House of Representatives
13 October 1932

13th Parliament · 1st Session

Mr. Speaker (Hon.G. H. Mackay) took the chair at 2.30 p.m., and read prayers.

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-I have recently asked questions of the Assistant Minister for Trade and Customs regarding 5,000 cases of eggs belonging to Mr. Earle, which were prevented from being exported. Can the honorable gentleman state how many cases were condemned bythe departmental inspectors, and the reasons for their rejection?

Minister for the Interior · EDEN-MONARO, NEW SOUTH WALES · UAP

– About four weeks ago, Mr. Earle submitted for export 5,532 cases of eggs. Upon inspection by the departmental officers some of the eggs were found to be soiled, others were undersized, some were “ watery whites “, and others had air bubbles and burst air bubbles. Accordingly, the shipment was rejected, but Mr. Earle was given permission to repack the eggs. Of the 4,827 cases already repacked, 3,565 have been passed for export; the balance have been rejected. The repacking of the remaining 505 cases will probably be completed to-day.

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– When will the Prime Minister be in a position to make a statement to the House regarding the overdue payments by the purchasers of the Australian Commonwealth Line of Steamers, and the action which the Government proposes to take to recover such amounts and the interest thereon?

Prime Minister · WILMOT, TASMANIA · UAP

-I am unable to make a statement on the matter at the present time; butat the earliest possible date I shall afford the fullest information to the House.


– Are any negotiations in progress in regard to the overdue amounts; if so, who is conducting them and what stage have they reached?


– The Government is negotiating with the purchasers of the ships, but I do not propose to make any disclosures at this juncture which might prejudice the discussions.

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Agreements between United Kingdom and Dominions.


– I ask the Minister for Trade and Customs whether, when submitting to the House the agreement made at Ottawa between the United Kingdom and the Commonwealth, he will make available to honorable members copies of the agreements made between the United Kingdom and Canada, New Zealand and South Africa, so that honorable members may be able to compare them with that which they will be called upon to approve?

Minister for Trade and Customs · HENTY, VICTORIA · UAP

– I regret that copies of the agreements between the United Kingdom and the other dominions were not available when I left Ottawa. However, I cabled about a fortnight ago to the Resident Minister in London (Mr. Bruce) asking him to send copies as soon as possible. When they arrive, they will be made available to honorable members.

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– In view of the close approach of Christmas and the widespread want and privation amongst the unemployed and their dependants, I ask the Prime Minister whether the Government will consider the advisability of making available more money for the relief of the unemployed, or will submit to the forthcoming Premiers Conference, a proposal that further moneys be provided for relief works?


– The provision of moneys to carry out the works programmes for the year and relieve unemployment will be considered at the Premiers Conference which will meet in Melbourne on the 24th October.



– I ask the Prime Minister how much longer the wrangling and bartering of the various interested parties who are candidates for the plums of ministerial office will continue? Does not the right honorable gentlemanthink that the time has arrived when the persons to whom the vacant portfolios will be allotted should be announced?


– I assure the honorable member that he need not have any personal anxiety in regard to this matter; he is not involved in any way. I shall make a statement regarding the new appointments very soon.



– Has the Prime Minister yet come to a decision regarding the taxation of certain funds belonging to the Starr-Bowkett societies?


– The Treasury is at present inquiring into this matter.



-Will the Prime Minister inform the House of the stage which the negotiations for a new sugar agreement have reached?


– The agreement has been sent to the Premier of Queensland for signature, and as soon as practicable after its completion will be submitted to both Houses of this Parliament.



– Is the Assistant Min ister for Trade and Customs prepared to answer the question of which I was asked yesterday to give notice, regarding a recent shipment of Russian timber?


– A shipment of about 1,800,000 super feet of Russian timber arrived in Sydney recently, and, as the Department of Trade and Customs is ofopinion that the timber is being dumped, a dumping duty of 10s. per 100 super feet is being imposed on it.



– On the 2nd September, I asked a question of the Prime Minister regarding a proposal to lease the Cockatoo Island Dockyard. The right honorable gentleman assured me that the matter was engaging the attention of the Ministry, and that the Government’s proposal would be announced in ‘ due course. I now ask him. whether lenders for the lease of the dockyard have been invited, and whether the closing date has been extended to the 5th November? If so, when was the Government’s intention to lease the dockyard first announced,’ and what is the reason for extending the date for the receipt of tenders?


– Offers for the leasing of the dockyard have been invited, and the time for the receipt of them has been extended for a month.Iam not able to give offhand the other particulars for which the honorable member has asked.


– In view of the fact that the Prime Minister gave the House the assurance that an announcement would be made respecting what was to be done with Cockatoo Island Dockyard, does he think it reasonable that that public asset, which is valued at £2,000,000, should be leased to private enterprise without this Parliament being consulted ?


– I have nothing to add to what I have already said on this subject. The Government wishes to make the best use of this asset, and at the same time to conserve the interests of the taxpayers, by reducing, if possible, the loss upon it. It is with this object in view that wo have invited tenders for the leasing of Cockatoo Island, and as the time stipulated for the closing of tenders has not yet expired, I can say nothing more on the subject at this juncture.

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– How does the Prime Minister reconcile the promise of the United Australia Party that, if elected to office, it would find a solution of the unemployment problem, with the action of the Government in leasing the Newnes shale oil-fields, which were previouslyoperated by a committee under the control of this Government, to private enterprise, which has now closed the works down?


– The whole object of the Government, in leasing the Newnes shale oil-fields to a private company, was to continue to operate these works in order to provide employment. We are still hopeful that that result will follow the arrangements which the Government has made.

Mr James:

– The private company has closed down the works,


– The matter is at present under the consideration of the Minister in charge of the negotiations, Senator McLachlan, and the last has not been heard of or said on. the subject. We are hopeful that we shall be able to continue to operate these works.


– Is it not a fact that the company to whom these works have been leased has not kept to the definite terms of the agreement, because of its failure to find the capital necessary for the proper development of the Newnes shale oil deposits ? Has not that company already forfeited its rights under the agreement ?


– I am not in a position to say that that is so ; but I shall ascertain; the. exact position from the Minister in charge.

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Motion (by Mr. Gullett) agreed to-

Thathe have leave to bring in a bill for an act to approve the provisions of an agreement made between His Majesty’s Government in the United Kingdom and His Majesty’s Government in the Commonwealth of Australia and arising out of the conference of representatives of the Governments of the British dominions held at Ottawa in July and August, One thousand nine hundred and thirty-two.

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

Motion (by Mr. Lyons) agreed to -

That so much of the Standing Orders be suspended as would prevent the Minister for Trade and Customs from moving the second reading of the bill and continuing his speech beyond the period of one hour until its conclusion.

Second Reading

Minister for Trade and Customs · Hen ty · UAP

– I move -

That the bill be now read a second time.

May I at the outset express my regret and disappointment that the leader of the Australian delegation to Ottawa who is now our Resident Minister in London is not standing in my stead at the table to-day? Mr. Bruce was pre-eminent among the great parliamentarians of the Empire who assembled at Ottawa, and his talents were disclosed not only in the making of the Australian agreement but in his powerful contribution to the success of the conference as a whole. Yet, desirable as it might be, that he should have returned to present the agreement to Parliament, the news of the New South Wales loan, conversion, which was received last week, shows the wisdom of the decision of the Prime Minister (Mr. Lyons) that his proper place at the moment was not here but in London. I shall only add that no Australian delegation overseas has ever enjoyed or benefited by more inspiring and capable leadership than we who went to Ottawa.

The purpose of the Imperial Economic Conference at Ottawa was to review the question of preferential trade within the British Empire, and to endeavour to establish such trading upon a sound reciprocal basis. Honorable members are already acquainted in broad outline with the manner in which the great task of the conference was handled, and with the measure and nature of the various tentative agreements which were made; my duty to-day is to explain in some detail the particular agreement entered into by the Australian delegation with the United Kingdom and the colonies, and to move for its approval by this chamber.

It is not necessary to survey in detail the long and chequered story of preferential trade within the Empire. Tariff preferences were in vogue in the very early times of the British Colonial Empire; for more than a hundred years the Colony of New South Wales regulated its duties iu the interest of the Motherland. There came a long eclipse of the practice under Britain’s policy of free trade and foreign treaty making. Preferential trading slumbered until at the close of the last century it was awakened by the vision and irresistible challenge of Joseph Chamberlain. Free trade in the United Kingdom resisted Chamberlain’s titanic assault, but the citadel had been shaken, and in the overseas Empire the effect had been immediate, and more or less general; preferences in Britain’s favour were freely and progressively granted by the dominions. In 1929, the average margin of the preferences granted by Australia upon goods of British origin was 15 per cent., and they extended over almost the whole tariff schedule. These preferences were in a sense unconditional, but I need scarcely recall to honorable members that in the minds of the Australian people there was always the consciousness that in many forms, tangible and intangible, there wa3 reciprocity from the people and government of the United Kingdom.

Iu 1919, the Government of the United Kingdom ‘made its first reciprocal grants, and at the successive Imperial Conferences of 1923, 1926, and 1930, the issue took larger and larger shape, while, concurrently, the’ advocates of a return to protection multiplied apace in the British electorate. Last year, we saw the dramatic collapse of freetrade, and the return of a coalition National Government, divided, it is true, within itself upon the fiscal issue, but leading a House of Commons overwhelmingly committed to protection through the tariff for home industries and preferential trade throughout the Empire. British minds the world over then turned with a new and gathering expectancy to the forthcoming conference at Ottawa. Mr. Bennett, the Prime Minister of Canada, who had at the 1930 conference proposed the gathering in Canada, had builded better than he knew.

The new National Government in Britain at once made it plain that the fall of freetrade did not mean protection for home British industries only.

Through the Import Duties Act, which became law early this year, that Government imposed for a limited period temporary duties of 10 per cent, against a wide field of foreign imports of a kind supplied by the dominions, and allowed the free entry of dominion products.

Therefore, at the opening of the Ottawa Conference, reciprocal preferential trade was already operating within the Empire. But it was operating without plan, and without certainty of continuance. On the British side, all the new preferential duties were to have expired in November of this year, unless in the meantime specifically renewed. On the dominion’s side the preferences, as for example, those granted by the Commonwealth, had been given piecemeal; they represented various margins, and any study of them showed that, generally, they had been somewhat carelessly if withal generously applied. At Ottawa, there was a considered and deliberate attempt, not only to make the trading preferences of the Empire really reciprocal, but to place them on a well-ordered businesslike basis, and to express them in definite agreements for a term of five years.

The case for a comprehensive scheme of preferential trade within the Empire rests upon the belief first, that such a scheme is practicable and economically sound, and secondly, that it will prove a powerful influence iu strengthening the bonds which hold the British people together. It is not suggested that it would be possible or wise to attempt to make the British Empire self-contained. There are commodities such as wool and wheat and coal, and many classes of manufactured goods, of which the Empire as a whole has an output far in excess of its requirements, while in other commodities, as for example oil, its supplies cannot meet its consumption. Moreover, it has never been held by those who believe in preferential trade that we should aim at excluding foreign trade from our markets. International, trading, like intercommunity trading, is essential to the progress of the world’s civilization. Yet, those who have worked for more than a generation for preferential trade believe that the

British Empire cannot fail to be reinforced, and more definitely assured of permanence, by a comprehensive arrangement which will ensure, without going to extremes, that British Empire markets shall be, as far as possible, supplied by British Empire goods.

If this great conference had met in a time of normal prosperity, it would have presented very few economic or political difficulties. Tariff preferences on a reciprocal basis would have been agreed upon, and we would have waited patiently for the scheme to yield its fruits. But meeting as it did in the midst of a depression of unparalleled range and intensity, with prices diminished almost to vanishing point, with the purchasing capacity of the great dominions exceedingly enfeebled, with governments everywhere in financial difficulty, with taxation threatening with extinction such industry and commerce as remained, it was imperative that the conference should evolve plans containing sound promise of immediate effectiveness.

The conference at Ottawa therefore directed its energies to the raising of price levels for the great export commodities of the dominions, and the colonies depending in the main upon the United Kingdom for their market. Preferential trade between the dominions as apart from Britain and between the dominions and the colonies was not neglected, but was regarded as of secondary consideration. The great -task was to enlarge as speedily as possible, reciprocal trade between the people of the United Kingdom and those of each of the dominions. Could that task be carried to a successful conclusion, the conference would do much for the early restoration of Empire prosperity and the re-employment of British peoples in all quarters of the world.

It is not necessary to dwell upon the importance of the home British market to dominion producers. “Without that great market, the Empire could not have gained its present strength, and the loss of that market would bring the Empire swiftly to ruin. To Australia this observation has a particular application. It is true that only 30 per cent, of the wool we export goes to Britain, and normally only about 30 per cent, of our wheat.* But apart from those two great staple products, our dependence upon the British market is most pronounced. In 1930-31, 90 per cent, of our exportation of butter, 76 per cent, of our meat, 75 per cent, of our fruits, and 95 per cent, of our wine went to the United Kingdom.

Moreover, although there recently has been an interesting and promising development in the exportation of some of these lines to other countries, the indications as a: whole point to our increased rather than reduced dependence upon the British market. For, while in Canada and in some eastern countries we have, fortunately, improved our markets, we have at the same time, been excluded from other markets, particularly from those of Continental Europe. The passionate spirit of post-war nationalism, implemented by tall tariff walls, together with the depression, have more or less closed many doors against us. Further, the produce of certain foreign exporting countries has been diverted to Britain in competition with similar produce from the dominions.

At Ottawa, therefore, we were compelled to ask the British people to continue to buy from us, not only as much as they have bought in recent years, but actually and heavily to increase their purchases. We had to ask this at a time when British purchasing capacity like our own is enfeebled by the depression. Nor was that all. We had also to tell the British people, through their delegation, that the present prices paid by them for our produce were so low as to be profitless to our producers and to ask that steps be taken to increase those prices against themselves for our benefit. Wc had to make it clear that unless and until that were done the dominions could hold out little or no prospect of service to the people of the United Kingdom by furnishing a profitable market for their goods or a safe and profitable investment for their money.

These facts were freely and generously recognized by the British delegation as the agreements with Australia and with the other dominions clearly show. In other words the British Government recognized - and this is an important point in any consideration of the work of the conference - that owing to the depression the first benefits from the new reciprocal trading project must of necessity go to the dominions. Here in Australia, for example, the returns to our primary producers must be restored to a profitable level, and the general financial burdens of our people must be reduced before the Commonwealth can again become a substantial buyer of British goods. The facts are incontrovertible, but the resulting difficulty, from the British view-point, and especially the political difficulty, will be plain to all.

Not only in the trade agreements did the British delegation accept the view of the dominions that the indispensable first step towards the success of the conference and the recapture of prosperity must be an advance in wholesale prices. How to improve price levels became the dominant consideration of the conference, and was the outstanding feature of the monetary resolutions adopted. It has been said that these resolutions did not carry the world or the British Empire very far on the road to recovery. But reflection will show that they were incomparably the most significant and helpful financial affirmations reached since the depression came upon us. They declared in specific terms that the monetary policy of the United Kingdom and the ^ dominions should be linked to an Empire effort to revive price levels.

It is to be remembered, in this connexion, that the power and influence of the Government of the United Kingdom in world finance, has, in an international sense, again become paramount. It is of the first importance and of great encouragement, therefore, that the conference, at the inspiration of the British Chancellor of the Exchequer, declared a rise in prices is necessary and laid down a policy, already, indeed; initiated in the United Kingdom, in favour of making available short term and long term money on the cheapest possible terms.

We have had striking evidence of the effectiveness of this policy both in the gigantic conversion loan of the United Kingdom and in the successful New. South Wales conversion last week. The Ottawa anticipation was that the Government of the United States would adopt a similar policy, and indeed that at no distant date it would be generally adopted throughout the important countries of the world. This would mean the cheapening of money internally, and would give much-needed relief for debtor nations with external obligations, with a consequent lightening of taxation, the aiding of industry, the renewal of confidence, and as the Australian delegation ventures to believe, the inevitable recovery of price levels. If I appear to have digressed from the trade aspect of what happened at Ottawa it is to emphasize the comprehensiveness of the endeavour of the conference.

To enable honorable members to follow without difficulty the story of the conference, and to assess the value to Australia of the agreements made and the concessions granted by the Commonwealth to Britain, it is desirable that I should explain to the House the preparatory work that was done before the delegation sailed for Canada. A great deal of the work of the conference was done before any of the delegations arrived at Ottawa, and this was especially true of the Australian delegation.

At the end of January last the Commonwealth Government received from the British Government a list of 250 tariff items and sub-items to which the British Government invited consideration with a view to concessions being made in favour of British industry. The concessions sought were not specific; no actual rates of amended duties were set out; but the British Government suggested that the items submitted should, as a first step, form the basis’ of exploratory discussion between the representative of the United Kingdom in Australia, Mr-. Hankinson, and the senior British Trade Commissioner, Mr. Dalton, and officials appointed by the Commonwealth.

The Government appointed a subcommittee of Cabinet - Mr. Bruce, Minister without Portfolio, the last Minister for Commerce, the honorable member for Wakefield (Mr. Hawker), and myself - to handle the Australian case. The work was divided into two sections. Customs officials under the direction of Mr. Abbott, the Deputy ComptrollerGeneral, engaged with the British officials in an examination of the British requests for tariff concessions, while officials of the Commerce Department and of the

Development Branch of the Prime Minister’s Department proceeded, under the direction of the Cabinet sub-committee, to collect and prepare the material upon which Australia’s requests to the Government of the United Kingdom would be based. The work was vigorously prosecuted. Some time before the delegation sailed for Ottawa, we had replied to Britain’s requests, and had outlined in detail the concessions which the Commonwealth was prepared to make, while at an even earlier date we had forwarded by cablegram to London almost the complete list of the various primary products upon which we desired preferential treatment from Britain, together with the margins and forms of preference desired. 1. should mention that it was clearly understood by both governments that responses or requests made at this preliminary stage were tentative, and subject without prejudice to variation at Ottawa.

In framing the Australian requests for preferences, the sub-committee, and afterwards the delegation at Ottawa, followed a course of studied moderation. We recognized that the preferences asked could not at once rescue primary production in Australia from the desperate straits in which it then found itself, as the result of the collapse in prices, to a level of normal prosperity. But we believed that the preferences requested would, if granted, have at least some immediate stimulating effect upon prices, and further, that as prosperity returned, they would enable the Australian farmer and grazier to bid successfully for a steadily increasing share of the British market. We were encouraged in that belief by the gratifying manner in which our primary producers had in the past competed in the United Kingdom against the producers of all other countries, either without preferences at all, or with very limited preferences.

The restraining consideration with respect to our requests was the degree to which the British Government and people could afford to grant preferences. We had to bear in mind that most of the exports in regard to which we sought preferences were foodstuffs of a kind consumed in the main by British workers and other people of moderate incomes. We had to remember the existing ‘industrial and economic conditions of the United Kingdom, where, while the conference was sitting, there were over 2,000,000 men and women unemployed and a charge upon the taxpayer. Moreover, we had to keep it always before us that agreements signed at Ottawa must receive the endorsement of the governments and political parties, and, in the last stage, of the electors at the ballotboxes. We held the view that excessive requests might easily wreck the conference, delaying the great project of preference for many years, or even defeating it for ever.

I como now to the response we made to Britain’s requests for changes in the Commonwealth tariff. These requests were of two kinds; some were for reductions in the British preferential tariff level, and others for a widening of existing preferences. At the outset of the preparation the Cabinet subcommittee had to make a decision and a recommendation to the Government pf first-class importance.

Honorable members are familiar with the fact that the Government’s policy is definitely against changes in protective tariff items without reference to and consideration by the Tariff Board. In other words, the Government denies to itself the right arbitrarily to raise or lower protective tariff levels, and this policy declared at the general elections in December has been closely respected. But what of the policy for Ottawa ? Was the Government to have one policy for the domestic Australian consideration and another for Ottawa? Would the Government, through its delegation, in response to the British requests for reduced duties in her favour, proceed to a special ministerial revision . independently of the Tariff Board?

After careful deliberation, the Government decided that the policy declared at the elections, and since acted upon in tariff resolutions now before this House’, must prevail at Ottawa. There’ can be no question, I submit, as to the wisdom of this decision. Apart from’ the pledge to the people, I can conceive of no more hazardous undertaking than for a

Customs Minister or any number of Ministers ‘ to engage hurriedly in tariff revision. Under the best of conditions such an enterprise is a gamble, but with Australian industry and world conditions as they are to-day, it would he political madness.

Obviously, however, if the Australian requests to Britain were to succeed, ways had to be found to bring about a substantial improvement iu the British trading position and prospects in the Australian market. The action taken was of twofold character. We decided to refer to the Tariff Board all the protective tariff items with respect to which Britain had made requests for reductions, and to obtain as many recommendations as possible before the conference opened. I need scarcely say that, in considering these references, the board worked with that complete independence which has always marked its deliberations. We also gave- to the Government of the United Kingdom the assurance that the board would continue its work upon these particular items, and that recommendations for reduced British preferential rates would be promptly considered by the Government with a view to their submission to Parliament.

The next task before the Cabinet sub-, committee was the consideration of the British request for extensions of existing preferences. Here, after an unsatisfactory attempt to deal with the tariff item by item, it was decided to adopt a’ sliding scale formula for general application, subject to exceptions both ways. That formula, as originally transmitted to London on the 1st June, was as follows: -

Some honorable members may contend that, as the protective section of the tariff was not to be arbitrarily reduced at Ottawa, it was impossible to make really useful concessions to British industry. That is a mistaken view. There was, first, the fact that with the present exchange position, the primage duty, and the ‘very weak purchasing power of the Australian people due to the depression, no reasonable reductions in protective duties would have at once been of much value to Britain. Unhappily it was as certain as anything could be that the Tariff Board would have finished its review of the items in which Britain was particularly interested before there was any marked improvement in the exchange position or any general removal of the primage. The important thing in Britain’s interest was to provide a stronger preferential position for goods of the kind now freely entering the Commonwealth, even under depression conditions. These goods are mainly such as are indispensable and not manufactured in Australia, and they enter either free, or at revenue rates of duty. It was over this field that Britain could, if her preferential position was strengthened, confidently look for an immediate expansion of trade. Some idea of the importance of this trade can be gained from a perusal of our. import statistics. In 1929- 30, the value of thu imports admitted free of duty from the United Kingdom was £29,000,000, a figure which represents 54 per cent. of the total importations from that country. During the same year, £41,000,000 worth of goods were admitted from the United Kingdom at rates of duty of 35 per cent, or less. It can be said, therefore, that 76 per cent, of our imports from that country is admitted at rates which even to-day enable British manufacturers to compete in our markets. By granting wider margins of preference over this field of imports, the United Kingdom will be in a position under normal trading conditions to attack a further £15,000,000 worth of our import trade. It may be said that to increase the margins of preference on the essential goods referred to is economically unsound, but it is at least equally unsound for the British Government to undertake to grant preferences in favour of vital foodstuffs from Australia and the other dominions. In our preparation and proposals we were seeking concessions of great immediate moment for Australia, and we had to offer something of immediate value in return.

Before leaving the preparatory phase of our work, I should like to introduce the subject of the meat industry; because it was meat which afterwards became the chief Australian problem at Ottawa. At the outset of our preparation we realized the great difficulties which confronted the British Government on this subject. We knew that the old freetrade slogan of “ a free breakfast table “ had more application to meat than to any other article of food, with the exception of bread. It was true that the declaration for protection at the British general elections last year had been an overwhelming one; but we were fully conscious that nothing would so surely re-awaken the great forces of freetrade as a suggestion that the tariff would be used to add materially to the price paid by the British working man for his bacon and beef and mutton. Nor could we forget that at that time ‘the present British Cabinet included a number of freetraders still unshaken in their fiscal faith, and that ontariff matter;; the Cabinet had agreed to differ, and actually did differ, in speeches made from the front bench in the House of Commons.

But while we were alive to the embarrassment certain to be caused to the British Government by any request for preference for our meat, we were still more alive to the vital necessity of this particular preference to Australia. In a cablegram to the British Government on the 14th June, ten days before the delegation sailed, we said that it would be impossible to obtain the endorsement of Australian public opinion to any reciprocal arrangement which did not contain provision for some real benefit in regard to the meat we exported to Great Britain.

This plain declaration did not in the least overstate the position. We did not suggest a preference on wool, and after the fullest consultation with our great wheat interests, including the growers and the co-operative marketing organizations, we had but limited faith in the Ottawa Conference as an agency of important benefits to the wheat-growers of Australia. Therefore, if meat could not in some way be brought into the proposed scheme of British preferences to the dominions, Ottawa would have no interest for the great cattle industry of our tropical northern areas, for other cattle-raisers large and small, scattered throughout all settled Australia, for the sheep industry in its wide ramifications, or for the thousands of wheat and sheep-farmers on the wheat belt. In other words, without some benefit for meat, the forthcoming conference was limited in its promise to the Australian dairyman, the fruitgrower, and vigneron, the sugar-grower, the producer of base metals, and to sundry minor industries, and that prospect w7as one the delegation at no stage contemplated without the gravest concern for the success of the conference.

The Agreement.

I come now to the actual agreement entered into by the Australian delegation at Ottawa with the British Government itself with respect to trade with the United Kingdom, and also to that part of .the agreement with the British Government acting on behalf of the colonies. But before proceeding further, I should be lacking in gratitude and appreciation if I did not say how much of any success achieved at Ottawa was due to the Government and people of Canada. The phenomenal greeting from all sections of the Canadian people - a greeting spontaneous, “ sincere and affectionate - followed as it was by perfect arrangements of every conceivable kind for our personal comfort and for the expedition of business; and by hospitality delightful but never excessive - created an atmosphere in which failure became from the outset impossible. Canada, in brief, set the stage for a successful conference. Mr. Bennett was the rarest of hosts, and, at the same time, a brisk, businesslike and dominant, though withal a very cheery, chairman. This was the first great imperial conference to be held out of London, and Canada has set an example for all others. The thought was always in our minds that the Ottawa Conference could only have been arranged by a very efficient government backed by a very efficient people.

A feature of exceptional interest to Australia in the agreement entered into with the United Kingdom, is that if we review the concessions made to all the dominions and colonies, it will be found that the benefits obtained for the Commonwealth exceed in range those gained by any other dominion. Measured by exports to Britain, Australia is favoured by natural conditions which give extraordinary diversity of her rural industry and production, and so it comes about that if the benefits of Ottawa are real and permanent, as I believe they will prove to be, the people of this country will enjoy more than an average share of them. With few exceptions, of minor importance, every Australian primary industry, great or small, is a beneficiary.

Assuming, therefore, that the preferences obtained and the other arrangements made in our favour have the effect of increasing our exports to Britain, and of raising in some degree our price levels, every country district in the Commonwealth may look for some stimulus in output and some increase upon present returns. But I need not remind honorable members that the value of the preferences which are new or increased, or which, if not increased, will have a certain five years’ duration, does not lie merely in the increase of the quantity of produce which may as a consequence be exported, or in the higher prices which may be realized. The value of expanding and profitable British markets for our pastoral and agricultural produce is far greater than that. A ready sale for our export surplus will have an almost incalculable effect upon the prices prevailing in our own domestic Australian market. The British price level also establishes the price level obtainable for. our exports iu foreign countries. That will be obvious to honorable members. [ think it can be established that the Ottawa agreements will improve prices for our produce in the London market, and in most, if not in all cases, the new British level will determine also the new level within markets of the Commonwealth. This has, of course, a special bearing upon meat. An improved price for our mutton and lamb in the Smithfield market will automatically add to the value of our flock of 110,000,000 sheep. In turn that will add to the value of all sheep country, and so will enhance Credit, increase purchasing power, and indirectly give a fillip to all Australian industry and business. That consideration, I may add, was always in our minds during our prolonged and extremely delicate and difficult negotiations to get meat included in the list of preferences.

It was understood early in the proceedings that, provided all the dominions showed a ready disposition to agree to reciprocity, the Government of the United Kingdom would grant to all dominions the preferences granted on the representations of any particular one. But, on the dominions side this rule was not to apply, and from the outset the Australian delegation opposed any suggestion that preferences granted by Australia should be granted as a matter of course to all parts of the Empire. The reason for this stand on behalf of the Commonwealth is fairly clear. For many years to come, the United Kingdom market will assuredly bc a much richer market for Australian producers than the markets of all the dominions taken as a whole. The British market is the Australian land settlers’ chief mainstay and hope. We desire to receive in that market the most generous preferences the British people are disposed to give, and are able to afford. Their disposition and capacity to grant and maintain preferences in our favour will naturally be largely conditioned by the value of the preferences we grant in return. Likewise, every £1 we spend upon British goods will stimulate the capacity and the readiness of the British people to buy Australian primary produce. If Ave were, for example, to grant to the weaving mills of India the 20 per cent, preference margin which wc have been giving on cotton piece goods from Lancashire, it is certain that India would at once become a strong competitor in the Australian market, and Lancashire enthusiasm for Australian meat and butter and fruit might reasonably be expected to wane. A similar result would follow if we placed Canadian manufacturers of motor chassis in the same preferential position with British manufacturers. We. decided, therefore, that any extensions to other parts of the Empire of the preferences in the first place granted to Britain must be a matter for individual negotiation and consideration.

For these reasons the negotiations at Ottawa were of two distinct kinds. Each dominion delegation negotiated separately with the British delegation upon the tariff concessions it was prepared to make in Britain’s favour. But, with respect to the British concessions to the dominions, all those delegations which were interested in the same commodity, such as meat or dairy produce, cooperated as nearly as possible in the presentation of a common request. With little exception, this arrangement worked well, and led to much expedition of business.

I propose now to set out the concessions granted by Britain in favour of Australian primary . production, and to endeavour to indicate their value in general terms, and also to touch upon some of the problems and difficulties which we had to overcome during at least part of the conference.


Let lis first deal with meat, both because of its supreme importance to the welfare of an overwhelming majority of our people on the land, and also because the subject gave more trouble, and occupied more time, than all the rest of our work at Ottawa. Australia’s original request was for a series of preferential duties on beef, mutton, lamb and pig meat, together with some restriction of foreign imports into the United Kingdom. The analysis of the British market for meat was a complex task, and the position is difficult .to explain in the brief space to which I must confine it. It will help, I think, if I give you a few figures at the outset, showing the imports of the different classes of meat into the United Kingdom. The following figures are in thousands of tons: -

The feature of the market up to and including 1930 was the stability of the total imports, and the total consumption. Between 1926 and 1930, beef consumption declined by 9 per cent., that of mutton and lamb increased by 10 per cent., while the total consumption of all these meats declined by 1 per cent. The importation of pig meats was’ on the increase, but so far had not disorganized the market for other meats, the prices of which, though reduced, were still at a payable level.

However, in 1931, owing to the increased severity of the depression, and a substantial increase in the imports of all classes of meat, the market was demoralized, and prices ‘dropped to pre-war levels, and even lower.

The figures which I have quoted show that beef imports in 1931 increased slightly over those of 1930, but that they were lower than in the years 1926 to 1928. Beef, therefore, was not a factor of the price decline. The increase in mutton and lamb imports in 1931 over those of 1930 was 11 per cent. With ,the decreased spending power of the British people, this increase in supply, which came from New Zealand, Australia, and South America, was sufficient to cause some decline in prices - but not to the disastrous extent to which prices did fall. For the principal supply factor we must * look to pig meats, the imports of which were 93,000 tons, or 16 per cent., more in 1931 than in 1930, reaching the colossal figure of 639,000 tons.

The collapse in prices commenced with the collapse of the price of bacon. Diminishing returns for dairy products, and especially for butter, the very low price for feeding grains, the rapidity with which pigs can be bred for the expansion of the industry, and the successive total or partial closing of European markets by tariff action caused one European dairying country after another to fling huge quantities of- pig meats, and especially of bacon, on to the British market. The effect of this was to close two-thirds of the British bacon-curing factories, and to break prices for all, pig products. Canada, which in 1926 had exported 43,000 tons of bacon to the United Kingdom, sent only 2,000 tons in 1931. All nonEuropean competitors were forced off the market, and the top price of Danish bacon, which forms the bulk of the supply, dropped from 112s. per cwt. in January, 1930, to 70s. at .the end of that year, and by December, 1931, to 48s. - the lowest price during the present century. A fall in the prices of other meats followed that of bacon. Australian lamb, the .top price of which never averaged less than Sd. per lb. in the years 1916 to 1930, had dropped to 5 1/4 d. by February,, 1932, while later in the year it was as low as 4£d. Australian mutton, the top price of which, in the years 1916 to 1930, was seldom below 5d. per lb., fell to 2-Jd. per lb. while the conference was sitting at Ottawa. The whole of this price was absorbed in killing, shipping, and marketing expenses: in fact, the sale of sheep for export had entirely ceased, and the only carcasses going forward were stock from cold storage. Australian frozen beef, which sold in 1930 at from 4d. to 6d. per lb., dropped to 2-Jd. for forequarters and 3id. for hindquarters. Small wonder that home and dominion meat producers have been faced with ruin.

The dominions’ case for meat was presented to the British delegation in the most comprehensive and exhaustive manner by Mr. Bruce, who asked for preferential duties on frozen beef, mutton, lamb and pig meats, together with quantitative restrictions upon, all meats, including chilled beef. A few days later the British delegation, in a general, although not explicit, reply to the Australian delegation’s requests as a whole, expressed its wish to improve tho British market for home and dominion mutton and lamb by a scheme of progressive quantitative restrictions against foreign imports, and to expedite a similar scheme already in hand for the improvement of the market for pig meats in the interests of the British farmer. Mr. Chamberlain, who in all the later decisive negotiations acted as the British spokesman, added, however, that the delegation did not consider that a case had been made out for a preference on beef.

Certainly the case for dominion beef, including Australian beef, was not an impressive one. Of the total amount of 1,399,000 tons of beef of all kinds consumed in the United Kingdom in 1931, S00,000 tons was of home British origin; 464,000 tons of chilled beef, and 59,000 tons of frozen beef came from South America, chiefly the Argentine;* 57,000 tons of frozen beef came from Australia ; and 19,000 tons of frozen beef came from New Zealand. Australia and New Zealand supplied only 5^ per cent, of the total consumption, and 13 per cent, of the total beef import. Nor was that the real weakness of our case. As honorable members know, chilled beef is more attractive to butchers and consumers than frozen beef, and we in Australia are still waiting on science for a process that will enable us to transport chilled beef over the long journey to Britain. Our supply was an insignificant part of the total imports, and our frozen beef was rated as an article of inferior quality. The Australian delega- tion had from the first recognized the weakness of the claims for the granting of a preference on frozen beef, and because of that we had not at Ottawa maintained our earlier tentative request for a duty on chilled beef from South America.

Our frozen beef could not be materially assisted by an import duty, or the imposition of a restriction against frozen beef from South America, because much of the beef classified as frozen which enters Britain from the Argentine is not carcass beef, but is made up of the marketable offal of the chilled beef. As a matter of fact, Australia and New Zealand supplied no less than 65 per cent, of the frozen beef carcasses imported by Britain in 1930, and the British delegation was able to say that we already had a sound position in the market. The market for the frozen commodity is a limited one, and most of it seems to be consumed in the Army and Navy, and by various institutions.

But, if there was not a strong case for dominions’ frozen beef, there was in our view still a very definite case for the quantitative restriction of chilled beef from South America. We urged that it would be idle for the British Government to attempt to improve the position for the home British meat producer, and for Australian and New Zealand mutton and lamb, if chilled beef from the Argentine and other South American countries were left free to flood the general meat market. This was a vital point, because Brazil and Uruguay are still in their infancy as chilled beef exporters, and their exportation is capable of enormous expansion. We contended, and I think quite soundly, that price levels for mutton and lamb could not be raised if an unlimited amount of cheap beef were available to consumers.

To a late stage in the prolonged discussions, we continued to press for duties on mutton and lamb, together with restrictions upon the importation of all foreign meat. The British delegation could not be brought to agree, however, that duties were necessary if quantitative restrictions were imposed, and we were obliged to abandon the request for the actual tariff preferences. We then concentrated upon the restrictions, and it is no exaggeration to say that thousands of sums on the question were done by the members and staff of our delegation in consultation with the British representatives.

The final settlement was as follows: -

  1. The Government of the United Kingdom’ undertakes to proceed with a plan, already in process of formulation, for the regulation of the importation of foreign bacon, in the interests of home agriculture, so as to ensure a minimum price of 80s. per cwt., at which price it is expected that the British farmer will be able to produce bacon at a profit. From the point of view of the dominions, this scheme should terminate the intensive competition of bacon with other classes of meat. Happily, bacon prices are already rising, and it may be that this will prove the prelude to a general improvement in the meat market. It is difficult to estimate the reduction in bacon imports which will be necessary to carry the price to 80s. per cwt., but the anticipation at Ottawa was that the total supplies would be reduced by between 75,000 and 100,000 tons.
  2. The importation of foreign chilled beef into the United Kingdom is to he limited to the volume of the importation during the year ended the 30th June, 1932. During that year the imports totalled 440,000 tons - less than in any other year since 1925. This limitation should prove of great value, both in hardening the prevailing market and as a safeguard for the future.
  3. The importation of foreign frozen beef carcasses, boned beef, mutton, and lamb, is to be progressively restricted over a period of eighteen months, commencing from the 1st January. 1933. For the purpose of this restriction the imports for the year 1931-32 are taken as the basis. In that year imports from foreign countries were lower than in the calendar year 1931. In the first quarter of 3933 the reduction is to be 10 per cent, of the imports for the corresponding quarter of the base year, and is to be continued by quarterly increases of 5 per cent, until, in the second quarter of 1934, the reduction will be at the rate of 35 per cent. That measure of restriction will then remain in operation during the period of the agreement.

The restriction of 35 per cent., operating from the 1st April, 1934, will reduce the annual imports of foreign mutton and lamb by 34,000 tons, and of frozen beef by approximately 10,000 tons, a total of 44,000 tons.

The Commonwealth Government, on its part, undertakes -

  1. To use its best endeavours to limit the exportation of frozen beef to the United Kingdom during 1933 to an amount exceeding the exportation during the year 1931-32 by not more than 10 per cent.
  2. That the exportation of mutton and lamb to the United Kingdom during 1933 shall not exceed the quantity imported from Australia by the United Kingdom during the peak year 1931-32.

After 1933 no restrictions on dominions’ exports are contemplated. The deliberate intention of the arrangement is to improve the wholesale price of mutton and lamb and pig meats in the British wholesale market, and to provide a better market for frozen beef from the dominions. While the Australian delegation would have preferred the imposition of preferential duties in addition to some quantitative restriction, the agreement certainly provides substantially more quantitative restriction than would have been undertaken by the British Government had the duties been decided upon, and more than would be secured by moderate duties operating alone.

The curtailment of the foreign supplies of meat cannot fail to have an improving effect upon the British wholesale market, while obviously it provides scope for increased exportation from the dominions. At first glance the restraint upon frozen beef, mutton and lamb exports from the dominions next year may appear undesirable in the Australian interest, but upon reflection I think it will be agreed that the temporary limitation of dominion supplies need not cause misgivings to our meat producers. The year 1931-32 was a peak year for our mutton and lamb exports to the United Kingdom, and in that year our beef exports to the United Kingdom were higher than for a number of years past.

There is also that important fact, which I have already mentioned, that dominion mutton and pig meats were already being kept out of the British market by the prevailing unprofitable price level. Australian killing for mutton exports had ceased. Clearly, therefore, if no agreement had been reached at Ottawa it is extremely unlikely that our Australian meat exports for next year would have reached those of the peak year ended June last. The British scheme for the restriction of bacon imports to bring about a wholesale price of not less than 80s. a cwt. promises to be of very great value to Australian farmers. We are not able to export bacon to the United Kingdom because of transport difficulties, but with a wholesale bacon price of 80s. the way will be open to our dairy farmers to engage actively in the raising of pigs for the export of frozen pork to be converted into bacon in British curing factories.

On the whole I give the House and the live-stock breeders of Australia the assurance that the agreement reached upon meat was quite as satisfactory as the Australian delegation ever contemplated it would be. That is endorsed by the honorable member for Wakefield, who carefully followed the negotiations. After months of very close study of British meat supplies in all their wide ramifications we were deeply impressed with the extraordinary difficulty of obtaining a satisfactory preferential scheme. This, however, we now believe has been obtained, and in my view, this scheme is of more value to Australian primary industries than any other single concession obtained at Ottawa.

The production of meat is one of our greatest industries. At this juncture, I propose to read a letter which I have received from Mr. Angliss, who accompanied the delegation to Ottawa as its accredited consultant on the subject of meat. The letter was quite unsolicited. It reached me only this morning, and although it is marked “ personal “, I have obtained Mr. Angliss’s permission to read it to the House. It is as follows: -

Dear Mr. Gullett,

There seems to have been a good deal of controversy going on recently in connexion with the Ottawa Agreement, and it has been stated in some quarters that nothing of any value has been obtained in connexion with our meat.

I would just like to say that as far as the meat portion of the Ottawa Agreement is concerned I consider it is much more valuable under the quota agreed upon than it would have been had wo the benefit of the tarin’ only. In my opinion (and in this I am joined by other meat men) a tariff would have been absolutely useless without a quota, and now it has been. decided there shall be no tariff, and just a quota I want to say that the view taken by the 7neat men generally is that a. quota will prove to be much more valuable to the Australian producer than the tariff which was mentioned in our earlier proposals, and I feel very certain when the restrictions on the foreign countries and the quota have been disclosed the country generally will recognize thu value of the meat agreement. I also feel confident that the benefits will be rauch appreciated by the meat producers.

Yours sincerely, W. Angliss.

Mr. Angliss is, I think, the largest individual exporter of meat in Australia. He is one of the greatest cattle owners in this country, and was, no doubt, writing on behalf of thousands of meat producers.


In considering the great commodity of wheat, which in national importance, ranks second only to wool, the Australian delegation, in common with the Canadian delegation, was confronted with a position of extraordinary complexity. In the first place we recognized that it was almost impossible for the British Government to take” any step which would increase the price of bread in Britain in the interests of the overseas dominions. It must always be borne in mind that the working-class bread-eating millions of Britain are the lowest paid and poorest white people in the whole Empire. But, that was only the beginning of our problem. Even if the British Government had been prepared to lift slightly the price of imported dominions wheat above world parity, that would not have been of substantial benefit to the wheat-growers of Australia and Canada. The fact is that the Empire is a heavy surplus producer of wheat.

In the six years 1925-26 to 1930-31, the dominions as a whole averaged an annual export of 330,000,000 bushels, while in the same years the average import into the United Kingdom was 198,000,000 bushels. So that if the United Kingdom had imported only empire wheat there would still have been an annual surplus of 132,000,000 bushels to be sold at parity in foreign markets. Obviously, therefore, no British preferential scheme would increase the Australian parity. We could scarcely expect Britain to subscribe to a preferential scheme under which her working people paid more for bread made from Australian wheat than foreign peoples, or we in Australia paid.

The British Government suggested a quota scheme which would ensure to us a substantial share of the British market at world parity price. That scheme was discussed by the Ottawa Cabinet Subcommittee with representatives of every section of the Australian wheat industry, including the co-operative marketing bodies, and the unanimous view was unfavorable to it. Very few of these representatives believed that even a preferential duty would be of benefit to the Australian wheat-grower. We therefore decided that the best course to follow would be to co-operate with Canada in an endeavour to induce the British Government to devise means to reserve to dominions’ wheat as large a place as possible in the market of the United Kingdom with safeguards against unfair marketing practices by any foreign country. Obviously, we had in mind the disastrous breaking of the world price level by dumping from Russia in 1930. On our side we undertook that under any arrangement made dominions’ wheat would be sold at Liverpool at world parity pricesThis proposal was agreed to and is expressed in the agreement by a duty of 2s. a quarter or 3d. a bushel against a TE foreign wheat, with free entry for theproduct of the dominions.

I may say that this arrangement hass been hailed with much satisfaction ii* Canada, where over a vast stretch of the prairie the wheat-grower is solely or almost solely dependent upon his harvest of grain, which therefore was his one interest in the Ottawa Conference. Happily, the Australian mixed farmer on the wheat belt has also his benefit under the agreement in the mutton and lamb’ market of the United Kingdom. Australia has a position of some advantage over other wheat countries in the markets of India and the Ear East, and this fact, coupled with the new British duties, may lead to some of our foreign wheat-growing competitors restricting their operations.

Under the Import Duties Act, dominions’ flour enjoyed a temporary advantage of 10 per cent, against flour of foreign origin. That preference now stands in the agreement for a term of five years. No increase was obtainable, but in view of the fear that the temporary duty of 10 per cent, against the foreign miller would in the interest of United Kingdom millers be applied to the dominions also, the Australian delegation was satisfied with the outcome. Milling is highly efficient in the Commonwealth and the preference should prove very useful.

Barley also remains on the 10 per cent, duty although at one stage in the negotiations we had hopes of either 15 per cent, or 6d. a bushel. The 10 per cent, is equal to 4d. a bushel on a depressed market, but will, like all the ad valorem duties, become more valuable as prices improve. Australian barley when carefully harvested . and graded, is, I understand, of -particularly good quality, and with the preference, there is ground for the hope that it may lead to the remunerative harvesting of increased crops, especially in South Australia and Tasmania.

Peas also retain the 10 per cent, preference temporarily granted under the Imports Duties Act; this amounts to about Sd. a bushel against foreign peas competitive in class. In suitable districts the crop is a desirable one in any rotation scheme of cropping, and the export market should be worth the attention of farmers.

Australian macaroni, manufactured from the special durum variety of wheat, is finding limited sales in the British market, and receives the useful stimulus of 10 per cent, preference.


The importance of the dairying industry to Australia needs no emphasis. It is already of first-class magnitude and no other branch of farming offers such easy opportunities for swift expansion. General concentration upon improved breeding and feeding, could, probably within a decade, make Australia the world’s largest exporter of dairy products. But during the past twelve months the price of Australian butter in Britain has fluctuated from slightly below to slightly above 100s. a cwt. - the lowest level for a number of years - and Australian dairy-farmers were finding it difficult to carry on at a profit.

The butter market of the United Kingdom is like its meat market, practically the only one now open to exporting countries. Until recently it had consumed 66 per cent, of the world’s total exports of butter, and Germany had ranked next with a consumption of 25 per cent. But Germany has now almost entirely stopped imports, and this threatened to lead, as similar European action did with respect to meat, to further heavy supplies for the British market. The state of that market and the cause of the collapse in the price level can be told in a few figures. In 1928, the total British imports reached 300,000 tons which was in excess of imports in any previous year. But three years later, in 1931, the imports advanced to 400,000 tons. As the price came down consumption increased to the exclusion of substitutes, but the avalanche of supplies, together with the reduced, purchasing capacity of the British people, persistently weakened values. Again, the low prices prevail- ing for grain feed stuffs was a contributing factor as continental farmers were enabled to engage in heavy winter feeding, and so maintain an unusually constant supply. Honorable members will see the same cause and effect running through the prices problem in the United Kingdom. Market after market which used to absorb some of the world’s surplus products is closed in the new fiscal era, and the diverted supplies have been thrown on the only open market, the United Kingdom, and we have suffered in the resultant slump. “With this position before us we decided, as with meat, to request the British Government to grant both a duty and a quantitative restriction in our favour. The prevailing temporary duty was 10 per cent, ad valorem, equal to about Id. per lb. Our original tentative request for preference was l$d. per lb. and a restriction, but finding that New Zealand was asking for 2d., we agreed to work on the same level. Again we found the British delegation opposed to the employment of both a duty and restriction against foreign supplies. The temporary duty of 10 per cent, was, however, increased to 15s. per cwt., which is equal to a little more than 1-Jd. per lb.

The cost of marketing Australian butter is 17s. per cwt., which includes refrigeration, inspection and export levy, land and sea transport, commission and all other charges, so that this new duty of 15s. places our dairymen in an exceptionally advantageous position as against the foreign producers, and cannot fail both to improve the price and to ensure for Australia an expanding position in the British market. It may be argued that the 10 per cent, duty failed to improve or even to hold up the price level, and that the additional 5 per cent, may also prove a disappointment. The fact is, however, that but for the 10 per cent, duty the price would have fallen still lower. As price levels for continental stock feeds revive and add to foreign costs of production, foreign competition faced with the duty of 15s. per cwt. may be expected to weaken.

The new duty of 15 per cent, on cheese is of more immediate importance to Canada and New Zealand than to Australia, but it at least provides our dairy- farmers with equal opportunity for profitable production. Condensed and dried milk and casein, which are also given a preferential margin of 15 per cent, against foreign supplies, are of more importance to British home farmers than to the dominions, but again they disclose an opening for Australian enterprise.


Of the 26,000,000 great hundreds of eggs imported by Britain, Australia is now supplying 1,000,000 great hundreds, and the export has, in recent years, been very progressive in equal competition with the foreigners. The new preference of ls. to ls. 9d. a great hundred according to weight, or about 10 per cent, of the London wholesale price will prove a very useful contribution to the cost of marketing and should enable the Australian industry to show further profitable expansion. The Australian egg is of average weight and will be favoured by a duty of about ls. 6d.


Australia’s 20,000 fruit and vinegrowers spread over all States have reason, I think, to look upon the Ottawa agreement with satisfaction. The new and additional preferences gained should not only benefit the orchardists and vignerons but also give a measure of financial relief to the various Governments which have ventured large sums of money in irrigation works and the foundation of new settlements. And may I add that the delegation worked with particular zest for these concessions because of their significance to a great many ex-soldier settlers.’

Apples, which have an export value of £1,250,000, have had their preference advanced from 10 per cent, ad valorem to 4s. 6d. a cwt. We were also associated with Canada and New Zealand in a request for some restriction of foreign imports upon a somewhat complicated seasonal basis. This was refused by the British delegation, and I think on solid grounds. Australian apples and pears with the produce of New Zealand orchardists, enjoy almost a monopoly of the British market through the early and mid-summer months. They meet competition, however, early in the season from apples from United States of America, which are carried over in cold storage, and again from the new American crop in September. The duty of 4s. 6d. a cwt. against foreign supplies will be of particular value in extending our selling season under favorable, price conditions.

The Australian export of pears has an annual value of about £70,000, and with the same preference as apples - 4s. 6d. a cwt. - there should be room for progress in the industry.

Australian oranges are to enjoy an advantage of 3s. 6d. per cwt. against those grown in foreign countries. This concession was granted in aid of other dominions rather than the industry in the Commonwealth. It cannot be said of our citrus growers as a whole that they have shown the same efficiency in production and marketing which is an outstanding feature with many of their fellow orchardists. They now have the inducement of this new British preference and also of the remarkably rich preference of more than Ss. a cwt. in the Canadian market, and Canada imports oranges to the annual value of between £1,400,000 and £2,000,000. The delegation ventures’ to express the hope that there will be an immediate and notable improvement in the organization of the local industry so that advantage may be taken of this preference.

The increase in the preferential margin upon dried vine and other fruits from 7s. to 10s. 6d. a cwt. may be interpreted as a well-earned reward to an Australian industry distinguished by the excellence of its practices. Australian dried fruits are deservedly famous throughout the world. Of the total production of raisins, lexias, and currants to the value of £3,000,000, two-thirds goes overseas. Of Britain’s total imports of raisins and currants, Australia supplies on the average, more than 30 per cent., while this year, we are selling more raisins in Canada than in the Commonwealth itself. The Australian export of prunes and dried apricots, peaches, and pears, has so far been of small dimensions, but the new preference, which more .than equals all marketing costs, should promote enlarged activities. Because of Britain’s trade treaty with Greece, tha preference on currants remains at 2s., but the Greek industry is well controlled, and those engaged in it have always regulated supplies and maintained a price not unprofitable to Australian growers. Our grievance in the matter, therefore, can scarcely be a strong one.

The agreement provides for a prefer.ence of 15 per cent, upon canned fruits, in addition to the duty on the sugar content. This represents about ls. a dozen tins, and is equal to approximately twothirds of .the total costs of marketing. Our request was for ls. 6d. a dozen tins, but the ad valorem concession applied to the annual export of canned peaches, pears, and apricots will, it is hoped, enable the Australian product to make still further headway against foreign supplies in the United Kingdom market.

Wine and Brandy.

The only additional advantage obtained for Australian wines was the increase in the preference from ls. to 2s. upon the light classes. This, however, should prove definitely helpful to winemakers. It has to be remembered that already, Australia enjoys an extraordinarily strong preferential position in the British market. The spirit content of dominion wines pays less import or excise tax in the United Kingdom than any other class of alcohol with the exception of the British so-called “ wines “ expressed from imported grape must. We made no headway against “ British wine,” which must bo recognized as a British industry based on imported raw material. I may mention, too, that the evidence in support of the complaint that foreign suppliers deprive Australian exporters of the value of the Empire preference by blending in the United Kingdom was not convincing, and a sound case could not be based upon it.

We failed to obtain a further concession upon brandy. The request, in which we were joined by the South African Delegation, was that the present preference of 2s. 6d. a gallon be increased to 153. The Chancellor of the Exchequer pointed out that the obstacle to an extension of the preference was the need to guard the revenue. The prevailing British brandy foreign import duty is 75s. 4d., which is ls. lOd. iti excess of the excise tax on whisky. The rate of 72s. lOd. per gallon On Australian brandy could not be reduced without reducing the excise on whisky. On financial grounds, the Government could not contemplate this. To meet our request by increasing the rate against French brandy was equally difficult, because the duty was already in the prohibitive class.

In. the interests of a large section of Australian vignerons, and indeed of winemaking generally, an increased overseas sale of brandy is of the greatest importance. To-day, there is not less than 1,250,000 gallons of brandy in stock in the Commonwealth. Consultations at Ottawa, however, appeared to indicate that an outlet must be sought elsewhere than in the. British market where little or no Australian brandy is sold. Thu evidence showed that even a margin of 15s. would not promote considerable sales of Australian brandy in the United Kingdom. The Australian delegation therefore went to considerable pains to obtain a preferential position in eastern British countries where brandy imports are remarkably heavy. In 1930, imports into Malaya amounted to 245,000 gallons; in 1931, imports into India were 347,000 gallons; to Ceylon, 47,600 gallon’s; and to Hong Kong, 77,400 gallons. As the agreement between the Commonwealth and the colonies discloses, we secured an increase in the Malayan preference on Australian brandy of from one dollar to 2.50 dollars, which at par rate of exchange represents 5s. lOd. in Australian currency. The ad valorem equivalent of this preference is about 33J,- per cent. This concession will, it is hoped, prove of considerable value to grape-growing interests.

Broadly speaking, it would appear that the preferences offer profitable activities to all well-conducted Australian orchards, and some improvement in the prospects of the holders of vineyards. It may be that in certain directions steady expansion of planting may be justified, especially in view of a probable increase of sales in the colonies and in such dominions as Canada and New Zealand. But. expansion needs caution, and should be on a scheme carefully prepared by those controlling the various co-operative bodies.

Other Primary Products.

The sugar position was not changed at Ottawa. Prior to April last all Empire sugar was accorded preference, the rate varying with the degree of polarization. The effective rate on Australian sugar was about £3 12s. a ton. Honorable members will recall that in April last the British Government reduced by £1 a ton the duty on sugar from the colonies. At the conference we joined with the South Africans, and with representatives of British beet sugar interests, in a sustained effort to have this additional preference made applicable also to sugar from the dominions. Our effort was not successful. The British delegation pointed out that the public finances of the sugargrowing Crown colonies were in a very bad way owing to the depression, and the government and taxpayers of the United Kingdom were in the last resort obliged to meet the deficiencies. The additional £1 preference on colonial sugar was in reality an indirect grant in aid to the colonies from the British taxpayer, as an alternative to a direct subsidy. The extra concession was a temporary one only, until the colonial financial position improved.

The preference ruling prior to April, 1932, gave to the dominions and the colonies a great advantage in the sugar market of the United Kingdom, and the reduction by £1 of the duty on dominion sugar would have cost the British public upwards of £250,000 a year. In view of these facts, and as the prevailing preference in 1931-32 was worth, approximately, £1,000,000 to Australian sugargrowers, the British refusal of our request can scarcely be described as ungenerous.

Australia enjoys in the British market a preference of £1 6s. 8d. per cwt. on hops, the duty against the dominions being £2 13s. 4d. and against foreign countries £4. At Ottawa we sought the removal of the duty of £2 13s. 4d. on Empire-grown hops of species required for blending, and not grown in the United Kingdom. The government of the United Kingdom, however, has recently introduced a plan for the organization of the domestic hop industry, and we had to be content with the maintenance of the ruling rates.

In the interests of Australian hardwoods, we joined with Canada in the request regarding timbers. It is considered that our hardwood poles, and material for harbour construction, should find free sale in the United Kingdom, but hitherto they have not been included in the specifications issued by public construction authorities. Hardwood will, under the agreement, receive a preference of 10 per cent., and the British delegations undertook to bring about the desired amendment of specification.

Other primary products which are beneficiaries are leather, honey, copra, eucalyptus oil, wattlebark and asbestos.

Base Metals.

The magnitude and extraordinarily high efficiency of the base metal industry in Australia spurred the delegation to every effort for at least the retention of the 10 per cent. preferences upon lead, zinc and copper. None of the new temporary preferences had been subjected to more attack, which came from both foreign producing interests and the British fabricators. Australia is more substantially interested in lead and zinc than in copper, but in association with Canada and Southern Rhodesia we urged the claims of these three metals upon the British delegation. In view of the fact that the fall in the price of metals, taking pre-war levels as a guide, has been heavier even than the fall of pastoral and agricultural produce, it was unfortunate that the Australian interest clashed so definitely with that of the British industrialists using our products as raw material.

When we urged that the Australian mines might have to cease operations, with consequent heavy unemployment in four States, the British delegation very naturally replied that, unless their manufacturers obtained raw material as cheaply as their foreign rivals, heavy losses and unemployment would certainly ensue in the United Kingdom. We, therefore, had to be content with the retention of the 10 per cent. preference on lead and zinc, and a prohibitive duty of 2d. per lb. on unwrought copper, conditioned with the provision that dominions’ metals on first sale in the United Kingdom must be offered at prices not exceeding those ruling in foreign competitive countries. This at least secures, as in the case of wheat, the great British market at world’s parity prices, and representatives of the dominions’ interests concerned who were at Ottawa agreed that very little more could be expected.

Australian Concessions.

I have set out - I hope not in excessive detail - the various benefits which “were Avon for the Australian primary producer at the Conference, and turn now to the reciprocal concessions which it is proposed should be made to Britain by the Government of the Commonwealth. In this consideration the first step must be to endeavour to estimate the value of the prevailing Australian preferences to British imports under normal tariff levels, and under normal trading conditions. Throughout the preparation of the case, and at Ottawa, it was agreed between the two Governments that all estimates with respect to the Australian import trade should be based upon the Australian financial year 1929-30. What represents a normal Australian tariff level was not easy to determine, but I venture the view that the protective tariff as it was in 1929 before the changes made in November of that year - speaking broadly, of course, and having regard to cost of production - was reasonably satisfactory.

Innumerable attempts have been made to assess the actual annual money value of Australia’s preferences to British goods, and the estimates have varied as widely as from £3,000,000 to £10,000,000. I do not propose to re-engage in an old controversy, but content myself by saying that, if the exhaustive overhaul of the Australian tariff and trade in preparation for the Ottawa Conference gave emphasis to one fact more than another, that fact was the remarkable efficacy of our preferences as an aid to British trade in this market. It is true that, with the recent abnormally high tariff levels, and with exchange and primage added, very many preferences have ceased to serve British interests. But, if one takes, say, the 21 year period from 1907 - when Australian preferences were first put into effect - to 1927, and compares Britain’s relative trade position with Australia, and with other important countries, excepting only Now Zealand at the beginning and end of the term, the value of the preferences becomes striking and incontrovertible. I venture a few figures -

Those are decisive figures. It is true that during those 21 years Britain’s relative growth of trade in the Australian market compares unfavorably with that of some foreign countries, but that was inevitable with the rise of greatnew industrial competitors such as the United States of America. Even so, however, it is remarkable that in most of the great commodities which Britain was able to supply she more than held her relative position, while at the same time showing actual expansion. It was because of the development of trade in such commodities as motor cars, petrol and oils and rubber, in which Britain was either not a competitor at all or a weak competitor, that she showed to some disadvantage in comparative total trade. Moreover, there is this very interesting fact. Britain maintained and developed her position in the Australian market as compared with other markets, as I have shown, during 21 years which were marked by an extraordinary development of Australian manufacturing. Some sections of the market were, of course, restricted by this local development, but with the increase in our production and the strengthening of the market generally because of this swift rise of industrial Australia, the general opportunity for British goods continued to expand.

With the single exception of India, Australia had been for some years prior to the depression Britain’s best overseas market; n remarkable fact in. the light of our small population, due beyond question to the generosity of our preference margins. Impressive also was Australia as a British market as compared with the other self-governing dominions. In 1929 we purchased British goods to the value of £54.000,000 as against £35,000,000 paid by Canada, £32,500,000 by South Africa, and £21,400,000 by New Zealand.

In the preparation for the Ottawa Conference and in the consideration of the concessions to be made by Australia, we, therefore, were entitled to take into account prevailing preferences and all that they had for many years been doing for British trade, and would do again with the return to prosperity. It. may be that, it will be found that by the other dominions more new concessions have been made to Britain at Ottawa than were granted by Australia, but, if so, the simple explanation will be that Australia had already carried preferences so far that her capacity for new favours was relatively limited. This can definitely be said. The sub-committee, with the full concurrence of the Government, prepared for the conference in a spirit of the utmost generosity. We endeavoured, as our delegation did afterwards at Ottawa, to give to Britain everything that could be given, subject only to the maintenance of efficient Australian industry and the preservation of vital foreign markets.

The British delegation accepted the decision of the Commonwealth Government that amendments of protective duties should be made through the Tariff Board, and that the Australian delegation’ was not in a position at Ottawa to engage in arbitrary alterations. That cleared the field for the consideration of Britain’s requests for extended margins of preference and for special adjustments upon commodities not produced in Australia and subject only to revenue duties.

As negotiations proceeded, we agreed to make the tentative preferential formula ,somewhat more attractive by increasing the minimum margin from 32-) per cent, to 15 per cent’., and as adopted it is as follows: -

Next’ we made the concession that the formula should, subject :to exceptions, apply not only . to the list of goods originally submitted by the British Government, but also to the whole Australian schedule. The exceptions, which are of special interest, were made in conformity with principles to which I am confident honorable members will subscribe. It may seem strange that we applied this preference to an even larger range of goods than Britain at the outset requested us to do. I am certain that when the British delegation came to Ottawa it had not the faintest intention in the world of granting to us in the British market a preferential position for dominion meat. I do not suggest that there was bargaining over the matter, because there was not. It was, however, because of the re-adjustment of the original points of view that we did not stand by the first proposal. Taking first those made in Britain’s favour, iu a number of important cases we carried the minimum preference up to 20 per cent, with the deliberate intention of endeavouring to give to Britain either an important expansion of trade, or new trade, where it was clear that her manufacturers had capacity to supply our market. A good example of this is typewriters. The old duty was British preferential free, and foreign 10 per cent. and the main supply came from the United States of America. Under the agreement, the new duties are British preferential free, and foreign 20 per cent.

Then on certain specific items with which Australian industry Avas not concerned Ave made preferential adjustments in both the British preferential and the foreign rates of duty. Unfortunately, revenue considerations did not permit of a lowering of British preferential rate3 of duty on more than a few nonprotective items, but that may, as a7c all hope, be possible at no distant date.

Turning to the exceptions in favour of Australia, these were made on obvious grounds, which on the whole were appreciated by the British delegation. If the application of the formula would have increased foreign rates of duty, we did not apply it in cases where already Britain enjoyed practically the whole of the Australian trade, or again in cases where Britain was not in a position to make a reasonable bid for the Australian market. Honorable members will agree that increased duties in such cases would not benefit Britain, while they would be needlessly provocative to foreign interests, and would increase prices to Australian consumers.

In a few cases the preferential margin was not carried up to the standard of the formula, because the commodities represented vital raw material for Australian industry, or were indispensable iii Australian primary production.

The important consideration of foreign interests Avas also responsible for a- number of exceptions. The governments of the United Kingdom and of the dominions axe completely within their rights in framing their tariffs upon an Empire preferential basis; but, in building up our agreements, as much consideration as possible was shown to the interests of foreign trade. In accordance with this attitude, it was agreed that in certain cases in which the prevailing preference

Avas below the formula level, no increase should be made, and that in certain other cases in which the preference Avas considerably above the formula, some reduction in the margin might be made.

At this stage I do not intend to deal with the future of Australia’s foreign trading. On behalf of the Government, however, it may definitely be said that in our view the Australian tariff still presents opportunities for mutually beneficial treaties Avith foreign countries, and the Government will gladly enter into negotiations to that end. It need scarcely be added that we value highly our foreign customers, and realize that one- way trade is expensive and impracticable.

To give an additional advantage to Britain, the Australian delegation undertook that all existing by-laws issued under the customs tariff should be reviewed in order to include iu the tariff many important groups of goods at present admitted under by-law. Under present conditions, goods admitted under by-law can be made dutiable at the discretion of the Minister, whereas if goods are specifically listed in the tariff, a change in duty can be effected only by action in Parliament, after inquiry and report by the Tariff Board. Honorable members Will appreciate the feeling of greater security under which British manufacturers will trade in these goods when the change indicated has been made. I need scarcely point out that the new minimum British preference of 15 per cent, iu the field of by-law admissions Avas the most valuable additional Australian concession made at Ottawa

Mr Scullin:

-. - What does that mean?


– It means that in cases in which by-law exemptions are being granted generally in respect of goods not produced in Australia, instead of continuing to grant such exemptions by ministerial decision Ave propose to make specific provision in the tariff for the more important groups at the rates operating under the by-law item. If the goods at any time come within the range of Australian industry, a protective duty will be granted.

Mr Beasley:

– The concession was granted for a purpose.


– It really means nothing detrimental to Australian industry. It gives more security and certainty to British manufacturers, as these goods are not being manuf actured in Australia. Who are at present exporting these goods to Australia? We are not granting concessions in respect of goods at present being manufactured in Australia.

A further undertaking entered into was that the Commonwealth Government would search out - both through the Tariff Board and the customs administration - protected fields in industry which are not at present being exploited by Australian manufacturers, and by the refining and reclassification of the tariff schedule make these preferentially available to British industry.

Another obligation entered into is that we shall survey the deferred duty policy. In the 1921 tariff a number of deferred duties was inserted, in the hope that the manufacture of many important commodities would be undertaken in Australia. Some of these duties since then been imposed, but many others have been deferred from time to time, and are still inoperative. Very little investigation has been made into the question whether the establishment of any of these particular industries would be economically justified, or whether the deferred rates were excessive or inadequate. We, therefore, had no hesitation in advising the United Kingdom delegation that the Commonwealth (Government would delete from the tariff all deferred duties which have no immediate significance to Australian industry.

The British delegation urged that the primage duty should be waived in whole or in part against British goods. The request, which was not an unreasonable one, was very sympathetically considered by the Australian delegation, and the Government was consulted. The proposed concession, however, if granted in a measure useful to British trade, would have involved the Treasury in a heavy loss of revenue, and therefore, had to be refused. In article 14 of the agreement, however, we have undertaken to deal with the matter as soon as the financial situation will permit.

At this stage it is desirable that I should deal with those articles of the agreement which bear definitely upon the Australian policy of protection by tariff. In inviting consideration of these articles, I. ask honorable members to bear in mind, first, the declared tariff policy of the present Commonwealth Government, and, next, the position iti which the Australian and British delegations found themselves with respect to the Australian tariff schedule as it was during the conference at Ottawa. The main points bearing upon tariff policy are to be found in Articles 9, 10, 11 and 12, and in these articles the Government of the Commonwealth undertakes -

Article 9. - That protection by tariff shall be afforded only to those industries which are reasonably assured of sound opportunities for success;

Article. 10.- That the tariff shall bc based on the principle that protective duties shall not exceed such a level as will give United Kingdom producers full opportunity of reasonable” competition on the basis of the relative cost of economical and efficient production ;

Article 11. - That as soon as practicable existing protective duties shall be reviewed by the Tariff Board in accordance with the principles laid down in Article 10, and that, where necessary, parliamentary action will follow such review ; and

Article 12. - That no protective duty shall be imposed and no existing duty shall be increased on United Kingdom goods to an amount in excess of the recommendation of the Tariff Board.

As the Prime Minister pointed out in this House soon after the agreement was signed at Ottawa, those undertakings are completely consistent with the tariff policy enunciated by him in his policy speech in December last, and as frequently expressed in this chamber. The Government in its policy of protection stands for (a) efficient industry as an essential qualification for tariff shelter; a competitive as distinct from a prohibitive tariff level; and (c) tariff making through the Tariff Board anc! not by arbitrary ministerial action.

I will admit that Article 12, which pledges the Government to confine increased duties ov new duties against British goods to levels not in excess of the Tariff Board recommendations, appears to break new ground. But in reality it does not do so, for it is merely consequential upon the Prime Minister’s declared policy prior to the December elections, that, if returned to power, his Government would not decrease duties without first referring them to the Tariff Board. That assurance was given in the interests of the manufacturers of Australia. This assurance in Article 12 is given in the interests of the primary producers of Australia, who are the immediate beneficiaries under the Ottawa agreement, of which Article 12 is an indispensable condition.

Some honorable members may ask why these declarations of policy are included in the agreement at all. They appear in all the agreements; though that is not why they appear in the Australian agreement. They were put into this agreement for a very special reason. At Ottawa we asked the British Government at once to impose, for our benefit, and against foreign countries, certain duties or restrictions, all of them aiming to improve the British market for outprimary produce, and some of them, as, for example, those applying to meat, to increase prices. In paragraph 2 of Schedule H. of the agreement which deals with meat, the Government of the United Kingdom declares that “it is essential to take whatever steps may appear feasible to raise the wholesale prices of frozen meat in the United Kingdom market to such a level as will maintain efficient production “.

The British Government agreed ‘in a very generous measure to our requests. But, when we came to deal with Britain’s request, our position was that, owing to the abnormal level of our tariff due to action in the closing months of 1929, and in the two succeeding years, and to exchange and primage, no scheme of preference margins we could adopt with respect to the protective tariff could open the way for improved British trade; and owing to our policy not to amend the tariff without reference to the Tariff Board, no general amendment of the schedule could be completed before the conference closed. We had, therefore, to ask the Government of the United Kingdom to meet our wishes at once, with the undertaking on our side that, as soon as possible, and by the grace of the independent Tariff Board, we would as far as practicable meet its wishes.

In the circumstances, the view of the Australian delegation and of the Government was that we could not do less than express specifically in the agreement itself what the present Government’s tariff policy with respect to protection is, and I say quite clearly, on behalf of the Australian delegation, that in no other way could the benefits given under the agreement to our primary producers have been obtained.

Mr Fenton:

– Did not our 25 years’ preference to Great Britain count for anything at this conference?


– I shall not be able to deal with that aspect of the subject to-day; but on a future occasion I shall state what I consider to be the benefits that Australia has received as an offset to the preferences she has granted to Great Britain. At the moment, I shall content myself with observing that our industrial position and wage standards are wholly due to our White Australia policy, and that this policy could not have been maintained for any time had it not been for the might of Great Britain. That is what we have received in exchange for our preferences.

As we were not iu a position at Ottawa tn amend the protective tariff, we gave assurances as part of the agreement as to the principles which would guide the Commonwealth Government in the consideration of the amendments desired by Britain.

The advantages bestowed upon Britain by the treaty fall into three classes. These are, first, the prevailing preferences which are now operating strongly in favour of British trade in the lower revenue and free levels of the tariff. Next, there are the generally increased preferences granted at Ottawa, which should immediately stimulate imports from Britain, and especially those coming in free or under revenue duties, and under other duties which are not of a prohibitive nature. Finally, there is the progressive benefit, which will accrue as the depression lifts, and as the Tariff Board proceeds with its work of revision, and there io a general return to what I have described as a normal tariff level.

Mr Scullin:

– What does that mean?


– -lt means approximately the level that was struck by the Tariff Board in the schedule of reductions which I tabled in this House in February on references submitted to the board by the Deputy Leader of the Opposition (Mr. Forde), when he was Minister for Trade and Customs. That level is quite satisfactory to me, and I think it will be satisfactory to Great Britain.

Mr Marr:

– Do not be drawn by interjections.

Mr Scullin:

– That is right; keep tilings hushed up.


– I assure the right honorable gentleman that I have no desire to hush up anything.

Mr Scullin:

– Then let the Minister for Health (Mr. Marr) remain silent. I asked a reasonable question.


– My reply to the question is that we declared our tariff policy before the delegation léft for Ottawa, and that that policy implies the revision of the tariff schedule through the Tariff Board.

Mr Scullin:

– And a downward revision !


– Who said so?

Mr Scullin:

– The honorable gentleman himself indicated it.


– I am perfectly satisfied with the downward tendency that ran through the Tariff Board recommendations during the administration of the right honorable gentleman’s Government.

Mr Scullin:

– Why not leave our schedules alone?


– Bearing in mind the great capacity displayed by Australia in the years preceding the depression as a purchaser of British goods, it is reasonable to anticipate that under the improved competitive position Britain will enjoy in future, she will be a considerable beneficiary as the result of the treaty. I have no doubt, too, that the preferences expressed through the tariff for goods of United Kingdom origin will be reinforced by the sentimental preference of the Australian people. I am confident that sentimental preference for commodities of Australian origin will run strongly in our favour in the United Kingdom.

Dominions and Colonies.

Advantage for Australian exports in the markets of the United Kingdom was, as I have said, necessarily the main objective of the delegation. We strongly hoped, however, that we would also find time and opportunity for the making of both improved and new trading agreements with the dominions and the Crown colonies. To this end much preparatory work was carried out in Australia before the delegation sailed, and consideration was given to a list of suggested Australian concessions submitted by the Secretary of State for the Colonies.

The New Zealand position was fully discussed with the delegation from that dominion during the voyage to Canada and at Ottawa. The possibilities of improving Australian trade with each of the Other dominions and colonies was explored again and again in the closest detail. But the magnitude of the major negotiation with the British delegation, and particularly the prolonged discussions upon the meat problem, made it impracticable to give to trade with the dominions the full time and industry necessary to complete, as we so much wished to do, the chain of new or improved agreements right round the Empire. We did, however, with slight exceptions, succeed iu bringing to a conclusion a tentative agreement with the Crown Colonies as a whole. Wo also carried to its final stage, except for signature by the Prime Minister of Newfoundland, an agreement with that dominion. With respect to the other dominions, much useful work was accomplished which will, I trust, lead to actual new agreements, or to better existing agreements at an early date.

A matter for particular regret was that the negotiations with the representatives of the dominion of India, although carried on in an excellent atmosphere, could not be brought to the decisive stage. On both sides, however, we have undertaken to continue the exploration. The cities of India - and this applies to Eastern Asia and to the colonies - contain great numbers of people with incomes capable of considerable purchasing power. Everywhere old traditions and prejudices with respect to diet and clothing are rapidly weakening. Modern science and mechanism as expressed in the wireless, the film, aircraft and the motor car are spreading, western influences and habits among all the relatively backward races, and the result can scarcely fail to be of increasing profit to a great primary producing country like Australia. The Government will spare no effort to secure a preferential arrangement with India which would justify our exporters in a sustained effort to win a profitable place in that market.

The Secretary of State for the Colonies, Sir Philip Cunliffe-Lister, negotiated on behalf of the colonies as a whole, or at least for all of those which are empowered to grant preferences. In each case, however, the arrangements arrived at have to be endorsed by the local legislature or other governing authority in the particular colony concerned. Provision, therefore, is made in the tariff schedule now submitted to the House for the new concessions which are specifically made for the colonies to be brought into effect by proclamation as advice is received that the colonies have endorsed the action taken by the Secretary of State.

A consideration of importance with respect to the conditional concessions the House is asked to make to the Crown Colonies is that the British delegation at an early stage in our negotiations made it clear that such concessions would be taken into the general account also as concessions to the United Kingdom. In other words, the granting of some of the concessions to the colonies contributed very usefully to the larger agreement made in the interests of Australian primary producers with Britain. Despite this, however, I think that the actual preferences in our favour provided under the agreement with the colonies will prove full recompense for the benefits conceded by the Commonwealth.

A somewhat remarkable feature about, the tariffs of the many British Crown Colonies is that most of them have for many years been granting very helpful margins of preference to the British Empire as a whole, including Australia. On the other hand, the Commonwealth at no time has given preferential treatment to the colonies, and has denied them participation in the preferences granted to Britain. For many years, therefore, the curious position prevailed that we gave preferences to Britain without trade reciprocity from her, and that the colonies gave preferences to Australia without reciprocity from us. It was clear that in these circumstances we were called upon, in the first instance, to grant sufficient preferences to the colonies to secure the continuance of existing preferences in our favour, and that having done that, if we wished for further concessions, we had to make additional concessions in our turn.

A survey of the trade of no fewer than 55 individual colonies, great and small, serves to remind us of the amazing and fascinating range and diversity of Britain’s world-wide colonial possessions. Honorable members may differ as to the future trading possibilities for Australia’ with this multitude of colonies. I am disposed to place it high, aud to venture the opinion that if the Commonwealth applies itself with interest and capacity to the development of this particular branch of trade, it will prove remarkably profitable for Australian industries, both primary and secondary.

Under the agreement between Australia and the Crown colonies, we receive no fewer than 42 new and increased preferences. These apply in the main to flour, frozen and canned meat, bacon and hams, fresh, dried and canned fruits, butter, condensed and powdered milk, wine and brandy and foodstuff manufactures such as biscuits, confectionery and jams. Beyond question, one of the restraining influences upon trade between the Commonwealth and the colonies and many other countries has been the absence of direct shipping communications. Consideration was given to this problem, and the Government will continue to prosecute it. While at Ottawa, tentative arrangements were made for the line of steamers which now trades between Australia and the North Atlantic eastern coast to call six times a year at St. John, in New Brunswick, and also, we hope, at the Bahamas, in the West Indies. This should reduce the cost of transport to a considerable market in Eastern Canada, and will give us direct contact with the West Indies, where, with the assistance of the new preferences, trade prospects become distinctly bright.

If the agreement is endorsed, Fiji should also offer sound opportunities for increased Australian exports. Honorable members will recall that our trading position there has weakened in recent years because, although Australian imports were given preference over some foreign goods, they were, in many instances, dutiable at a rate higher than the products of the United Kingdom, Now Zealand and Canada. This discrimination is removed under the agreement, and Australia is to receive most favoured nation treatment. Of . Fiji’s total imports of £1,220,000 in 1930, Australia contributed no less than £450,000, and with the improved preference, progress should be substantial. Failure to have reached an agreement with Fiji at Ottawa would have lost. us the partial preference we now enjoy, and the valuable existing trade would have been placed in danger.

Malaya, however, promises perhaps the best colonial field for an expansion of Australian trade. In 1929-30 our exports to British Malaya were valued at £1,400,000, and with the valuable brandy concession to which I have referred, and a number of other increased preferences, notably upon butter, the market there should be one worth vigorous exploitation by our exporting interests.

Happily, most of the products of the colonies are of a kind not produced in Australia, and in making the proposed concessions in return for the benefits to be received there is not, with two or three exceptions, any clash of interests. Broadly speaking, we grant to the colonies on specified commodities the same margins of preference that apply in the formula adopted for the United Kingdom consideration, but, in addition, the agreement provides for a few special concessions. Beginning with the West Indies, it is proposed to provide a preferential margin of 5s. per gallon on rum and bitters. So far as rum is concerned, that still leaves a protective margin of 6s. a gallon for Australian rum. For many years that margin was only 3s., and there is not, I think, the least danger to local industry in the change. Bitters is not produced in Australia. The * island of Trinidad is a heavy producer of asphalt. At present asphalt is admitted to Australia free of duty. A duty of 10 per cent, is proposed upon the foreign product and upon substitutes, with free entry from Trinidad. Most of our imports are now drawn from Mexico and the United States of America, where they are derived from the residue of mineral oils, and it is anticipated that the competition will continue to prevent a noticeable increase in the Australian selling price.

I have indicated the very definitely improved prospects which Fiji holds out for Australian trade under the agreement, and the danger to existing Australian trade if no agreement had been reached. This was obtained only by concessions in return, and it is provided that

Australia will permit, at the old duty rate of 2s. 6d. a cental, the import of not more than 40,000 centals of Fijian bananas a year, to be divided between the markets of Sydney and Melbourne. The present duty is Ss. 4d. Australia’s production of bananas amounts to 2,300,000 bushels a year, so that the contemplated quantity from Fiji should not impair the interests of local growers. In the interests of British North Borneo, the agreement preferentially restores the old duty of 10 per cent, upon log timber, and the same concession will apply to the British Solomons, where an Australian company controls the milling and export.

In return for the really rich brandy preference and other concessions from Malaya, the Australian delegation undertook to raise no objection if Canada reduced the duty of 3 cents a lb. against Malayan pineapples to 1 cent. At present under the Canadian-Australian treaty, Australian pineapple is dutiable at 1 cent, Malayan at 3 cents, and foreign at 5 cents. The Malayan product is definitely inferior in quality to the Australian, and finds its sale in a different class market. Already the Australian pineapple has made extraordinary headway at the expense of the United States of America and Hawaii, and there is still an excellent prospect of further progress. The delegation made the concession, however, with reluctance, and only because of the exceptional j) resent richness and sound promise of the Malayan market for a wide range of Australian primary produce, and because it was made vital both to the continuance of existing Malayan preferences in our favour and to the extensions obtained. The remaining preferences proposed to be given to the colonies by the Commonwealth present no exceptional features and, generally speaking, apply to commodities not produced in Australia.


The Australian delegation at Ottawa, including the six accredited representatives of industry and commerce, was in numbers one of the smallest at the conference, and in consideration of the relative interests at stake, it was quite the smallest. The full and true .value of the work accomplished cannot yet be assessed, but at least it can be said that no delegation was served more faithfully and effectively by its consultants or by its official staff. The consultants, the Honorable W. C. Angliss, M.L.C., and Messrs. M. B. Duffy, R. W. Knox, S. McKay, H. W. Osborne, and F. H. Tout, by reason of their wide and intimate knowledge of the interests they represented, and their generous disposition at all times to take the large view, and to give us of their best, proved of invaluable assistance. This was the first occasion upon which special interests were called to Australia’s aid at an Imperial Conference, and the experiment proved a shining success.

I have no words which would adequately express the sense of admiration which Mr. Bruce and I feel towards the members of the official staff. These Australian public servants excelled, I venture to say, in comparison with other official staffs at Ottawa, in the remarkable range and thoroughness of their knowledge of the great and widely varied subject-matter of the conference. Night was as day to them in their labours, and their weeks were without end. In greatly serving Australia, they upheld the best traditions of the Service which they adorn. Beyond_a natural desire, because of the ministerial position I occupy, to pay a special tribute to Mr. Abbott, the Deputy-Comptroller of Customs, I would not wish to distinguish between them, but w7ould ask to be permitted to place their names on record in the order in which they appeared in the official list at Ottawa -

Dr. A. E. V. Richardson, Professor of Agriculture, University of Adelaide.

Mr. E. Abbott, Deputy ComptrollerGeneral, Department of Trade and Customs.

Mr. J. F. Murphy, Prime Minister’s Department, Secretary of the Delegation.

Mr. F. L. McDougall, C.M.G., Economic Adviser to the Commonwealth of Australia in London.

Mr. L. R. Macgregor, Australian Trade Commissioner in Canada.

Mr. L. E. Stevens, Department of Commerce.

Mr. C. B. Carter, Department of Commerce.

Mr. A. C. Moore, Department of Trade and Customs.

Mrs. F. M. Grant, Private Secretary to the Minister for Trade and Customs.

Mr. G. Tindale, New York Staff, Commonwealth Customs Department.

Mr. J. TJ. Garside, New York Staff, Australian Secretary’s Office.

The thanks of the Commonwealth Government are due to the University of Adelaide and the Waite Institute in South Australia for its courtesy in making available to the delegation the services of its distinguished director, Dr. A. E. Y. Richardson. Dr. Richardson proved an invaluable and indefatigable ally.

One other name should be included, that of Mr. J. B. Cumming, the senior Commonwealth Customs Officer in London, whose keen and talented work in association with Mr. McDougall prior to the conference was of much assistance to the delegation,

I desire also, on behalf of the delegation, to acknowledge our great indebtedness to the late Minister for Commerce, the honorable member for “Wakefield, who out of his comprehensive and exact knowledge of Australian primary industry contributed inestimably to the preparation for the conference. We felt that in going to Ottawa without the honorable member we were at a serious disadvantage; but the agreement most definitely carries the stamp of his rare abilities.


Of the preferences obtained by Australia as a whole, it will be agreed that they confer upon the primary producers of Australia benefits which are equal to the anticipations of the delegation and of the Government. They bring reciprocal preferential trade into practice on a broad basis, from which it can, from time to time, be expanded as necessity arises, and opportunity offers. They give to our pastoralists and farmers a substantial advantage in the world’s one great import market for perishable primary produce over all competitive pastoralists and farmers outside the Empire. They apply, not to the produce of new industries which have to be pioneered into existence, but to a wide range of great established industries in heavy production, and to industries most of which have, down to this depression period, been carried on without the new advantage they are now to enjoy. These preferences so generously granted by Britain even in her hour of great economic trouble will, I confidently believe, go far towards enabling our primary producers to survive their present difficulties and, as better times return to us, they will play a great part in the general intensification and expansion of all our rural activities.

I am sure that none of us who engaged iu the work at Ottawa believes for a moment that we have completely succeeded. The conference lasted for four weeks and two days. The trade of the world-wide British Empire, which we had in detail to consider, is a mighty and most various and complex fabric; and beyond the trade of the Empire we had to consider, and frequently also in detail, the trade of many foreign countries.

This agreement marks, I venture to think, the initiation of a policy of reciprocal preferential trading which will at once begin to contribute to the dissipation of the depression which broods over the British Empire in common with the rest of the world. Its beneficial effects will be progressive and cumulative. In its present form it will prove a strong and growing instrument, ever working for increased production, employment and prosperity throughout the lands which make up the Empire. Moreover, it is. an instrument which in the hands of sympathetic and co-operating governments will surely be from time to time expanded and improved. As it stands it is, doubtless, not perfect. It would be remarkable indeed if no mistakes had been made in the brief month’s work at Ottawa. But this can be claimed for the agreement between the Commonwealth and ‘ the United Kingdom and the colonies, that it carries tangible aids and benefits to all sorts and conditions of the peoples of the contracting countries, but it carries hurt or prejudices or sacrifices to none.

The agreement will benefit all sorts and conditions of people, and in a collective sense will make stronger both the Commonwealth and the United Kingdom. That which makes Australia stronger generally and adds in a general way to the strength of Britain must commend itself to this House and to the Australian people. But the Australian delegation, with the full support of the Commonwealth Government, aimed at something nearer and more definite than a general benefit either to Australia or to the United Kingdom. Prom the beginning of the preparation for Ottawa until the conference closed we worked for specific benefits for our primary producers. We worked in the belief that in the fashioning of tariff in this country the man on the land and his employees had hitherto come off second best. They have been given, it is true, compensatory duties and arrangements in an endeavour to balance them up, and with respect to the local Australian market that policy has been attended by some success. But with respect to the great export surplus of primary production, the man on the land, and those who work for him, have been, to state it mildly, somewhat overlooked in the past by this Parliament. It is scarcely an exaggeration to say that hitherto this Parliament has been in tariff and industrial legislation a two-standard Parliament - one standard for the cities and another standard, .a very much inferior standard, for the country.

This Ottawa agreement which I now submit to the House makes an. attempt, belated it is true, but a sincere, constructive and comprehensive attempt, to adjust that unfair balance. It proclaims, in the first place, the inherent right of the country people of Australia and their industries to equal economic consideration with the city people and secondary industries in this Parliament. Next it recog- nizes the desperate plight of all who are engaged in primary industry at the present time, and ‘ their imperative claims to assistance and relief. It is an acknowledgment, too, of the plain unchallengeable truth that, had it not been for the magnificent fortitude and industry of our farmers and pastoralists, and their unprecedented production and export during these years of adversity, there must have been a total collapse of our whole financial and industrial structure, with a calamitous further increase of unemployment, with money available neither for its relief nor for the maintenance of our great social services.

We owe our financial, industrial and economic salvation during this crisis to the man on the land. This agreement has been drawn in aid of the man on the land, but it has the supreme merit that if we can help the man on the land we help every agency of industry and business and employment in the Commonwealth. This charter of rural aid could be a thousand times justified even if it provided for the curbing of other Australian interests to the advantage of primary industry. But it does not do so. It does not reduce the protective level of our Australian tariff. It does not call upon the Australian Government to reduce that level. On the contrary, although it does not reduce the protective level against British imports, it very generally increases the protective level against foreign imports. It may be said that that is done in the interests of the British, industrialist; in reality it is done in the interests of the Australian primary producer. But in any case the Australian manufacturer has his protective level raised over hundreds of duties against the foreign manufacturer, whose competition is more to be feared than that of Britain because of lower foreign costs.

I commend the agreement to the House, in the interests of Australia, and of the Empire as a whole, but particularly do I ask all parties to subscribe to it in the interests of our primary producers, for whom in the main it was fashioned.

Debate (on motion by Mr. Scullin) adjourned.

page 1167


Customs Tariff (1932) : Special Duties" (No. 4) : Primage Duties (No. 2) : Customs Duties (Canadian Preference, No. 2). *in Committee of Ways and Means:* {: #debate-6-s0 .speaker-KFS} ##### Mr GULLETT:
Minister for Trade and Customs · Henty · UAP -- I move- {:#subdebate-6-0} #### Customs Tariff (1932) {: type="1" start="1"} 0. . That on and after the fourteenth day of October, One thousand nine hundred and thirty-two, at nine o'clock in the forenoon, reckoned according to standard time in the Territory for the Seat of Government, Duties of Customs at the rates respectively specified in the column of the schedule hereto headed " British Preferential Tariff " be imposed on goods tho produce or manufacture of the United Kingdom. That on and after a time and date specified in a proclamation issued by tho Governor-General acting with the advice of tho Federal Executive Council applying to any goods the produce or manufacture of the British Non-Self -Governing'1 Colonies and Protectorates, tho Mandated Territory of Tanganyika, and so much of the Cameroons and Togoland as is governed under British . mandate, the rates respectively specified in tho column of the schedule hereto headed " British Preferential Tariff " Duties of Customs at those rates be imposed on such goods specified in tho proclamation as arc the produce or manufacture of tho countries specified in the proclamation in relation to those goods. That, excepting by mutual agreement or until after six months' notice lias been given to tho Government of the Dominion of New Zealand, nothing in this Resolution shall affect any goods the produce or manufacture of the Dominion of New Zealand entering the Commonwealth of Australia from the Dominion of New Zealand. That on and after the' fourteenth day of October, One thousand nine hundred and thirty-two, at nine o'clock in the forenoon, reckoned according to standard time in the Territory for the Seat of Government, Duties of Customs at tho rates respectively specified in the column of the schedule hereto headed " General Tariff " be imposed on all goods other than goods to which, in pursuance of the foregoing provisions of this resolution, the rates respectively specified in the column hereto headed " British Preferential l.'ai iff " apply. THE SCHEDULE. THE CUSTOMS TARIFF. {: type="1" start="1"} 0. All imitations to bc dutiable at the rate chargeable on the goods they imitate, unless such rate is less than the rate which would otherwise be chargeable on the imitations. 1. " Proof " or " Proof Spirit " means spirit and gazetted substitutes therefor of a strength equal or equivalent to that of pure ethyl alcohol compounded with distilled water so that the resultant mixture at a temperature of 60 degrees Fahrenheit has a specific gravity of 0.91976 as compared with that of distilled water at the same temperature. 2. The term " Iron " includes Steel. 3. " Wool " or " Woollen " includes all manufactures of wool or hair or combinations thereof. 4. " N.E.I." means " not elsewhere included." 5. " Departmental By-law " means By-law made by the Minister, and published in the *Gazette.* 6. Unless the Tariff otherwise provides or the Minister otherwise directs, any goods composed of two or more materials shall be deemed for the purpose of classification to be composed wholly of the material of chief value in the goods, provided that when the respective materials are of equal value the goods shall be deemed for the aforesaid purpose to be composed wholly of the material that would make the goods liable to the higher or highest rate of duty. 7. Whenever any goods are composed of two or more separate parts any part though imported by itself shall, if so directed by the Minister, be dealt with under the item applicable to the complete goods. 8. " Non-spirituous ' means free from spirit or containing not more than two per cent, of proof -spirit. 9. " Spirituous " means containing more than two per cent, of proof spirit. 10. Whenever goods are composed of two or more separate articles, oven though such articles are specifically mentioned in tho Tariff, the Minister may classify the goods under such item or items as he directs. {:#subdebate-6-1} #### Special Customs Duty (No. 4) {: type="1" start="2"} 0. That in addition to the Duties of Customs collected in accordance with the Customs Tariff for the time being in force or in accordance with Customs Tariff proposals, there be imposed, on and after the fourteenth day of October, One thousand nine hundred and thirty-two, at nine o'clock in the forenoon, reckoned according to standard time in the Territory for the Seat of Government, a special duty of Customs at the rate of fifty per centum of the amount of duty otherwise payable (not including Primage Duties) on such of the goods included in the items specified in the first column of the Schedule hereto as are specified in the second column of that Schedule which were exported from the country of export after the third day of April, One thousand nine hundred and thirty, and which are entered for home consumption on and after the said fourteenth day of October, One thousand nine hundred and thirty-two. That in this Resolution " Customs Tariff proposals " shall mean Customs Tariff proposals (not being proposals relating to Special Duty or Primage Duties) introduced into the House of Representatives on or after the thirteenth day of October, One thousand nine hundred and thirty-two, and shall include any amendment of such proposals. That, excepting by mutual agreement or until after six months' notice has been given to the Government of the Dominion of New Zealand, nothing in this resolution shall affect any goods the produce or manufacture of the Dominion of New Zealand entering the Commonwealth of Australia from the Dominion of New Zealand. {:#subdebate-6-2} #### Primage Duty (No. 2) {: type="1" start="3"} 0. That in addition to the duties collected in accordance with - {: type="a" start="a"} 0. any law of the Commonwealth for the time being in force imposing Duties of Customs ; or 1. Customs Tariff proposals ; there be imposed on and after the. fourteenth day of October, One thousand nine hundred and thirty-two, at nine o'clock in the forenoon, reckoned according to standard time in the Territory for the Seat of Government, ad valorem Duties of Customs (in this Resolution referred to as primage duty) at the rates hereunder set out on the undermentioned goods which are entered for home consumption on and after the said fourteenth day of October, One thousand nine hundred and thirty-two, except such goods as are hereunder specified as being exempt from primage duty - 1. Goods exempt from primage duty - Goods covered by Items 157, 158, 160 (a), 162, 163, 164, 165, 166, 167, 171, 334 (g) (2), 338 (c), 368, 370, 371, 372, 373, 394 (a), 400, 401, 409, 410 (c), 417 (b), 423, 424 (e) and 427 (a) of the Customs Tariff for the time being in force or of Customs Tariff proposals ; Agricultural and horticultural seeds not covered by any item of the Customs Tariff for the time being in force or of Customs Tariff proposals ; Agricultural horticultural and viticultural spraying and dusting materials and preparations to be used in thechecking of plant and seed insect pests and of plant and seed diseases ; Annatto Cheese Cloth and Rennet to be used in the Cheese Industry ; Bibles, or any portion of a bible ;. Books and periodicals imported by or for the following libraries, viz. : - The Public Libraries of New South Wales (including the Mitchell Library), Victoria, Queensland, South Australia, Western Australia and Tasmania. {:#subdebate-6-3} #### The National Library, Federal Capital Territory The. Libraries of the Universities of Sydney, Melbourne, Adelaide, Queensland, Western Australia, and Tasmania. {:#subdebate-6-4} #### State Parliamentary Libraries ; Primage Duty . (No. 2) - *continued.* Bullion and specie ; Bags sacks packs and bales for bran, chaff, potatoes, onions, ore,coal, corn, flour, sugar and wool ; Calico and hessian for use in the manufacture of bags of a size capable of holding at least forty-five pounds of flour ; Chemicals to be used in the recovery of metals by the flotationcyaniding and similar processes ; Cream separators and partsthereof ; Dips washes and drenches for live stock and materials for use in the manufacture of such dips washes and drenches; Farm tractors and parts thereof ; Fauna for Zoological Gardens at Sydney, Melbourne, Brisbane, Adelaide, Perth, and Hobart ; Fishing nets andnetting for fishing and twine for the manufacture or repair of such nets or netting ; Garden and field spraying machines and spray pumps ; Haypresses; Historical records, inprint picture ormanuscript, imported by or forPublic Libraries, including the Mitchell Library ofNew South Wales ; Hymn books and prayer books designed for congregational use at public worship ; Literature published by or issued under the authority of the League of Nations ; Machinery tobeusedinthe mining industry ; Manures and fertilizers ; Materials for *use* in the manufacture of agricultural horticultural and viticultural spraying preparations ; Materialsfor use in the manufacture of cornsacks, floursacks andothersacks ; Milking machines and parts thereof ; Outside packages and outer coverings, including the sole containing package, containing solely goods exempt from primage duty ; Postage stamps ; Potato raisers diggers sorters and planters .; Rabbit poisons; Rabbi tand dingo , traps ; Radium; Rape seed for pasture purposes.; Rock phosphate; Sheep shearing inachinesand parts thereof .; Stockinette andHessian to be used in the manufacture of meat wraps ; Straw stackers ; Stud stock,viz:-draught . horses, cattle, sheep, and pigs ; Sub-surface packers f or agricultural purposes ; Sulphur; Vessels exceeding 1,000 tons gross register ; Water bore casings ; Water pipes to be used in the agricultural, dairying, grazing and mining industries ; Wire, iron and steel, of gauges (Imperial Standard WireGauge) Nos.8 , to 14 both inclusive-; Wool presses ; and Any other goods which are fromtime to time exempted from primage duty by Proclamation madeby the Governor-General with the advice of the Federal Executive Council and published in the *Gazette ;* {: type="1" start="3"} 0. Goods subject to primage duty at the rate of four per centum ad valorem - Goods covered by Items 174, 219 (c). 404, 404a and 415a of the Customs Tariff for the time being in force or of Customs Tariff proposals ; Books and periodicals imported for public libraries not specified in1 above ; Fibres for useinthe manufacture ofbinder twine ; Fuel oil and coal consumed in Australian waters ; Goods, other than those exemptedfrom primage duty, for public hospitals ; Newsprintingpaper; Outside packages and outer coverings including the sole containing package, containing any. goods subject to primage duty at the rate of four per centum ad valorem but containing no goods subject to primage duty at the rate of ten per centum ad valorem ; Power kerosene ; Printing Paper, other than newsprinting paper, for use in the production of newspapers and periodicals registered under the Postal Regulations for transmission by post as newspapers or periodicals ; Rock salt.; Primage Duty (No. 2) - *continued.* Stud stock, viz. : - horses other than draught horses ; and Any other goods which are from time to time, by Proclamation made by the GovernorGeneral with the advice of the Federal Executive Council and published in the *Gazette,* added to the list of goods upon which primage duty at the rate of four per centum is imposed; and {: type="1" start="3"} 0. Goods subject to primage duty at the rate of ten per centum ad valorem - All goods whatsoever, which are not, in pursuance of the foregoing provisions of this Resolution - {: type="i" start="i"} 0. exempt from primage duty ; or 1. subject to primage duty at the rate of four per centum ad valorem. That where by this Resolution any goods are exempt from primage duty or are subject to primage duty at the rate of four per centum ad valorem, on. the condition that those goods will be used for a purpose specified in relation thereto in the Resolution, the Comptroller-General of Customs may require security that those goods will be used for the purpose so specified. That in this Resolution " Customs Tariff proposals " shall mean Customs Tariff proposals introduced into the House of Representatives on or after the thirteenth day of October, One thousand nine hundred and thirty-two, and shall include any amendment of such proposals. {:#subdebate-6-5} #### Customs Tariff (Canadian Preference) {: type="1" start="4"} 0. That notwithstanding anything contained in any other Customs Tariff proposals introduced into the House of Representatives on the thirteenth day of October, One thousand nine hundred and thirtytwo, there be imposed on and after the fourteenth day of October, One thousand nine hundred and thirtytwo, at nine o'clock in the forenoon, reckoned according to standard time in the Territory for the Seat of Government - {: type="a" start="a"} 0. On all goods the produce or manufacture of the Dominion of Canada and not covered by paragraphs (6) and (c) of this Resolution, Duties of Customs at the rates of duty respectively specified in the column headed " British Preferential Tariff " of Customs Tariff proposals ; 1. On such goods the produce or manufacture of the Dominion of Canada as are specified in Schedule B of the Agreement contained in the Schedule to the Customs Tariff (Canadian Preference) 1931 and by that Act are dutiable at the rates specified in the Intermediate Tariff provided in the Customs Tariff 1921-1930, as proposed to be amended by Customs Tariff proposals introduced into the House of Representatives during 1932 and prior to the thirteenth day of October, One thousand nine hundred and thirty-two. Duties of Customs at the rates of duty respectively specified in the column headed " Intermediate Tariff " in the schedule to such last mentioned Act as so proposed to be amended, such rates being those respectively specified hereunder in the schedule hereto ; and 2. On such goods the produce or. manufacture of the Dominion of Canada as are specified in Schedule B to the Agreement contained in the Schedule to the Customs Tariff (Canadian Preference) 1931 and by that Act are dutiable at the rates specified in the General Tariff Duties of Customs at the rates of duty respectively specified in the column headed " General Tariff " of Customs Tariff proposals. That in this Resolution, except as regards paragraph (b), " Customs Tariff proposals " shall mean Customs Tariff proposals (not being proposals relating to Special Duty or Primage Duties) introduced into the House of Representatives on or after the thirteenth day of October, One thousand nine hundred and thirty-two, and shall include any amendment of such proposals. In all there are four resolutions, the main tariff resolution, special duties proposals, primage duty resolution, and customs tariff Canadian preference proposals. The main tariff resolution is a completely new tariff, incorporating the unaltered portion of the 1921-28 tariff, and the tariff resolutions tabled in this House during the course of the present year. It gives effect to the formula margin of preference and other changes that were agreed to by the Australian delegation at the Ottawa Conference. The application of the formula has resulted in an increase in the general tariff over a large number of items. There are some 440 items and sub-items under which immediate increases are being imposed under the general tariff. It is interesting to observe the number of increases at the various margins. They are as follow : - A detailed examination of the new schedule will make it clear, as I have already emphasized in my speech on the Ottawa agreement, that with one or two unimportant exceptions, the level of the protective items of the tariff has been maintained, and the Government has adhered to its policy not to reduce the protective level without inquiry by the Tariff Board. The total number of reductions is 26, 20 under the British preferential and six under the general tariff. Nearly all of these reductions are made to items which have no protective significance, while others are adjustment of anomalies which would have been effected at the first opportunity, and are not connected with the Ottawa settlement. The summary of alterations furnished to honorable members shows the items affected and the classes of goods on which increased or reduced duties will operate. A notable departure from the previous tariff schedule is the reversion to a twocolumn tariff. From 1907 to 1921 the Australian tariff was a two-column one. In the latter year a three-column tariff was established by the introduction of the intermediate column, for the purpose of enabling the Commonwealth to negotiate trade treaties with foreign countries. Apart from granting to Canada a small number of rates under this tariff, the intermediate tariff was inoperative. In these circumstances it was decided to delete this column and to adopt the practice of bringing down bills covering any trade treaties which may in the future be negotiated with foreign countries. In my speech on the Ottawa agreement, I mentioned the Government's policy in this regard, and I do not propose to cover the ground again. It might be stated, however, that reservations were made by the Australian delegation at Ottawa concerning the existing margins of preference under a number of important items. It will be observed from the wording of the tariff resolution that the concessions which the Commonwealth is prepared to make to the colonies will be put into effect by proclamation. It has been necessary to adopt this course as the individual colonies have not yet intimated their decisions with regard to the requests made by Australia. The most important change effected by the primage resolution is the re-imposition of the 10 per cent. primage duty on galvanized iron. It will be recollected that on the 1st September last a tariff resolution was introduced which reduced the duty on this commodity by £1 per ton. This was in accordance with a recommendation of the Tariff Board. At the same time, a proclamation was issued removing the primage duty on galvanized iron. However, in making its recommendation for a lower duty, and arriving at the protection necessary, the Tariff Board had taken into account the fact that primage and exchange were operating. The effect of the reduction in duty combined with the removal of the primage was to expose the local industry to unreasonable competition. The attention of the Tariff Board was invited to the matter, and it reported that had the primage duty not been in operation when it submitted its report it would have recommended higher duties, to the extent of 30s. per ton. As the matter is one of first class importance and highly controversial, I propose to ask that the following memorandum received from the chairman of the Tariff Board on this point be incorporated in *Hansard.* Commonwealth of Australia. Commonwealth Tariff Board, Commonwealth Offices, Treasury Gardens, Melbourne, C.2. 16th September, 1932. MEMORANDUM. With reference to his memorandum of14th September, 1932, the Comptroller-General is advised that the Tariff Board when recommending that duties of - be imposed on imported galvanized iron took into consideration the fact that the local industry was at the date of the board's report partly protected by the primage duty of 10 per cent. ad valorem, which was equivalent to £1 9s. 2d. per ton on 26-gauge galvanized corrugated iron of " Orb " quality. Had the primage duty not been in operation the board in paragraph (c) of its recommendation would have recommended the imposition of duties of - {: type="A" start="H"} 0. McConaghy, Chairman. The Comptroller-General, Department of Trade and Customs, Canberra,F.C.T. The re-imposition of the primage duty will give effect to the Tariff Board recommendation in regard to better quality iron. Other exemptions from primage are dips, washes and drenches, for livestock, and materials for use in the manufacture of such goods. Previously, sheep washes and sheep dips only were exempted. Chemicals to be used in the recovery of metals by certain processes are also exempted. Hitherto the exemption has applied only to chemicals used in the recovery of gold. In addition, postage stamps, fishing nets, and books and periodicals for State parliamentary libraries are exempted under the present resolution. The special duties resolution providing for a 50 per cent. surcharge maintains the existing position, and no alterations are made by it. The Canadian resolution does not amend the existing Canadian agreement; it merely ensures its continuance in the form in which the agreement was ratified by Parliament last year. Perhaps it would not be out of place to mention that the negotiations conducted by the Australian delegation with a view to the extension of the treaty with Canada, are still proceeding. Progress reported. *Sitting suspended from 5.51 to 8 p.m.* {: .page-start } page 1249 {:#debate-7} ### MINISTERIAL CHANGES {: #debate-7-s0 .speaker-F4O} ##### Mr LYONS:
Prime Minister and Treasurer · "Wilmot · UAP -- *by leave -* I desire to make a brief announcement to the House with regard to an alteration in the personnel of the Government. Recently, as honorable members know, the then Minister for Commerce, the Honorable C. A. S. Hawker, tendered his resignation as a member of the Government, and for the time being I was sworn in as Minister for Commerce. A few days ago I received from the Postmaster-General, the Honorable J. E. Fenton, an intimation of his intention to relinquish his portfolio. This resignation has now been accepted by His Excellency the GovernorGeneral. I now desire to inform honorable members of the following appointments to the Ministry: - The Honorable Robert Archdale Parkhill has been appointed Postmaster-General ; the Honorable John Arthur Perkins has been appointed Minister of State for the Interior; the honorable member for Parramatta, **Mr. Frederick** Harold Stewart, has been appointed Minister of State for Commerce; the honorable member for Bass, **Mr. James** Allan Guy, has been appointed as an Assistant Minister. {: .page-start } page 1249 {:#debate-8} ### QUESTION {:#subdebate-8-0} #### BUDGET, 1932-33 *In Committee of Supply:* Consideration resumed from the 12th October *(vide* page 1135), on motion by **Mr. Lyons** - >That the first item of the Estimates, under Division I. - The Parliament, namely, " The President, £1,300 ", be agreed to. Upon which **Mr.** *Scullin* had moved, by way of amendment - >That the amount bo reduced by f i. {: #subdebate-8-0-s0 .speaker-JWE} ##### Mr CASEY:
Corio .- On a recent occasion in this chamber, and previously in the press, the right honorable the Leader of the Opposition **(Mr. Scullin)** claimed that the fiscal measures taken by his Government a year or eighteen months ago were responsible for righting the trade balance. I realize that one takes on a doughty opponent when one crosses swords with the Leader of the Opposition, but on the basis of the figures relating to imports during the last two or three years, I beg to doubt whether his claim can be substantiated. The claim itself is interesting, in view of the fact that it runs counter to the orthodox view of those who have studied this question for years - I refer principally to the leading economists of this and other countries - that, in the long run, imports are determined by exports, which are a measure of the purchasing power of the community. It is interesting to analyse the figures of the last two years in order to see which theory, theirs, or that of the Leader of the Opposition, is borne out in practice. As honorable members know, imports into this country are divided between dutiable and free goods in almost equal proportion. The important upward tariff schedules of the Scullin Government were completed by June, 1930, so that we can regard 1931 as tho first Scullin tariff year. Bearing in mind that imports are divided practically equally between dutiable and free goods, one might expect, if the right honorable gentleman's contention is to be borne out in practice, that there would be a remarkable decline in the volume of dutiable imports, and a much less noticeable decline .in the volume of free imports. If one were to hazard a guess, one might suggest that there might be a decline of from 70 per cent, to 80 per cent, in the volume of dutiable imports, due to the almost prohibitive tariff of the Scullin Government, and a decrease of 20 per cent, or 30 per cent, in the free imports. The Statistician's figures, however, show something very different. Taking 1929-30 as the last Bruce-Page Government tariff year, and 1930-31 as the first complete Scullin Government tariff year, we find that the total imports in the latter period were lower by 53.7 per cent., dutiable imports being lower by 55 per cent., and free imports by 51.8 per cent. Taking the next two years, 1930-31 and 1931-32, the total imports were down by 27.7 per cent., the figures for dutiable imports being 28.2 per cent, down, and for free imports, 27 per cent. There is a remarkable resemblance in these figures, free and the dutiable imports declining by almost exactly the same percentage in both the years under notice; and it is the more remarkable when we bear in mind the right honorable gentleman's repeated claim that his Government's fiscal measures determined the volume of imports into this country. X think we get a hint at this stage that the purchasing power of the Australian community, rather than the height of the tariff wall, determines the volume of imports. I think it would be nearer the truth to say that the trade balance was more speedily righted by the extreme fiscal measures of the late Government. There are two points of criticism that may be directed at this contention of mine, and it is well that I should forestall them. Firstly, I remind honorable members that in November, 1930, a number of items, including cotton piece goods, cutlery, tea, and rubber, were transferred from the free list to the dutiable list through a revenue tariff being imposed on them. In that way, imports valued at £2,250,000 were transferred from the free list to the dutiable list. If I -weight these figures against myself, it means a 4 per cent, addition to the decline of dutiable imports, and a correspondingly smaller importation of free goods - not a very great percentage in view of the similarity of imports in both divisions to which I have previously drawn attention. Secondly, it may be supposed that when the high duties were imposed, the public, by reason of the necessity for economy, would switch from highly dutiable goods to less dutiable, or free, items. I have, however, searched the lists, and can find no noticeable examples of that kind. One might expect a decline in the imports of woollen piece goods in favour of cotton, linen, or silk piece goods. There is, I admit, a smaller decline in the imports of cotton, linen, and silk piece goods than of woollen piece goods; but the decline is small, and does not affect the validity of my principal contention. Even weighting the argument against myself in those two directions - and I do not think that any other criticism can be levelled against my contention - there is still a striking similarity in the decline of dutiable and free imports as between the pre-Scullin and the Scullin tariff years. The most that can rightly be claimed by the right honorable gentleman is that his Government's very high tariff wall hastened the righting of the trade balance, rather than that it was the primary cause of that result. For what his Government did, he should be given credit; but I submit that the credit due to him should be limited to that extent. The figures confirm the orthodox view that, in the long run, imports are determined by the volume of exports, which are the measure of the purchasing power of the community. But even that statement must be qualified. I realize that in any one year of low exports, the banks are quite willing to finance imports, possibly to the extent of £10,000,000; '! mention that amount after consultation with those who have knowledge of these matters. Moreover, in these times of high exchange, British exporters are willing to leave a considerable proportion of their funds in Australia, pending the hone of a return to lower exchange rates. I gather from the banks that the sum involved might be about £10,000,000 per annum. Taking those two factors - the financing by the banks in years of low exports, and British funds remaining in this country - we could have a volume of imports in excess of exports to the extent of about £20,000,000 a year. But that state of affairs would not last for more than nine or twelve months; it would almost certainly be adjusted within a year. The virtue of the Scullin Government tariff was that it cut off imports suddenly, and so righted the trade balance just when it was necessary that that should be done. For its prompt action in that direction, the Scullin Government is entitled to full credit; but it should not claim credit for more than it did. Any other Government would have taken somewhat similar emergency action at that time. The New Zealand position is also an addition to my argument. New Zealand has a comparatively low exchange - it is about 10 per cent, against the dominion - and a relatively low tariff. The sister dominion being chiefly a primary producing country, has been particularly hard hit by economic conditions; nevertheless, New Zealand balanced its external trade last year. It is true that it borrowed £4,000,000 or £5,000,000 by means of treasury-bills in London, but even without them, its external trade balance has been righted without recourse to any excessive fiscal measures.' I claim that this is an addition to my argument that the real factor in righting a nation's trade balance is the purchasing power of its people. The remarks of the Leader of the Opposition on the subject of the exchange rate were so interesting that I should like to pursue that subject a little. During recent months, representations have been made on behalf of various sections of the community that the exchange rate should be either raised or lowered, or that it should be placed under some degree of political control. As to whether it should be raised or lowered, I have no definite view to place before the committee. No individual without access to the full facts can express an opinion on the subject that is worth attention. However, self interest has never debarred people from expressing their views on this subject, notwithstanding that they should be expressed only by those who have a full knowledge of ail the factors entering into the situation. When I speak of the exchange *rate* I refer to the Australian-sterling exchange rate. Our currency is linked with sterling, in that all our commercial and financial dealings with the rest of the world are carried out through the medium of sterling. An Australian merchant who does business with a foreign country, such as Italy, must pay for Italian goods in Italian lire. He has first to buy British sterling, aud then, possibly unconsciously, to purchase Italian lire. It is a two-fold operation. "We, in Australia, are generally dependent on two variables - the Australiansterling exchange rate and the sterlingother currency exchange rate. I have tried to get a quantitative estimate of how important a thing to us the exchange rate is, and I have set myself two questions : "What proportion of our Australian primary production is exported, and so affected by the exchange rate? "What proportion of our dealings is influenced by the Australian exchange rate, and what proportion by the sterling-gold or other currency rate? The statistics show that 42 per cent, of our recorded primary production in 1930-31 was exported; and I am also mindful of the fact that the domestic price level in Australia of primary production is affected by the exchange rate which thus has a wider range than that of the export market. So that something close to half of our recorded primary production is directly affected by the exchange rate,, and a larger proportion indirectly affected. . On an analysis as to where our exports go in the world, one finds1 that, roughly speaking, one-third of them go to countries that are still on the gold standard, and two-thirds to countries that are off the gold standard, and have approximately the currency level of sterling. Thus, we have confirmation of the fact that the depreciation of the Australian pound is definitely an important factor in our economy, in that nearly one-half of our production is affected directly, and a greater proportion indirectly, by the depreciation of the Australian pound; also that of the two variables, the Australiansterling rate and the sterlingother currency rate, the more important is the former. "We can therefore say with assurance that this matter is one of great public importance to this country. It is not surprising, therefore, that certain interests have been trying to get the exchange rate under political control, but the various sectional interests operating in this regard are actuated by diametrically opposing motives ; but I shall return to this- later. At the present time, the question of the level at which exchange rate is fixed, is determined solely by the Board of Directors of the Commonwealth Bank. The exchange rate could be made a powerful weapon of sectional patronage, and it is well, therefore, that the rate is determined by the bank with no obligation to this Parliament, this Government, the trading banks, the Bank of England, or any one else. The Commonwealth Bank Board, in coming to its determination, has access to a wider field of information than has any other individual body in this country. It takes into account all financial and economic factors; it makes its decisions in the interest of the whole of the people, and not of any section. The board is, happily, I think, entirely divorced from all sectional or political pressure, and long may such an arrangement remain ! What are the factors that influence the Commonwealth Bank Board in coming to its determination? I suggest that there are six principal considerations. The first, and possibly the most important, is that of commercial supply and demand, which is dictated from time to time by the balance of imports and exports. The second is the Government demand for sterling for debt service abroad. These two factors constitute what is normally known as the visible balance of trade, and are admittedly the most important considerations. The third factor is the necessity for building up in London a fighting fund to defend our currency gainst seasonal attack. The fourth point is the consideration of the price level in this country, which is definitely affected by the exchange rate. The fifth is the interests of primary producers who are decidedly benefited by a high exchange. The sixth factor is that it is in the interests of the whole community, importers, exports, and tho Government, that the exchange rate should not bt* subject to sudden ups and downs, but should advance on a smooth curve, so far as possible, in the interests of trading stability. Let me now examine these factors in a little more detail. The first two, the visible trade balance - the commercial plus and minus - and tha Government's requirements in London, are the only factors that are capable of exact calculation. All the others are less clear cut, and their evaluation is more a matter of opinion and judgment. Referring to my third point - what value of sterling credits does Australia need in London as a seasonal buffer - in the pre-depression period that we were pleased to regard as normal times,' the Australian balance in London was usually about £25,000,000. In addition to that, we had another fund in Australia of equal value, and of almost equal availability, in the form of the gold reserve to the note issue .which, in those days, was about Iff. *Casey* £45,000,000. This, in addition to the £25,000,000 in London, made a total of about £70,000,000 sterling, which was available to Australia as a seasonal buffer to take up the slack in bad seasons, when there might be a nin on our Australian currency. Those London funds were needed, and are still needed, to hold our exchange steady, to smooth the curve over several years. In Australia we are unavoidably exposed to the vicissitudes of the seasons. The money for our primary products come3 in on a seasonal basis, and goes out during the rest of the year. If the exchange rate were free to find its own level, it would be subject to sudden ups and downs which would dislocate business, but owing to the existence of a relatively large accumulation of funds in London, we have a spring buffer or shock absorber to take up the slack between in-seasons and outseasons. This buffer in London has been very greatly depleted in recent times. Our London funds are now well under £20,000,000, and our gold reserve in Australia is down to £10,000,000, so that we have now little more than one-third of what we previously held. That buffer must be built up again, and the obligation on the part of the Commonwealth Bank Board to rebuild it will have a definite effect on exchange in the future. I now come to the effect of exchange on price levels in Australia. Honorable members who comprise the official Opposition frequently quote the Macmillan report. As I read that document, one of its main contentions is that there are two courses which may be followed - either the external exchange rate can be kept steady, or internal price levels can be kept steady. The inference I draw is that it is seldom possible for a country to serve both those gods. But in the last twelve months, since the Commonwealth Bank Board has had complete control of the exchange rate, wc have been fortunate enough to have stability in external exchange and reasonable stability also of our internal wholesale price levels. That is a most remarkable thing. Australia is almost unique in this respect. Honorable members may not be willing to give the whole credit for that admirable result to the Commonwealth Bank Board; but they must give a considerable measure of the credit to the board. As to the effect of the exchange rate on the primary producers, there is no doubt that a high exchange rate means more Australian pounds to our exporters, and as I have tried to point out, to a lesser degree to others, but I maintain that our primary producers vary greatly in their need for an exchange bonus. A high exchange gives an equal exchange benefit to all primary producers - those who are needy and those who are not so needy. A high exchange rate, like a water-sprinkler, benefits all, irrespective of individual needs; it is definitely more than fair to some, and much less than fair to others. {: .speaker-KXT} ##### Mr Paterson: -- Like the rain, it fulls on the just and the unjust. {: .speaker-JWE} ##### Mr CASEY: -- Yes. While it waters some parts of the garden which may be parched, it also waters other parts which are relatively flourishing. There is a serious doubt, I think, whether the woolgrowers, who are the greatest buttress of this community, are deriving the whole eleven an appreciable proportion of the benefit from the high exchange rate. Even among themselves, opinion is divided on that matter. It has been said that the fact that the wool sales are held here militates against the growers getting the ' benefit of the exchange premium, and this doubt is reinforced by the experience of many European countries, during the decade after the war. The outstanding fact during the first period of inflation was that the products of the country sold within the country fetched less and less in gold as the exchange rate went up. I submit, but not in any dogmatic way, that it is quite possible that our wool-growers, with an increased exchange rate up to £135 or £140, would not get all or possibly any of that increased benefit. I do not think that it is in any way proven that they would. My last point relates to the necessity for avoiding the ups and downs in exchange rates at short intervals. If the exchange were free, unmanaged and unpegged, there would, owing to the higgling of the market, be inevitable ups and downs, which would be an additional bar to the smooth working of commerce, as well as a decided inconvenience to trade. The Commonwealth Bank smoothes out the curve, and only varies the rate up or down when it is absolutely essential to do so. Thus, the whole community - importers, exporters and the Government - have some reasonable knowledge of where they are, and can plan for the future in their finance. I maintain that the exhange rate has definitely to be in the hands of one body, and that in a matter of such immediate public importance, it would be fatal if there were divided control in its determination. The only alternative I can see to control by the Commonwealth Bank Board is control by this Parliament, and I submit that that would be a calamity. The exchange rate, like the tariff, would rapidly become, under an irresponsible government, the shuttlecock of party politics, and it would be possible on the numbers in this House, and not on the merits of the case - on the arithmetic of the matter, rather than on the culm and logical consideration of it - to meddle with the rate to suit political ends. I submit that any change in the method by which the rate is now determined would be calamitous. The Commonwealth Bank is not yet a central bank, although it is on the way to becoming one. The board has played a distinguished part in the rehabilitation of this country in the present economic depression. The Commonwealth Bank has proved a bulwark against the sinister intentions of organized political banditry, who, during the regime of the last Government, sought to get control of the people's savings in an attempt to bolster up their discredited economic and currency theories. The Commonwealth Bank Board has, in tho last two or three years, ensured the stability of the credit structure of the Commonwealth, and therefore the board, and in particular its chairman, deserves well of this community. The Commonwealth Bank is in the best position to make an unbiased determination as to what should be the exchange rate. **Mr. Theodore** has recently been giving instruction to the younger members of his party on the economic way in which they should direct their minds. One of the principal gambits which he has been suggesting, according to press reports, is that, as the board of the Commonwealth Bank is under the thumb of the Bank of England, the bank is not of very great consequence in this community. That observation of the former Treasurer of the Commonwealth is not endorsed by the right honorable the Leader of the Opposition **(Mr. Scullin)** who, in the course of his remarks yesterday afternoon, gave a certain amount of credit to the board for what it had done in recent years to ensure the financial stability of the Commonwealth. But **Mr. Theodore,** as I have said, in giving financial instruction to the younger members of the legitimate Labour party, spent some time in scarifying the Commonwealth Bank for taking its instructions from **Mr. Montague** Norman, the Governor nf the Bank of England* I have, of course, to depend upon the press reports of **Mr. Theodore's** utterances, and they may not. represent the complete statement of his views. I can find no evidence in support of his contention that the chairman of the Commonwealth Bank Board is in any way influenced by the views or desires of **Mr. Montague** Norman. **Mr. Theodore** may believe that he has grounds for his contention, but I cannot imagine that they are valid. I happen to know **Sir Robert** Gibson and **Mr. Montague** Norman, and I cannot believe that either would be influenced in any way by the views of the other. As a fact it is fairly well known to many that **Mr. Norman** has been of the opinion for many years that he has not been taken sufficiently into the confidence of the Commonwealth Government. Any cine with a knowledge of the Imperial financial position must know that **Mr. Theodore's** statement with regard to the Commonwealth Bank Board is a travesty of the facts. It may be all right to suggest, for instance, in the *Labor Daily,* that the Commonwealth Bank's policy is dictated by the Bank of England, but every one knows that there is nothing in the suggestion. The Bank of England is the world's greatest central bank. In all our financial arrangements we are connected with sterling in a way which we cannot avoid. Our interests are" so closely associated with those of Britain that when Britain goes off the gold standard, so do we. **Mr. Theodore,** if he will consider the history of recent years, will remember that the Commonwealth Bank advised him, as Treasurer in the late Government, with regard to its gold legislation,- under which gold was coralled out of the trading banks into the Commonwealth Bank, and the greater portion of our reserve, also under **Mr. Theodore's** administration, was exported to rectify our trade, balance. He will also remember that the Commonwealth Bank Board raised the exchange rate from time to time, and when necessary, rationed exchange; it assumed the obligations for the accumulated funds held in London by the private banks. I submit that this history shows no evidence of an unduly conservative policy, but a consideration solely of the necessities of our Australian situation, as it has been influenced by external economic forces over which we had no control. **Mr. Theodore** and the right honorable the Leader of the Opposition **(Mr. Scullin)** are in agreement that the board has pursued a deflationary policy. I cannot understand how this view can be substantiated in the light of the fact that during the last three years the Commonwealth Bank, and through it the trading banks have provided £73,750,000 worth of treasury-bills to support government finance: That definitely is an inflationary, not a deflationary policy. Now, who are those who wish to bring about a change from the present position ? Who desire to see the Bank Board wholly or partially set aside and some other method adopted for the determination of the exchange rate? Those who desire this change are a section, or, at all events, individual members of the Country party, and a section of the Labour party. Strange bedfellows, surely! The argument of those Country party members who wish a change to be made is, as I understand, based on the simple syllogism : Some country interests are in distress; high exchange benefits them, so let us have a high and a higher exchange rate. Therefore, they say, "Let us have a higher and higher exchange ". I may be wrong, but I have heard no more cogent or logical argument than that from members of the Country party who plead for a higher exchange. The Labour party, or, to be more correct, those members of it who , wish to get control of the exchange, are in this matter, to some extent, under suspicion, because the declared policy of the Labour party is to secure control of the banking system of this country. Political control of the exchange rate would be the thin end of the wedge to secure political control of our banking system, and I maintain that any deviation from the present policy under which the sole responsibilityrests with the Commonwealth Bank Board, would be a fatal mistake. Any suggestion that this or any other Government should guarantee the Bank Board against losses due to an unduly high rate of exchange would automatically bring the board under the beginnings of political control. If the board were guaranteed against such exchange losses, it would inevitably become susceptible to hints and advice from the Government. I believe that any such guarantee would be a dangerous threat to the independence of the Bank Board and one that might well be exploited in less happy political circumstances than exists at present. If honorable members will bear with me for a few minutes I should like to conclude what I have to say on a more general note. I suggest that this depression has opened our eyes to the existence of problems which hitherto Were no more than suspected. Among these problems is that of exchange management. In our economic and financial experiences the world, and Australia with it, has lived a generation in the last three years. In the violent economic disturbances to which we have been subjected we have not had time to sift and analyse completely our varied experiences or digest the lessons which, no doubt, are there to be learned. We have been too close to the disruptive influences to know precisely what the lessons have been. We have been pushed about by underlying economic forces, and have only taken such action in our own defence as has been dictated by sound thinking, based on the experience of the past. During a storm it is unwise to alter the rigging of a ship except to take in sail. When this economic storm is over we may expect the bitter experiences through which we have passed, and the lessons which we have learned, to lead to economic reforms which will guard us from similar perils in the future. Such is my belief, though many may hold that the governmental machine as it now exists in this country is not properly equipped to do this forward thinking, to sift and analyse our experiences in the approaching post-depression years, so that by the adoption of economic and other reforms we may have a shield and buckler against depression in the future. I make no secret of the f act that I should like to see serious consideration given to the formation of an economic advisory council. {: .speaker-K9A} ##### Mr Gander: -- More experts! {: .speaker-JWE} ##### Mr CASEY: -- Yes. We cannot get away from the necessity, in these times, of taking expert advice. We have acknowledged the necessity, in the important instances in the last two years, of calling together *ad hoc* committees of experts to advise the governments of Australia on the economic situation. The way in which the Premiers plan was evolved was a typical and important instance. But although we have acknowledged the value of this outside expert assistance, we have, so far, hesitated to take the next step. At present we depend upon sporadic and occasional advice by financial and economic experts hurriedly drawn together. I submit that what is needed is a permanent body of experts and representatives of the various economic interests of the community to. give continuous assistance and advice tothe Government and Parliament on those financial and economic problems that are swaying the interests of this country from one year's end to the other. However, I do not at this stage propose to elaborate the proposal; I hope later to have an opportunity of so doing. I merely say that should the Government eventually, in its wisdom, decide to appoint such an economic advisory council, and should that council be a proper and adequate reflection of the economic life of this country, its deliberations and advice should be of very considerable value to the Commonwealth Bank Board in determining the exchange rate. Until that day comes, and until this expert non-political body comes into existence, I am firmly of the opinion that control of exchange should remain the sole function and responsibility of the Commonwealth Bank Board. {: #subdebate-8-0-s1 .speaker-JPV} ##### Mr BLAKELEY:
Darling .- The budget speech of the Treasurer was one of the most extraordinary that has been delivered during the existing depression. It is tragic that at a time when hundreds of thousands of people are workless and almost without hope, the budget, proposals of the National Government should offer no succour to them, and make no contribution to a solution of the great problems with which we are confronted. Mainly the speech consisted of groups of figures which had been assembled by the Treasury officials; such comment as accompanied them was empty phraseology. The 400,000 workless in this country who ask for bread, are offered by the Treasurer nicely rounded phrases ! The right honorable gentleman declared that the confidence, which he said on the hustings could bc brought about only by the advent of a non-Labour Government, has now been restored, and prosperity is just around the corner. In the whole speech there is not a ray of hope for the workers or the business community. After all, whatever the Prime Minister or his supporters may claim, unless the people have work and purchasing power, confidence is worthless. Wages have been reduced, and Draconian legislation has been directed against the inoffensive pioneers of Australia; whilst certain privileged sections have been relieved 'of taxation, the Government has by reducing pensions, placed an additional burden of £1,1.00,000 upon the indigent aged and invalids. In addition the Government promises further reductions of taxation; the Prime Minister has repeated that promise on three occasions, each time with increasing emphasis, to tho great satisfaction of some sections of the community. But there is not the slightest suggestion that tho o]d-age pensions and other social services shall be restored to their former level. Apparently the burdens imposed upon the pensioners are to endure so long as the present Government lasts. In the industrial sphere there is no ray of hope. The Treasurer merely submitted a collection of figures rounded off with empty nothings, and piously hoped that everything would turn out all right. We are told that " in a measure confidence has been restored." Where are the indications of that? I "should think that the purchasing power of the people is the best barometer in an industrial depression; it, certainly gives no indication that confidence has been, or is being restored, but there is plenty of evidence that the contrary is the case. Notwithstanding tho protestations of the new Postmaster-General **(Mr. Parkhill),** that unemployment is decreasing, the latest quarterly summary issued by the Commonwealth Statistician proves that unemployment is increasing, and is now greater than at any previous time in the history of Australia. This is occurring under a government which professes to be waiting to usher in that prosperity which is " just around the corner ! " Proof of the return of confidence would be a diminution of the army of 400,000 unemployed men, who have probably from 600,000 to 900,000 women and children dependent upon them. One third of our workers are unemployed, and many others have rationed work for from 1 to 4 days a week. Confidence would express itself in a greater volume of trade - in the increased manufacture, importation, exchange, and purchase of commodities. There can be no confidence in a community whose purchasing and consuming power has been destroyed. The Prime Minister and various other United Australia Party candidates said during the last general election, campaign, that confidence could not be restored in Australia while the Scullin Government remained in power, and that until a government was in office which could obtain real money, there could be no genuine prosperity. The electors were told that if the United Australia Party candidates were returned to power, the hitherto unparalleled unemployment would disappear. They were promised work, real money, and confidence. All the Prime Minister can say now is that confidence has " in a measure " been restored. What is the measure he uses? The Government has made no attempt to solve .the tragic problem of unemployment and apparently has not the slightest desire to do so because its policy is that dictated by the private banks, which are concerned only with the borrowing and lending of money for private gain, to which the whole of the existing troubles of civilization are due. Our civilization is rich in finance, education and inventive genius; indeed by the mechanization of industry we have created a Frankenstein monster which is denying hundreds of thousands of people the right to work. Amid mountains of wool and textiles for the manufacture of clothing, leather for the production of boots and shoes, wheat for the production of the daily loaf, and materials with which comfortable homes could be built, 30,000,000 workless and hungry people throughout the world wander helplessly. Whilst this tragic anomaly exists, nothing is being done by those who control finance in this and other countries to enable the workless to work and to buy the goods that are available in abundance and could be produced in even greater quantities i*f people had the means with which to purchase them. Capitalism has failed abjectly when the intellectuals and the financiers acknowledge that they can do nothing to relieve the distress of the suffering millions. Capitalism^ probably at its zenith ; many of us believe that the present depression is the beginning of the end of capitalism, and that henceforth monetary policy will have to be managed in the interests of the people. Private banking institutions have brought the world to the verge of collapse. **Mr. Keynes,** the noted economist, said in the course of a recent lecture in London, that we are now on the brink of catastrophe and general default throughout the world. Private finance and those controlling it are exclusively responsible for this. There is abundance of wealth, and all the means of comfort; people desire to work so that they may be able to purchase their needs, but are denied the opportunity to do so. I am amazed at the uncomplaining patience of the 400,000 unfortunates in the Commonwealth. The national Government, by amendments of the Crimes *KA.ct* and the Immigration Act, and by proposed alterations to the Arbitration Act, is trying to stem the rising flood of dissatisfaction. But in every country the workers are becoming disgusted with the incompetence of rulers whose control denies to many millions the right to work and live. The trouble is man-made, and is due exclusively to the mad desire for private gain on the part of those who control finance, which is the life blood of society. Any proposal to interfere with the present, monetary system is sternly and stoutly resisted by those who at present control finance, and the opinions of the majority of members of the Nationalist and Country parties in this country are completely orthodox so far as finance is concerned. Several supporters of the Government have spoken on the budget, and each with varying success has sneered at and criticized the monetary policy of the Labour party. Honorable members will recollect tho sensation which was caused in this chamber two and a half years ago, when the Scullin Government brought, down its policy for the alleviation of the internal financial position. It was impossible at that time to do anything to relieve our financial position overseas, but we certainly could have relieved the position in Australia by increasing our price levels. The PostmasterGeneral **(Mr. Parkhill),** in one of his characteristically inimitable speeches, which usually are meaningless, said that the Labour party had no policy, and I think that he convinced the honorable member for Corio **(Mr. Casey)** that that was so, but while he spoke for ten minutes in that vein he spoke for twenty minutes in actually criticizing the Labour party's policy which was first enunciated by the Scullin Government . and not, as was stated by the Postmaster-General, in *20,000* newspapers and speeches prior to that time. The policy enunciated by the ex-Prime Minister **(Mr. Scullin)** and the ex-Treasurer **(Mr. Theodore)** two and a half years ago, was then, for the first time, publicly acknowledged. It was not until some twelve months later that that policy, revolutionary as it may have been termed, was taken up by various economists throughout the world, even by men previously ultra-conservative in their outlook. An increase in price levels cannot be brought about by the mere making of budget speeches, or by protestations that prosperity is around the corner. Private enterprise has no money with which to develop busi-ness. Everybody is waiting for the prosperity which the Prime Minister **(Mr. Lyons)** says is coming to Australia. Under the present fiscal policy of this Government we cannot expect a manufacturer to build a factory or extend his existing factory, or a storekeeper to purchase and hold in stock £300 or £400 worth of goods in anticipation of prosperity making its appearance in this country. Wor can we expect the man on the land, whether engaged in agricultural, pastoral or horticultural pursuits, to borrow money or spend his capital in increasing his products in order to sell them in some cases at a loss and in other cases at a small profit. We shall not by mere protestations that prosperity is around the corner alleviate our internal financial position. Therefore, the responsibility rests upon the Commonwealth and the State Governments to give the fillip necessary to restore confidence in Australia. The monetary policy of the Labour party embraces the establishment of a central reserve bank, -and the extension of credits. I am not in a position to say to what extent credits should be extended - that is really a matter for financial experts - but we must have an extension of credit, which some people may describe as inflation. If we bring that about, we shall merely be returning to the position in which we found ourselves prior to the operation of the deflationary process which was inaugurated by the Bank of England and wished upon Australia. I advocate au extension of credits preferably by the Commonwealth Bank, and in that connexion I do not anticipate that private enterprise will be of much use or value. Money should be made available for works, such as the clearing of land and afforestation. It should be expended as far as possible on reproductive works embracing water supply and sewerage systems, although a fair amount would need to be expended on non-reproductive works such as beautification schemes. We should inaugurate a system of silos throughout Australia. Hundreds of thousands of bags are used every year in the garnering of the Australian crop. We have thousands of men ready and willing to build silos, and practically the whole of the material required, including iron and steel, engines for elevators, and cement, is obtainable in Australia. There would be a high percentage of labour costs in this Work. A large number of men could be employed on . schemes such as I have detailed. The Labour Government introduced a bill to establish a central reserve bank, but unfortunately, its efforts to assist Australia's internal position by that means were thwarted by the Nationalist, party in the Senate. At that time, the private banking institutions had started to withdraw credits, and I believe that there was a good deal of politics connected with their resistance to the Labour party's policy. We then introduced legislation which provided for a fiduciary issue, and once again we were opposed by private and vested interests, which are so stoutly protected by most of the Government supporters. There is a fundamental difference between Labour and anti-Labour. Anti-Labour stands for private and vested interests and Labour stands for the people. By that I mean that private property and vested interests are nearer and dearer to the heart of the present Government than is human life. {: .speaker-KIU} ##### Mr Hutchin: -- If the Labour party stood for the people, the people did not stand for it. {: .speaker-JPV} ##### Mr BLAKELEY: -- The honorable member is politically youthful. After he has been defeated four or five times, or relegated to the cold shades of the Opposition, he will become more philosophical. We proposed a fiduciary issue of £18,000,000. {: .speaker-JUD} ##### Mr Dein: -- For a start. {: .speaker-JPV} ##### Mr BLAKELEY: -- I would remind the honorable member, who is also politically youthful, that what in politics is to-day repugnant is tomorrow welcomed with open arms. 1 warn, the honorable member that the proposal for a fiduciary currency or an extension of credit which was advocated by the Labour Government may be forced upon him whether he likes it or not. The honorable member, like the Prime Minister, is waiting for prosperity and the restoration of confidence in this country, but in the meantime, he has agreed to reduce pensions and to introduce a freetrade policy into Australia. Neither this, nor any other country, can. extricate itself from the financial morass in which it finds itself unless it adopts some system which provides for an extension of credit. In advocating such a system we of the Labour party are in good company. I have with me a number of opinions on this subject. The following memorandum was signed on the 25th June of this year by 41 members of the Department of Economics of the English University: - >The progress of the crisis is continually confirming the view that the most serious evil from which wo are now suffering is the great fall in wholesale prices of the last two and a half years. This has brought about serious maladjustments throughout the economic system owing to the fact that some prices move readily under the influence of supply and demand while others are relatively inflexible. The most practical remedy for this situation is to operate upon the prices which are adjustable; these should be raised until they bear the same relation to the fixed prices as they bore at the outset of the crisis. To secure confidence arid allay possible anxieties the Government should explicitly declare its policy in advance. A definite pronouncement of this kind should remove all fears of uncontrolled inflation - fears which arise primarily from a sense of uncertainty. Those 41 economists advocate that large sums of money should be made available in the form of an extension of credits, which, of course, is in line with the policy of the Labour party. **Sir Joseph** Stamp, in the Ludwig Mond lecture, University of Manchester, said - >The brutal fact is that the present wholesale and retail levels are incapable qf giving the desired equilibrium; they constitute an entirely unstable and artificial distribution of the national income, and a rise in the wholesale level of the order of 25 per cent, and of the cost of living of 10 per cent., are essential to full employment at the current level of money wages, for some time at any rate, until real efficiency earnings are substantially greater. The following statement appeared in the *Midland Monthly Review* of May-June, 1932 :- >One thing is certain; that business cannot recover substantially and more than fitfully unless and until commodity prices in terms of our own currency show ah upward tendency .... For the gathering confidence essential to this process it is clear that cheap and abundant money must not be granted spasmodically. All the authorities and economists to-day agree that price levels must be increased. {: .speaker-JUD} ##### Mr Dein: -- How can they be increased ? {: .speaker-JPV} ##### Mr BLAKELEY: -- I have looked in vain for any suggestion from the supporters of the Government as to how price levels can be increased. We look in vain in the budget proposals of the Government for any indication of an attempt to increase them. The only proposals of a concrete nature in that connexion hav6 been made by the members of the Opposition. If the honorable membersfor Lang **(Mr. Dein)** does not know the policy of the Labour party in this respect it is no credit to him. {: .speaker-KNP} ##### Mr Maxwell: -- - -Can the honorable member for Darling name one practical business mail who supports the policy which he is advocating? {: .speaker-JPV} ##### Mr BLAKELEY: -- Numerous reputable business men have declared that price levels must be increased. {: .speaker-JWE} ##### Mr Casey: -- But only on an international basis. {: .speaker-JPV} ##### Mr BLAKELEY: -- I know that Australia cannot by herself solve the problem with which I am dealing, but this Government, with the help of the Commonwealth Bank, or by the introduction of legislation, could do something to alleviate our present circumstances. Certain interjections which have been made by honorable gentlemen opposite are of the kind one hears from the outskirts of a crowd at a political open air meeting. Not only has this Government neglected to do anything to alleviate unemployment, it- is also pursuing a fiscal policy which must considerably increase the number of unemployed in Australia. The Scullin Government laid plans for a revival of trade. When it assumed office it was confronted with an economic mess caused by the jazz financial policy of the Bruce-Page Government. Australia's credit overseas at that time was so low that she could not borrow a shilling. Our trade balance was so heavily adverse that drastic measures had to be adopted to avoid the posting of our name as " unable to pay ". We literally shovelled gold into the boats and sent it overseas to avert that threatened calamity. Tariff prohibitions and embargoes, in addition to very high duties, were imposed in spite of severe criticism from our opponents. I do not include the youthful new-comers to our political life, now sitting on the Government side of the chamber, among the critics of that time. We succeeded in building a favorable trade balance adequate to provide for our public commitments. In fact, the margin was between £7,000,000 and £8,000,000 in our favour. {: .speaker-JUD} ##### Mr Dein: -- And what happened then? {: .speaker-JPV} ##### Mr BLAKELEY: -- A Nationalist government came into office and immediately started to use the £8,000,000. We knew that the time would como when the wholesale firms and middlemen of Australia, who had allowed their stocks to become depleted owing to the depression, would have to purchase new goods. It is well known that many people who were, and are now, able to buy goods, would not do so. They were waiting for the prosperity which the Prime Minister tells us has returned. Our policy was designed to ensure that when such business firms and private citizens could no longer refrain from replenishing their stocks, they would be able to buy Australian made goods and so provide work for Australian people. Had this policy been persevered with, Australia would now be in a much better position. But, unfortunately, the Scullin Government had to give way to a government which immediately implemented a. policy helpful to everybody but Australians. Labour's full-blooded protectionist policy was put on one side and a weak, anaemic policy substituted for it. The effect of the freetrade policy of this Government is shown in the increased imports for July and August of this year in comparison with those of the corresponding months of last year. The returns show that our imports increased as follows: - Merchandise, 44 per cent; metal manufactures, 98 per cent.; drugs and chemicals, more than half of which could be manufactured here, 73 per cent. ; animal substances, most of which could be produced here, 58 per cent.; paints, all of which could be produced here, 55 per cent.; jewellery, nearly all of which could be manufactured locally, 55 per cent.; and apparel, most of which could be made by Australian men and women, 47 per cent. It is obvious to everybody that the fiscal policy of this Government is again bringing Australia into the danger zone. This Government, like the Scullin Government, will inevitably be forced to impose tariff prohibitions and embargoes unless a miracle occurs. The Scullin Government held certain gold reserves which it sent overseas to alleviate our difficulties; but this Government holds no gold which it can use for that purpose. The insane, haphazard fiscal policy of this Government of protectionists and freetraders - pull devil, pull baker - cannot be pursued for long. The unstable state of mind of the Government was shown clearly in its recent' dealings with glass and galvanized iron. The fact is that the Government does not know its fiscal mind from one day to another. Notwithstanding what the Assistant Minister for Trade and Customs **(Mr. Perkins)** said a week or so ago, a company established operations in Australia and was prepared to provide work for 250 people in manufacturing glass; but the Government said to the glass importers, " You may bring in your supplies ". For 21 days, the existing prohibition was lifted and orders were sent out of Australia for 3,375,000 feet of of glass. It reminds .one of the phrase, " There is something sinister in this ", which was so often used by the present Minister for Trade and Customs **(Mr. Gullett)** when from the Opposition side of the House he was criticizing the tariff proposals of the Scullin Government. I know that the Government has said that it intends to ration the supplies of glass, but that' does not mean anything, for the glass ring has its supplies on the way to Australia. {: #subdebate-8-0-s2 .speaker-JOS} ##### The CHAIRMAN (Mr Bell:
DARWIN, TASMANIA -- I must ask the honorable member not to discuss specific items in the tariff schedule. {: .speaker-JPV} ##### Mr BLAKELEY: -- I have referred to glass merely to illustrate the mad fiscal policy of the Government. Its antiAustralian outlook and its desire to emulate the jazz financial practices that were followed during the six years the Bruce-Page Government was in office will again sweep Australia on to the rocks. We know that during the régime of the Bruce-Page Government up to £40,000,000 a year was borrowed overseas. {: .speaker-KIU} ##### Mr Hutchin: -- By the States. {: .speaker-JPV} ##### Mr BLAKELEY: -- It does not matter who borrowed it. The Commonwealth Government obtained revenue through the customs in consequence of the borrowing. {: .speaker-JUD} ##### Mr Dein: -- Which government spent the money? {: .speaker-JPV} ##### Mr BLAKELEY: -- I am not here to instruct the honorable member for Lang **(Mr. Dein)** in the ABC of politics. It cannot be denied that the surplus of £2,500,000 which the Government has shown on its operations for the last quarter is due to the heavy importation of goods from overseas. The time will shortly come when we shall find it impossible to pay for these goods. It will be seen therefore that not only is the Government failing to make provision for the unemployed, but it ispursuing an anti-Australian policy which must result in continued depression. Our army of 400,000 unemployed looks in vain for the prosperity promised by this Government. {: .speaker-KLL} ##### Mr Makin: -- I rise to a point of order. I ask for a ruling as to whether it is not permissible for an honorable member to discuss items of the tariff in this debate ? The budget debate provides honorable members with an opportunity to review every aspect of a government's administration, and while it would not be proper for specific tariff items to be discussed in an ordinary debate, I submit that they may be discussed in this debate. Possibly you may desire to consult precedents before giving a decision, but I feel that honorable members would be grateful for some direction from the Chair as to the latitude they are to be allowed in discussing tariff matters during the budget debate. {: .speaker-JOS} ##### The CHAIRMAN (Mr Bell: -- It has always been the practice to allow honorable members a good deal of latitude in discussing the budget. When the honorable member for Darling **(Mr. Blakeley)** was addressing the committee, he was dealing with a specific item in the tariff schedule now before Parliament, and on that account I asked him not to continue to do so. Specific items in the tariff schedule cannot be discussed at length during the budget debate, otherwise the whole tariff schedule would be open for discussion when not actually before the committee. I have allowed honorable members, as is usual, to make a general reference to tariff matters, but they must not discuss specific items in the schedule. The honorable member for Hindmarsh **(Mr. Makin)** must admit that a general discussion of the tariff at this juncture is not permissible. {: .speaker-JPV} ##### Mr Blakeley: -- On the point of order- {: #subdebate-8-0-s3 .speaker-10000} ##### The CHAIRMAN: -- There is no point of order before the Chair. {: .speaker-JPV} ##### Mr Blakeley: -- I submit that there is. {: .speaker-10000} ##### The CHAIRMAN: -- I have given my ruling on the point raised by the honorable member for Hindmarsh, and there is, therefore, no point of order before the Chair. {: .speaker-F4Q} ##### Mr Scullin: -- I rise to order. Surely an honorable member is entitled to raise another point of order? {: .speaker-10000} ##### The CHAIRMAN: -- I understood that the honorable member for Darling was discussing the point of order already disposed of. {: .speaker-F4Q} ##### Mr Scullin: -- My point of order is that the honorable member for Darling **(Mr. Blakeley)** was not referring to any specific item in the tariff schedule, but to the action of the Government in prohibiting the importation of glass and rationing supplies. He was not referring to any specific customs duty. Was he therefore out of order? {: .speaker-10000} ##### The CHAIRMAN: -- No ; not if referring only to the general effect of the tariff policy. At the request of the honorable member for Hindmarsh **(Mr. Makin)** for guidance, I gave a ruling on the point of order raised. {: .speaker-F4Q} ##### Mr Scullin: -- We must protect our rights. {: .speaker-10000} ##### The CHAIRMAN: -- I understood the honorable member for Darling to rise to the point of order on which I had already given a ruling. {: .speaker-JPV} ##### Mr Blakeley: -- I desire to make a personal explanation. When I rose just now, I intended to raise a point of order. {: .speaker-10000} ##### The CHAIRMAN: -- The honorable member did not. {: .speaker-JPV} ##### Mr Blakeley: -- I submit that I did. As you, sir, perhaps unwittingly, misrepresented me, I desire to say that when referring to the subject of glass I was dealing with the policy of the Govern.ment in imposing duties and then removing them. {: .speaker-10000} ##### The CHAIRMAN: -- The honorable member will see that under cover of a personal explanation, he is discussing my ruling. {: .speaker-JPV} ##### Mr Blakeley: -- You, sir, misrepresented me by saying that I was dealing with an item of the tariff schedule when 1 was not doing so. I think that you were wrong in giving such a ruling. *[Quorum formed.]* {: .speaker-10000} ##### The CHAIRMAN: -- I had no desire to misrepresent the honorable member for Darling. When I called him to order during his speech it was for dealing with a specific item of the tariff schedule. {: #subdebate-8-0-s4 .speaker-KYI} ##### Mr PROWSE:
Forrest .- One of the principal subjects in the budget speech is that relating to indirect taxation, which is derived through the imposition of customs and excise duties. Notwithstanding the points of order that have been raised with respect to the tariff, I trust that I shall be permitted to make a general reference to certain matters closely associated with indirect taxation. Some honorable members, who have spoken on the budget have criticized the Government for its freetrade policy, and others for its extremely high protective tendencies. I intend to criticize the budget from the latter aspect. The right honorable the Leader of the Opposition **(Mr. Scullin),** sincerely I believe, contended that the Government's action in removing certain embargoes imposed by the previous Government had been the means of causing unemployment ; but it is interesting to note that with every increase in the tariff there has been an increase in unemployment. For every four minutes during which the Scullin Government was in office, one man lost his job; but since the present Government has been in power, unemployment has decreased, although I cannot say at what rate. Honorable members opposite have made frequent references to the favorable trade balance established during the regime of the Scullin Government, a result which was brought about by imposing embargoes and increasing customs duties, in many instances to prohibitive rates; but they have not mentioned that during that period £30,000,000 worth of gold - representing approximately the amount of our favorable trade balance - was exported, and that during that period there was also a decrease of £22,000,000 in customs revenue which had to be made up by an increase of 30 per cent, in direct taxation. The floating debt, which stood at £27,000,000 when the Scullin Government assumed office, increased to £60,000,000, at the time a change of government occurred. I regard that as inflation. When the Scullin Government came into power the budget deficit was £1,500,000. When it left office the deficit was £15,000,000. The price levels of secondary products reached the 200 mark while those for primary products reached only 117. The action of the previous Government in restricting imports and consequently interfering with inward shipping, resulted in higher freights and a serious diminution' of labour on the wharfs concerning which the honorable member for West Sydney **(Mr. Beasley)** had something to say. When the Leader of the Opposition had the responsibility of handling the finances of this country he found it necessary to reduce invalid and old-age pensions. He says now that conditions have changed. They have changed. Confidence has been restored and Australian £100 bonds, which, during the regime of the Government of which he was the leader, were down to *£60,* are to-day almost at a premium. Does he contend that a high tariff has been beneficial to Australia? This Government proposes to reduce customs duties; but it, too, will fall down on its job and unemployment will increase if price levels are further reduced with consequent increased cost of export production. The raising of price levels is an international problem. The price levels of primary products have fallen to a lower level, in some instances, than they have touched since the 16th century, whereas the legislation passed through this Parliament has been the means of keeping price levels of secondary commodities at an unnecessarily high level, and those suffering as a result of low price levels have to purchase from those obtaining high prices. I am not at all enamoured of the proposals adopted at the Imperial Economic Conference at Ottawa, as outlined by the Minister for Trade and Customs **(Mr. Gullett)** this afternoon. There are indications of the influence of centralization brought about by bolstering up industries which do not provide employment, and are of no real value to Australia. They are able to submit a strong case to the Tariff Board. Some of them are willing to produce their balance-sheets in order to prove that they are not prosperous ; but others will not do so, and thus the board is unable to obtain particulars of the high profits that they are making. It must be manifest to thinking persons that the great exporting primary industries cannot progress while they have to sell at world price levels and purchase their secondary requirements at artificially enhanced values. The Leader of the Opposition referred very glibly to the extent to which we are dependent upon our exporting primary industries, and to the influence that they have on our credit. Yet nothing has been done to aid their development. Have the Prime Minister and honorable members generally noticed the fall in the price of wheat that has taken place during the last fewdays? It would appear that they have not; or, if they have, it does not seem to concern them very seriously. An intimation was given to-day that the price of galvanized iron had been raised by 30s. a ton, although already it was more than double the amount charged in any other country. Has the Government knowledge of the widespread complaints concerning the ravages of rabbits in the different States, as a result of which there is likely to be a tremendous loss of sheep, with a consequent diminution of our exports of wool? This Government thinks, as the last Government did, that it is more important for employment to be given to a few persons in the making of wire netting than that the burden should be lifted bow the farmer, who has to pay twice as much for this product as is charged in other countries. Surely that is not in the interests of Australia! I have received a communication from a man in the north of New South "Wales who wishes to put down seven miles of fencing to keep rabbits off his holding, but will not do so while the price of wirenetting remains at its present high level. It must be clear that if Australia could produce wire netting at a competitive figure, men would be engaged in making it, and employment would be given to others in erecting rabbit-proof fences. But the position is made impossible. It costs more than the price received for a bag of wheat to buy an axe handle, the cost of which to-day is 350 per cent, greater than when the price of wheat was very much higher. It does not seem to occur to the Government that those who are producing this necessary commodity for export to the markets of the world, so that our credit may be established abroad, have such limited means that they must be enabled to purchase their requirements at a cheaper rate. They cannot continue to improve their properties and create wealth if they are burdened with expenditure which makes Lt impossible for them to do so. The Government is unable to prove to mo or to anybody else that the development of our secondary industries has been instrumental in reducing our national debt by one shilling, or has contributed to the discharge of our obligations. "Why should assistance be given to industries that in many cases are doing a real disservice to this country by hindering its proper de,velopment? I should like honorable members to realize that during the last two or three years our national income has been reduced by between £160,000,000 and £200,000,000. In the light of that fact, it is urgently necessary to deal drastically with all forms of lavish expenditure. *[Quorum formed.]* The honorable member for Gippsland **(Mr. Paterson)** showed in his excellent speech yesterday, that 'the people were burdened, not only by high costs, but also by heavy taxation. I believe that the excessive taxation which is levied upon income from property retards the progress of this country, because it discourages men from investing in what would promote development. The Government would act wisely if it removed the differentation that exists between personal exertion and property taxation, the effect of which is to keep up interest rates. High interest rates have a retarding influence on development. A slight reduction has been made, but it is not sufficient. "Wheat-growers whose borrowings represented say, one bag of wheat to each £1, have now to repay in the terms of three bags of wheat to each £1. The small wool-growers, who borrowed for the improvement or the stocking of their property, on the basis of £1 to one sheep, now have to repay on the basis of three sheep to the £1. Their task has been trebled, and they have had no relief in connexion with the prices that they have to pay for their requirements. Pharoah did not impose greater exactions on the Children of Israel when he compelled them not only to make bricks, but also to provide their own straw. Until the Government realizes the sources from which the prosperity of every individual springs, we shall descend to deeper depths of depression. I expected great achievements at Ottawa. The result may be regarded as the thin end of the wedge for further negotiations along more beneficial lines, but I cannot imagine that a great deal of benefit will accrue from what has been done. Experts have stated that. Australia is attempting to develop too many industries. We should have Concentrated on certain big industries that are natural to this country. Some of the commodities that are now being produced in Australia at a high cost could he imported at half the price that is now being paid for them, with consequent benefit to our people. Had our representatives been unshackled in the negotiations that they conducted at Ottawa, substantial results might have accrued, not only to Australia, but also to other dominions within the British Empire. That they were hobbled by the tariff policy that is now in force is manifest from the schedule placed before us to-day. Concessions have been given to Great. Britain, not by relieving the people of Australia of tha burden that is imposed by the duties that are levied on goods from that country, but by increasing the tariff on the products of other countries. It means that the primary producer who should earn £1 from the goods he exports gets only lis. worth of goods purchased in Australia. That sort of thing can- not continue. Any government with the interests of the nation at heart would seriously take these things into consideration and endeavour to evolve a more equitable basis. I am aware that, in a great measure, our parliamentary system is to blame. Our secondary industries have brought about centralization which militates against the real' development of the country. The interests concerned vote selfishly - as their representatives in this chamber declare - to create work in the cities. When he was Prime Minister, the present Leader of the Opposition **(Mr. Scullin)** declared that he had great sympathy for the wheat-growers and others on the land. At great expense, his Minister for Markets called into conference wheatgrowers from all parts of Australia. The great desire, allegedly, was to help those people at a time when prices were below cost. The conference approved the imposition of a flour tax. Immediately the hoards of centralization implanted political fear in the Government by declaring that such a course would increase the cost of bread. All the talk and expenditure of money in connexion with the conference went for nothing. The proposal was against the vested interests iu the large centres of population, and it was rejected. The man on the land is in a minority. The majority vote in this chamber which favours high protection will have to learn through its stomach, if not through its head. Over 75 per cent, of the small wheat-growers and wool producers are bankrupt. If, because of financial stress, small holdings are again merged into great stations and we revert to the conditions of 80 years ago, the land will become overrun with rabbits and scrub, and it will cost millions of pounds to restore it to its present stage of development. The Minister for Trade and Customs **(Mr. Gullett)** referred to the meat trade, a most vital industry to Australia, and mentioned the deplorably low prices ruling in Great Britain. If one were to purchase lamb at 3d. per lb. and ship it to that market one would receive in return a debit note instead of a cheque. Yet every endeavour is being made to develop the fat lamb trade. It is essential that we should come to the level of sincerity. There is no royal road to prosperity. The printing and issuing of great quantities of notes cannot help us. The money must he earned. One hears a lot of talk about the necessity for a high standard of living. A country, or a man, is entitled only to the standard which can be earned. Australia has been living on a scale that has not been earned. In the years that followed the war prices were abnormally high. We enjoyed a big revenue merely because we received high prices for our exports. Unfortunately, primary producers did not enjoy those high prices to the full, for, because of the high tariff, they had to pay excessively for their requirements. They did what they could to develop their land, but received no assistance. Governments borrowed to the limit of their credit - credit created by the primary producer - but, so soon as the farmers were unable to continue exporting, so bringing money into the country, borrowing ceased, and our secondary industries could no longer flourish. They are now endeavouring to regain prosperity by charging double the prices they should for their products, and the Government is helping them by countenancing the establishment of corrupt combines behind high tariff walls. {: .speaker-KZF} ##### Mr Lane: -That is strong language. {: .speaker-KYI} ##### Mr PROWSE: -- We know that combines are rampant behind our high tariff wall, and that they insist upon exacting the last pound of flesh from the producers by making exorbitant charges. A wise government would disregard the pressure of voting interests, and endeavour to rectify the position of the primary producers, instead of allowing it to go from bad to worse. I assure honorable members that I desire to see goods manufactured in Australia, and I am prepared to give a reasonable degree of preference, but I declare it wicked to give secondary industries the assistance which they at present receive. {: .speaker-KZF} ##### Mr Lane: -- For instance the tobacco industry. {: .speaker-KYI} ##### Mr PROWSE: -- I made my position most clear with regard to tobacco. If that industry were properly established here, it would pay £6,500,000 per annum to the Consolidated Revenue of the Commonwealth. We cannot justify excessively high protection to one section, while another is neglected. The primary industries have borne the burden and heat of the day. They arc our most important asset, for they earn the money that is necessary to establish the nation's credit. Yet they are asked to bear the result of the unnatural protection that is granted to secondary industries. They cannot carry on any longer. In the circumstances, it is only right that the Government should call on those other industries to stand on their own feet. At present, they arc not standing at all : they are all leaning, each, perhaps, at a different angle. If our export industries are destroyed, the other industries will fall with them, because there will be no one left with money with which tobuy their goods. The late Government would have met such a situation by the issue of more paper money. The honorable member for Melbourne Ports **(Mr. Holloway)** suggested that we should continue to pay high wages in order that the workers may have sufficient money to pay the storekeepers of the country. That is only like taking in each other's washing or cutting each other's hair. Of the income of Australia, 97 per cent. is derived from the export of primary products, so that the bulk of the wages paid to the workers, and in turn paid by them to the storekeepers, comes from those engaged in primary industries. The value of our exports is less by £200,000,000 per annum than it was three years ago. If we are to continue living on the same high standard as formerly, where are we to get the money with which to pay the storekeepers. We are heaping additional burdens on one section of the community in order to foster industries which do not increase the national income by1s. I want to help Australia, and I do not care much from what direction that help comes. The position is so serious that the assistance of every thinking man in the community is required. The sooner we face the facts the better it will be for the whole of the people of Australia. If we can increase production, the workers will be better off than they are now; but that cannot be done while the present high cost of production remains. The worker who has his nominal earnings decreased may feel that he has been unfairly treated; but if he can buy with £2 what it cost £4 to buy two years ago, he will be just as well off on the lower nominal wage. We should aim at getting every man back to work, increasing our exports, and stimulating trade. The action of the Scullin Government, and, indeed, of the present Government also, has led to reprisals by other countries. The position is serious. Our exclusive attitude has placed Australia in hu insular position, and left this country without a commercial friend in the world. Italy, France, Germany, Belgium, and Egypt have placed heavy duties on Australian wheat; Japan contemplates buying as much of her wool requirements as possible from South Africa, because of our high tariffs and our objection to buying anything from her in return. We cannot afford to lose a trade with those countries which is over £40,000,000 per annum in our favour. It would not hurt Australia to buy something from them, especially if our buying meant that they would not impose retaliatory duties on our goods. The unfriendly feeling of other nations towards Australia is the result of our insular fiscal policy which, if not changed, will seriously affect our export trade. We shall never effectively occupy Australia so long as we continue our present policy. The Scullin Government cut down the expenditure on defence to tho very bone, and the present Government has not greatly improved the position. The Labour party professes to believe in the settlement of world disputes by peaceful arbitration. So do all of us; but it is well not only to fear God, but also to keep our powder dry. We profess to believe in the League of Nations and in the settlement of international disputes without recourse to war. There is nothing wrong with that policy, but the position of Australia's representatives at the meetings of the League of Nations may not always be an enviable one. The day may come when they will be asked how many people there are in. Australia to the square mile, and when they reply that the average is about 2i persons to the square mile, the delegates will compare **Mr.** /Vo awc. Australia with France, with 250 people to the square mile, or Belgium with 300, or Germany, with a still greater number, or Japan or China with 400 persons to the square mile. The delegates of other nations may want to know by what right a mere handful of people in Australia occupies this huge territory. It is up to us to make better provision for our defence. I believe in the policy of a White Australia; but if we are to maintain it we must show that a white nation can be efficient and can effectually occupy the territory under its control. We set ourselves up as an exclusive people, entitled to standards of living which no other country with an income like our own would attempt to set up. We are not unlike a remittance man who spends his remittance unwisely as soon as he gets it. Most of us in this chamber are natives of Australia, and surely this land is dear to us. We should face facts, and ask ourselves whether we are not imperilling our country by our mismanagement of it, and by our misconception of what is right. We must be more unselfish. The only honorable thing for us to do is to tell the electors the whole truth, and what is necessary for the proper development of this great country. {: #subdebate-8-0-s5 .speaker-KLL} ##### Mr MAKIN:
Hindmarsh .- The budget for the present financial year is sending people to beggary. It is an uninspiring financial document, for it provides not a ray of hope for the thousands who are suffering by reason of continued unemployment and consequent destitution. The amendment submitted by the Leader of the Opposition **(Mr. Scullin)** is most timely, because I am afraid that honorable members opposite, and particularly Ministers, are beginning to regard the present deplorable situation in Australia as a condition which might naturally be expected. We are recreant to our trust if we accept the present position in that frame of mind. This budget has brought humiliation and tears to thousands of deserving persons by reason of the serious penalties that it has' imposed on those who are least able to bear increased burdens. The action taken by this Government will long remain in the memory of the people, and the Ministry will be marked down as the most reactionary and undemocratic in Australian history. I am not expressing merely my own opinion, because that is the view taken by hundreds of thousands of people throughout Australia. To-day the invalid and old-age pensioners, and others who need the help of the social services of this country, have felt for the first time the direct effect of the wretched policy which" this Government is pursuing. A most deserving section, which is richest in the wealth of citizenship, is being reduced to dire poverty through the application of that policy. Honorable members opposite will find it difficult to reconcile their present action with the ever-increasing buoyancy of Commonwealth revenues. No government can justify the cutting down of social services at a time of increasing revenues, particularly when a definite promise has been given that at an early date the taxation now imposed on the more wealthy section of tho community will be to some extent remitted. Before there is any remission of taxation, the social benefits should be fully restored to their former level. I hope to have something more to say on this subject when the Estimates of the Department of the Treasury are under consideration. At the same time, I avail myself of the present opportunity to protest as strongly as I can against the unjust and humiliating conditions imposed by the Government on the invalid and old-age pensioners, as well as on others who have suffered as the result of the Government's action. There are two subjects to which one with my views upon political economy would naturally desire to address one's self. In the first place, there is the general subject of finance, and, particularly, banking practice. I would have liked to express my views fully on that matter, because it is arresting the attention of every thoughtful citizen in the Commonwealth. The second outstanding subject is that of unemployment, brought directly under the notice of the committee by means of the amendment submitted by the Leader of the Opposition, which is equivalent to a vote of no-confidence in the Government for its failure to take adequate steps to cope with a problem of paramount importance. On this occasion, however, I think that I may well devote the whole of the time at my disposal to the consideration of the subject of unemployment in Australia, and its relation to world affairs. Although it may be desirable to provide . relief works, we should recognize that such measures do not furnish a final solution of the problem of unemployment. The financial resources of our unemployed citizens have been almost entirely depleted and they are now forced to depend on the Government for relief to a greater extent than at any other period in the history of the Commonwealth. {: .speaker-KUW} ##### Mr Stacey: -- The whole world is affected. {: .speaker-KLL} ##### Mr MAKIN: -- That is true. All countries, irrespective of their fiscal policies, are feeling the present depression very severely. Some honorable members will argue that the unprecedented difficulties confronting the civilized world are due to the payment of war debts and reparations. Others will contend that they are attributable to the dislocation of the gold standard. Others again, including the honorable member for Swan **(Mr. Gregory),** are convinced that they are due to the operation of tariffs. All these may be regarded as factors which accentuate the position, but the fact that there is so much unemployment in all countries, freetrade and protectionist alike, and even in countries which have no war obligations to meet, should induce us to look elsewhere for the cause. Obviously, strict adherence to the gold standard is not a remedy, as witness the acute distress and unprecedented unemployment in France and in the United States of America, which are in possession of the bulk of the world's gold. What the world has failed to realize is that, during the last decade or so, entirely new industrial conditions have been developing, due to wonderful discoveries in science and their application to modern workshop practice. It is significant that economists with worldwide reputation- men who are supposed to be searchers after truth to declare it - have been silent with regard to this important feature of industrial life in all countries. In this country there have been many conferences between Commonwealth and State Ministers during the last few years, and although economists have been called in to advise the governments, they have not directed attention to the industrial revolution that has been taking place in Australia as well as in other countries. They have paid no heed to these new industrial phenomena. {: .speaker-KUW} ##### Mr Stacey: -- Has the honorable member a remedy? {: .speaker-KLL} ##### Mr MAKIN: -- I should not attempt to diagnose our financial and economic ills, were I not prepared to suggest the remedy. {: .speaker-KIU} ##### Mr Hutchin: -- Then let us have it. {: .speaker-KLL} ##### Mr MAKIN: -- The honorable member for Denison **(Mr. Hutchin)** need not flatter himself that he has a monopoly of intelligence on industrial matters. On this subject he may pose as the big man in this House; actually he is more of a big noise than anything else. We have not had from these economists in Australia a more frank statement concerning industrial conditions because, for the most part, they are the official advisers of the principal banking institutions, and presumably conceive it to be their duty to maintain the *status quo* of the industrial and financial system under which they are living. But public opinion is awakening on this subject. The people are taking cognizance of the new industrial order that has been evolved, and before long the Government will be forced to realize the urgent need for reform. Recent reports from Geneva indicate that the League of Nations is giving this important subject some attention. It is convinced that, if relief is to be given to the world, and employment provided for the workers in all countries, there must be a re-adjustment of the industrial conditions. There will require to be a substantial reduction of tho working hours of those engaged in industry before we can bring about the re-employment of thousands of our own citizens who are to-day eagerly seeking work. Unless there is in the immediate future some adjustment of the working hours, thousands of men of middle age, who are to-day unemployed, will never be re-engaged in industry. I am amazed at the patience which has been exhibited by the working people in view of the Government's faltering methods, and its continued delay iu dealing with this transcendentally important question. I recently asked the Prime Minister to place before the next Premiers Conference, a proposal to make an industrial survey of the Commonwealth to ascertain the advantage that has been given to industry and production generally, by the application of science and modern methods. In this respect a wonderful advance has taken place 'in the industrial world, particularly within the last few years. We should not be behind other nations in our adherence to the principles that will adequately meet this situation, and that will give to our workers and those dependent upon industry a share in the benefits that flow from the advances that have been made in industrial science. Evidently the Government has no intention of moving in the matter. The League of Nations has given consideration to this allimportant subject. I have with me a report from the International Labour Office at Geneva, dated the 18th July of this year, and the foreword headed "Note of the Week " reads - >We may remind our readers that at its last session the International Labour Conference passed a resolution commending a reduction in hours of work and condemning a reduction in wages. By means of a shortening of hours, the resolution affirmed, production could be adjusted to consumption, available work could be distributed over a large number of persons, and the unemployed could be reabsorbed into employment. The International Labour Office, it was urged, should investigate the question of the establishment of a 40-hour week in all industrial countries by international agreement ... In the present issue, for example, will be found -u report of a recent discussion in the Italian National Council nf Corporations, leading to the adoption - with the support both of workers' and employers' representatives - of a resolution in which the council "faced with the problems of unemployment and the need to give occupation to a larger number of workers," called for " a prompt examination of the possibility of a compulsory reduction of hours of work to 40 in the week ... in order that precise international agreements may be concluded." The report also states that **Senator Giovanni** Agnelli, a noted authority of Italy, laid stress on the increased capacity of modern industry for production and advocated a 36-hour week without any diminution of wages. It cannot be denied that in every avenue of occupation modern methods are displacing men. I have with me a statement which, although rather alarming, faithfully portrays the exact position. It reads - > **Mr. C.E.** Knoeppel,an American industrial engineer, writing in *The Efficiency Magazine,* gave the following striking instances recently of the reduction of costs: - > >From one worker to a loom, in a textile industry, we now have cases of four, eight, and sixteen; also 32, 75, and 125 looms being looked after by one operator. > >One man with an electrical handsaw replaces four men. A power-chisel does the work of ten men. A floor-sanding machine displaces five men. Two men have replaced fourteen in charging steel furnaces. Seven men cast as much pig-iron as sixty used to do. In the Panama-Pacific steamers *California, Virginia,* and *Pennsylvania,* three firemen do the work of 120 stokers in each ship. > >In turning locomotive tyres, it now takes one hour and twenty minutes to turn a pair as against fifteen to thirty hours formerly. In repairing locomotives with oxy-acetylene torch, four men can do in three to seven hours what it used to take eight men three weeks to do. **Mr. Knoeppel** gives additional evidence, showing the manner in which men are being displaced in industry. {: .speaker-KUW} ##### Mr Stacey: -- How does the honorable member propose to overcome that difficulty ? {: .speaker-KLL} ##### Mr MAKIN: -- I have already suggested that an industrial survey should be made of the conditions prevailing in industry throughout Australia, so as to ascertain to what extent modern appliances and machinery have displaced manpower. I have also suggested that the unemployment problem could be substantially solved bya reduction in the working hours per week and by an improvement in the conditions and wage standards of the workers. I can quite understand that my suggestions will meet with the hostility of government supporters, whose sole object is to swell the profits and dividends of the employers. The desire of this Government is to grind down the workers as much as possible. It has no wish to remodel industrial standards in keeping with the tremendous progress in every department of industrial activity. {: .speaker-KXQ} ##### Mr Archdale Parkhill: -- The honorable member need not upset himself about it. {: .speaker-KLL} ##### Mr MAKIN: -- It is possibly the PostmasterGeneral who is upset, for he must realize that under the new circumstances of industry which undoubtedly are arising, he will be deprived of many benefits which he has enjoyed in the past. He knows too well that the profits and dividends which he has drawn from various sources at the expense of the working community will not be so lucrative in the future as they have been in the past. A noted economist, J.C. Stamp, has been referred to several times in this debate. This gentleman has written aforeword to a book which was available in Canberra only yesterday in which he says - >Since the Great War the methods of production used by or available in industry have made it possible for at least a 50 per cent. greater volume of goods to be produced by the same amount of labour. I should like to know who has enjoyed the benefit of this greater production? It is certainly not the workers, for the result of this great volume of production has been unemployment and rationing. Increased productivity should have made the lives of the workers a little more comfortable, but the reverse has been the case. Not only have the workers become more impoverished, but their position in industry has become more insecure than ever before. More than one great economist has placed the hall-mark of his approval on the view that I am advancing. If honorable members desire any further information on this point, I refer them to a book, entitled *The Economic Consequences of Power Production,* written by Frederick Henderson, an employer and a director of a big corporation. {: .speaker-KOL} ##### Mr McBride: -- What is that about a corporation? {: .speaker-KLL} ##### Mr MAKIN: -- The levity of the honorable member does not do either him or the State he represents any credit. He should at least show a little sympathy with the unemployed, and recognize that re-adjustments are essential if industry is to be rehabilitated, and the unemployed army of Australia is to be provided with work.' I should like to give one or two illustrations of how improved conditions in field, factory, transport, and office, have re-acted adversely on the workers, As an instance of this, we know very well that in consequence of scientific research and modern invention, the roads of this country have been very greatly improved. That, however, has led to a reduction in the amount of road work available. Another factor that has operated in this direction is the use of mechanical ditchers and dredges in road excavation operations. Yet nothing has been done to recompense our road-workers for their loss of employment. This applies also to every other avenue of employment. {: .speaker-KXQ} ##### Mr Archdale Parkhill: -- There is not a road of any kind in many parts of the Northern Territory. {: .speaker-KLL} ##### Mr MAKIN: -- The Minister should, at least, be serious. If the reports that are coming to hand from Central Australia are reliable, it will probably be necessary for the Government to build roads there. We hope that this will be so. The improvements that have been effected in the manufacture of textiles, implements, confectionery, boots and clothing, in the transporting of goods, in the production of metals and coal, the generation of power, and in many other industrial enterprises, have reacted unfavorably upon the workers during the last decade or so. One result of the progress of industry through modern invention has been the displacement of thousands of workers. Unless we are prepared to re-adjust industrial conditions, we shall not find a permanent solution to the unemployment problem. Australia has led the world in many reforms, and there is no reason why she should not do so in this connexion, but apparently, each nation wants to hold back until some other nation shows the way to .progress. Australia is so richly endowed with raw materials and the ability to fashion them into finished products, and is so capable of becoming self-contained and self-supporting, that she should set an example to the world, in the improvement of industrial conditions and particularly in the reduction of the working hours of the operatives in industry. One of the greatest scientists of our time, **Sir Alfred** Ewing, has recently expressed doubt about the fitness of modern civilization to enjoy the benefits which science has made available to us. He has even said that these benefits have been misused and abused. Our present methods of "unrestricted competition with unscientific organization and distribution certainly cannot be continued. I venture to prophesy that if we take a step in the direction of the social ownership of industry, conditions will be improved, The people are obtaining a better understanding of this important phase of national control of industry, and I should not be surprised if, in the next decade, some such form of control of production especially in regard to prices and profits is adopted. I refer more particularly to the control of those great key industries engaged in the production of coal, minerals, light and power, so essential to manufacture. Such industries should not be left to the caprice of private enterprise, but should be brought under direct authority of the community itself in order to provide the people with the benefits which science has made available, and relieve them, at least to some extent, of the burdens, which they are now carrying. These suggestions may be somewhat premature, but they have been made by others, and I trust that it will not be long before there is a determined attempt to improve the industrial and social conditions of the people. At the forthcoming Premiers conference, consideration should be given to the need for a general survey of the industrial conditions of Australia in order to determine to what extent reduced hours of labour can be adopted, thereby reducing unemployment, and offering better conditions than are available at present. In conclusion, I repeat that the budget speech delivered by the right honorable the Prime Minister **(Mr. Lyons)** is the most dismal and uninspiring financial statement this Parliament has ever been asked to consider. That important section of the community which has not only borne an undue share of sacrifice, but is also suffering distress unprecedented in the history of Australia, is totally unprovided for. It is the responsibility of the Government to do something tangible to relieve unemployment, and to give a direct lead to other countries. "We should remodel our industrial system, and by so doing, provide work and the necessities of life to which every member of this community is justly entitled. Progress reported. {: .page-start } page 1271 {:#debate-9} ### ADJOURNMENT {:#subdebate-9-0} #### Sales Tax Motion (by **Mr. Latham)** proposed - >That the House do now adjourn. {: #subdebate-9-0-s0 .speaker-KF9} ##### Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936 .- I have been informed that sales tax is still being charged by some wholesale merchants on certain commodities from which this tax has been removed. They say that they have not been advised that the sales tax is not now to be collected on these goods. {: #subdebate-9-0-s1 .speaker-KZO} ##### Mr LATHAM:
AttorneyGeneral · Kooyong · UAP .- The liability to pay sales tax depends upon the existence of a statute and not upon any notification of its existence. Persons are not individually notified that a statute providing for its remission has been passed. There is no authority to make a charge for sales tax unless a law is, in fact, in operation under which a sales tax is imposed. The most effective way in which the honorable member can deal with the matter is to forward to the Treasurer particulars of the items upon which sales tax is being collected. Question resolved in the affirmative. House adjourned at 11.7 p.m. {: .page-start } page 1271 {:#debate-10} ### QUESTION {:#subdebate-10-0} #### QUESTIONS ON NOTICE *The following answers to questions on noticewere circulated: -* Onions {: type="1" start="1"} 0. Are the recent large importations of onions into the Commonwealth due to the Australian onion-growers failing to supply the regular requirements of our market; if so, in view of the fact that onions are being sold at prices higher than the ordinary citizen can afford to pay, will the Minister allow this necessary commodity to come in free of the £8 per ton import duty, and clear of primage and any other tax that onions may at present carry ? 1. Willhe appoint a departmental inquiry to report on the reason why the local growers have failed to supply the reasonable requirements of the Commonwealth? Butter Building Societies >Will he furnish a statement similar to that prepared by the Commissioner of Taxation relating to Victorian building societies and published in the *Melbourne Stock Exchange Record* issued on the 11th May, 1932, in respect of all the principal building societies in Australia? Migrant Land Settlement {: type="1" start="1"} 0. Have arrangements been made for any officer's of the Commonwealth Government to give evidence before the Royal Commission on Migrant Land Settlement in Victoria? 1. If so, what officers have been deputed to appear before the commission? 2. Willhe lay on the table of the House any papers concerning the matter? {: type="1" start="1"} 0. Two officers of the Development Branch, Prime Minister's Department, have been called to give evidence before the Royal Commission on Migrant Land Settlement appointed by the Government of Victoria. 1. No officers have been deputed by the Commonwealth Government to give evidence before this commission on behalf of the Commonwealth. 2. Confidential instructions were given on account of the fact that it was not considered proper to disclose communications which had been made and received upon a confidential basis. These instructions were shown to the royal commission. It is not considered advisable to place them on the table of the House. Tobacco Crop Feeding of Children {: type="1" start="1"} 0. Has his attention been called to a statement in the *Herald* of the 1st instant, containing a memorandum from a new book issued by the League of Nations advising how children should be fed? 1. If so, will he request his department to supply details to all the State education departments, and request them to publish such details in the school papers of the various States, in order that the good advice contained therein may reach the homes of the workers ? Electoral Statistics {: type="1" start="1"} 0. What was the number of electors enrolled onthe occasion of the last federal elections? 1. How many electors recorded their votes? 2. How many notifications were sent out to electors who failed to record their votes? 3. How many replies were received? 4. How many notifications were returned undelivered? 5. What other action was taken in regard to the matter by the Electoral Department in conformity with the Electoral Act? {: type="1" start="1"} 0. 3,649,954. 1. 3,468,303. 2. 167,794. The balance (13,857) included persons from whom explanations had already been received, aged and infirm electors, electors whose deaths were recorded subsequent to polling day, &c. 3. 95,321. 90,969 contained replies considered valid and sufficient. 4. 72,013. 5. Warnings were issued in 2,460 instances and notifications to electors whose reasons for failure to vote were held not to be valid and sufficient were forwarded to 1,892 persons, 1,795 of whom elected to have the matter dealt with by the Commonwealth Electoral Officer for the State, under the provisions of the electoral and referendum regulations. Court proceedings were taken in 208 cases - 174 for failure to reply to the notifications and 34 for failure to vote. Glass Industry Deportations >Howmany persons have been deported from the Commonwealth, since the present Government took office, for each of the following reasons: - > >Illegal entry into the Commonwealth? > >Criminal offences or criminal records? > >Health reasons? > >Connexion with "White Slave" traffic? > >Connexion with communist or other political activities? {: type="1" start="1"} 0. 12. 1. 34. 2. 56. 3. Nil. 4. Included in 2. Total 102 up to the 30th September, 1932.

Cite as: Australia, House of Representatives, Debates, 13 October 1932, viewed 22 October 2017, <>.