:

– That assurance is no good to me; it is too vague, as have been all the ether statements of this Government ever since it took office. It is worth nothing. I want a definite assurance that, if these people go to the court and are given a 10 per cent. cut or more, the tariff will fall in sympathy. Whatever value my vote may have, I do not know; but I command that vote, and accept responsibility for the way in which I exercise it. I tell the Minister clearly and definitely that, if I am not given that guarantee in unequivocal language he will not get my vote.

Mr Morgan:

– Are you not somewhat dictatorial ?

Mr LAZZARINI:

– I am in the happy position that I can be absolutely dictatorial so far as my vote is concerned. It has also been said that this Australian company is a pup of a British company. Many companies in Australia are in that position. One of the most miserable, so far as the wage-earner is concerned, is in my electorate. I do not know whether this industry acts fairly towards its employees; but, so far as my knowledge goes, I can say that companies in Australia that are pups of other companies in England, Germany, or the United States of America, wish to engraft on this country conditions that operate in their own countries, but which are foreign to Australia, and are not up to the Australian standard. This company, on its own admission, watered its stocks in good times to the extent of £500,000. I believe that the amount is far greater, and that, notwithstandingits disclaimer of any such knowledge, it is interlocked and interwoven with the Broken Hill Proprietary Company and other companies. If it can water its stock to the extent of £500,000, no amount of protection that may be given will enable it to show a profit. It is issuing bonus shares and building a huge superstructure on faked capital and yet asks for duties that will enable it to obtain the same return on the watered stock as from the original capital. If the Tariff Board has a right to consider the conditions of the workers in the industry under review, and suggest that their wages should be. reduced, it should have power to inquire into the whole of the conditions of the industry.

Mr Nairn:

– The board made its recommendations on the basis of current wages.

Mr LAZZARINI:

– I was referring to another aspect of the matter. The honorable member and others of his party are beginning to realize that there is something in the argument used by us years ago about watered stock now that they find that the practice is hitting them. When making . recommendations with regard to duties, the Tariff Board should inquire into the history of companies of this character, and should consider the amount of capital originally invested. By piling up its capital costs this company is trying to make one industry return the dividends that should be paid by three or four industries. The Tariff Board has suggested to this company that it should try to obtain a 10 per cent. cut in the wages of its employees.

Mr Curtin:

– The price recommended by the board as fair was not contingent upon a 10 per cent. reduction in wages.

Mr LAZZARINI:

– But the board clearly expected such, a reduction to be made.

Mr Curtin:

– The honorable member may expect it also.

Mr LAZZARINI:

– Yes; and that is why I want an undertaking from the Minister that, in the event of that reduction being made, this duty will be reduced accordingly.

Dr Earle Page:

– Move for the postponement of the item.

Mr LAZZARINI:

– The Minister should come to a decision on this matter. I have never taken part in a tariff debate in which the imposition of a particular duty was not regarded as an open question, and I would not support a government that would make a vote on a duty a vital party issue.

Mr PROWSE:
Forrest

.-I listened patiently to the statement made by the Minister for Trade and Customs (Mr. Forde), and I hope that the people of Australia will read it. If they do, they will be persuaded that the Minister is a special pleader for the manufacturer against all comers, and that nothing else matters to him except the maintenance of this industry. He is exceptionally jealous about the honouring of a promise made by a party leader, who is about as blind as himself regarding protectionist principles. When the galvanized iron industry was established it received a duty of £1 per ton> and the rest of the protection granted to it took the form of a bounty, which was paid by the whole of the people. That position is -now to be changed, and the committee is asked to grant a British preferential duty of £5 10s. per ton. lt is a pity the Minister is not more jealous concerning the honouring of more recent promises than that relating to this industry. When the Labour party took office the Prime Minister, in a statement in this House, urged the farmers to grow more wheat. That appeal was issued through the broadcasting stations, and it was stamped on the letters that passed through the post office, but the promise then made to the primary producers was not carried out. Let us, as Australians, consider the actual position in regard to galvanized iron. Who are the buyers of this material? I point out that our rural towns, as well as the capital cities, are maintained by the primary producers. The Minister did not give any credit to the Tariff Board, but he overrode the opinion of its members, who were specially appointed to consider the effect of alterations in duties. He, unlike the Tariff Board, neglected to point out that it was unwise to shelter one industry at the expense of the rest of the community; he merely thought of the interests of this great company, with its watered stock. The English company charged the Australian section of it £500,000 for goodwill. It is absurd to hear a Labour man, above all others, boosting the boodlers in this way. The Minister said that the material used in a galvanized iron case had gone up in price 2s. 3d. That is because of the timber duties imposed by the party opposite. Then he quoted the wages paid by Lysaght and Company in England, and showed that there was a difference of from 70 to 90 per cent, between those rates and the wages paid in the Austra lian factory. That would be all right if Australia could afford to pay the increased wage, but I think that the claims of other Australians should be considered. As the honorable member for Fremantle (Mr. Curtin) remarked, surely this National Parliament should have regard to the position of all the citizens. It is admitted that the primary producers must use galvanized iron. The Prime Minister and his followers realize the terrible plight of the wheat-growers of Australia; yet this committee is urged to place a still greater load on their backs, although every bushel of wheat grown by them last season involved a loss of ls. lt is the last straw that breaks the camel’s back.

The honorable member for Newcastle (Mr. Watkins) is, of course, a special pleader on this matter, because he represents the electorate in which this industry is carried on. It was said by the Minister that failure to grant this increased duty would not only wreck the galvanized iron factory of Lysaght Limited, but would also cause the ruin of Broken Hill Proprietary Company. I can assure the committee that the primary workers are not able to carry these industries any longer on their backs, and, if necessary, they must go to the wall rather than that other far more important industries should fail.~ The present depression and unemployment in Australia are due largely to the fiscal policy of the present Government. Mr. Delprat at the great banquetheld at the inception of the Newcastle Steel Works, said that the company would need no protection in the development of this great industry* No doubt he meant what he said, but, owing to the policy initiated by fanatical protectionists like the present Minister for Trade and Customs, he was later forced to change his opinion. As “ The Big Four,” who recently visited Australia, pointed out, we are attempting too much in the direction of manufacturing such goods as matches and encouraging various tiddly-winking industries, while neglecting the important industries that would lead to the general employment of the people. The protectionist policy has merely placed Australia in an insular position. Later, Mr. Delprat had to ask for higher duties in order to prevent the closing down of the works, and thus the difficulties were increased. The policy of protection might have been a success in Australia had we concentrated on- industries such as the iron and steel and woollen industries. Even if the Minister is successful in getting the committee to accept his proposal, the scheme will utterly fail. In order that Lysaght Limited, and the firm’s employees shall not suffer, he is prepared to place heavier burdens on the farmers. The Minister thinks that by moving an amendment to provide that when the consumption of galvanized iron in Australia again reaches 60,000 tons per annum the duty will be reduced by fi a ton, he will get his proposal accepted. ‘ The only thing which will increase Lysaght’s output will be the ability of the people to buy that firm’s product. At present those who require galvanized iron are unable to purchase it. Are other sections of the people of Australia to be penalized in order to give favoured conditions to one firm? Where is the equality of sacrifice in such a proposal? I shall support the amendment foreshadowed by the honorable member for Gippsland (Mr. Paterson) because I see no advantage to Australia in maintaining an industry that needs continually to be spoon-fed. During the recent recess I visited one of my constituents who had erected the posts of a shed in which he proposed to conserve fodder for his stock in order to fatten them for market. But when he sent to Perth for a quotation for the galvanized iron to cover the shed he was told that it would cost £33 a ton. That is nearly twice as high as the people of other countries have to pay for that commodity. How can we expect to export our produce to other countries when our primary producers have to pay- for their requirements double what the rest of the world pays? If honorable members were to visit the farmers in the Western Australian wheat belt they would find many of them with barely sufficient food to maintain themselves and their families, and they would see valuable machinery exposed to the elements because of the excessive cost of the galvanized iron necessary to protect it. It is not right that we should bolster up a manufacturing industry if by so doing’ out staple primary industries are injured. The Minister suggests that 2,000 workers are kept in employment by these duties on galvanized iron. I ask him how long Lysaght Limited will keep them in employment if the farmers of Australia cannot buy galvanized iron. The consumers of the iron, not Lysaght Limited, or the Broken Hill Proprietary Company, keep these workers in employment. The people of Australia are unable to maintain the present costly system. It is absurd that we should continue to shelter one industry so that it may declare dividends and pay high wages while others cannot make ends meet and thousands of farmers are passing through the insolvency courts. Our first care should be to protect those industries which establish and maintain the credit of the country, and without which no secondary industry could exist. We should take care that no further burdens are placed on our primary producers. Indeed, we should do our utmost to remove from their shoulders some of the existing burdens which weigh them down so that they may be better able to compete in the markets of the world. We have been told thai high tariffs decrease prices. Will any honorable member go so far as to say that the additional protection sought to be given to the galvanized iron industry by these duties will reduce the price of that commodity in Australia? The Government is seeking to give this company a monopoly. If it is successful, Australian citizens will be deprived of any opportunity of benefiting from a reduction in the cost of commodities in other countries. We should recognize that the goods protected by these excessive duties are bought by Australians, and surely honorable members know how limited is the capacity of the consuming public of Australia to buy galvanized iron at such a price. With the honorable . member for Wimmera (Mr. Stewart), I hope that the Minister and” the Government will not make this a party question, for I am convinced that sufficient members in this chamber recognize that our great primary industries cannot stand any further burden. If we have to decide between those industries and the galvanized iron manufacturing industry, we should, in the interest of

Australia, decide in favour of the former. I shall vote for the amendment proposed by the honorable member for Gippsland (Mr. Paterson).

Mr JAMES:
Hunter

– I intend to support the Minister in this matter, in order that an industry which is of vital importance to the people of Australia may be adequately protected. I do not regard this question parochially for the establishment of Lysaght Limited is not in my electorate. The honorable member for Forrest (Mr. Prowse) painted a gloomy picture when he said that the galvanized iron manufacturing industry was maintained at the expense of the fanners of Australia. Evidently, the honorable member would be prepared to support Chinese industries, notwithstanding that by so doing Australian citizens would be thrown out of employment. Apparently, he does not. realize that the more unemployment there is in Australia the smaller the home market for the products of Australian farmers. I cannot understand the honorable member’s outlook. With the honorable member for Newcastle (Mr. Watkins), I have, on several occasions, inspected the works of Lysaght Limited, and have consulted with the men employed there, and the union officials who are iu constant touch with them, and I have found that the company treats its employees well. This industry at its inception was encouraged by the government of the day, because of its undoubted value to Australia. Again, in 1918, its value was recognised. I propose to quote from the report of the Tariff Board for 1926-27 to show that Lysaght Limited were given to understand that if they installed a plant capable of meeting Australia’s requirements for galvanized iron they would be given adequate protection. The Tariff Board then stated -

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.

On the strength of that promise, the company installed a plant capable of producing S0,000 tons of galvanized iron per annum. At that time, Australia’s rt- quirements of galvanized iron were between 80,000 and 100,000 tons a year; the consumption has now fallen to approximately 30,000 tons per annum. When it is a question of providing employment for our own people, the duty should, if necessary, be prohibitive.

I agree with the honorable member for Newcastle that this industry is Australian-wide. Its ramifications extend throughout Australia. In the electrolytic zinc works in Tasmania the company employs a large number of workers; at Iron Knob a further 750 mon -are employed quarrying the ore which is sent to the Newcastle steel works; at Newcastle 1,500 workers are employed in producing the bars necessary for the manufacture of galvanized iron. In addition, 900 persons are engaged at Lysaght Limited itself. Therefore, a considerable number of people are dependent upon this industry. Much of the machinery installed at Lysaght Limited at Newcastle has been manufactured in Queensland. If ever an industry deserved encouragement it is the iron and steel industry at Newcastle. We have also to take into consideration the fact that 200,000 tons of coal are being consumed every year by Lysaght Limited, and thai a greater quantity is being consumed by the steel works supplying the raw materials for this company. Therefore, if this industry is left to face the competition of cheap-labour countries, unemployment throughout Australia will increase enormously. There is a division of opinion on this item among honorable members in this corner, but I shall vote for the continuance of the existing duty, and if, in spite of it, imports still flow into this country, I shall be prepared to support a proposal to increase it still further. Although much capital has been made out of the Tariff Board’s report, there is one part of it which appeals to me, and should guide honorable members in coming to a decision on this item. It appears on page 5, and reads as follows : -

Importance of industry as a consumer of labour. - The industry is of great importance to Australia in that it is productive of a large amount of labour. Practically all the raw materials used are of Australian origin, and a very large percentage of their cost is tin’ result of expenditure on labour. Calculations made by the board indicate roughly that the production of I ton of galvanized iron sheets, the expenditure on labour in converting the crude natural resources of the Commonwealth into the finished sheets packed in cases is not less than £11 per ton. Australia’s normal requirements of over 100,000 tons per annum would, if made in Australia, result in tha distribution of wages amounting to over £1,000,000 pur annum.

That portion of the Tariff Board’s report should guide us in our efforts to try to solve the problem of unemployment. We have now an opportunity to foster this industry.

Mr Prowse:

– It cannot sell its products.

Mr JAMES:

– Not at present, but conditions will improve. I do not take the gloomy view of the honorable member. I think that brighter days are in store for Australia and its industries. I hope that the amendment to adopt the recommendation of the Tariff Board will be rejected, and that the proposal as submitted by the Minister will be carried by the committee.

Mr GABB:
Angas

.- One would hardly think, in view of the few’ honorable members present, that the debate now taking place is of such great importance to tha people of Australia. It has been stated that the duty on galvanized iron is one of the most important items of the tariff. [Quorum formed.] For the information of the rank and file of the people of Australia, I want to record in Hansard the fact that, although we have been in recess for the past five weeks, and are now discussing one of the most important items of the tariff, only fourteen members were present in the chamber prior to a quorum being formed. The people should be told that under the party control system, tho Government, when it knows that it has ‘the numbers, considers that it is unnecessary for members to be present in committee to hear debates in order to arrive at their decisions. Two things have emerged from this debate. First, the Minister has considered this item to be of sufficient importance to warrant the preparation of a lengthy statement in support of it, and, secondly, hi3 statement is the first evidence that we have had of any sign of a return to sanity on the part of the Ministry. In this instance the Minister has moved an amendment, which I admit is somewhat ineffective, but which provide. that when the output of Lysaght Limited reaches 60,000 tons per annum, a reduction of £1 in the duty shall take place. Those two facts show clearly that we are approaching an election, and that this Cabinet is at last getting its ear to the ground, and taking heed of the growing feeling of dissatisfaction throughout Australia in respect of the tariff schedules which have been in operation ever since they were laid on the table some eighteen months ago. This -prohibitive protectionist Ministry is showing signs of sanity, and is beginning to realize that the swing of the pendulum in Australia is against excessive duties. I welcome that fact. I also compliment the Tariff Board upon its splendid report on galvanized iron. Upon reading it, and I have read it on more than one occasion, I have been struck, first, with the careful inquiry that has been made by the board into this industry, and secondly, with the clear evidence of its attempt to be fair to the firm engaged in it. There may be some honorable members who feel inclined to join issue with me in regard to that matter, but no one who reads this report carefully and enters into the spirit of it can. help but feel that the board endeavoured to do the fair thing to all connected with this enterprise. I recognise that this is a most important industry, and I do not wish to give a vote which will have the effect of’ causing it to cease operations. But I want to make sure that duties will not be imposed which will permit the company to make undue profits at the expense of the people of Australia, particularly under present circumstances.

Although I have underlined’ a number of paragraphs in the report, I shall not read all of them; but in view of the fact that the Minister attacked the board I feel it necessary to make some reference to its findings. So far as I can recollect, this is the first occasion upon which a Minister of the Crown has seen fit to attack the Tariff Board in this House. The making of that attack is evidence that the Ministry’s case in support of these heavy duties is weak. 1 cannot understand why the attack was made, seeing that the report shows evidences of such careful inquiry, and a, clear desire to be fair.

On page 9 of its report, the board, in dealing with the profits of the company, makes the following remarks: -

The balance-sheets and trading and profit und loss accounts of John Lysaght (Australia) limited, the distributing company, which were obtained by the board, disclose that very high profits were being earned during thu past three years. These trading results do not support the contention that, such substantial reductions iu (United Kingdom invoice) selling prices were necessary to enable the company to meet competition. Both the exporting company and the importing company are under the one control, and there may be circumstances rendering it convenient that a large proportion of the total profits from manufacturing and selling should be retained in Australia. Whatever may be the reasons, the apparently arbitrary reductions from the f.o.b. prices shown in invoices from John Lysaght Limited, Bristol, necessitates the cautious use of these documents iu determining the actual f.o.b. prices of galvanized iron exported to Australia.

The guarded language of that paragraph suggests to me that the board had more in ite mind than it expressed. It did not accuse the company of faking its accounts, nor do I do so; but it seems to me that something was done which was very close to that. The board was apparently satisfied that the company was making such high profits that great caution was necessary in determining what rate of duty should be recommended. The guarded language of the paragraph which I have read has had a good deal to do with my decision to support the amendment of the honorable member for Gippsland (Mr. Paterson). I am glad that the amendment makes provision for the withdrawal of the duty if the company increases the price of galvanized iron beyond £25 per ton. The board regarded this as a fair price for 26-gauge iron under existing conditions.

I was interested to hear the honorable member for Newcastle (Mr. Watkins) say, during a previous debate on this subject, that the farmers of Australia had good living conditions.

Mr Watkins:

– When did I say that?

Mr GABB:

– When this subject was previously under discussion. While the honorable member for Hunter (Mr. James) was speaking, I had a feeling that he intended to make a similar remark, but evidently he has some farmers in his constituency, and know3 a little about their circumstances. The farmers of Australia are very far from enjoying good conditions. The bulk of them produced wheat at a loss last year, and the indications arc that they will produce at an even greater loss this year. In the circumstances, I think it necessary to quote again a statement which I have previously put on. record in Ilansard. It is necessary to impress upon some honorable members who represent metropolitan constituencies that the farmers of Australia are, in many cases, just about down and out. About a fortnight ago, there was published in the South Australian press the names of more than 3,600 farmers who were in distress and in the hands -of the State bank. The list occupied more than three pages of the newspaper.

Mr James:

– -Does the honorable member realize that there are hundreds of thousands of unemployed in Australia?

Mr GABB:

– I do; but we shall not help them, but only increase their difficulties, by increasing the costs of the farmers. Prom present indications there is very little likelihood of those 3,600 farmers getting out of the hands of the State bank. Yet it is proposed to ask them to pay from £28 10s. a ton to £32 10s. a ton for galvanized iron. If this is done it will add to the distress of the most distressed section of the Australian people, with the exception of the unemployed. For that matter, I think that many of the farmers are in just as great distress as many of the unemployed.

Mr James:

– Are the f sinners the only purchasers of galvanized iron in Australia ?

Mr GABB:

– I do not suggest that; but 1 should like to know from where the Minister obtained the figures which he quoted this afternoon to the effect that the primary producers purchase only 15 per cent, of the galvanized iron sold annually in Australia.

Mr Forde:

– The figures I quoted showed that 20 per cent, of the iron went to the primary producers. Tha figures were obtained from the chief Australian distributors of galvanized iron.

Mr GABB:

– Does the Minister seriously suggest that the primary producers - and by primary producers I mean the wool and wheat growers, the dried fruit growers,- the grape growers, the dairy farmers, and others - buy only 25 per cent. of the galvanized iron sold in Australia?

Mr.Forde. - I do, and the figures were supplied by the merchants.

Mr GABB:

– Then all I can say is that either the merchants who supplied the information deliberately made misstatements, or the officers of the department have supplied the Minister with information which is absolutely untruthful and wrong. It is an insult to the intelligence of honorable members to expect them to accept such a statement. If the Minister had limited his statement to the wheatgrowers, it might have been accepted ; but it is ridiculous to say that all the primary producers buy only 25 per cent. of the galvanized iron which is sold here. Does the Minister realize that, in some country districts,the dwelling houses are constructed almost wholly of galvanized iron, while in many of the suburbs in our metropolitan areas the people dare not build galvanized iron houses?

Mr Forde:

– I suppose the honorable member will admit that the butchers, bakers, miners and others who live in country towns cannot be classed as wheatgrowers?

Mr GABB:

– I grant that, and I did not make such a statement. The Minister gave a well prepared list of the galvanized iron requirements of farmers, but his contention that the primary producers use only 25 per cent. of the total Australian requirements is too, much for thinking persons to swallow. If statements of that description are a fair indication of the standard of the information supplied to the honorable gentleman by his department, I can only conclude that its advice is unreliable.

Mr Forde:

– I gave authentic figures, and invite the honorable member to dis prove them.

Mr GABB:

– I resent the Minister’s coming along and trying to put such statements over the committee.

Mr Frost:

– Why not give us figures to disprove the contention?

Mr GABB:

– Had I known that such statements were to be made, I should have provided myself with a few facts in rebuttal of them. Neither the honorable member for Franklin (Mr. Frost) nor I really need figures on the subject. Our own powers of observation tell us that it is not the townies, the people who roof their dwellings with tiles or rubberoid who mainly use galvanized iron. The primary producers are the principal users of it, and I make bold to state that their requirements represent more nearly 50 than 25 per cent. of the Australian output.

Mr Martens:

– There are 35,000 people in Townsville living under galvanized iron roofs.

Mr GABB:

– That may be so, but there are also 35,000 people on the sugar plantations who also live under galvanized iron roofs.

Mr Martens:

– That is not so.

Mr GABB:

– It is so, unless the majority of sugar-farmers in that area are Italians, and living under Southern European conditions. The following statement is taken from the Adelaide Advertiser of Thursday, the 4th June, regarding the conditions which obtain in the wheat-growing areas of South Australia : -

Other distributors speak of the pathos of the bag dwellings and galvanized iron sheds, that were meant only to provide a shelter until the first harvest, but have housed families for more than three years with no chance of anything better. Yet the spirit of these people is still unconquered, and if they can be helped through the hardships of this winter, they will have new hopes for better fortune with the next crop.

Mr Martens:

– What has that to do with the price of galvanized iron?

Mr GABB:

– A good deal.

Mr Martens:

– It has more to do with the price of land.

Mr GABB:

– No. These are the new mallee districts where the price of land is all right. The report goes on -

One family had no flour, and they were eating boiled wheat and crushed wheat fried in fat. They had been living on it for three days and one man took them a bag of flour because they were all ill. There is such a large family of them, and only a bag home.

I see the honorable member for Hindmarsh (Mr. Makin) looking at me. These conditions exist on the west coast, with which he is familiar. I could take honorable members to my district and show them what such people are actually passing through. These are the very persons who are penalized by these heavy duties. It ill becomes the honorable member for Newcastle (Mr. Watkins) to talk of the good living conditions enjoyed by some farmers. His remarks indicate how little acquainted he is with the facts.

The thought has occurred to me that, with the exception of the honorable member for Fremantle (Mr. Curtin), honorable members on the Government side are prepared solidly to support the proposed duties. The whip is being cracked over them as it was in connexion with the item dealing with whisky not bottled in bond. It is an innovation in the party. Previously a man was left to his own opinion with regard to the tariff.We have the spectacle of honorable members on the Government side, with one exception, prepared to act against the evidence of the Tariff Board in order to bolster up a monopoly and maintain the price of a commodity at peak levels, instead of giving effect to the policy of the Government and bringing down prices. That may be a good policy for the workers at Iron Knob and Newcastle, but what about the farmers? Honorable members are prepared to support these additional duties, but were averse to a sales tax on flour, designed to help the wheat-farmers. I am aware that the Government dared not sponsor such a tax, as the metropolitan members of the party would not allow it to do so.

The CHAIRMAN (Mr. McGrath).Order ! The committee is discussing galvanized iron.

Mr GABB:

– I am endeavouring to connect my remarks with the item, and to point out that while honorable members opposite are prepared to support a sectional tax in the form of heavy duties on galvanized iron they will not grant a quid pro quo to the wheat-farmers by approving a sales tax on flour. Although I believe that it is futile for me to continue to protest, I felt impelled to make a few remarks regarding the heavy penalties that are placed on primary producers. I shall draw attention to a paragraph which appears in the report of the Tariff Board on galvanized iron, as follows: -

Immunity from competition may result in the maintenance of the present list price of £28 10s. per ton, which the board considers excessive. The present high price not only throws an undue burden on primary producers and on the building trade, but it also checks consumption and thereby tends to maintain high costs of production.

There we have the circle completed. The Minister says that the duty will be reduced when production reaches 60,000 tons a year. The Tariff Board says that the present high price will check any increase in production. Evidently, therefore, things must remain as they are, and the wheat-growers and other primary producers must continue to bear this burden. Of course, I know that if I continued to talk until Doomsday it would not have any effect on the Government, even though my case is a good one. The Tariff Board’s report, considered without party bias, ought to convince the committee that this firm, which enjoys a monopoly, should not be allowed to continue charging the present high price. It should convince honorable members that it is their duty to protect primary producers and others from what I believe to be exploitation by this monopoly.

Progress reported.

page 51

ADJOURNMENT

Case ok Mr. Jacob Johnson : Evidence Before Royal Commission - Melbourne Labour Conference.

Motion (by Mr. Scullin) proposed -

That the House do now adjourn.

Mr LATHAM:
Kooyong

– I wish to refer to a report of some evidence given yesterday by the honorable member for West Sydney (Mr. Beasley) at an inquiry in Sydney. He is reported in the Sydney Morning Herald as follows : -

Witness stated that the final stages, prior to the appointment of the royal commission, particularly the missing documents, caused the Deputy Leader of the Opposition seriously to review the question. The Deputy Leader of the Opposition had stated that he did not think the list of missing documents was so formidable.

I think that the honorable member for West Sydney must have misunderstood a casual remark which I made to him. I did not intend to convey to him that I had reviewed the question. All I said was that I was surprised at the long list of documents mentioned by the honorable member for East Sydney (Mr. Ward), when speaking on the matter on the motion for the adjournment of the House. I have not reviewed this matter in the light of any documents which I have not seen, and 1 have had no reason to change the opinion I previously expressed in this House. I am available to be called as a witness if the Commissioner wishes; but I take this opportunity of making this correction, because it does not seem to me that the Commissioner will desire my evidence on what is, after all, only an incidental point.

Mr LAZZARINI:
Werriwa

– This afternoon the Prime Minister (Mr. Scullin) in answer to a question, denied that the recent Labour conference in Melbourne re-affirmed the principle of a fiduciary notes issue as part of the policy of the Australian Labour Party. I have before me a report of that conference, and, while I admit that the report may not be strictly accurate in all particulars, I do not think that the substance of it can be denied. Indeed, the decisions of that conference are now general knowledge. In a report of the conference published in the Sydney Morning Herald of the 31st August, 1931, the following appears : -

Melbourne, Sunday

By 22 votes to 13 the special Federal conference of the Australian Labour Party on Saturday agreed to a composite resolution embracing several independent proposals which, although they expressed hostility to the provisions of the Financial Emergency Bill, recognized that the rehabilitation plan had to be accepted. The conference directed, however, that any future attempts to bring about reductions in wages, pensions, and social services must be resisted by all Labour members.

I do not propose to quote from the report at length, but desire to place on record the resolution agreed to, which was moved by Mr. W.Forgan Smith, leader of the Queensland Labour Party, and seconded by Mr. Curtin, M.P. That resolution is as follows : -

In view of the position created in the ranks of Labour by the adoption by the Federal Labour party of that part of the Premiers’ plan to which the Labour movement throughout Australia has declared its definite hostility, this conference declares that the reduction of wages, pensions, and social services runs counter to Labour’s platform and cannot be accepted as any part of Labour’s policy, in that it (a) seeks to pivot national and industrial recovery on the balancing of governmental budgets, whereas budgets can only be balanced by the restoration of employment to the workless and the stimulation of industry; (b) exposes workers to further reductions in wages, and pensioners,&c, to further reductions in pensions; (c) evades the essential nature of the crisis, which is monetary in character, and can be met only by a policy of monetary and banking reform; (d) emphasizes the dominance of the financial control by compelling governments to adopt political and economic policy according to the decrees and desires of banking and credit monopolizers; and (e) violates the substance of ideals and principles for which the Labour Government stands and for the realization of which it exists. The conference therefore instructs Federal and State Labour partiesthat there shall be no further reductions in wages, pensions, and social services, and that any proposals in this respect must be resisted. The conference re-affirms the policy agreed upon at the March special interstate conference at Sydney, together with Labour’s platform in genera], as providing the only means whereby economic and social justice can be secured for the people of the Commonwealth and the period of special crisis brought to a termination.

Federal Labour members were directed to give effect to that portion of the platform relating to monetary reform. Everybody knows that the policy laid down at the March conference included the fiduciary issue proposals, anda bill designed to give effect to that policy was introduced into this House. That policy was reaffirmed by the conference in a resolution carried by 22 votes to 13, and among those who voted for the proposal were, I am informed, the Prime Minister (Mr. Scullin), the Treasurer (Mr. Theodore), and the Minister for Markets (Mr. Parker Moloney). The resolution directs the Government to pursue the policy enunciated at the Sydney conference, the policy which was apparently supported by the Prime Minister, the Treasurer, and the Minister for Markets. At the conference they voted for a policy which, when outside the conference, they were not prepared to support, saying that any reference at the present time to a fiduciary issue would do harm. I leave the matter there for the present. No one can deny that the Melbourne conference the other day re-affirmed the policy laid down at the March conference in Sydney, a policy which was in line with that enunciated at the Canberra conference some months ago.

Mr SCULLIN:
Prime Minister · Yarra · ALP

– In reply to the honorable member for Werriwa (Mr. Lazzarini) I may say that I did not deny that the Melbourne conference re-affirmed the policy laid down iu March last; nor did I deny that the conference re-affirmed the monetary policy of the Labour party. The honorable member asked me whether it was a fact that the conference had instructed the Government to go right ahead” with a fiduciary notes issue. I replied that it was not a fact. I may say, however, that I am 11Ot bound to enter into a discussion of the domestic policy of the Labour party with one who is outside the Labour party.

Question resolved in the affirmative.

House adjourned at 10.40 p.m.’

Cite as: Australia, House of Representatives, Debates, 16 September 1931, viewed 22 October 2017, <http://historichansard.net/hofreps/1931/19310916_reps_12_132/>.

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