House of Representatives
3 November 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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– Will the Prime Minister amplify his statement of yesterday by defining the exact procedure to be adopted in discussing and voting on the Ottawa agreement? The United Kingdom and Australia Trade Agreement Bill contains certain clauses, a main schedule, and other schedules A to H. A further schedule, which is consequent upon the Ottawa agreement, has been laid on the table by the Minister for Trade and Customs. Will the House have an opportunity to debate each of these schedules separately, and to discuss and vote on the individual items contained therein ? If that cannot be done in regard to the bill itself, will honorable members be able to deal separately with the items in the independent schedule?

Prime Minister · WILMOT, TASMANIA · UAP

– The procedure must be determined by Mr. Speaker. When I spoke yesterday, I assumed that it would be competent for any honorable member to move an amendment to any portion of the bill, but as the bill proposes the ratification of a definite agreement between two parties, any variation of it would mean a rejection of the agreement. In practice, therefore, an amendment of the bill would involve the failure of the agreement. For that reason the bill and the agreement attached to it must be taken as a whole. That will not prevent any honorable member from moving an amendment, or the House, from agreeing to it if it is prepared to accept the responsibility of rejecting the agreement.

Dr Earle Page:

– Does that apply also to the separate schedule of increased duties ?


– If Parliament accepts the agreement it will thereby confirm the formula governing the preferences to the United Kingdom. The formula provides for a preference of 15 per cent., and the Government is establishing that margin by increasing the rates of duties against foreign countries. It will be competent for Parliament to decide that this margin shall be established by reducing the rates applicable to goods from the United Kingdom. The Government hopes that the House will give one clear decision on this principle, rather than deal with each individual item involved in the agreement. The Government will defend the granting of the 15 per cent, preference by increasing the rates against foreign countries; but honorable members may decide that effect shall be given to the formula by a different method. I hope, however, that they will assist the Government to get a decision on the general principle which will apply to the whole schedule, rather than deal with the issue on each item.

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– In view of the newspaper reports that the Flag Signal Station at Millers Point, Sydney, is to be removed, will the Minister for Commerce receive and consider representation from the Maritime Workers unions before definite action is taken to remove a convenience which is necessary for the workers on the waterfront?

Minister for Commerce · PARRAMATTA, NEW SOUTH WALES · UAP

– I shall be pleased to receive representations on the subject.

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– The annual report of the Murray River Waters Commission states that considerable representation had been made to that body that action should be taken to clear the valleys and countryside of timber and debris prioto. inundation. The reply of the commission was that the cost of clearing the areas of timber and grass before submergence would be prohibitive, the estimate being over £60,000 for a capacity of li million acre feet, and £70,000 for a capacity of two million acre feet. I ask the Minister for the Interior whether, instead of risking the continual pollution of the water by vegetable matter and other debris, it would not be preferable to clear the land prior to inundation? Will he consult engineers on the matter?

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

– This proposal has al-, ready received some consideration by the Commission, and will be further dealt with at a meeting to be held at Albury about a fortnight hence.

Mr Scullin:

– Is not much of the area already inundated?


– I understand that a considerable extent of it is inundated.

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– I ask the Prime Minister whether the Commonwealth representatives on the Loan Council have taken any steps in connexion with the allocation of loan moneys to the various States to induce the State Governments to proceed with works as quickly as possible? If they have not done so, will the Prime Minister urge the State Governments to expedite the undertaking of works with a view to providing the maximum amount of employment before Christmas ?


– The Commonwealth representatives considered it unlikely that the State Governments would be able to carry out their full works programmes within the financial year, because, as I pointed out yesterday, they were slow in commencing; but State Ministers have assure4 us that they expect , to expend within the year approximately the whole of the available amount. Therefore, there will be no’ need for the Commonwealth to spur them on to greater activity. The representatives of the States have expressed their desire to proceed with their works programmes as rapidly as possible.

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– Can the Prime Minister inform the House when the report of the committee which was recently appointed to inquire into the wool industry will be available ? Such a report would be of value to honorable members when discussing the Ottawa agreement.


– I understand that the report is ready for presentation to the Government, but I have not received ir yet.

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– Has the AttorneyGeneral read the newspaper summary of the report recently submitted by Mr. Justice Halse Rogers, the commissioner appointed to inquire into the granting of licences for tin hare racing in New South Wales, in the course of which the Commissioner referred to a foreigner named Swindell as “ a schemer “, “ a deviser of crooked stratagems “ unprincipled “, unscrupulous “, “ a sinister figure in any community”? Will the honorable member consider the advisability of deporting this undesirable foreigner?

Attorney-General · KOOYONG, VICTORIA · UAP

– I have seen in the press the reference to the report, and I assure the honorable member that his suggestion will be considered.

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– Early in the life of this Government a bill was introduced in the Senate to amend the Customs

Act. It contained a provision giving the Government power to impose embargoes by regulation. What happened to that bill, and does the Government propose to go on with it?


– The bill is at present in the Senate, and I am not now in a position to tell the honorable member just what is being done with it.

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– In view of my representations for an amendment of the Navigation Act in order to combat the unfair competition of the heavilysubsidized Matson line, and to afford some relief to the many unemployed Australian seamen, will the Prime Minister say. if the press report that a subsidy of £6,000 is to be paid to Huddart, Parker Limited, to enable it to engage in trade with Tasmania, is an indication that this is the only action contemplated by the Government in this matter?


– The desire of the Government is to assist in the maintenance of a steamship service between Sydney and Hobart, and has nothing whatever to do with the proposition regarding the Matson line. But I may inform the honorable member - since be is entitled to have this information because of the many questions he has asked on this subject - that I had hoped to discuss the matter with the Minister for Trade and Customs (Mr. Gullett), but, as honorable members know, that has been impossible. In those circumstances, and in order to ascertain the stage reached at the discussions at Ottawa, I have now communicated with the right honorable member for Flinders (Mr. Bruce), in an endeavour to reach a decision in the matter.

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Repatriation Wards


– Is it the definite intention of the Commonwealth Government to allow the Works Department of New South Wales to build the new repatriation wards at the Callan Park Hospital ? If so, in view of the fact that the Commonwealth Government main- tains an expensive Works Department, inclusive of architects and others capable of doing this work, will the Minister consider the desirability of allowing that department to carry it out?

Minister for Health · PARKES, NEW SOUTH WALES · UAP

– As I stated last night, this matter is at present the subject of negotiation between the Commonwealth Government and the Government of New South Wales. The Commonwealth Government has to provide the funds necessary for the erection of the buildings. A site has been inspected and chosen, and the proposed building is receiving the consideration of State authorities, who have had experience in the erection of lunacy quarters, to ensure that when erected it will suit the requirements of those who are to occupy it.

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– Has the Government given consideration to a suggestion made in this House about a month ago that a select committee should be appointed to inquire into the position of the wheat industry?


– In view of the many matters that have been pressing the Government recently, it has not had an opportunity to consider that proposal.

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– Will the Government give consideration to the exemption from sales tax and primage duty of educational books required by schools of arts and kindred institutions?


– When the Government is considering further exemptions from the sales tax, the matter raised by the honorable member will certainly receive consideration.


– Has the Prime Minister seen a protest in the Melbourne Argus against the sales tax being chargeable on gift books sent from England to Australia, and, if so, will he take action to ensure that such gifts shall be exempt from taxation?


– I shall give consideration to the matter raised by the honorable member.

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– Yesterday the honorable member forRichmond (Mr. E. Green) asked me . a question with reference to the alleged reduction of the pensions of limbless soldiers undergoing treatment at the Prince of Wales Hospital at Eandwick. The position is that limbless soldiers receive, over and above their pension, an allowance under the fifth schedule of the Australian SoldiersRepatriation Act. If the honorable member will refer to this schedule, he will find a proviso to the effect that the allowance is not payable during such time as the recipient is an inmate of an institution maintained at public expense. Under no circumstances is a soldier’s pension reduced while he is in hospital.

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The following papers were presented : -

Commonwealth Bank Act - Treasurer’s Statements of combined accounts of Commonwealth Bank and Commonwealth Savings Bank, together with certificates of the Auditor-General, as at - 31st December, 1931; 30thJune, 1932.

Insurance Acts - Regulations amended - Statutory Rules 1932,No.1 23.

Invalid and Old-age Pensions Act - Regulations amended - Statutory Rules 1932, No. 122.

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Motion (by Mr. Guy) agreed to -

That he have leave to bring in a bill for an act to approve an agreement made between His Majesty’s Government of the Commonwealth of Australia, and His Majesty’s Government of the State of Queensland, and for other purposes.

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

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Debate resumed from the 13th October (vide page 1166), on motion by Mr. Gullett -

That the bill be now read a second time.


.- Before proceeding to discuss the bill, I wish to express my regret at the illness of the Minister for Trade and Customs (Mr. Gullett) who introduced it, and his inability to continue the work which he began overseas. Whatever opinions may be expressed in this chamberregarding the measure itself and the agreement, there can be no doubt that there was a considerable amount of hard work, and indeed overwork, at that conference, as there is at many conferences, and the Minister was undoubtedly under a heavy strain. I am sure that honorable members will sympathize with him in his illness, and I express the hope that he may soon be restored to health.

On the motion for the adoption of the Ottawa agreement, Parliament is called upon to make a vital decision, in fact, one of the most vital decisions that it has been called upon to make. This decision involves more than a matter of trade. It raises the issue whether this Parliament shall impose restraints upon succeeding parliaments with respect to a political policy on which there are strongly conflicting views, and whether Australia shall maintain a high protectionist, or a half-and-half tariff. The Ottawa agreement was signed by two Ministers, and adopted by Cabinet more or less unanimously. But we have now been given to understand that Parliament must accept or reject it as a whole. Parliament is therefore placed in a very difficult position. Several questions have been asked on this subject, and the Prime Minister has declared that there can be no amendment of the agreement.Any amendment of it will mean its rejection.

Some articles of the agreement are so repugnant to those who stand for Australian industries and, what is more important, Australian self-government, that they outweigh any concession that may have been obtained for our producers. On this account, honorable members should insist upon seeking a new agreement which will provide an opportunity to secure concessions and preferences without binding Parliament hard and fast, and without” violating the policy, which has been recognized for many years in Australia, of protecting Australian industries. I believe that we should have an opportunity of this kind. I also believe that it is wrong for the

Government to throw an agreement like this on the table and say that we must accept or reject it as a whole, notwithstanding that it contains several articles entirely repugnant to those whobelieve in self-government in Australia. For these reasons, among others, I move the following amendment: -

That all the words after “ That “ be omitted with a view to insert in leiu thereof the following words : - “ the bill be withdrawn and negotiations opened for a new agreement embodying concessions to Australian producers and preferences to Great Britain on specified items without endangering our protective policy or depriving Parliament of its power to give effect to the will of the people ongeneral tariff policy.”

I have no doubt that honorable members have read articles 10 and 11 of the agreement. These articles provide for a general review of our tariff by the Tariff Board with the object of giving effect to the principle that our “ protective duties shall not exceed such a level as will give United Kingdom producers full opportunity of reasonable competition.” That is clearly an instruction to the Tariff Board to review every item of the tariff, and recommend lower duties. Referring to this aspect of the agreement, Sir John Simon has said -

Australia had expressed willingness to reduce tariffs till our manufacturers would be able to compete.

Mr. Baldwin, who was the leader of the British delegation at the Ottawa Conference, has also given an indication of the opinion of the British Ministers as to the real meaning of article 10. Speaking in the House of Commons, he said -

It was a wonderful thing that theyhad got Australia to undertake that protective duties should not exceed what would give the United Kingdom an opportunity for fair competition.

Honorable Members. - Hear, hear !


- Mr. Baldwin’s statement was received with cheers in the British House of Commons, and it is now being received similarly by honorable members supporting the Government, who believe in a half-and-half protectionist policy.

Mr Thompson:

– There is nothing to object to in that statement.


– The honorable member for New England (Mr. Thompson) believes in giving instructions to the Tariff Board to reduce duties, but not otherwise.

Mr Lane:

– He is not anti-British anyway !


– Order !


– The honorable member who made that interjection is not fit to sit in this Parliament.

Mr Lane:

– I take exception to that remark.


– The honorable member for Barton (Mr. Lane) made an offensive remark which, had exception been taken to it, he must have withdrawn, and I called him to order. The Leader of the Opposition (Mr. Scullin) has also made a disorderly remark, and I ask him to withdraw it.


– I withdraw it. We are entering upon one of the most important debates of this Parliament, and I suggest that stupid and inane interjections should he reserved for some other time and place.

Hitherto the Tariff Board’s duties have been twofold. The board has been required to protect Australian industries, and to safeguard the interests of Australian consumers. But under the Ottawa agreement, a third duty will be imposed upon it, to watch the interests of British manufacturers, and ensure that they are given full opportunities to compete with Australian manufacturers on the Australian market. Industries that have been established in our own country, that employ Australian workers and use Australian raw material, and that pay taxes to the Australian governments, are to receive no advantage whatever in Australia as against British competitors.That being so, our protectionist policy is being thrown overboard. Mass production overseas, and the dumping of goods into this country make fair and reasonable competition impossible. Under this agreement our industries will be subjected to a killing competition. I ask honorable members to contrast the provision which I have just mentioned, with that which appears in paragraph 4 of the eighth schedule to the agreement, which reads as follows: -

The policy of His Majesty’s Government in the United Kingdom in relation to meat pro duction is, first to secure development of home production, and, secondly, to give to the dominions ah expanding share of imports into the United Kingdom.

Why did not our representatives adopt a similar attitude in respect of Australian industries? When I was at the 1930 imperial conference, economic questions and reciprocal trade were discussed at length. On that occasion I said -

The policy of Australia is, first, to encourage and support the Australian manufacturer, and, secondly, to secure to British industry the lion’s share of the import trade.

Undoubtedly there is scope for an exchange of goods between Australia and other British countries; but such trade can be carried on without sacrificing the interests of any of the countries concerned and without cut-throat competition. A good deal has been said about our not wanting to engage in one-way trade. Who has ever suggested that Australia wanted to engage in a trade of that kind? I have never done so. I have enough sense to know that we must pay for “imports with exports. But I also affirm that if Australia is to remain solvent and meet her overseas obligations, she must export more than she imports.

A most objectionable feature of this agreement is article 12, which prevents the Australian Parliament from imposing new duties or increasing existing duties on United Kingdom goods without the recommendation of the Tariff Board. That board was created by Parliament for the purpose of advising Parliament and furnishing it with information in regard to tariff matters. But now it is proposed that in the imposition of duties on goods from the United Kingdom, this Parliament shall become subservient to a body which it has created. Australia’s industries may be strangled, an adverse trade balance may be threatening the nation with financial disaster, but if the board refrains from making a recommendation, this Parliament will be impotent. Had such restraint on this Parliament been in existence in 1929, and early in 1930, we should not have been able to grapple successfully with our adverse trade balance, and, therefore, would have defaulted as a nation.

This agreement instructs the Tariff Board as to what it shall do, and lays down in definite terms what the Australian Parliament shall not do regarding the general tariff policy. By ratifying the agreement we shall barter away our fiscal freedom as a nation. The board is bound by article 10 to reduce duties, and by article 12, this Parliament is bound to the board, and cannot exceed any duties that it recommends on goods from the United Kingdom.

The delegates to the Ottawa Conference left this country with the goodwill of all sections of this House and of the Australian people, with the belief that they would stand by the generally accepted policy of Australia. It was not contemplated by anybody in this House that they would agree to an agreement imposing rigid restrictions on general tariff policy. Reciprocal trade was another matter. It was discussed at the 1930 conference, and adjourned for further consideration at Ottawa. During the many weeks of its discussion at the 1930 conference, which I attended, never once did any delegate suggest that we should lay down an agreement on general tariff policy. Exchange of preferences on specified items was all that was ever proposed, and that is all that should have been adopted at Ottawa.

I ask what reason has been given for adopting this far-reaching policy, and going beyond anything that had been previously conceived by tying the hands of this Parliament to a general policy for five years? An excuse was offered by the Minister for Trade and Customs in these words -

In no other way could the benefits for our primary producers have been obtained.

I regard that as the most astounding statement to which I have ever listened. Surely our past record provided a solid basis on which to build substantial concessions for Australian industries? Previous duties gave British industries preference margins averaging 15 per cent. The agreement that we are now considering increases those margins on 428 tariff items. Australia is to receive preference on 40 items. Britain, therefore, had the best of the bargain even in the earlier stages, without any insistence on our pledging our whole tariff policy in a written agreement of five years’ duration. I ask honorable members to note how careful the British delegates were not to accept restrictions on their own Parliament similar to those imposed on this Parliament.

Mr Hutchin:

– What about article 4? Mr. SCULLIN. - Not one article imposes such restrictions on the British Parliament as are imposed on this Parliament. The preferences that are to be given by Great Britain are specified, the commodities named, and the extent of the concessions definitely stated. I could not imagine Mr. Baldwin or any of the other British delegates agreeing to conditions that would tie up their Parliament as this Parliament will be tied up.

Mr White:

– Then why did the Liberal Ministers resign ?


– The honorable member should askthem.

The Minister for Trade and Customs spoke at length upon the advantages to Australia that it is alleged will result from the restrictions imposed by Britain on the importation of foreign meat. Let it not be forgotten that there are restrictions on the importation of Australian meat to Britain for this year. The Minister claimed that the meat restrictions represented the greatest achievement won by Australian delegates at the conference. I invite honorable members to examine the terms of the agreement. They reveal that the Government of the United Kingdom may remove those restrictions when it chooses. There is nothing castiron about them. The British Government is to be the sole judge as to when supplies are adequate, and when the restrictions shall be lifted. I am not blaming the British Government for that, for it has the right to protect its consumers, just as it has the right to protect its industries. But the elasticity should be general, not one-sided. We are bound with bands of steel, while the other contracting party is bound with bands of elastic. The Minister for Trade and Customs stated that unless our delegates had agreed to the meat conditions, the benefits to our primary producers could not have been obtained. That must arouse resentment throughout the country. Since 1907, valuable preferences have been given voluntarily to Great Britain on a large number of items. We gave to British industries preference on 90 per cent, of their goods entering Australia, and, prior to recent impositions of duties in Great Britain, received in return preferences on only 12 per cent, of our importations to Great Britain. Not once in that 25 years did an Australian government suggest withdrawing those preferences in order to force a bargain.

Mr Gregory:

– But our governments made those preferences useless.


– I spoke at the 1930 conference in reply to that very kind of statement, and pointed out that Australia is second only to India as a market for British goods. Is that rendering our preferences useless ?

Mr Hutchin:

– That was because we were so busy borrowing from Great Britain.


– The Minister for Trade and Customs repeated my declaration’ that we are Britain’s second best customer. But he did not give the reason advanced by the honorable member for Denison (Mr. Hutchin). It is true that we imported more than we should have done because of our borrowing policy. Some may claim, as does the honorable member for Swan (Mr. Gregory), that, although we allow a margin of preference, even the preference duty is so high a3 to keep British goods out of the country. If that be so, how is it that in the year 1928-29, the last normal year for which figures are available, we were Britain’s second best customer? I quoted the figures when I was in London, and they show that we imported £26,000,000 worth of goods from Britain free of duty, although, had those goods been of foreign origin, they would have been dutiable. Was that of no advantage to Great Britain? Practically half of our imports from Britain were admitted without the payment of a penny in duty. On other goods that were not admitted duty free, we gave generous margins of preference. Much has been said during this discussion of Argentina, and what a good customer of Great Britain she is. I heard the same kind of talk when I was in London, with particular reference to the money invested in Argentina by British interests. I had the figures taken out by the officers who accompanied me, and I found that, for the year 192S, the. total imports into Argentina were £180,000,000, of which £31,000,000 worth, or 17 per cent., were obtained from Britain. During the same year, Australia imported £144,000,000 worth of goods, £55,000,000 worth, or 38 per cent., of which came from Great Britain. The Minister for Trade and Customs the other day quoted the figures for the previous year, 1927. I refrained from quoting those figures, because I regarded 1927 as an abnormal year, when our imports reached a record high level. However, 3ince the Minister for Trade and Customs used the figures for that year, I shall quote them here. The Minister said that, during 1927, we imported £67,000,000 worth of goods from Great Britain, representing 41 per cent, of our imports, as against 19 per cent, by Argentina, and 15 per cent, by Canada. The Minister said, “ These are impressive figures.” In view of these facts, could we not have obtained some further concessions without tying our hands in regard to our tariff policy for the next five years ?

In a recent speech, to which I listened with interest in Sydney, the Prime Minister (Mr. Lyons) said, “Australia has reduced no protective duty.” Yet here are the facts. The Ottawa Conference ended on the 20th August, and, on the 1st September, only twelve days later, the Assistant Minister for Trade and Customs (Mr. Perkins) tabled a new tariff schedule in this House making drastic reductions on 34 items. Was that an accident? Was it a mere coincidence, or was it the beginning of a policy for reducing tariff protection in accordance with decisions reached at Ottawa?

Mr Lyons:

– I said that there had been no reductions as the result of the Ottawa Conference.


– I repeat that it was only twelve days after the termination of the Ottawa Conference that the amending schedule was tabled. Of course, I know that the Prime Minister will say that the amending schedule was merely carrying out the Government’s policy, which would have been proceeded with if there had been no Ottawa Conference.

Mr Lyons:

– That is so.


– Then the members of the Government ought to speak with one voice on this matter. I propose to quote the statement of the Minister for Trade and Customs, the man who signed the Ottawa agreement. It is evident from what he said that still further reductions in the tariff are to be effected as a result of the Ottawa agreement. The Minister was enumerating the advantages which will accrue to Great Britain as a result of the agreement, and among other things he said -

There is a progressive benefit which will accrue as the Tariff Board proceeds with its work of revision, and there is a general return to a normal tariff level.

There will, of course, be progressive benefit to importers, but retrogression for Australian manufacturers. The Minister for Trade and Customs defined what he meant by a normal tariff by saying that it was the tariff which existed in 1929, before the changes were made in November of that year. The November alterations were made by the honorable member for Maribyrnong (Mr. Fenton) as Minister for Trade and Customs in the Scullin Government. Therefore, the Government’s idea of a normal tariff is, apparently, the tariff which existed under the BrucePage Government. ‘ All the increased duties imposed by the Labour Government to protect Australian industries are to be abolished. There is to be a return to the “normal tariff” under which Australia was flooded with imports. Under that so-called normal tariff our imports exceeded exports by so many millions of pounds that Australia was brought to the brink of bankruptcy. Yet the Government proposes to return to that tariff. The progressive revision of which the Minister spoke was to be “ by the grace of the independent Tariff Board “, that is, by the favour of the board. This body, the creature of Parliament, is to be gracious enough to favour us by revising the tariff back to the “ normal “ tariff of 1929. If the Tariff Board is to remain an independent body, how do members of the Government know that it will revise the tariff in a downward direction? Have they prescience ? Are they omniscient ?

Mr Hutchin:

– Look at the last general report of the Tariff Board.


– Even that report does not contain information which would justify the statement of the Minister for Trade and Customs. As a matter of fact, articles 9, 10 and 11 of the Ottawa agreement really constitute instructions to the Tariff Board. This so-called independent board has been given instructions per medium of an agreement signed by two Ministers of the Government, and that agreement is now before us for ratification. If it be not true that the board has received instructions, how could Australia’s delegates at Ottawa have given a guarantee to the British Government that there would be a return to a normal tariff - to that tariff which permitted an abnormal volume of imports into this country, and led to the building up of an adverse trade balance, and threatened the country with financial disaster?

The honorable member for Balaclava (Mr. White), in one of those cheap interjections in which he indulges so freely, asked “Why did the Liberal Ministers in Britain resign “ ? In reply, I ask him to read the statements of those conservative Ministers in Britain who support this agreement. Those statements are of more importance than the action of the Liberal Ministers who resigned. I might as well ask the honorable member why the honorable member for Maribyrnong resigned ; it would be just as irrelevant. British Ministers, and the press which supports them, give a different interpretation of the Ottawa agreement from that given to us by our Prime Minister, who stated that the Ottawa agreement would not result in reducing protective duties. Mr. Baldwin, who led the British delegation, in the course of a speech in the House of Commons, stated “I maintain that the Ottawa Conference lowered tariffs “, Mr. Runciman claimed that the Tariff Board would initiate a downward movement in the tariff. The London Times and the Daily Telegraph both stated that the Ottawa Conference would lower tariffs, and the Daily Express stated -

The agreement is a sure sign of the move towards the ideal of free trade within the Empire.

And yet we are told that the Ottawa Conference has not resulted in reducing tariffs ! I know that the doctrine of free- trade within the Empire has been promulgated freely in Britain, but I hope it is not a policy which will ever be adopted in Australia. It rests with this Parliament to safeguard Australian industries.

The Prime Minister also stated that the Australian delegates at Ottawa expressed in the agreement which they signed the policy which he had laid down in the clearest terms during the last federal elections. I ask honorable members to search that speech for the clear terms to which the Prime Minister has referred. This agreement is a gross betrayal of Australian industries. I quote from a newspaper report of an address delivered to the Tariff Reform League by Senator Sir Hal Colebatch on the 27th October -

The Federal Government had to violate its election pledges. It gave pledges to the Country party to do certain things and at the eleventh hour gave pledges to the Chambers of Manufactures in Melbourne and Sydney.

That was the “ clear “ policy that was put before the electors; and my authority is an honorable senator who supports the present Government.

Mr Archdale Parkhill:

– You can have him at any time.


– I invite the Prime Minister to quote any passage from his policy speech which indicated that Ministers would be prepared to sign a contract binding this Parliament for five years. Can he point’ to one sentence that warned the electors that the Tariff Board was to be instructed to revise the whole tariff schedule down to the level obtaining prior to the introduction of the Labour Government’s schedules? Did the Prime Minister announce to the electors that by direction from Ottawa the Australian Parliament was to become subservient to the Tariff Board?

But even if the right honorable gentleman’s claim be correct, even if the Ottawa agreement embodies everything he said or meant to say during the election campaign, even if he is able to reconcile the pledges given to the Chambers of Manufactures with those given to the Leader of the Country party (Dr. Earle Page), what justification or mandate had he to embody his policy in an agreement for five years? This Parliament has been elected for three years, and whatever mandate the Government may claim to have received at the last election can apply only to the life of this Parliament ; otherwise democracy is a sham.

Mr Nairn:

– The right honorable member’s Government made a sugar agreement for five years.


– And the present Government broke the agreement. That contract, however; was a domestic one between the Commonwealth and an Australian ‘State. It was in accordance with a mandate from our own people. It did not give away the fiscal rights of the Australian people to any external power or authority, and it did not tie the hands of this Parliament in regard to a matter of general policy. In the Ottawa agreement, the fiscal freedom of Australia has been signed away. I repeat that whatever justification or mandate the Government may claim, this agreement’ binds this Parliament and the next in regard to fundamental principles of fiscal policy. Acceptance of it would rob the people of their rights at the next election and would, in effect, disfranchise them in regard to vital principles of the protectionist policy. The present Parliamenthas, at the most, two years to run. At the next general election the people may return to power a government opposed to many features of this agreement, and in that event is the will of the people to be flouted? I say definitely on behalf of the Australian Labour Party that we shall not agree to that.

The Prime Minister said that talk of amending or ending the agreement was unpatriotic. Patriotism is a shield behind which many men have sheltered in many ages, and the first shot fired at me in this controversy was the declaration that I am not British. The most serious blow struck at the unity and goodwill of the British Commonwealth of Nations has been struck by this agreement; that is one reason why I regret it. The attempt to impose cast-iron conditions on the people of Australia or on any people inside the British Commonwealth of Nations will endanger the unity and goodwill now existing, and, I hope, will always exist. I do not preach sickly or sycophantic sentiment, but I strongly believe in preserving unity and goodwill within the British Commonwealth of Nations, for therein lies, not only the safety of our own country, but also the future hope of the world. If we can keep our community of British nations intact, we shall be better able to ask other countries to come together on a basis of goodwill ‘ and understanding. Because I strongly believe that the unity of the British Commonwealth of Nations will lead eventually to universal peace, I wish to see nothing done that will tend to impair that unity. The undertaking that existing protective duties shall be reduced low enough to admit British goods on a competitive basis with Australian-made goods, will « also impair the friendly relations between the nations. Unity and goodwill will be promoted, not by competitive trade but by complementary trade in the exchange of goods, we taking from the United Kingdom, instead of from foreign countries, a greater proportion of the goods we must import, and selling to it increased quantities of our primary products.

Mr Maxwell:

– Does the right honorable member believe that Australian industries should be protected from reasonable competition ?


– An Australian industry which has proved its capacity to supply local requirements of good quality at reasonable prices should have the whole of the Australian market.

Mr Archdale Parkhill:

– If it can do that it ‘needs no assistance.


– The suggestion that an Australian industry needs no protection against the products of cheap labour in other countries, even in the Empire, shows how little the honorable member understands this subject. I have been accused by one honorable member of having said in Australia that I would give the whole of the local market to our industries, although I had said something different on the other side of the world. I said abroad, and I say now, that in respect of some goods which Australia cannot produce, there is scope for British preference by purchasing less from foreign countries. I believe that when conditions return to normal, British exports to Australia can be increased by from £15,000,000 to £25,000,000 annually by a policy of preference in respect of those things which we cannot produce. Reciprocal preference will enable us to expand our primary production, and adopt more intensive cultivation in order to supply the United Kingdom, the biggest market in the world for raw products. In that way the trade between the United Kingdom and Australia can be built up without injury to either.

The Government insists that the Ottawa agreement gives effect to the policy it announced at the general election. There is no warrant for embodying a party policy in a contract with another nation for a period three years beyond the life of this Parliament. This is an intra-imperial treaty, and we are told that it is as binding as an international treaty. The Government claims as a worthy achievement that it has brought an intra-imperial treaty down to the basis of a party policy. Many changes of government have occurred in the history of this Parliament, but never previously has the fiscal policy of any party that had swung into power at an election been embodied in a treaty with another nation. If the Government insists that -this agreement for five years is based on a mandate it obtained at the last election, there can be no cause for complaint if, with a change of government, a’ variation of the agreement is insisted upon. Would it not be better at this stage to amend the agreement in order to make it acceptable to all sections of the Parliament, and avoid limiting the power of the succeeding parliament to give effect to the will of the people? If the present Government should be reelected at the next appeal to the people, it can extend the agreement for the term of the succeeding parliament. But this endeavour to bind two parliaments invites breach of the agreement.

At the imperial conferences in 1926, when Mr. Bruce was the Australian representative, and in 1930, when I represented the Commonwealth, effective work was done to harmonize the real selfdetermination of the dominions with the true unity of the British Commonwealth of Nations. Speaking on that aspect at the 1930 conference, I said -

We must strive to safeguard the unity of the whole, without sacrificing the individual liberty of the parts.

But the Ottawa agreement cuts right across that. At another stage, referring to the economic aspect, I said -

In competitive trade there are elements of friction and loss to some of the competing nations. Complementary trade, however, must be wholly good for those who engage therein.

In negotiating the trade treaty between Australia and Canada, particular care was taken by the governments of both dominions to avoid the slightest danger of friction. Preferences were given on specified non-competitive items. The same thing could have been done under this agreement. Special provision was made in the Canadian treaty for its amendment at any time, if it were found that the industries of either countries were being prejudicially affected by it. Further than that, the agreement was made for one year, and thereafter could be terminated by giving six months’ notice. That is a proper qualification of an agreement. It is elastic and gives freedom of action. It ensures friendly relations, because when we suggest that a country is tied, and that its people are bound by documents and parchments to another country, we sow the seeds of dissension, irritation and friction, and do grave injury to the unity and harmony existing between the Commonwealth of Nations. All the concessions, even if multiplied tenfold, will not compensate for the risk to which I have referred, and there is more than that risk in this agreement. I speak with some little experience, because I have sat at the table of an imperial conference. Although the views of the delegates are wide apart, yet there is an earnest desire on their part to maintain unity.

The motives underlying the policy of preferential trade should be the mutual advantages gained by British nations trading with each other and, by extending that trade, the keeping of a maximum amount of business within the family of nations. The ties of kinship, however, will not be strengthened by sordid bargaining or the making of binding agreements. But the Ottawa agreement creates irritation by insistence on competitive trade, and, by imposing vetoes on the important phases of political policy, it violates our self-governing rights. Under this agreement Australian industries are imperilled, because our fiscal freedom is pledged. This agreement may be ratified by this Parliament under the crack of the party whip, but it cannot last.

Prime Minister · Wilmot · UAP

– The speech delivered by the Minister for Trade and Customs (Mr. Gullett), when moving the second reading of this bill, covered the ground so well, and anticipated so completely the criticism of the Leader of the Opposition, that I do not intend to traverse the ground again, as I do not wish to weary honorable members and waste the time of the House. From the time when the delegation was in Ottawa, I have studied as carefully as I could the provisions of the agreement, and have endeavoured to ascertain at every stage whether they were such as I personally could accept. Now, having heard the speech of the Leader of the Opposition (Mr. Scullin), I feel that he has been unable to indicate a single weakness in the agreement, or anything which I would wish to strengthen. The right honorable gentleman has moved an amendment, the object of which is to destroy the agreement, because the carrying of the amendment would, of necessity, prevent the ratification of the -agreement “by this Parliament, and make entirely useless the ratification of it which will, I am sure, be given by the British Parliament. Therefore I am compelled to regard the amendment as hostile to -the agreement, and destructive of the benefits that have been won by the Australian delegation in conference with the representatives of the other parts of the Empire. The Government must resist that amendment in order that the agreement may be ratified.

The Leader of the’ Opposition spent most of the time at his disposal in condemning the Government for having entered into an agreement which, he says, will rob this Parliament of its sovereign rights, and the people of their right of self-government. He complains that it binds future Australian parliaments. Yet, what are the facts? This Parliament is free to accept or reject the agreement. We, as representatives of the people, were elected, not only to carry on the business of the country in accordance with general principles, and to impose a definite tariff policy, but also to negotiate an agreement such as this. When the Government announced its tariff policy to the people, it also announced its determination, as did the Country party, to negotiate and carry out an agreement with Great Britain and the other dominions to bring about Empire preferences. There was a general mandate given to this Government by the people in that regard. To-day, we are giving effect to it. In doing so, we are exercising the democratic and selfgoverning rights of the community. We have done nothing that the people have not authorized us to do. There was no doubt about the verdict of the people, and where they stood, and if a vote were taken to-morrow, a similar verdict would be given again.

Mr Beasley:

– That is questionable.


– The Leader of the Opposition referred to another agreement - the sugar agreement - for which he was responsible. The right honorable member defended it as riot having the restrictive effect that the Ottawa agreement has. Yet, what is the position? The ‘ right honorable gentleman, when Prime Minister, did not ask this Parliament to ratify the sugar agreement.

Mr Scullin:

– Nor did the BrucePage Government.


– I am not finding fault with that agreement, but I am discussing the principles involved in the making of it. The agreement was made without consulting the Parliament, although tying it absolutely and definitely. Yet to-day, the Leader of the Opposition is accusing me of breaking that agreement. I did not break it. I said that the agreement would be altered only if the parties to it agreed voluntarily to that action being taken.

Mr Forde:

– The Prime Minister held a gun at their heads.


– No gun was pointed at the heads of any one.

Mr Forde:

– The representatives of the growers say so.


– I gave the definite assurance to the representatives of the sugar industry when they were sitting in conference, that in no circumstances would I use my position to force an amendment of the sugar agreement. We were elected by the people to negotiate the Ottawa agreement, and we have done that with their approval and backing. Not only the previous Government, but other governments have entered into agreements behind the back of the Parliament, even though those agreements have tied the Parliament morally, if not legally.

The Leader of the Opposition, in his opening remarks, suggested that under this agreement goods would be dumped into Australia to the disadvantage of Australian industries. Let me point out that all the safeguards of the Industries Preservation Act remain as they were before the Ottawa agreement was entered into. The Leader of the Opposition is the last member in this chamber who should raise that question, because in the agreement entered into between Canada and Australia, the dumping provisions, as between those two countries, were specifically excluded. That agreement waived the protection given under the Industries Preservation Act. It was not suggested then that Australia would be swamped with goods.

Mr Scullin:

– The honorable member is misrepresenting the position. There is a proviso in the Canadian Treaty that, if any one of its provisions prejudicially affect an industry, it may be terminated in three months.


– There is no getting away from the fact that the Canadian agreement provided that while it remained in operation the dumping provisions of the Industries Preservation Act were not to apply. The Minister who introduced the bill which contained this provision said: -

It will be observed from Article 5 that both dominions agree not to apply the dumping provisions of their laws.

Mr Scullin:

– But the right honorable gentleman is ignoring the proviso.


– The fact is that the protection which the Australian Industries Preservation Act affords Australian industries against dumping remains the same as it was before the Ottawa agreement was made, and it will continue until the termination of the agreement. The Leader of the Opposition pointed to all the disadvantages of the agreement from his stand-point, but glossed over the many advantages that have been gained for the primary producers of Australia. The Minister for Trade and Customs (Mr. Gullett) in his speech dealt in detail with these advantages, so there is no need for me to do so. But to illustrate the value of them, I shall again draw the attention of honorable members to the preference that has been obtained for our primary producers through the restriction of the importation of foreign meat into the United Kingdom. The Leader of the Opposition airily brushed this aside; but although he made light of it, those directly interested in the Australian meat industry know that an increase of even Id. per lb. in the price of the meat which we export would mean that an additional £500,000 would be distributed among the Australian meat producers. Concessions of that description and magnitude cannot be lightly regarded, for they mean a great deal to Australia. It should be remembered also that we have been able to retain the degree of preference which Australian sugar and wines now enjoy. Last year, the preference on Australia sugar - and it will continue until the termination of this agreement - was worth £1,000,000 to the Australian sugar industry.

Mr Forde:

– But that was not obtained as a result of the Ottawa agreement; it was already in existence.


– I am pointing out that it has been retained. Does the Deputy Leader of the Opposition (Mr. Forde) object to concessions of that kind being honoured by succeeding parliaments? I am sure that he is only too happy to think that this concession will extend beyond the life of this Parliament. He cannot have it both ways. When honorable members are looking at the effect of this agreement on Australia they should also think of its effect on Great Britain. We have obtained new, and, in some cases, extended preferences’ in respect of Australian butter, meat, dried and fresh fruits, eggs, and other commodities, which will mean a great deal to our primary producers.

Mr Forde:

– Surely the right honorable gentleman does not seriously suggest that the agreement will result in an increase in the price of wheat?


– Advantages have been secured for the Australian producers of all the commodities I have mentioned. What was the aim of our delegates at the Ottawa Conference? The Minister for Trade and Customs pointed out clearly - and I think all honorable members, irrespective of their particular political views, are agreed on this point - that in order to restore some measure of their former prosperity to our primary producers it was necessary that the price of their commodities should be increased. Our delegation set itself the task of showing to the representatives of the other British dominions, and particularly of the United Kingdom, that’ production in Australia was at present unprofitable. They set out to demonstrate the necessity for some increase in commodity prices, knowing well that they were dealing with the representatives of the United Kingdom, which was by far and away the largest overseas consumer of Australian products. They felt that if they could clearly indicate the necessity for an increase in commodity prices the representatives of the United Kingdom would cheerfully co-operate in an effort to include in the agreement provisions which would meet the situation. For honorable members properly to estimate the value of the concessions given to our primary producers by the Imperial Government, it is necessary for them to hear in mind that tha United Kingdom takes 95 per cent, of all the wine, 90 per cent, of all the butter, 76 per cent, of all the wheat, and 75 per cent, of all the fruit that we export. The United Kingdom market is thus almost the whole overseas market for Australian products. Our delegation realized that if it could induce the representatives of the United Kingdom to assist in implementing a policy which would lead to a lifting of the prices of Australian products, it would do a wonderful service to the primary producers of this country. But the Leader of the Opposition made no reference to this aspect of the subject. He merely picked a few holes in the general scheme, and entirely overlooked the wonderful benefits which it conferred upon our producers. There was really no ground for the criticism which he offered.

The right honorable gentleman found fault with the provisions of the agreement which relate to future tariff schedules; but I do not think that he objected to the margins of preference as between Great Britain and foreign countries. I hope that there is no disagreement on that subject. The wonderful benefits which Australia will derive from this agreement were fully described by the Minister for Trade and Customs, and all the right honorable gentleman has done is to object to some of the conditions which affect these concessions. If this Government had been in the position of the previous Government, it could have given a definite undertaking that it would, by ministerial action, vary the tariff schedule in any way that was agreed upon; but we could not give such an undertaking, for we gave a definite pledge prior to the last election in relation to our tariff policy. We assured the manufacturers of Australia, for instance, that if we were returned to office there would be no drastic reductions of the tariff, even on the rates brought into operation by the previous Government, without adequate inquiry and investigation by the Tariff Board. Seeing that that promise was given to the manufacturers, there surely was nothing wrong in our pledging ourselves to do the same thing in respect of the primary producers. We were endeavouring to obtain some advantages for our producers, and we had to give Great Britain an assurance that the policy that was agreed upon at the Conference would be continued for a specified term. Having given the manufacturers of Australia an assurance that reductions in the tariff would be made only after calm, careful and judicial investigation, it was surely competent for us to give an assurance that increases would be agreed to only after a similar investigation. This assurance was given in the interests of the primary producers. The Government has not departed from its declared tariff policy. The only variation of the policy announced to the people of this country during the election campaign is contained in article 12 of the agreement, under which the Government agrees to accept as a maximum the duties recommended by the Tariff Board. But even there, the agreement is not unalterable. The relations between the representatives of the Commonwealth and those of the United Kingdom and the other dominions at the Ottawa Conference were such that I have no hesitation in saying that if for special reasons it appeared to be necessary to impose a higher rate of duty than that recommended by the Tariff Board the way is open for us to confer on the subject with any of the governments concerned. If good reasons could be advanced for a departure from the provisions of article 12, I have no doubt that an agreement could be reached. In this matter Great Britain would deal with any proposal that we made to her as we would deal with any proposal that she made to us.

It has been suggested by the Leader of the Opposition that Great Britain has given away nothing in regard to her general policy. But what are the facts? If the right honorable gentleman will turn to schedule D of the bill, he will find a list of articles in regard to which Great Britain has agreed to impose definite duties for the period of this agreement. These duties cannot be varied in any way without the consent of the Commonwealth Government.

Mr Scullin:

– The items are specified in that schedule, and therefore, that is not a departure from the general policy.


– With all respect, I suggest that that is a quibble. Great Britain has definitely bound herself not to vary the duties on these articles by even 1 per cent., without first obtaining the approval of the Commonwealth Government. The Government of the United Kingdom is, therefore, more completely tied by this agreement than is the Commonwealth Government, because a certain amount of latitude is allowed to us within the margins of preference, while no latitude is allowed in these items to the Government of the United Kingdom during the five-year terms of the agreement. This means that our primary producers will enjoy a sense of security which, apart from such an undertaking, would not obtain, but which is necessary for them, because they have to plan their production a year or two ahead. If the Imperial Government felt, after experience, that there should be a reduction of duty in any of these particular items, and it conferred with the Commonwealth Govern- ment on the subject, and made out a sound case in support of its view, I have no doubt that an agreement could be reached for an equitable variation. Similarly if the Commonwealth Government felt that there should be a variation in any of the duties which have been specified in respect of British goods above the maximum recommended by the Tariff Board, and it made out a good case, I have no doubt that a satisfactory variation of the agreement could be reached.

The right honorable member had a great deal to say about the Tariff Board but, after all, what does the Tariff Board do? It is required to investigate in the fullest detail the circumstances of our different industries, and to recommend a duty which will give the degree of protection necessary to maintain the industry. Does any honorable member wish for a higher duty than that? Surely we only desire duties sufficient to maintain our industries, and if such duties are recommended by a judicial tribunal, what more, in the name of goodness, could we desire? Even honorable members opposite will admit that the cases in which this Parliament would desire higher duties than those necessary for the maintenance of an industry are rare indeed. I see no danger to any Australian industry so long as the possibility of negotiation with the Imperial’ Government remains open with respect to those cases.

The Leader of the Opposition (Mr. Scullin) said that the Government is instructing the Tariff Board how it shall carry out its investigations. The Tariff Board has always taken all these matters into consideration when investigating the claims qf any industry. Does anybody suggest that the Government does not want efficiency in Australian industries; that it would not make it an essential qualification that’ a sheltered industry should be an efficient one?

Mr Beasley:

– “Who is going to determine it3 efficiency?


– The Tariff Board. The only danger of protecting something that is inefficient is in acting politically, purely from a party point of view, instead, of leaving the matter to the investigation of an independent tribunal.

Does any honorable member really want to see an Australian industry built up on a prohibitive, rather than a competitive, basis? Surely honorable members opposite do not want to have erected a protective wall that would establish monopolies, and enable industries to career along inefficiently and uneconomically, to the disadvantage of the community generally?

Mr Beasley:

– The right honorable gentleman supported the Scullin tariff when he was a member of that Government.


– I did. I now have the opportunity of ensuring that every item of the tariff that has not yet been investigated by an impartial body shall be examined by the Tariff Board, .so that Parliament and the country may be satisfied that those items are justifiable.

It is the stated policy of the Government that tariff-making shall be done through the medium of the Tariff Board. The Leader of the Opposition declares that this agreement is a party matter, in conformity with the Government’s tariff policy.

Mr Gregory:

– Why not get back at once to the Tariff Board’s recommendation?


– I do not think that anybody has ever seriously suggested that the Government should accept every recommendation of the Tariff Board. The recommendations of that body are considered by the Government. The only variation of that policy is in the direction that has been indicated, and it applies only to British products. I should like honorable members again to read the articles of this agreement. The Leader of the Opposition takes exception to articles 9 and 12. Article 9 reads -

His Majesty’s Government in the Commonwealth of Australia undertake that protection by tariffs shall be afforded only to those industries which are reasonably assured of .sound opportunities for success.

Does any honorable member wish anything other than that to be done? Article 10 is as follows : -

His Majesty’s Government in the Commonwealth of Australia undertake that during the currency of this agreement the tariff shall be based on the principle that protective duties shall not exceed such a level as will give United Kingdom producers-

The Leader of the Opposition omitted the following words from this article: - full opportunity of reasonable competition on the basis of the relative cost of economical and efficient production-

Honorable members opposite laugh. They know very well that at the present time the Tariff Board takes evidence in regard to the relative cost of economical and efficient production before recommending that any tariff shall be imposed. Article 10 continues - provided that in the application of such principle special consideration may be given to the case of industries not .fully established.

Again, special provision is made for the struggling new industries seeking to become established. None of these things are new, so far as the operation of the Tariff Board is concerned. Article 11 reads -

His Majesty’s Government in the Commonwealth of Australia undertake that a review shall be made its soon as practicable by the Australian Tariff Board of existing protective duties in accordance with the principles laid down in Article 10 hereof, and that after the receipt of the report and recommendation of the Tariff Board the Commonwealth Parliament shall be invited to vary, wherever necessary, the tariff on goods of United Kingdom origin in such manner as to give effect to such principles.

At one stage of his remarks the Leader of the Opposition said that I claimed that there had been no reduction of tariff as a result of the Ottawa Conference. I repeat that there has been no such reduction. Because an alteration was effected a few hours after the conference was completed, that must not be taken to be a result of those deliberations. Any reduction in our tariff has been a result of the investigation and recommendation of the Tariff Board. Even had there been no Ottawa Conference, those items would have been referred to the board, in conformity with the Government’s pledge to the people.

Mr Riley:

– Is the right honorable gentleman prepared to lay on the table all the communications that passed between the Government and the delegation with respect to reductions of duties?


– The honorable member and his colleagues know perfectly well that no government could do what he suggests. The agreement between the United

Kingdom and Australia has been clearly explained by the Minister for Trade and Customs. The only objections raised by the Leader of the Opposition are those to which I have referred. One was the alleged limitation that will, in future, be placed upon Parliament by the board. There is no justification for that insinuation. Another was that some injury will be done to Australian industries. So long as those industries are efficient and economical, they have nothing to fear from the Ottawa agreement.

Mr Forde:

– What did the bananagrowers tell the right honorable gentleman last night?


– At a time when we are dealing with a momentous problem, that has involved months of negotiation between the dominions and Great Britain, and we are endeavouring to view the matter in its true perspective, preserving the rights of Australia’s secondary industries, and at the same time advancing the interests of our primary producers, the nightmare of a banana obscures the honorable member’s vision ! I hope that he will widen his outlook.

Mr Forde:

– The deputation told the right honorable gentleman last night that the agreement was ruining their industry.


– Order !


– The honorable member knows that the few bananas that will come to Australia as a result of this agreement will not harm the Australian growers.


– That is not the view expressed by the growers themselves.


-The honorable member must cease interjecting. I shall not warn him again.


– I shall not, at this juncture, go into further details about the banana issue. I have received deputations both from banana and from pineapple growers, and I shall endeavour to do what is possible to see that the interests of those cencerned are not adversely affected. Practically all of the complaints regarding the banana and pineapple industries emanate from Queensland, which has received more benefit from the Ottawa agreement than all the other States put together.

I heard nothing from the Leader of the Opposition that shakes my confidence for a moment in the belief that this agree- ment will confer vast benefits upon the primary producers of Australia. In spite of what the right honorable gentleman says, I am confident that the agreement will bring us more closely into contact with Great Britain and our sister dominions, to the mutual advantage of all concerned. I feel sure that, in attaining the desired goal, no injury will be inflicted upon Australian secondary industries, and that lasting benefits will accrue to our primary industries.


.- While honorable members may have the good fortune to listen to the proceedings of many more parliaments, they will probably never take part in a more important debate than that which is now engaging our attention. To-day the House has heard the views advanced by the right honorable member for Yarra (Mr. Scullin), on behalf of the official Opposition, and the reply of the Prime Minister (Mr. Lyons). To realize the importance of the discussion, it is only necessary to recall that almost for the last twelve months the people of the British Commonwealth of Nations have thought and been taught nothing but Ottawa, and what will be achieved by that gathering. Many expected that something wonderful would emerge from Ottawa ; that it was a royal road to prosperity. Others realized that the goal can be reached only in slow stages. Therefore, we watched the proceedings at Ottawa with a new hope. I think we can claim that a great deal of good has already come out of the conference, and much more may be looked for. As the Prime Minister pointed out, it was a tremendous thing to have gathered together at Ottawa representatives of all the dominions and of Britain herself, all bent upon alleviating the troubles which confront the Empire, and on discovering permanent remedies for them. At that conference one could sense the same spirit as prevailed throughout the Empire during the years between 1914 and 1918, when we were fighting an even sterner battle than that in which we are engaged to-day. One cannot expect a great deal at once from the Ottawa Conference, but it appears to me that the foundations of a long-range policy have been laid, a policy which will result in drawing closer together the component parts of the Empire, and be productive of mutual benefit both to Great Britain and to the dominions. That plan is concerned chiefly with tariffs. We have to decide in this Parliament what our future policy is to be, whether we shall have a high prohibitive tariff, a high protective tariff, or a moderate and reasonable tariff which will do justice to every one, and permit of fair and healthy competition. The party to which I belong is sometimes twitted with wishing to wipe out all tariff protection, but that is not true. We desire a reasonable tariff, as we desire to be reasonable in all things. We have fought bitterly against high tariffs, because we realize that they have crushed the primary producers of this country under such a burden of costs that it will be difficult for them to recover.

All Australians agree that some form of protection is necessary, but it should not be framed so as to bear unjustly on any one section of the community. Our tariff policy in the past has undoubtedly borne with undue severity on the primary producers. The opening of this debate finds Australia at the cross-roads. The decision now to be made by Parliament, on behalf of the nation, will affect the happiness and prosperity of the country for years to come. I welcome the Ottawa agreement, and approve of the clauses embodied in it. The conference has shown us a way out of our difficulties. It is better for Australia that our tariff policy should be controlled by an independent body such as the Tariff Board than that it should be thrown every three years into the political melting pot, with the possibility of a complete change of policy should there be a change of government. It is all to the good that tariffs should be stabilized for at least five years so that people may realize the advantage of divorcing tariffs from party politics.

It would be impossible for me or for any other honorable member to discuss all the phases of the Ottawa agreement, and I propose, therefore, to address myself to the probable effect of the agreement on the wool-raising industry, of which I have particular knowledge. It is evident that the tariff policy of Australia has in the past been based largely upon that of the United States of America. We can trace the history and effects of high tariffs in that country over a period of 100 years. During that time the United States of America has become a great and powerful nation, but we now find that, having reached a certain stage, she has, by concentrating too much on industrial progress, placed herself in a position in which she is suffering more severely from the depression than any other country in the world. Only this morning I read in the press that one of every eight adults in that country is out of work. The terrible plight of the primary producers there should be a warning to us against pursuing a policy of high protection. In the United States of America the primary producers constitute 27 per cent. of the population, and yet, according to recent statistics, they receive only 7.5 per cent. of the national income. The tariff policy of the United States of America has been largely dictated by the manufacturing interests. Important manufacturing groups have solicited contributions to particular party funds in order to place in power a party pledged to impose high tariffs. I read recently that Mr. Wanamaker, the American millionaire, had asked his business associates to subscribe money in order to put a certain party into power, telling them that, if they were successful, they would be able to recoup themselves as the result from the profits made through the help of higher tariffs. We do not wish that sort of thing to occur in this country. I have no desire to be pessimistic, but unless we alter our tariff policy, I can. see no hope for the primary producers of Australia. So long ago as 1830, when the United States of America was just embarking upon its policy of high protection, there were observers who were able to read the signs of the times. Senator McDuffy, representing one of the Southern States, stated in the course of a speech in the Senate at Washington, that-

Owing to the federative character of our Government, the great geographical extent of our territory, and the diversity of the pursuits of our citizens in different parts of the union, it has so happened that two great interests have sprung up, standing directly opposed to each other.

The first of these interests embraces the manufacturers who cannot thrive in the face of European competition without protection and subsidies from the Government; the second is composed of the producers of the agricul tural staples in the south - staples that can find a market only in foreign countries and can be advantageously sold only in exchange for the foreign manufactures which come into competition with those of the northern and middle States. . . . These interests then stand diametrically and irreconcilably opposed to each other. The interest, the pecuniary interest, of the northern manufacturers is directly promoted by every increase of the taxes imposed on southern commerce: and it is unnecessary to add that the interests of the southern planter is promoted by every diminution of the taxes imposed on the production of his industry.

That applies very much to Australia’s position at the present time. It is evident that the same thing was in the mind of President Cleveland when, in the course of a presidential address, he said -

It is a condition which confronts us, not a theory. . . . The question of free trade is absolutely irrelevant and the persistent claim made in some quarters that all efforts to relieve the people from unjust and unnecessary taxation are schemes of free traders, is mischievous and far removed from any consideration of the public good. The simple and plain duty which we owe to the people is to reduce taxation to the necessary expenses of an operation of the government, and restore to the business of the country the money which we hold in the Treasury through the perversion of governmental powers.

Much of what he said is also true of Australia to-day. Despite these warnings, however, we, in Australia, appear to have adopted a policy modelled on that which has failed so dismally in the United States of America. It is pleasing, therefore, to observe that at the OttawaConference a definite halt was called to the mad fiscal policy which this country has pursued during the last few years. I do not desire to criticize any action taken by the last Government to meet an emergency. I give the right honorable member for Yarra (Mr. Scullin) credit for acting in what he believed to be the interests of the country, although, in my opinion, he did not adopt the best course.

Australia’s tariff policy has resulted in very high costs in this country. Our costs of production are higher than those of most other countries in the world, and they bear with particular severity upon certain sections of the community. Moreover, our tariff policy has tended to isolate Australia, to make her intolerant of the rest of the world, and to throw our industrial processes into chaos. No country can hope to be self-contained. I cannot imagine what would happen to a country if it did become self-contained; if it neither exported nor imported. In that event it must stagnate and die. “We must trade and exchange commodities, one country with another. Trade must be kept going backwards and forwards across national borders, with as little hindrance as possible. Day after day in this Parliament we hear honorable members asking what has happened to the world that trade is stagnant, and millions of workers are unemployed. I consider that half the economic troubles of the world are due to the tariff walls which the nations built up during the war and post-war periods.

Mr.Ward. - This agreement will make the walls higher.


– It will facilitate the ebb and flow of trade, and permit a greater exchange than would be possible if our tariff policy were framed only by men elected to this Parliament. It certainly will not hamper the trade in wool and wheat, which Australia must sell on the markets of the world.

Mr Holloway:

– If the honorable member’s argument regarding the effect of tariff walls is sound, this agreement is a mistake.


– Our past tariff policy has caused isolation and intolerance, and has made Australia unpopular with other nations. Its worst effect from the point of view of those I particularly represent has been the steady rise in the costs of primary production. In my first speech in this Parliament in 1926, I said that we were living in a fool’s paradise, because we were trusting to the ever-increasing returns from primary products, and only a fall in their values was needed to bring our whole financial and economic system toppling down. That fall has occurred, and as a result we sec the whole of Australia in financial chaos.

Mr Holloway:

-Not only Australia.


– Australia more than any other country would have been able to avoid much of the sorrow and suffering which has been experienced during the last two or three years if more consideration had been extended to her primary producers in the past. They had no chance when the value of their commodities dropped. They were crushed beneath the burden of costs which, to a large extent, had been built up by the fiscal policy. Professor Hancock in his interesting book, Australia, says of the Australian protectionist policy -

Protection in Australia has been more than a policy; it has been a faith and a dogma.

That is true. There was no possibility of reasoning with the advocates of high protection ; yet from the Tariff Board we have received warning year after year against the extremes to which the policy of protection was being carried. The first warning was given in 1925, and in its report to Parliament in 1926 the board said -

The custom of passing back andforth between the Federal Arbitration Court and the Tariff Board for increments in wages and duties, must produce an ever-increasing wage rate and an ever-increasing tariff.

In 1927 the Tariff Board practically published a treatise on the abuse of protection. It condemned the trade unionists who unceasingly sought increments at the expense of the primary producers, the manufacturers who made profits instead of increasing their efficiency, and also the farmers who dared to demand that they should participate in the benefits of protection. Those conclusions were corroborated by the findings of the Economic Committee, consisting of Professors Brigden, Copland and Giblin, and Messrs. Dyason and Wickens, which reported to the Bruce-Page Government in 1928. That committee pointed out that under the tariff policy adopted by Australia a burden of over 9 per cent. was placed on the primary producers, over and above their other costs. That was computed on the 1927 price levels, but on the basis of the present prices the burden is nearer 15 to 16 per cent. Surely this must impress upon honorable members the impossibility of primary production being continued unless the producers are given some relief from the tariff burden.

Mr Holloway:

– We must have a protective policy.


– I agree; but prohibition, or duties that prevent fair competition, will react to the disadvantage of the people who impose them. The prohibitionist emphasizes the importance of developing the home market, but whilst in respect of the lesser primary products the Australian market is sound, it is of little value to the two great primary products which are our principal exports. Of what value is the home market to the wool-grower or wheat-farmer? These producers have to face over and over again high costs of production which are not due to inefficiency on their part, and yet they must sell their products in the markets of the world. If the Ottawa agreement is implemented in the spirit in which it was conceived, the burden of costs on primary producers will be reduced by a reasonable and sound economic tariff policy. That will not be brought about immediately; but by a long-range policy, such as I hope this House will adopt, some relief may be given to the primary producers.

I admit frankly that I view this matter mainly from one angle. I know the desperate condition of the primary industries, particularly wool-growing with which I have been connected all my life. I have been impressed since my return to this Parliament by the reasonableness of most of the speeches to which I have listened, and by the serious thought which honorable members of all parties are giving to the problems of the nation, but I fear that many of them do not realize the dangers and worries of the primary producers. I assure them that unless some of the burden of costs is removed from this section as quickly as possible, they will be unable to continue their industry. I have here a list of itemized expenses taken from 485 financial returns supplied to the New South Wales, South Australian, Victorian, and Tasmanian Graziers Associations for 1931, and submitted in evidence to the Arbitration Court. They show that, including interest on borrowed capital, the cost of wool production was 12.8d. per lb., and the net return after deducting railage and brokers’ charges, was 7.4d. per lb.

Mr Ward:

– What guarantee has the honorable member of the accuracy of those figures?


– They were accepted by the president of the Arbitration

Court. I have also an interesting return from the electorate of Gwydir, which embraces some of the best pastoral country in New South Wales. The north-west plains were, until the present depression set in, one of the most prosperous grazing areas in New South Wales. I asked an accountant who prepares the income tax returns for many of the graziers in my electorate to compile for me a return treating all the stations in the north-wes of New South Wales as one, and lumping their costs and returns. The result was that on an area of 168,033 acres the average number of sheep carried was 139,377. Those figures show the high quality of the land. The wool produced totalled 1,241,756 lb.; the total cost of production was £52,459, and the proceeds of the sales, £41,169. Exclusive of interest on capital invested, the cost of production was lOd. per lb. and the return only about 8d.

Mr Maxwell:

– How are the graziers able to carry on under those conditions ?


– They have kept going mainly by mortgaging their future. They have given up almost everything. Their personal expenses have been reduced to a minimum; no longer can they entertain thoughts of travelling for health or recreation. Even in the hoi summer months their women folk do not employ domestic help. They are carrying on only by increasing their liabilities, by obtaining advances from banks and other financial institutions. . Even when this country shows some sign of prosperity, as the result of the efforts of those engaged in. primary production, they will have to continue to hear the burden of keeping Australia together for the past two or three years.

Mr Gregory:

– The position is much worse for the small wool and wheat growers. *


– That is so. The root cause of the evil of high cost of production has been our tariff policy of the past, and, if conditions do not improve, I cannot see how the country people will get out of their difficulty.

Mr Holloway:

– In what way will the Ottawa agreement assist them?


– By bringing about a reduction in production costs. What is keeping this country together is our exports of wool, wheat, meat and butter. We have no exports worth mentioning of secondary manufactures. Under the tariff policy of the past the primary producers were being crushed into the ground whence come the products on which their livelihood depends. Take, for instance, a large property in the electorate of New England, near Inverell. In 1928 the wages paid on account of that property including shearing, amounted to £5,061, interest to £1,800, wool return to £13,144, and farm produce return to £1,845. In 1929 wages, including shearing amounted to £4,376, interest to £2,020, wool return to £11,820, and farm produce return to £1,600. In 1930 prices commenced to fall, and wages, including shearing, amounted to £4,500, interest to £2,080, wool return to £7,343, and farm produce return to £2,000. In 1931, wages including shearing amounted to £3,381, interest to £2,480, wool return to £3,956, and farm produce return £1,684. In 1932 the position was slightly better. Wages, including shearing, amounted to £3,209, interest to £2,121, wool return to £4,809, and farm produce return to £1,542. Although there have been heavy decreases of wages and general income in respect of that property, the interest charge has remained practically the same. I make no wild statement as to whether the commitments of this country should or should not be met. What I am pointing out to honorable members is that if some relief is not given to the primary producer, if his burden of fixed commitments has still to be met despite his decreasing income, it will be impossible for him to carry on. No man in this country is anxious to shirk his obligations, but there is a limit to the obligations that a man can meet, and under existing conditions it is impossible for the man on the land to meet his commitments.

Mr Prowse:

– How many hours a day does he work?


– He expects a return, not for his long hours of labour, but for what he produces. The primary producers have, during the last two or three years, kept this country together, and, through the Ottawa agreement, we have now an opportunity to assist them. That agreement confers important concessions upon Australia, but they are not so wonderful as to place Australia immediately on the road to prosperity. The concession on meat is of importance. I wish to pay a tribute to the right honorable member for Flinders (Mr. Bruce), and the Minister for Trade and Customs (Mr. Gullett), for the manner in which they, and those associated with them, fought for concessions for Australia. Great Britain naturally expects something in return for those concessions. She is simply asking for reasonable competition for the goods that she exports to Australia. Surely no honorable member will cavil at that. Competition is good for a country, because it spells efficiency, and the lowering of the costs of production. If there were no competition in Australia, the position would indeed become serious, not only for the primary producers, but also for many people engaged in secondary industries.

Mr Holloway:

– One of the basic principles of the agreement is the elimination of competition.


– I do not agree with the honorable member. All that Great Britain is asking for is reasonable competition for her goods within Australia. Surely this Parliament, and the people generally, are prepared to agree to that request in view of the concessions given by that country to Australia, not only under the Ottawa agreement, but also over a period of many years. Every country, in order to live, must have trade. The honorable member for Melbourne Ports, and other honorable members who stand squarely behind the secondary industries of this country, are hoping for the day when Australia will export its manufactures as well as its primary products. That day should not be far distant, and I believe that through the Ottawa agreement, it can bc hastened. In that agreement I see the dawn of prosperity for this country, and of a better understanding between Australia and Great Britain. What I fear mostly is that this country, because of a misunderstanding, and not because of .a sinister motive, may adhere to an unreasonable fiscal policy, and thus put the primary producers into the position in which the farmers of the “United

States of America find themselves to-day. Those farmers are in desperate straits, and there is little hope of recovery for them. Recently, I read in an American publication, an article with huge headlines to the effect that one-quarter of a State had been sold to pay taxes. There, in one day, by order of the sheriff, 40,000 farms were auctioned in order to meet the taxes owing on them. Neither the Government nor the people of this country would allow our primary producers to get into a similar position.

I shall close my remarks by quoting the speech of one of the greatest Prime Ministers of Great Britain - I refer to Disraeli. It may be- of interest to honorable members to know that the first party which Disraeli formed in the British Parliament was a country party. Speaking in the House of Commons of the men engaged in rural industries in Great Britain as far back as 1849, he said -

You, the leading spirits on the benches I see before we, have openly declared your opinion that if there were not an acre of land cultivated in England, it would not be the worse for this country.. You have, all of you in open chorus, announced your object to be the monopoly of the commerce of the universe, and to make this country the workshop of the world.

Your system and theirs are exactly contrary. They invite union. They believe that national prosperity can only be produced by the prosperity of all classes. You prefer to remain in isolated splendour, mid solitary magnificence. But, believe me, I speak not as your enemy, when I say that it will be an exception to the principles which seem hitherto to have ruled society, if you can succeed in maintaining the success at which you aim without the possession of that permanence and stability which the territorial principle alone can afford.

Although you may for a moment flourish after their destruction - although your ports may be filled with shipping, your factories’ smoke on every plain, and your forges’ flame in every city - I see no reason why you should form an exception to that which the page of history has mournfully recorded; that you. too, should not fade like the Tyrian dye, and moulder like the Venetian palaces.

But united with the land you will obtain the best and surest foundation upon which to build your enduring welfare; you will find in that interest a counsellor in all your troubles in danger your undaunted champion, and in adversity your steady customer.

Those views can well be applied to our present position. I welcome the Ottawa agreement because running through ii is a spirit of co-operation and unity. By ratifying it, we shall give an opportunity to the country and city interests to wort together in an effort to overcome the difficulties which beset this community generally, and ultimately to make Aus tralia one of the brightest jewels in thecrown of the British Empire.


.- Like the honorable member for Gwydir (Mr. Abbott), I am proud in being privileged to take a humble part in this debate, which I regard as epoch-making. If we are fortunate enough to live for another quarter of a century, I believe that we shall look back on this time with considerable gratification, and see in the years which followed the ratification of this, the first effective imperial co-operative arrangement, a marked degree of development, not only in the cohesiveness of different parts of the Empire, but also in their general well-being. It is not so very long since the idea of effective imperial reciprocity was first put forward by Mr. Joseph Chamberlain, in a speech which he delivered at Gainsborough. It was in 1905 that he enunciated what he believed to be the main requisite for the future progress of the Empire. Mr. Chamberlain was a man of vision. He could see a long distance. Looking back over the previous half century, he saw that, whilst the industrial development of England had extended in the absence of serious competitors, and while England was still the workshop of the world, the day was coming, if it had not already dawned, when other nations would arise, follow England’s example, and, in a short space of time, become her serious competitors, with the result that the doors which had been open to British manufacturers would gradually close. The logical thing, then, was to open up avenues of trade which would sustain England in the hour of her need, when she was faced with the developing foreign competition. It was to the Empire that Mr. Chamberlain turned, for he realized the extent of the Empire’s resources, and its capacity to provide raw material, absorb surplus people, and export goods.

The next leading figure in the development of this general idea was the Honorable Alfred Deakin, to whom we all pay tribute as a far-sighted. able and patriotic Australian. At the Imperial conference of 1906, Mr. Deakin, with Sir William Lyne, endeavoured to make reciprocal fiscal arrangements with the Old Country as a free arrangement between free peoples. He put forward the proposition that, if the Old Country were willing to give tariff preferences to Australia, Australia on her part was prepared to give tariff preferences to Great Britain. No great progress was made at that conference, because the idea was still deeply rooted in the mind of the average Englishman that it was nothing short of a crime to attack what was called “ the free breakfast table.” The gentlemen then in charge of the government of Great Britain had not the vision of Mr. Joseph Chamberlain. It was not then apparent to them that tha gates opening to the markets which Great Britain enjoyed were being shut against her, and that it was wise for her to look for other avenues of trade, as, in the long run, she would be forced to do by outside competition and developing nationalism and national industrialism. Notwithstanding the failure of Mr. Deakin and Sir William Lyne to make such an arrangement at that conference, when they returned to Australia they submitted to the Commonwealth Parliament a tariff schedule which provided for a considerable measure of preference to Great Britain. As Sir William Lyne pointed out, preferences were granted averaging 22-J per cent, over a range of 251 items. I confess that I do not understand the method of calculation by which he arrived at that conclusion. But Australia, without receiving anything in the way of a fiscal quid pro quo, made a substantial preference grant to Great Britain. Of course, that proposal was attacked by the then freetrade leader, Sir George Reid, whose .ability in analysis could not be questioned. These are the words that he used on that occasion -

In looking at this scheme of preference, one must consider whether thu protection which is afforded to Australian industries is effective or not. If the protection which is afforded is effective, then the preference is a sham On the other hand, if the protection afforded is not sufficient to protect, then the protection is a sham.

From that statement one can take a line to article 10 of this proposed treaty. I take leave to differ from some speakers in this debate who have said that there is not a weak link in this proposal. I think I see one or two weak links that we would like to strengthen. But it is impossible for us to strengthen them. It is of no use for us to disregard the facts. “We must read English as it is written. In article 10, as the Leader of the Opposition has pointed out, it is provided that full opportunity of reasonable competition shall be given to the United Kingdom producers. There is no equivocation in that statement. “Full opportunity” is full opportunity - no more and no le3S. “Reasonable competition “ is a fairly plain statement. If full opportunity of reasonable competition “ is to be offered in this market, as it is under the provisions of this treaty, Australian manufacturers and British manufacturers will start off scratch together in the march to the customers in this market. Let me give an illustration of what I mean. Supposing that a butter churn could be landed in Australia by the British manufacturer, duty aside, for £8, including cost of production, freight, and insurance, and that, in the opinion of the Tariff Board - and that is the criterion by which we must judge - a similar churn could be efficiently manufactured in this country for £12, my interpretation of article 10 is that we undertake to provide, by way of protection, a duty of not more than £4 against the English machine. In that case, and I speak subject to correction, the British and the Australian manufacturers would start off scratch in their march to the customers of this country. This will give a serious jolt to many Australian secondary industries which are not in the first flight of efficiency. The question is whether it is right or wrong in the interests of this country to establish that position.

The previous speaker described the parlous condition of the primary producers of Australia. Every one who is not blind to the facts and has a proper sense of proportion, realizes the great importance in the economy of this country, of the men engaged in our landed industries. Anything that, can be done to alleviate their position, and to ensure the development of our land industries, should be done, even at the risk of jolting inefficient secondary industries. As to efficient secondary industries, they have nothing to fear from the provisions of article 10. If Australians are what they claim to be, they should stand up manfully against the competition of efficient British manufacturing industries, realizing all the time that, although the tariff will just bridge the gap so as to put British and Australian industries on an equal footing, they will still have closeness to this market, better ability and opportunity to study this market, and the sentiment of their fellow Australians in their favour. This should be enough for them.

The other big branch of the primary industries of Australia which has been hard hit during this depression is the mining industry, and particularly the base metal branch of it. But the manner in which it has come through the depression sets a brilliant example to Australian industry generally. Not only has no protection been provided for the mining industry, but it has been saddled with the additional costs arising from protection, just as have the people who follow landed pursuits. Yet during the last three years the big mining organizations of Australia have kept reasonably in line with the fall of from. 60 per cent, to ‘70 per cent, in the value of their products, in spite of the added costs to which they have been subjected. The journal of the Stock Exchange of Melbourne published some figures recently which arc typical of the mining industry of Australia. As an example, in the period from 1928 to 1932, the cost per ton of treating ore fell progressively in the following way: -

This result was achieved in spite of the added costs heaped on the industry by various legislative enactments. The reduction of 8s. per ton is about 20 per cent. That does not indicate the whole of the economy. Another table published in the same journal gives the value of the recoveries in the treatment processes. “We find that the assay value of the lead re- covered rose progressively from 65.6 per cent, in 1928 to 74.9 per cent, in 1932. This is a substantial metallurgical improvement. The silver return increased from 23.6 per cent, to 30.6 per cent, and the return from zinc rose correspondingly. The cutting of costs and the improvement in the recovery of minerals have been the only factors which have enabled our big mining industries to maintain operations as they have done, and to keep in employment thousands of men who would otherwise have been out of work. If article 10 of this treaty puts the hard word on the secondary industries of Australia - and there is no reason why the hard word should not be put on them in this way - it will be to our good. Those engaged in our secondary industries must learn that the time has gone when their industries can be wrapped in cotton wool. Australia is now a nation, and she must stand up to the world, and keep in step willi world improvements.

The first tariff preference afforded to Australia by Great Britain followed on the budget introduced into the House of Commons in 1919 by Mr. Austin Chamberlain. The preferences affected only a small range of commodities, namely, dried fruits, wines and sugar. It was not until 1932 that the National Government of the United Kingdom introduced the Imports Duty Act and extended these preferences. But this development came gradually, and was due, no doubt, to a realization of the changed conditions of the world. The Minister who introduced this bill told us that in 1929 the degree of British preference granted by Australia equalled 1!) per cent, over practically the whole range of the tariff.

There are many who say that because Great Britain’s reciprocity did not express itself in tariff preferences, Australia, by comparison, has done a magnificent job, and should not have been expected to do anything more at Ottawa than declare “ Wo have done you proud in the last 25 years. We want the moon,” and that they should have got it. Those who say that overlook the advantages of our association with Great Britain, from the point of view of kinship as well as of business. They forget that, first and foremost, we have relied upon the Old Country for our very security, and for the funds with which to develop this country. It would not have been possible to obtain those funds but for the Colonial Stock Act of 1900, which placed Australian stocks on the trustee list in Great Britain. We should also remember the Empire Marketing Board and the Merchandise Marks Act of 1926, which have helped dominion produce to establish its entity on .the British market and build up a clientele.

It was in 1897 that Canada made the first move towards extending preferences to Great Britain, and as time went on the trend of trade between those two countries was completely changed. In New Zealand, the first step was taken in 1903, and in South Africa in 1904. As I have already mentioned, Australia did not take her step until 1907. As the gates of Europe and the United States of America were gradually closing on Great Britain and ourselves, it became necessary for us to look more and more to one another for mutual help and development. This Ottawa agreement marks a big advance along a new road of Empire which I trust we ‘ shall continue to traverse until, in the end, it has led us to true prosperity.

The Leader of the Opposition (Mr. Scullin) deprecated the hard and fast conditions of the treaty. To an extent his criticism may be justified. But, after all, this is a very involved and difficult transaction, and it could not safely he expressed in a loose fashion. While too rigid an arrangement would breed ill will, it can be safely contended that undue looseness would lead to misunderstanding, and that, in turu, would breed ill will. In his secondreading speech the Minister for Trade and Customs (Mr. Gullett) defined the attitude of the Australian and British delegations as one of “ studied moderation “. I have no doubt that that was so, so far as circumstances permitted. But I repeat, this transaction is so involved and difficult that the representatives who met at Ottawa had to come down to a more or less hard business deal. As we read in the press, the concluding stages necessitated work day and night, in order that the agreement might be securely tied up. It is because of the strain of those long hours the Minister is not with us to-day, and I join with the Leader of the Opposition, as, I am sure, do all other honorable members, in expressing regret that the task proved so arduous. I wish him an early recovery.

Now for a short analysis of the articles embodied in the bill. Article 1 relates to concessions by the United- Kingdom for the continuation of free entry into that country of certain Australian goods. Article 2 concerns a new schedule of duties on foreign goods. Article 3 relates to a preference schedule, while article 4 promises the continuance of the general ad valorem duty of 10 per cent.” on certain specified foreign goods. That article is worthy of more than passing notice, because of its last, line, which intimates that, the duties “shall not be reduced except with the consent of His Majesty’s Government in the Commonwealth of Australia”. That is a pretty substantial concession for the Home Go1vernment to have made. Article 5 specifies that our grain and metals are to be offered on first sale in the United Kingdom at prices not exceeding the world price. That will probably be one of the most difficult things to determine. The danger that has been referred to, of depressing markets in other parts of the world and thus making the Australian exporter worse off than he otherwise might be, will not occur. The effect of this arrangement will he that Australian goods coming under this classification will be in a quota position on the British market and, therefore, be much more certain of finding a market. Article 6 deals with the regulation of meat imports into the United Kingdom. Upon that I do not propose to comment except to say that if all that is claimed for it materializes, it will prove a most valuable arrangement. Personally, I am not competent to follow it very far.

By and large the treaty constitutes an arrangement in restriction of trade. In that respect it is quite in the fashion, because such arrangements are in force all over the world. Economic nationalism has expressed itself in all countries, big and little, and the units of the British Commonwealth of Nations have been the last to come into line. Wo are really being forced by world events to do this. A state of economic siege exists, and it will continue for some time. One’s chief comfort is that, because of its material and human potentialities, our Empire should be able to stand the siege at least as long as any other country. If the breaking clown of trade barriers is to be a long drawn-out job, we should be able to see it through if we order things within the Empire in the maimer provided in this agreement. From article 8 onwards, there is mention of that which Australia has to do. There is to be a rearrangement of the tariff to provide preferences. Protection is to be given only to industries which have a reasonable chance of proving themselves efficient. Article 10 provides that “full opportunity of reasonable competition” is to be given in this market to the producers of the United Kingdom. I summed up that suggestion earlier in my remarks. Article 11 is consequential upon article 10. Article 12, to which the Leader of the Opposition took strong exception, also meets with my disapproval, and I am sorry that it is worded as it is. I should have preferred wording similar to that embodied in the Canadian treaty. Whereas wo are precluded from imposing a new protective duty or raising an existing duty to an amount iri excess of the recommendations of the Tariff Board, article 1& of the Canadian agreement provides -

That the Government in Canada undertake that no existing duties shall be increased on United Kingdom goods except after inquiry, and the receipt of a report from the Tariff Board, and in accordance with the facts as found by that body.

That is a much sounder arrangement. However, the following articles provide a safety valve. If circumstances arise in the future which show that the calculations made in these general provisions are wrong, negotiations may be entered into to put them right. I have no doubt that the development of events will disclose that continuous consultation and modification of detail will be necessary. If that happens, the Ottawa agreement will bc but the beginning of an elastic system which will conserve the interest of the community, and foster the common sympathy which should exist between the component pa.rt3 of the British Common- wealth of Nations. According to article

I’d, United Kingdom producers are to be given full rights of audience before the Tariff Board. That is an eminently fair proposition. But it is difficult to understand how the Tariff Board will be able to keep tab on the costs in industries in Great Britain. Costs do not “ stay put,” as I have shown in connexion with the mining industry, the costs of which have been progressively reduced; principally as the results of technical efficiency and new inventions. Costs are also largely affected by turnover and market conditions, and it will be extremely difficult for the Tariff Board, located in Australia, ‘ to keep sufficiently close survey of costs relating to manufacturing plants in Great Britain to enable it to adjust duties to a nicety, as is contemplated in this agreement.

I am not an extraordinarily high, nor an extraordinarily low, tariffist. I believe that we should attempt this scheme of reciprocity. In doing so, we shall need to watch closely the working of it. One of the severest and quickest reactions will be in our own fields of employment. If we smash those fields because of imperfections in the agreement, the repercussions will be sufficient to cause it to go by the board. That I am anxious to avoid. I should like to see the agreement developed, and to that end, I am largely in agreement with the honorable member for Corio (Mr. Casey) who suggested the establishment of a watchdog body of economic ability, cither a component part of, or in liaison with the Tariff Board. That body has to do a close-up job on industry after industry, and it is difficult for it to maintain in proper perspective the wide field of Australian activities, and the economic effects of the protective policy as applied to them.

I do not seek the high tariffs that have been asked for by certain honorable members. We have heard it said, apropos of the removal of some high tariff duties, that the Government is destroying fields of employment. I have been at some little trouble to find out what has been the effect of those high duties upon the fields of employment. There are before me some official figures showing the expansion that has taken place in the Victorian industries under the new high duties which, it was claimed, would provide employment for a large number of persons. That information is incorporated in the following table and is illuminating : -

In addition to the above, some overseas firms have extended branches to Victoria, and have absorbed a considerable number of employees in the following established industries : -


– Why not be fair, and mention one concern which employs 250 persons in the manufacture of wireless sets?


– The information I have quoted is contained in a report furnished to me at my request by the Department of Labour in Victoria. I asked the department to supply me with a list showing the new factories which had been opened, and the number of males, females and juveniles employed.

Mr Forde:

– For what period ?


– For the year 1931-32. The industries I have mentioned, and the volume of employment provided by them, constitute a sufficient answer to the claims ofthose who say that the high tariffs imposed under the Scullin regime resulted in providing work for a very large number of breadwinners.

I regard the treaty as a tonic pill. It contains some jam to make it sweet for the primary producers, but it may cause pain in the interior economy of some of the less efficient secondary industries.

Mr Cameron:

– They will get over it.


– No doubt they will do so in time, and then their last condition will be better than their first. This is an attempt to give effect to the principles of reciprocity and co-operation, and I am in favour of it. Our high tariffs have resulted in unbalanced development, and the crowding together of large industrial establishments in excess of the country’s requirements. I could point out to honorable members industry after industry capable of producing twice or three times as much as Australia can consume under normal conditions. There is no chance of those industries ever getting back to a condition of real prosperity, whether tariffs bc high or low. Our policy has resulted in forcing up costs, through the aggregation of industries, which leads in turn to the inflation of values. High property values have been responsible for high costs and high prices. I welcome the change which has been promised as a result of the Ottawa Conference. If we are not yet round the corner, we are beginning to turn it, and to get on to a road which promises to lead us to a better destination than that towards which we have been tending for the last generation.

West Sydney

– The last two speakers spent much of their time traversing the history of tariffs in this country. Their contributions to the debate were, interesting, and may read very well ; but we are not concerned now with what has happened in the past. Present conditions are unprecedented, and we can learn from the past little that will be of help to us in improving them. The honorable member for Gwydir (Mr. Abbott) made it appear that most of the troubles of the primary producers are to -be attributed to the tariff. During the earlier portion of his speech he dwelt much on this phase of the subject, but towards the end, when giving an itemized account of the costs borne by primary producers, he revealed that one of the largest items in those costs is the enormous burden of interest. He did not, however, dwell on that matter, but, was disposed to glide away from it, and to concentrate on the more familiar subject of the tariff. That appears, indeed, to be the general attitude of members of the Country party when discussing the position of the primary producers. When secondary industries are being benefited, they inveigh forcibly against the policy of protection, but with regard to proposals for assisting primary industries by way of bounties they adopt an altogether different line of argument.

Mr Scullin:

– Protection to the extent of 1,000 per cent, would then not be too much.


– That is so. The sky is their limit. The honorable member for Gwydir supported a government which was in power during the most prosperous years of Australia’s history, and he was for some time a Minister in that government.

The tariff was increased at intervals during the life of that government, to meet the requirements of Australian industry, and these increases must have been acceptable to the honorable member and to his party, because he and they continued to support the Government. Moreover, he admitted this afternoon that the action taken by the Scullin Government to meet the position caused by our heavy adverse trade balance was justified. As a matter of fact, that position had arisen because of the policy pursued by the Government which he supported, and in which he was for a time a Minister.

Listening to the speech of the Prime Minister (Mr. Lyons) one might imagine that the Ottawa agreement found general favour throughout Australia, and that > every one agreed with him that the muchtalked of prosperity had indeed arrived at last. Yet we know that the Ottawa agreement has already led to one resignation from the Government. Evidently the honorable member for Maribyrnong (Mr. Fenton) had the courage of his convictions. He believed that the agreement was not in the best interests of Australia. Perhaps there are others supporting the Government who, had they as much courage, would also have handed in their resignations.


– The honorable member for Moreton (Mr. Francis) is, I understand, thinking of resigning.


– The honorable member for Moreton spent much time in the preparation of a lengthy statement setting out why he had chosen to remain in the Ministry; “but his own constituents will, when the time comes, be the best judges of his action. The honorable member for Denison (Mr. Hutchin) gave a somewhat left-handed support to the agreement. Hari he expressed himself i-s he really felt, he would no doubt have condemned the. agreement as heartily as any one of us on this side of the chamber.

Mr Forde:

– His style was cramped.


– Yes. He feels, no doubt, that he must support the Government, live or dic. But, believing in his heart that the agreement will fail, he hopes to be able, when that happens, to tell his constituents that, after all, he was not enthusiastic about it from the first.

Opposition to the agreement is widespread outside Parliament. ‘The president of the New South Wales Chamber of Manufactures, after the Minister for Trade and Customs had delivered his speech on the second reading of the bill now under consideration, telegraphed to the Prime Minister expressing his definite opposition to t lie terms of the agreement. He said that it would, if enforced, sound

I he death-knell of many of Australia’s secondary industries. Then, various sections of primary industries which will be affected by the agreement have entered organized protests- Mass meetings have been held, and resolutions condemning flic agreement have been passed and forwarded to the Government.

As a matter of fact, the real adverse effect of the agreement is not yet understood in Australia. The speech of the Minister for Trade and Customs was remarkable, not for what it contained, but for what was left out of it. Hardly anything was said on the subject of currency, the most important question of all, although the matter was dealt with by a special committee at the conference. All we have learned regarding it is contained in a bald resolution published at the conclusion of the conference. The people have been on tip-toes awaiting information as to the real effect of the agreement, but that information has been withheld from them. The attitude of the Country party is, in some respects, extraordinary. Instead of the leader of that party expressing his views about the agreement, we have listened to a speech from the back bench. There does not seem to be any enthusiasm for the agreement, even among mem hers of the Country party, despite the fact that the proposals are alleged to benefit the primary producers.

Mr Forde:

– Nobody is enthusiastic about it.


– I am sure that that is so. Every one seems to be sitting on the fence, hoping that when the collapse comes lie will be able to justify himself by falling to one side or- the other. The latest addition to the ranks of straight-out opponents of the agreement is the Bank of New South Wales, which one might suppose to be in sympathy willi the Tory interests of the country.

In a statement issued on the 2nd November, the directors of the bank make it clear that they are not satisfied with the agreement. It is evident, therefore, that the agreement has failed to win approval in the eyes of practically all sections of the public.

The delegates who went to Ottawa on behalf of Australia were charged with the task, first, of obtaining a greater degree of preference on the British market for Australian primary products, and, secondly, with jealously safeguarding the interests of the expanding secondary industries of the Commonwealth, which are to furnish employment for those now in distress for lack of it. That may be regarded as the basis of the Australian case at Ottawa. The speeches of our delegates indicate that they were inclined to disregard the secondary industries in order to gain a measure of preference for the primary producers; but it is apparent that the spokesmen of the primary producers are not very enthusiastic about what Was supposed to have been accomplished on their behalf. The relationship of price levels to international and intra-Empire debts is inextricably bound up with the question of Empire preferences. Supporters of the Government have spoken a good deal of the need for raising price levels. They contend, and we agree, that it is impossible for the primary producers to continue their industry if their products have to be sold on the markets of the world at prices below the cost of production. To solve that problem, the raising of price levels is proposed, but bow that is to be done has not been clearly shown by the advocates of this policy. One cannot ignore the fact, that even in the United Kingdom, where there is a huge army of unemployed, the purchasing power of the people, whom we regard as the potential consumers of our products, has reached a very low level. In those circumstances, I cannot sec any possibility of the prices and markets for our exportable products being increased. One gathers that early in tlie discussions at Ottawa, the consideration of price levels in relation to international or intra-Empire debts was set aside by the British delegates, whose aim was rather to secure markets for certain of the products of their manufacturers, irrespective of the economic consequences to the dominions. In the final analysis, they wanted to be able to use the decisions at Ottawa as a lever in the bargaining at the International Economic Conference which is to follow. I am convinced that the British delegates, while realizing to some extent the value of the dominions, particularly as markets for British secondary products, were more concerned about extending their foreign markets. This consideration rather overshadowed what was ostensibly the main purpose of the conference, namely, to promote trade within the Empire, and assist the primary producers of the dominions to get a greater share in the markets of the United Kingdom. The Ottawa Conference was, in fact, merely a preliminary or a stepping stone to the world economic conference.

Australia has to pay its overseas’ debt with goods, and the low prices obtaining foi- our primary products makes this liability press more heavily upon us. I understand that to-day, two and a half units are required to pay for a debt contracted on the basis of one unit; in other words, we have to export two and a half times as much wheat or wool as formerly to meet our overseas obligations. If the conference had resolved to equalize debts and price levels, either by increasing prices or reducing our interest commitments, Australia would have been helped considerably, but the primary producers have been left in the same position as before, to (he continued advantage of the British bondholders. Therefore, the decisions at Ottawa have not relieved Australia’s economic position at all.

I have said that, throughout the discussions, the British delegates at Ottawa had their eyes on the International Economic Conference, in support of that, I quote Sir John Simon, Secretary for Foreign Affairs -

As the result of Iiic agreements, Britain now has mi opportunity such as she has never hari before nf making bargains with other countries. flc added that since the return of the delegates from Ottawa, the Foreign Office had been besieged by foreign representatives, desirous of negotiating trade treaties.

Sir John Simon vigorously denied that the agreement precluded Britain from bargaining successfully with foreign countries.

A statement of particular interest to the Commonwealth, as demonstrating the .mothering effect upon Australian industries nf article 10 of the agreement, was the Minister’s insistence that Australia had expressed its willingness to reduce tariffs to such a level as to enable British manufacturers to cf minute in Australia.

It is clear that the Commonwealth Government has determined to reduce the tariff. There should be no further quibling in this regard. Speaking at the dinner of the Chamber of Manufactures in Sydney recently, the Prime Minister (Mr. Lyons) said -

The manufacturers of Australia and the party which 1 now lead have always been the closest and friendliest of allies. To day, I hear criticism that this Government is not to be trusted in the matter of protection. 1 say it is impossible for the Ottawa agreement to prejudice either manufacturers or their employees. Secondary industries were not sacrificed at Ottawa, in order to obtain benefit* for primary industries.

The issue of the Sydney Morning Herald in which that speech was reported contained also the following stinging comment : - ls it fair to the Australian public that Ministers here should remain silent upon this point, when the Resident Minister in London states that the new tariff is to be “ followed by a gradual adaptation of Australian tariff policy to the principles agreed upon nl Ottawa”? We are pressing there quest ions not to embarrass the Government, but for the sake of fair dealing. We protest against the pretence that the tariff of last week i> the Ottawa treaty tariff, and that Parliament should be asked to debate and vote upon either the tariff or the treaty bill in any such pretence. The Prime Minister might have declared boldly last night, instead of hinting in veiled language, that the preferences intended to be granted to Britain are, by design, to await an improvement of prices of Australian exports in the new and advantageous market provided in Britain. Why does Mr. Lyons lack the courage to toll Australian manufacturers straightly that they have a breathing space in which to equip themselves for the coming “competitive tariff,” and appeal to them in the name of efficiency to take advantage of that breathing space? This must be the truth, for. if not, then the Ottawa treaty will become an empty sham.

Mr Archdale Parkhill:

– The Prime Minister was clear enough this afternoon.


– The journal which has taken the Prime Minister !o task in this fashion is a supporter of the Government.

Mr Archdale Parkhill:

– Why not accept the Prime Minister’s declaration of policy to-day?


– The Sydney Morning Herald said that there is too much backing and filling.

Mr Archdale Parkhill:

– There was no backing and filling this afternoon.


– There has been constant backing and filling, and that explains the distrust that is manifest throughout Australia, despite the assurances of Ministers. If a conservative journal like the Sydney Morning Herald is not satisfied, and speaks of the agreement as an “empty sham” if it does not mean more than the Prime Minister has admitted, we, who are opposed to the Government’s policy, are justified in saying that the proposals put before us in consequence of the decisions at Ottawa are lacking in the political honesty and candour which the people are entitled to expect. If the Ottawa agreement is designed to do what the Sydney Morning Herald says is intended, the Government should be frank, and allow the manufacturers and their employees to know what they have to face. I am not particularly concerned for the manufacturer? as such - I certainly am not indebted to them politically - but they do control large industries. which provide employment for our people. Their plants produce goods which we need, and because I believe in the capacity of the Australian workers and those who direct them to produce most, of the requirements of our people, I advocate the protection of the secondary industries. For the sake of square dealing, it is time that a responsible member of the Government declared definitely the policy which the Government has adopted. Certainly the Resident Minister in Loudon is making declarations on the subject, but he is many thousands of miles away, and it would appear that in Australia an endeavour is being made to hide the real intention of the Ottawa agreement, so far as it affects our secondary industries.

In regard to the international economic conference, I am convinced that when the inevitable struggle occurs between the representatives of the various nations, the United Kingdom will be so concerned with its own troubles as to worry very little about Australia. That the difficulties in Great Britain are becoming greater daily is obvious to any intelligent observer; we have to face that fact, and mould our policy accordingly. I fear that in the clash of world interests Australia will not figure very largely. The honorable member for Gwydir (Mr. Abbott) spoke of the need for the United Kingdom to reshape its industrial and economic policy to meet the altered conditions in industry, and to appreciate the fact that, because of industrial developments in other countries, Great Britain is no longer the workshop of the world. Ail these factors will no doubt be considered by Great Britain at that conference, and when the real struggle takes place we shall be but a negligible quantity. If Great Britain intends to use the Ottawa agreement for bargaining purposes at the forthcoming World Economic Conference, it achieved at the Ottawa Conference a triumph of diplomacy. I have heard other speakers, when comparing the advantages conferred under the agreement, refer to Great Britain’s part in framing it as a master stroke of diplomacy. Great Britain, under that agreement, is not tied to the extent that Australia is. As a matter of fact, the honorable member for Denison (Mr. Hutchin) has admitted that Canada is in a better position than Australia. The honorable member read only portion of article 13 of the Canadian agreement, which deals with the tariff. That article also states -

Anil that after the receipt of the report of the Tariff Board thereon, such report shall lie laid before Parliament and Parliament shall be invited to vary, wherever necessary, the tariff on such commodities of United Kingdom origin in such mar. ner as to give effect to such principles.

Canada, unlike Australia, is not prepared to relinquish its self-governing rights. It has said in effect that it will not allow the Tariff Board or any other similar body, to have the final decision in respect of the tariff on British commodities. The Canadian delegation at the conference was apparently more wide awake than the Austraiian delegation to the motives of Great Britain.

What appears on the face of the agreement to be concessions to Australia are really not concessions at “all. That part of the agreement which relates to meat is interesting because the Government has claimed that the concession on that commodity is one of the great advantages won by Australia at Ottawa. The Honorable William Angliss, of Melbourne, who is connected with the meat exporting trade, has stated that the concession on meat will be of wonderful benefit to this country. Mr. Angliss, who conducts a large slaughtering business in Melbourne, and has a number of cattle stations, is probably our largest exporter of meat. He has, therefore, an absolute grip of the whole of the meat export trade. I do not know whether the export quota will be fixed by the Government or by those engaged in the industry, but if it is left in the hands of those engaged in the meat industry, then Mr. Angliss will benefit at the expense of the small grazier. He will decide what meat is to be exported, and if his cattle are in the yards they will be the first to form the quota. It is very evident that Mr. Angliss will bc in a ma’s tor position to obtain benefits - if there are any benefits - under the agreement. I am, therefore, not prepared to take his word as to the benefits that are likely to accrue to Australia as a result of the concession regarding meat. Prior to the Ottawa Conference, a good deal of propaganda was indulged in by Lord Vestey in respect of the meat interests in the Argentine. We have been informed that about £500,000,000 of British capital is invested in that country. Lord Vestey was supposed to have said that he was not prepared to allow the Argentine to bc sacrificed at Ottawa for a bit of Empire sentiment. He has a big say, not only in the politics of Great Britain, but also in the economic life of that country. We cannot hide from ourselves the fact that the capitalists not only direct industry, but also exert, a great influence in politics, and in this way Lord Vestey was able to play an important part in connexion with the Ottawa Conference. He would not be likely to agree to any proposal that would sacrifice his interests in the Argentine, and that assumption seems to be borne out by the fact that since our delegates have returned a report has been published in the press to the effect that Major Elliott, speaking at the conservative conference in Great Britain recently, said -

Hie schedule agreed upon at Ottawa regarding meat imports into the United Kingdom would probably be made permanent instead of ibc eighteen months’ duration, as originally agreed upon.

That is a contradiction of the statement of the Minister that after 1933 no restriction on the dominions’ meat experts to Great Britain was contemplated. Major Elliott apparently has some knowledge of British politics, because he made his statement before conservative members, who constitute probably the greatest political force in Great Britain to-day. When our delegates left Ottawa it. was understood that the quota system would operate for only eighteen months. According to Major Elliott, the system is likely to be permanent. The indication is that, although a certain agreement, was readied at the Ottawa Conference, Lord Vestey will make every effort to safeguard his interests in the Argentine. It, therefore, appears to rue that Australia will derive from the Ottawa agreement little or no advantage in respect of ment.

The concession on wheat is, of course, of importance to the members of the Country party, who have recently been advocating a bounty on wheat for the relief of the farmers of this country. From what I can gather, the position of the primary producers is anything but satisfactory. Most of them are finding it difficult to make ends meet. The Ottawa agreement provides for a preference of 3d. a bushel on the Liverpool market based on world’s parity. This concession, far from being of advantage to the wheat producers, is likely to be detrimental to them.

Sitting suspended from 6.15 io 8 p.m..


– It appears to me that the Ottawa agreement will make the lot of the wheat-grower even worse than it is at present. The “ bearing “ of the market by the Argentine and Russian interests will certainly have its effect, if not at Liverpool, certainly at other important centres in Europe, and so the world’s parity price will suffer, and the wheat-growers will also suffer. I can quite understand why the members of the Country party are not enthusiastic about this aspect of the agreement. The position of the wheat market is a matter of considerable importance to Australia at the moment. A paragraph which appeared in the Sydney Sun last Thursday read as follows: -

During tlie coming winter much grain in North America, will probably be used in the farm-house furnaces. Weight for weight, wheat is quoted in some places below the cost of sawdust. ‘

The outlook for the wheat-growers is, therefore, gloomy.

In spite of all that has been said by Government supporters, it can safely be argued that the Ottawa agreement will not do anything effective to bridge the difference between the cost of production and the selling price of our products. As there can be no expectation of the agreement having a beneficial effect on external markets, the primary producers must consider how it will influence the home market. It is quite obvious now that our tariff policy will be seriously affected by this agreement, and this will in its turn result in additional unemployment in Australia. The position, bad as it is now, will undoubtedly become worse, and the purchasing power of our people will fall to a still lower depth. It is apparent, therefore, that the primary producers cannot expect this agreement to improve the home market in any way. The wheatgrower, the fruit-grower, the dairy farmer and the mixed farmer may obtain slight advantages from certain provisions of the agreement, but these will be more than outweighed by the serious effects which certain other provisions of it will have in still further reducing the amount of employment available in Australia, and so crippling the home market.

Articles 10, 11, and 12 will most certainly impair the self-governing powers of Australia, and so are repugnant to every sense of justice and equity. Our obligation is primarily to serve the interests of our own people. The state of affairs throughout the world to-day is such that governments in every country are being forced, irrespective of considerations of sentiment, to adopt measures to protect the interests of their own people, and that is what we had a fight to expect this Government to do. Consequently, if we feel that the guiding principles of this agreement are adverse to the best interests of our people, and will abridge our rights of selfgovern.ment We have every justification for opposing the measure.

I am of the opinion that the Ottawa agreement is also antagonistic to the Balfour declaration of Empire equality, because it is designed to make the Australian people merely hewers of wood and drawers of water for the British captains of industry. A good deal” has already been said in this debate about article 12, and much more will be said about it before the debate concludes. It cannot be too frequently stressed that this article seriously affects the power of this Parliament to protect the industries of Australia. There cannot be a shadow of doubt that the article implies the scuttling of Australian secondary industries. It is proposed that the Tariff Board shall be equipped” with greater power than this Parliament has. It is required of us, in my opinion, to jealously safeguard our power and to rigorously resist any intrusion into our sphere of government. If the agreement is approved, unemployment will undoubtedly increase, and Parliament will be unable to do anything to safeguard or stimulate our secondary industries. Stripped of all humbug, this agreement means that for five years the Parliament of Australia will be powerless in do anything effectively for the protection of Australian industries. We question, not only the right of the Government to make such an agreement as this, but also the constitutionality of its action. For the reasons that I have given, the party which I have the honour to lead will support the amendment of the Leader of the Opposition (Mr. Scullin). “We believe that it is the duty of this Parliament to protect Australian industries, and to do everything possible to make this country self-contained. We shall support the amendment, and if the bill is passed, as is probable, 1 make it clear not only to our own people, but also to the people overseas, that immediately an opportunity presents itself to terminate the agreement, we shall accept it. We do not feel ourselves bound by the agreement in any shape or form. We believe that it cuts across our rights as a selfgoverning dominion, and we shall associate ourselves with any’ party which takes effective action to free our people from the shackles imposed upon them by this agreement, and to restore selfgovernment in Australia.


.- Honorable members know and appreciate the remarkable ability of the Leader of the Opposition (Mr. Scullin) in debate. I, for one, listened with the greatest attention this afternoon to his speech on this bill. That he advanced such a weak case in opposition to it is a measure of the strength of the Ottawa agreement. The right honorable gentleman ignored entirely the obvious advantages of this treaty to the primary producers of Australia, and did not attempt to present a balanced argument to the House. We have the right to expect from one of his experience and ability a considered, even if a hostile, attitude on a subject of such great national importance as the Ottawa agreement. The right honorable gentleman contended, among other things, that, if the agreement were ratified, the hands of future Australian Governments would be tied. To use his own words, “ if we ratify this agreement, we barter away our fiscal freedom “. I suggest that this is merely a phrase and nothing more, although the right honorable gentleman made great play with it. In my opinion, it is well that at last some real check has been imposed on the fiscal excesses of recent years, which were rapidly bringing city and country into open hos- tility. As an alternative to the agreement the Leader of the Opposition suggested that a loose arrangement might be made which could be altered from parliament to parliament. Such an arrangement could not be so farreaching in effect as the present agreement, which, in my opinion, represents a most promising basis for economic reciprocity. The right honorable gentleman also objected that British producers were to be given full opportunity for reasonable competition in our markets. The basis of such competition is to bc fixed in accordance with the recommendations of the Tariff Board. For the first time the Tariff Board is to be given a reasonable chance to do the work it was established to do. The Leader of the Opposition suggested that one of the principal functions of the Tariff Board was to protect -the Australian consumer. I make bold to ask to what degree did the Scullin Government allow the board to do anything to protect the Australian consumer? That one of the functions of the board should be to protect the Australian consumer has always been the opinion of this party; but the contempt to which the recommendations of the board were subjected by the Scullin Government does not bear out the right honorable gentleman’s assertion that the function of the Tariff Board is to protect our consumers. The right honorable member told us that if we ratify this agreement protection will be thrown overboard. I protest against the selfdeception manifested in the continued use of the word “ protection “ when what is really meant is “ prohibition “, the retention of 100 per cent, of the Australian market for the Australian manufacturer. The Leader of the Opposition argued further that if the Ottawa agreement were ratified and the trade balance went once more against us, we should be powerless to take extreme steps, such as the prohibition of imports, to rectify the position. I submit that that remark entirely ignores the provisions of the concluding paragraph of article 16, which can be taken from its ‘context without distortion. That paragraph reads -

In the event of circumstances arising which, in the judgment of Hia Majesty’s Government in the United Kingdom, or of Hi? Majesty’s

Government in tlie Commonwealth of Australia, as the case may be, necessitate a variation in the terms of the agreement, the proposal to vary those terms shall form the subject of a consultation between the two Governments.

In my view that paragraph means that, were we in difficulty we could consult with the Imperial Government, and I’ cannot believe that such a consultation would be ineffective.

The Leader of the Opposition went on to say that the Imperial Government suffered no restriction of her liberty by reason of the Ottawa agreement. I do not know how that argument could bo advanced seriously in view of article 4 of the agreement, which reads -

His Majesty’s Government in the United Kingdom undertake that the general ad valorem duty of 10 per cent, imposed by section 1 of the Import Duties Act 1032, on the foreign goods specified in the Schedule D, shall not be reduced except with the consent of His Majesty’s Government in the Commonwealth of Australia.

Mr Scullin:

– I pointed out that, as Schedule D dealt with specific items it did not affect the general policy of the Imperial Government.


– The Prime Minister suggested that the right honorable gentleman’s contention was a quibble. What a noise there would be in this chamber if the Commonwealth Government had agreed to a restraint similar to that which the British Government has accepted. If we had been asked to agree to a limitation similar to that provided for in Schedule D, the Opposition would have had some justification for resisting the provision,

The Leader of the Opposition did not even mention the action of the British Government in making sacrifices and incurring the certainty of an increase of the cost of living in the United Kingdom. As I have said, his speech was not such as, on so important a subject as Imperial economic reciprocity, we had tlie right to expect from one of his experience. The right honorable gentleman believes in imperialism; he has told us so on many an occasion. Yet,

I suspect that he believes that imperialism begins and ends at home. Evidently, he is no believer in the golden rule, “ Do as you would be done by ;” rather it would seem that his motto is “ Sinn Fein,” “ Ourselves alone.”

Is our ideal of economic unity one which we should make some effort to accomplish, or is it merely a catch phrase? No one knows better than the Leader of the Opposition the difficulty of obtaining any measure of imperial economic reciprocity. He and other Prime Ministers have failed at previous conferences to secure even the smallest measure of agreement on imperial economic matters. I do not blame the right honorable gentleman for that, because it was then impossible to do so. I suggest that it was only because of the prevailing depression that the constituent parts of the British Commonwealth of Nations were brought more closely together in this matter, and are now willing to try to trade a little more closely with each other. In this connexion, some of the remarks of the Leader of the Opposition at the previous Imperial Conference will bear quoting. He said -

Our success will bo judged by the progress which wo are able to achieve towards Empire economic co-operation. . . . We can guarantee one another markets of sufficient importance in most commodities to absorb a far greater volume of production than we have yet attained….. In 1027-28, Australia purchased some £45,000,000 worth of manufactured goods from foreign countries which were of a type which Great Britain could supply.

The right honorable gentleman would not have made that statement had he meant that the greater part of that £4.5,000,000 would have been made available to Australian manufacturers. I submit that he thought that a considerable part of that amount was to be given to Great Britain in exchange for some similar benefit. He concluded with these words -

Thu Commonwealth Government would like to see that £45,000,000 either manufactured in Australia, in Great Britain, or in some part of the Empire.

In the event of the governments o! the Empire deciding upon a definite forward policy of Imperial economic co-operation, tlie Commonwealth Government will be ready to do its part.

Mr Scullin:

– I thank the honorable member for having made that quotation.


– It is a balanced statement of the case, which bears repetition even away from its context. It shows that at that time the right honorable gentleman had, and I believe still has, proper ideas regarding economic imperial co-operation.

My principal criticism of what the Leader of the Opposition said this afternoon is that be took his stand solely and narrowly on the trading relations of Great Britain and Australia. As the honorable member for Denison (Mr. Hutchin) has said, it is in the long-range interests of this country to have regard to the whole of our relations with Great Britain, and not only our trading relations. “We should get our relations with Great Britain iti proper perspective. They may be classified under four principal headings: defence, finance, trade, and the maintenance of such institutions as our “White Australia policy.

Taking first our trading relations, in 1930-31, we sold about 44 per cent, of our total exports to Great Britain. In these difficult times, when markets are difficult to secure, that is a market which we cannot treat in cavalier fashion. “We cannot take any risks in our dealings with the Mother Country which might jeopardize that market. The British market means a great deal more to us than does our market to it. This agreement is designed to increase the percentage of our exports to Great Britain.

Secondly, a3 to our financial relations: Although some may suggest that we have availed ourselves too freely of the privilege that we have on the British market by reason of our loans having the privilege of trustee securityship, we have accepted the privilege, and we shall probably continue to avail ourselves of it. It is estimated that that advantage is worth at least i per cent., and at certain times, 1 per cent, in interest, or a saving in our interest bill of from £2,500,000 to £5,000,000 a year. “We definitely save something between those two large sums annually by reason of the privilege of our loans being on the British trustee security list. There are many in Great Britain who think that we have too great privileges in the British financial market.

Coming next to defence, it is a hackneyed thing to say that in the last resort we are dependent for our defence on the British Fleet. Our own small, though efficient, fleet unit, does not pretend to be able to defend even our own shores, let alone our trade routes. Yet, we occupy a greater proportion of the world’s covetable area than our numbers warrant, or, at least, so a great many foreign countries hold. With the increasing pressure of population throughout the world, it is unlikely that that feeling will grow less in the over-populated countries. It was suggested recently by the honorable member for Bendigo (Mr. E. F. Harrison) that although everything seems well in time of peace, we should have no alternative, should war break out, but to hide behind the apron of Britain.

And again, there is no getting away from the fact that it is only by our Imperial connexion that we are able to get the world to respect what we are pleased to call our rights, in particular, our most cherished institution, the White Australia policy. It is unpopular with the other countries of the world, and we could not maintain it for ten years were it not for the prestige of our connexion with Great Britain and the Empire. Those are the material facts of our relations with Great Britain.

I have not made any -attempt to appeal to sentiment, but have- tried to set out briefly the solid and material advantages to us of our relations with Britain. “Yet sentiment should not be ignored or underestimated in the final summing-up of our relations with Great Britain. I believe that the future of this country is bound up with that of Great Britain for as far ahead as we can see. I expect to be accused of jingoism, and lack of Australian outlook by certain honorable members, but I firmly believe that the vast bulk of the Australian people believe as I do. As I have said sentiment should not be overlooked. The British press is only too ready to keep the British public informed of the state of the trading between Great Britain and the other parts of the Empire. If those trading relations become considerably less attractive from the point of view of Great Britain, British sentiment towards us will inevitably cool.

Mr Rosevear:

– So that our sentiment is based on the value of trading relations.


– Sentiment 13 one factor among many others which we cannot afford to ignore.

The case of the Opposition is based principally on the fact that this agreement make3 it impossible, so far as we can effect it, for prohibition of imports to become the fiscal policy of this country. Before the depression, our manufacturers probably had 60 per cent, of the local market, so far as the important items are concerned. Since the depression became intense, the local manufacturers have acquired from SO per cent, to 90 per cent, of the local market. In the pre-depression days that 60 per cent, was sufficient to maintain our industries on a reasonable profitmaking basis. Even 80 per cent, of the reduced Australian market during this depression has been insufficient to maink tain our industries as a whole on a profitable basis.

Mr White:

– That is because of the smaller turnover.


– The decrease in demand, as the honorable member says, causes practically the whole trouble. When a revival comes, a slight increase in percentage of their hold on the local market over that of pre-depression days will serve to maintain our secondary industries on a profitable basis. If the Opposition had its way, and maintained practically a fiscal policy of prohibition, that policy, when times began to be normal, would inevitably result in wholesale and unhealthy expansion of our industry.

What is to be said of Britain’s part in this agreement? She is taking risks in respect of her trade, particularly her exports of manufactured goods to the Argentine and Denmark, and many other countries. Previously, Denmark was a large purchaser of British goods. Now Germany has stepped in, and is attempting to effect a reciprocal trade arrangement with Denmark whereby each country will have preference in the markets of the other for dairy produce, on the one hand, and manufactured goods, on the other. Great Britain will definitely lose trade with the outside world, hoping to make it up within the Empire. It is certain that, as the result of this agreement, the cost of living will increase in Great Britain, with the risk of important political consequences. Yet the British Government is willing to take those risks in the endeavour to do something real in the interests of economic imperial reciprocity.

What risk is Australia taking? In spite of the remarks of the honorable member for Dalley (Mr. Rosevear), it is firmly established that our producers will receive, almost at once, substantial benefits, while I defy any honorable member to prove that our secondary industries will be harmed. As to the criticism that British and Australian manufacturers will in future have to compete on equal terms in the Australian market, if the agreement is read as a whole, instead of in isolated phrases, that fear will prove groundless. No one who follows Tariff Board reports need feel anxiety lest Australian industry may be sacrificed by the action of the Tariff Board. It is unwise to say more than that; hut that can be said with certainty. On a previous occasion T ventured the opinion that the Tariff Board is in need of reform. The extra responsibility that will be thrown on that body warrants the increase of its. personnel, and certain other reforms.

It has been claimed that we shall be losers in .respect of commodities which the Empire produces in greater volume than Britain can absorb, as the slightly higher price we are likely to get in Britain by reason of the preference and the sheltered market will be offset by the lower price * we shall get for the balance sold outside, on the world’s market. That is a theoretical argument that may seem to have some force on paper, but it has but little application to the Australian position. Take the four principal elements of our exports - wheat, wool, dairy produce, and meat. We are not expecting to get an increased price for wheat, for by the terms of the agreement we are obliged to sell that commodity to Great Britain at world’s parity, or at any rate not at an increased price. Therefore the argument does not apply to wheat. “Wool is not subject to the agreement. Britain provides the only market of any consequence in the world for meat and dairy produce. She absorbs 90 per cent, of the world’s export of meat, and from 75 to 80 per cent, of the world’s export of dairy produce. 1 cannot see how we shall be under any disadvantage through having a sheltered and privileged position in the only market which absorbs any considerable quantity of these two commodities.

The honorable member for West Sydney (Mr. Beasley) said that Canada had obtained advantages through her agreement with Great Britain which we had failed to get. I do not agree with him.

Mr Beasley:

– I read the relevant sections.


– The first nine lines of the article the honorable member quoted are practically indentical in both agreements. Article 11 of the Australian agreement states-

His Majesty’s Government in the Commonwealth of Australia undertake that a review shall be made as soon as practicable by the Australian Tariff Board of existing protective duties in accordance with the principles laid down in Article X. hereof, and that after the receipt of the report and recommendation of the Tariff Board- the Commonwealth Parliament shall bc invited to vary, wherever necessary, the tariff on goods of United Kingdom origin in such manner as to give effect to such principles.

The corresponding article in the Canadian agreement is as follows : -

His Majesty’s Government in the Dominion of Canada undertake that on the request of His Majesty’s Government in the United Kingdom, they will cause a review to be made by the Tariff Board as soon ae practicable of the duties charged on any commodities specified’ in such request in accordance with the principles laid down in Article X. hereof, and that after the receipt of the report and recommendation of the Tariff Board, the Dominion Parliament shall be invited to vary, wherever necessary, the tariff on goods of United Kingdom origin in SuCh manner as to give effect to such principles.

I submit that the meaning and the effect in each instance are identical. It is evident that the debate on this agree ment is bringing out the partisan views of the Opposition in all their force.

Mr Scullin:

– Has the honorable member contrasted article 12 of the Australian agreement with the corresponding article of the Canadian agreement?


– I do not think that the two articles are essentially different; there may be some slight variation in the wording.

Mr Scullin:

– And iu the meaning?


– Article 12 of the Australian agreement states -

Hia Majesty’s Government in the Commonwealth of Australia undertake that no new protective duty shall be imposed and no existing duly shall be increased on United Kingdom goods to an amount iu excess of the recommendation of the Tariff Tribunal.

The corresponding article of the Canadian agreement is as follows : -

His Majesty’s Government in Canada undertake that no existing duty shall be increased on United Kingdom goods except after an inquiry and the receipt of a report from the Tarin” Board and in accordance with the facts as found by that body.

It would be casuistry to suggest that there is any difference in intention between the two articles.

Mr Archdale Parkhill:

– The Scullin tariff was very different from the Canadian tariff.


– That is so. No doubt some passion will be engendered during the course of this debate, but no cause is furthered by the expression of merely party views. The agreement will prove good or bad as the years go on. It will have to rest on its merits, and if it is bad it will fall of its own weight. No one can read the future, but I believe that the agreement promises well for Australia. Those manufacturers who, from time totime, are tempted to believe that their interests lie with the Labour party; by reason of it3 policy of prohibition of. imports, would do well to remember that they have to take the bitter with the sweet, the rough with the smooth. If they support the socialist clement in our politics, and place in power a socialist government, before many years are past they will see the control of banking and credit nationalized in Australia.

East Sydney

.- The Ottawa conference was one of many such gatherings which have been held throughout the Empire, at which socalled economic experts have attempted to find a way out of our difficulties. Usually they have succeeded only in creating fresh difficulties without removing the old ones. Honorable members opposite have tried to convince us that Australia will receive some advantage from the Ottawa agreement at the expense of our foreign competitors in the British market. Even the British economists admit that Britain cannot afford to lose any of her foreign markets. She must at all costs retain the diminished volume of her trade with other nations. Various reasons have been advanced for the present world depression, and many persons are of the opinion that it is due in large measure to the erection of trade barriers by those countries which desire to preserve their own markets for themselves and yet to dispose of their surplus products in foreign countries. The Minister for Customs (Mr. Gullett) stated the other day that international trade, like inter-community trade, lay at the very root of progressive world civilization. Nevertheless, he presented for our approval an agreement which must tend to restrict rather than foster international trade. Of course, we have not been told the whole truth about the Ottawa Conference. As the honorable member for West Sydney (Mr. Beasley) said, the speech of the Minister for Customs was noteworthy, not for what it contained, but for what was left out of it. It is evident to any one who has followed the trend of world events that British manufacturing interests must be assured of supplies of cheap raw materials for their factories, and must, at the same time, have an outlet, for the goods they produce. The Ottawa agreement was engineered by British diplomatists, and it must be admitted that they outgeneralled the Australian representatives. I am not criticizing the ability of the right honorable member for Flinders (Mr. Bruce), but I challenge the sincerity of his interests in Australia’s welfare. Mr. Bruce, as a matter of fact, proved to be a most capable representative of the British Government, but a very poor one for the Australian people. The

Ottawa Conference was really called together so that British diplomatists might organize the Empire into an effective economic unit to compete against other Imperial world units ; and that has been the outcome of the conference. Australia is not going to gain anything either for her secondary or primary industries. Some honorable members, during tho course of this debate, told us of what happened a hundred years ago, but they neglected to analyse the agreement to ascertain whether Australia will gain any benefit from it.

World markets are essential to Great Britain. Three-quarters of her trade is done with foreign countries, and only onequarter with the other units of the Empire. Year by year Britain’s overseas trade has fallen way, as, indeed, has that of most other countries within recent years. Britain’s real purpose is to stimulate international trade, and she proposes to use the Ottawa agreements as a lever to break down the tariff barriers of foreign countries.

Mr Hutchin:

– What is wrong with that?


– What would the honorable member say if Russian wheat, or meat from the Argentine, were granted preference over Australian products?

Mr White:

– That will not happen.


– Let us analyse the position to see whether there is any possibility of it happening. Within the last four years, industrial production has declined in every country in the world, with one exception. The figures I am about to quote have not been prepared by any one in sympathy with the Labour party, but are contained in the monthly bulletin of statistics issued by the League of Nations. As compared with 1928, production for 1932 has been as follows: -

There is an increasing need for Britain to find work for her unemployed, and an outlet for the products of her factories. This is the opinion expressed by leading British economists, who ought to be familiar with the position. Mr. Runciman, speaking in the House of Commons on the 9th July, 1929, said -

It is not really within the Empire that we can afford to restrict our trade. Threequarters of our raw cotton comes from outside, besides three-quarters of our oils and five-sixths of our ores. We cannot afford to do without any of these.

Mr. R. A. Mark, past president of the Chamber of Manufactures of New South Wales, in the course of a broadcast address, stated -

The retention of world markets is vital to Britain. A tariff policy which discriminates iu favour of the dominions may result in British products being penalized in sonic of her most important foreign markets, where she is already hard pressed to hold her own. In the Argentine for instance, Britain was unchallenged until 1014, but during the war the United States of America took advantage of this opportunity to break into this vast commercial field and by 1923 had built up an export trade almost equal to that of Britain. By 192C the United States of America exported to the Argentine £40,000,000 worth of goods, whilst Britain’s exports were valued at £31,000,000. Germany had also managed to secure a share of Argentine trade amounting to more than half that of Britain’s. The position in Brazil is somewhat similar, and, as over £1,000,000,000 of British capital is invested in South America-, Britain cannot afford to take any action which will jeopardize her trade in that continent.

Honorable members opposite have said a great deal about sentiment and the ties of kinship, but they should remember that trade follows, not the flag, but the most profitable market. Yet another British economist, Mr. Hurst, has stated -

Wo have to remember also, that vast amounts of British capital, running into many hundreds of millions, have been invested in foreign countries like Argentina and Brazil as in the British Empire, and that these will be imperilled by a policy of discrimination and commercial exclusion. Our people and their representatives in Parliament must learn commercial arithmetic and a sense of proportion. Hitherto our trade, being free, has followed the most profitable channels. It lias followed, not. the flag, but the price list. It has been guided not by imperial sentiment, but by the unimpeded enterprise of our business mcn. So little part does sentiment play in trade that last year, among the self-governing countries of the Empire, Ireland and South Africa -displaced Australia and Canada from the head of the list of our customers. We need not depreciate our Empire trade. It is very important. In 1930, before the worst of the slump had taken place, our exports to all the self-governing dominions were valued at £140,000,000. But our exports to Europe alone in the same year were valued at £180,000,000.

Honorable members should not close their eyes to the facts. Honorable members have repeatedly said that the cost of production is a factor affecting the ability of Australia to compete in the world’s markets. Great Britain also has to compete in the world’s markets, but one of the suggestions made by the British delegates, which honorable members regard as a genuine gesture, is that a tax might be placed on foreign foodstuffs in order t o assist dominion primary producers. But if foodstuffs imported into Great Britain are taxed, and thereby the cost of production in the United Kingdom is increased, the chances of British industry competing in the markets of the world will be lessened. That fact is obvious. Therefore, this agreement, while removing obstacles on the one hand, is creating them on the other. In order to induce Australia to accept a one-sided contract, which will be useful to the United Kingdom when haggling with other nations for trade advantages, certain sops are offered to our primary producers, who are asked to believe that they will derive wonderful advantages from these concessions. In 1932 a British Imports Duties Act was passed, tinder which a preference of 10 per cent, was given to certain dairy products from Australia, but at ‘the Ottawa Conference the British delegates emphasized the fact that the duties would expire on the 15th November unless action were taken to renew them. The threat that the duties would not be renewed was used to influence the Australian delegates to make concessions to the United Kingdom. Yet enormous preferences have been granted by Australia to Great Britain over a period of many years, and Great Britain has never offered to reciprocate- by giving advantages to our primary products on her market. If either party has any claim to consideration it is Australia. The Ottawa Conference was merely a glorified meeting of commercial travellers, at which one set of individuals sought to gain advantages from the others. And in the haggling that took place the British representatives out-manoeuvred those from Australia.

Much has been made of the concession given, to Australia’s exporters of meat, as a result of which we are to expect a considerable extension of our export trade to tlie United Kingdom. But does the agreement offer to our meat producers the advantages that they are led to believe they will receive? The consumption of beef in the United Kingdom in 1931 was 1,399,000 tons. Local production that year was 800,000 tons, and the importations of frozen beef from Australia amounted to 57,000 tons. Therefore, Australia’s contribution to the beef supply of the United Kingdom in that year was very small. A much greater quantity of chilled beef was imported from the Argentine. Science has not yet discovered a process by which Australian chilled beef can be successfully landed in Great Britain. It will be seen that last year over 57 per cent, of the beef requirements of the United Kingdom was provided by home producers, whose interests are not identical with those of dominion producers. What will happen? In an endeavour to raise the price level, our exports of beef to Great Britain are to be limited in 1933 to the quantity exported in 1932. A similar restriction is to apply to the chilled beef from the Argentine. Any proposal to limit indefinitely the supply of dominion beef to the British market would be of no advantage to the Australian industry, because it would thereby be deprived of an opportunity to expand. But honorable members may say that the restriction applies only to the end of 1933, after which the Australian exporter may send as much frozen beef to the British market as he choose. The British meat producer, however, is of opinion that the enormous importations from Australia and’ New Zealand in recent years have been mainly responsible for the fall in prices on the British market. I quote from the Sydney Morning Herald of to-day -

The Chancellor of the Exchequer (Mr. Neville Chamberlain) said he was convinced that the agreement reached at Ottawa was the only way to secure stability in the live stock industry. Britain has been glutted by the dominions constantly increasing production. Supplies must, therefore, be regulated. The Government desired to reduce foreign rather than, dominion supplies. Since tlie Ottawa . Conference prices had dropped further. The programme in the Ottawa agreements could not be varied without the consent of the dominions, but the Government would consider steps outside the Ottawa Bill to deal with the critical situation. During the experimental period there would he consultations with the dominions, with a view to formulating a more permanent scheme, involving, doubtless, further restrictions on imports, and a further rise in prices.

It is idle to suggest that after 1933 the restrictions on imports will not be continued. The livestock industry in Great Britain is in a precarious condition, and stock-raisers there are as much concerned as those in Australia in the preservation of their industry. Therefore if, after 1933, the imports of Australian meat should increase considerably and prices should fall, the British producers will exert pressure on the British Parliament, to continue the restrictions upon imports from the dominions as well as upon those from the Argentine.

Some of the leading delegates to the Ottawa Conference, notably Mr. Bennett, the Prime Minister of Canada, and the right honorable member for Flinders (Mr. Bruce), were obsessed with the idea that all that was necessary to restore world prices was to remove Russian competition. According to the London Times of the 22nd July, Mr. Bennett said in his opening address to the confer en ce- -

They must safeguard their established standards of living and be active to defend the free institutions of the Empire when they found them menaced by organized economic hostility operating .through State controlled standards of living. State controlled labour, and State aided dumping dictated by high State policy.

His remarks were strongly supported by the right honorable member for Flinders. But consider the British view of the suggestion that the dominions should demand the exclusion of Russian goods from the,

British market. Mr. Lloyd George said only last month -

British imports of wheat from Russia in 1931 amounted to nearly 29,000,000 cwt, from Canada 27,000,000 cwt. Soft timber imports have increased considerably from Russia in the past few years, while those from Canada have fallen by more than 50 per cent. Neither the world nor the British Empire can expect any permanent advantage from an anti-Russian policy. Whatever obstacles are set up in her path Soviet Russia with her immense natural resources, which are now being developed with fertile energy, will more and more in the coining years, force her way into the markets of the world.

Every student of international trade statistics knowshow important Russia has become as a market for the exporting nations of the world, and if Great Britain does not take advantage of the wonderful trade opportunity provided by a population of 160,000,000 people, other nations will. That the British manufacturers of machinery have benefited greatly from the Russian trade is shown by the following extract from the trade journal Machinery of the 17th December, 1931:-

Practically all the large increases of exports in November went to Russia. It may be assumed that Europe consists mainly of Russia at present for machine tool market purposes.

It will be seen that Great Britain’s most sorely pressed industries, those producing machinery, are finding their most profitable market in the Soviet Republic, and if Russia be deprived of the opportunity to sell on the British market, Great Britain will lose those orders which are at the present time providing her people with work. The extract from Machinery continues -

In 1931 the export on machine tools to the United Soviet Socialistic Republic was 61.6 per cent., and in December, nearly 90 per cent. of our total exports of these products.

Electrical equipment in 1931, exported to the United Soviet Socialistic Republic, represented 21.4 per cent., and of boilers 23 per cent. of our total exports of these products.

Surely honorable members will recognize that this is a market that mustbe exploited by the British manufacturer.

The suggestion of Messrs. Bennett and Bruce that the fall of world commodity prices has been caused by Russian dumping is net in accordance with the truth. As a matter of fact, not more than 4 per cent. of the aggregate national income of Russia is exported. Students of the wheat market know that the fall in prices on the world’s markets began before Russia recommenced exporting after the war. To-day Russia is a purchaser instead of an exporter of wheat, and yet prices continue to fall. I quote from the Sydney Morning Herald, a source of information which honorable members opposite, at any rate, will not distrust -

page 1884



Increased Russian Yields

The Dominion Cereal Committee had a preliminary discussion on the world wheat position. The subject chiefly concerns Canada, Australia, and India as producers, and, in a lesser degree, South Africa and Rhodesia. The average annual world- crop from 1909 to 1913, omitting Russia and China, amounted to 3,200,000,000 bushels. The 1930 crop was 3,700.000,000 bushels. The European wheat crop has not increased. The crops of five non-European countries jumped from 1,476,000,000 bushels between 1909 and 1913 to 2,100,000,000 bushels in 1930.

The comparative average crop figures are -

Honorable members may say that those figures prove that Russia is flooding the markets of the world, but that is not so -

The United States during the war was the world’s greatest wheat exporter, but latterly Canadahas been the greatest exporter. Russia’s 1909-1913 exports averaged 164,000,000 bushels, and her 1924-1929 exports averaged 1 3,000,000 bushels. A remarkable fact was that the increase in Russia’s wheat crop was equivalent to the total Canadian crop.

How then, can it be suggested by honorable members that the placing of Russian wheat on the markets of the world was the main factor in the fall of the price of this commodity?

Any agreement that does not give some real benefit to Australian exports, such as wool and wheat, can be of little use to us. Let 113 examine these alleged benefits. I have shown that Australia will receive no advantage from the concession on meat. Suppose that at the end of 1933 the imports of Australian meat into the United Kingdom are still limited, and we then have a couple of good seasons and production increases, what shall we do with our surplus meat? Shall we destroy it, or export it to- foreign markets? We must suppose that other nations will not accept this agreement without protest. They will adopt retaliatory methods if they are debarred from selling their meat on the British market, which is the greatest market of the world. If Great Britain is unable to absorb all our meat exports, we shall find it difficult to place our surplus on other markets.

I come now to wheat. The honorable member for West Sydney (Mr, Beasley) has shown that the concession on wheat will be of little or no value at all to the farmers of this country, and I believe that his opinion is shared., at least, by many members of the Country party. The British Empire to-day produces more wheat than the United Kingdom can consume, therefore, we have to look elsewhere for a market for the great bulk of the wheat produced within the Empire. We have to find other markets for our surplus wheat. The Minister for Trade and Customs (Mr. Gullett), in his second-reading speech, said that the average export of dominion wheat from 1925-26 to 1930-31 was 330,000,000 bushels, and that the average annual imports into Great Britain during the same period was 198,000,000 “bushels, leaving 132,000,000 bushels to be placed on other markets of the world. Under the Ottawa agreement an additional duty of 2s. a quarter, equivalent to 3d. a bushel, is being imposed on foreign wheat, but that does not guarantee to the Australian wheat-farmer any portion of the British market. The honorable member for West Sydney has pointed out that wheat is so plentiful in the world to-day that large surpluses are being car ried forward from year to year. It is quite possible that foreign countries will dump their wheat into Great Britain, even if they have to pay a duty of 3d. a bushel. They will “bear” the market, and force down the price of wheat to below the cost of production in Australia. In that way many of our farmers will be forced off the land. If the Australian wheat-grower were guaranteed some portion of the British market, that would shut out the competition of wheat from Russia and the Argentine, and those countries would then dump their surplus production in the other markets of the world. Under the agreement, the Australian producer is to supply wheat to Great Britain at Liverpool at world’s parity prices. When those countries which are deprived of the British market dump their surplus wheat elsewhere, prices will crash, and the Australian grower who is supplying wheat to Great Britain at world’s parity price will receive less than the cost of production. This agreement offers no hope of recovery for the Australian wheat-grower. Yet honorable members still persist that it offers wonderful opportunity for the expansion of the Australian wheat industry.

What is the price Australia has to pay in return for this problematical advantage? Let me show how the British authorities, through their own neglect and short-sighted policy, are losing opportunities to expand their trade. I refer honorable members to the following statement made before the Manchester Rotary Club by Mr. C. E. Denis, deputy director of Messrs W. B. Dick and Company Limited : -

It was true that so far as Russia was concerned this country had an adverse trade balance, and that Germany and the United States of America had favorable ones. The explanation was simple. Germany and the United States of America had set themselves out to try to meet conditions in Russia as they existed to-day. Russia could not afford to pay at once. She required eighteen months’ credit, the Government of this country and our banks would not go beyond twelve months. Germany and the United States of America did and, consequently, got the orders, and there was definite proof that so far Russia had not failed to meet her obligations in respect of the purchase of any of the goods supplied.

The opportunities that were given to the German industrialists to place their surplus products in Russia were made possible by the advances made to them by British bankers; so that British capital was used to the advantage of the German captains of industry, and the consequent detriment of the British people. The British market is not our only market. As a matter of fact, we export the great bulk of our wheat and wool to foreign countries. What will be our position in respect of those exports if we build a high tariff wall round the British Empire to shut out the trade of other countries, at the same time demanding the right to place our own products on the markets of the world? These other nations will adopt retaliatory measures against the British Empire, and it is quite likely that international complications may arise as a result of the Ottawa agreement. Take the position of the United States of America to-day. Honorable members have already pointed to the enormous difficulties confronting that nation. We cannot shut our eyes to the fact that other nations, as well as the dominions, are in need of assistance. We cannot divorce ourselves from the requirements of the world, because what affects one country affects others. The United States of America has been referred to by some honorable members as one of the most up-to-date and efficient countries in the world, yet, despite that fact, its trade is declining, and the number of people unemployed there has increased to 11,000,000. That has taken place in a country which boasts of its system of payment by results, its speed-up methods,, and its efficiency schemes. That nation is to-day watching closely the outcome of the Ottawa agreement. The best customer of the United States of America is the United Kingdom, and then follow Canada, Japan, Germany, France, China, the Philippine Islands, Italy, Netherlands, and Belgium. The trade of the United Kingdom and Canada with the United States of America represents about 80 per cent, of the combined trade of the other eight countries. If the British market is closed to the United States of America, and other countries, they will retaliate against the Empire. We cannot expect them to do otherwise. It is not possible for the Empire to isolate itself from the rest of the world. The supporters of the Government have time after time said that it is ridiculous to expect that Australia or the British Empire will ever become self-contained, because many of our requirements must be obtained from outside the Empire itself. Therefore, this agreement offers no road back to prosperity. The British delegates at the conference were well aware of that, and they played with the Australian representatives. I do not doubt the ability of the right honorable member for Flinders (Mr. Bruce), but I do submit that, in negotiating the Ottawa agreement, he made a bad deal for Australia. The members of the Country party contend that assistance must be given to the producers of wool, wheat and meat. The agreement is supposed to assist both the wheat and the meat industry, but it offers nothing to the wool industry. Wool prices have dropped considerably, and if the Australian producer is to compete successfully overseas, his costs of production must be reduced. Yet the whole tendency of the Ottawa agreement is to increase the price of his requirements.

I suggest to honorable members that they should not accept as gospel the inspired statements that have appeared in the press from time to time regarding the advantages that will be conferred by the Ottawa agreement upon Australian industries generally. No matter what is done at this stage to tie the hands of this Parliament, I assure honorable members that, although the party to which I belong may not be the dominant party in this House, it will support any party that takes action to break the agreement, and to replace it with a more equitable one, so that Australia may receive some real advantage.Honorable members supporting the Government talk about patriotism, and confend that to be good Australians we must first of all be good Britishers. In this debate we should hear a little more of Australian sentiment, and do something to further the interests of the Australian people.

I come now to butter, which is one of the other products referred to in the

Ottawa agreement. I submit that the advantage to be conferred on the butter producers is problematical, and my opinion is borne out by the Dairy Produce Export Control Board, which is quite competent to speak with authority on this subject. The board, in its report, gives tlie following weekly prices ruling for Australian butter on the London market during the past five seasons: -

The board states -

The total quantity of Australian butter shipped to the United Kingdom during the twelve months ended the 30th June, 1932, wai 83.973 tons, which constitutes a record for Australia. During the previous season the quantity shipped was (10,109 tons, which was a record up to that time.

When the last mentioned price was being paid our butter was receiving the benefit of the 10 per cent, duty imposed on foreign butter by the British Import Duties Act of 1932. The report goes on to say-

The duty of 10 per cent, imposed by the British Customs Authorities on importations of butter from foreign countries has been of no immediate benefit to the dominions, as the London market has been flooded with foreign importations which have caused the prices to fall to their present low level.

If that could happen when a duty of 10 per cent, was operating it could also happen when a duty of 15s. per cwt. was operating. When foreign countries find themselves in difficulties in disposing of their surplus products, they easily overcome such obstacles as a 10 per cent, or a 15s. per cwt. duty. If it suits them to do so they will flood the market with their produce.

Let us for a moment consider what Australia is giving in return for the advantages alleged to be conferred on her producers by the Ottawa agreement. This country has for many years given a substantial preference to Great Britain, worth, in the aggregate, many millions of pounds; yet hitherto we have received nothing in return for them. Honorable members may talk about having had protection from the British Government, but such talk is intended only to smother up the real object of the Ottawa agreement, which is to benefit Great Britain and not Australia. Article 9 of the agreement provides that -

Protection by tariffs shall be afforded only to those industries which are reasonably assured of sound opportunities of success.

Who is to determine whether an industry is reasonably assured of sound opportunities of success? lt is also provided that -

The tariff shall be 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.

Both the honorable member for Denison (Mr. Hutchin) and the honorable member for Corio (Mr. Casey) were doubtful of the exact meaning of that provision. Of course, no one understands the Ottawa, agreement except the men who engineered it; but the Australian people will soon discover the meaning of it. Even if they will not now listen to the criticism of the Labour party, they will in the near future feel the effect of the agreement, and realize that it is not beneficial to this country. The level of the Australian tariff is to be determined by a tariff tribunal which will undoubtedly receive its instructions from the Minister for Trade and Customs. It will not be an impartial tribunal. This was shown clearly by the Minister for Trade and Customs, who, in a moment when he was not carefully watching his words, unwittingly said that he had issued a certain instruction to the board. If that can be done once it can be done again. We may be quite sure that the so-called impartial tariff tribunal will be instructed as to what it must do. If honorable members have any comment to make on the Ottawa agreement they should make it clearly, and not spend their time in discussing what Disraeli said many years ago, or what happened iu the British Empire long before some of us were born. If we think that a serious error has been made, we should be courageous enough to declare quite frankly that the Minister without portfolio (Mr. Bruce) and the Minister for Trade and Customs (Mr. Gullett) bungled their job at Ottawa, and did not make an agreement acceptable to this country.


.- Seeing that honorable members of the Opposition favour a policy of unlimited protection, it is amusing to hear them advance purely theoretical arguments against the Ottawa agreement, based .upon a somewhat critical circular recently issued by the Bank of New South “Wales. I shall not follow them in that theoretical discussion. To me this agreement is a pure matter of business, and I shall discuss it on the pounds, shillings and pence basis. I did not expect the agreement to be received without criticism, and honorable members of the Opposition may fairly exercise their critical faculties on some of its provisions. The subject of imperial preference is too big to be judged by party considerations, but, unfortunately, it is being discussed on that level, not only in Australia, but also in Great Britain and Canada. The Australian Labour Party objects to the agreement because it contends that Australia is giving away too much; the British Labour Party objects to the agreement because the United Kingdom is giving away too much; and the Canadian Opposition objects to it because it was negotiated by the Canadian Government. It is regrettable that the agreement should be viewed from selfish and unworthy stand-points. I ask honorable members to compare their attitude to this agreement with the attitude of the Opposition of last year to the agreement negotiated with Canada by the then Minister for Commerce (Mr. Parker Moloney). That agreement was on similar lines to this, but was not so extensive in its effects. The Opposition of that day unanimously supported the agreement because it was advantageous to Australia. We did not complain because something had been given away. We took the view that all such agreements must involve giving and taking. We did not hesitate to give full praise to the honorable gentleman who had negotiated the agreement although he was a member of a Labour government. This agreement, like that one, is founded on the principle of reciprocal concessions. Our representatives at Ottawa were in duty bound to do the best they could for Australia, and I believe that they did it. The Leader of the Opposition (Mr. Scullin) says that he is favorable to the policy of imperial preference. The Government which the right honorable gentleman led provided for British preferences in the tariff schedules which it tabled, and the right honorable gentleman affirms that he is still willing to grant preferences to Great Britain, but would limit them to those commodities which” Australia cannot produce. That, I suggest, is a selfish attitude. Unfortunately, the Scullin Government raised our tariff duties to such a height, that the preferences granted to Great Britain were, in many cases, valueless. If our delegates at Ottawa had adopted the policy that they would not grant concessions in regard to anything produced in Australia, the British Government would undoubtedly have refused to negotiate an agreement. Those who desire preferences must be prepared to give some. We cannot expect to succeed on a policy of “ take all and give nothing.” Yet, although this agreement is a business transaction, I would not describe it as a sordid bargain. It is a bargain which is beneficial to all the parties to it. There can be no bargaining unless both sides are prepared to make concessions.

The necsssity for the extension of our export trade has stared us in the face for some years. For one reason or another our export trade with foreign countries had been gradually slipping away from us. The United States of America has refused to trade with us on anything like fair lines. Wc were, therefore, constrained to look to the United Kingdom and the other British dominions for an extension of business. We have had a union of sentiment within the Empire for 1 long time, but hitherto we have not been able to translate that sentiment into anything of commercial value. The opportunity to do so came quite accidentally on this occasion through an alteration of the policy of the Government of the United Kingdom, respecting tariffs. When the present administration came into office in Great Britain we were able, for the first time, to negotiate with a government that believed, in effective imperial preferences. Acceptance of the principle of imperial preferences implies reciprocity. It was only because Australia was prepared to give something that she got anything.

Concessions of duty are to be made by us on various commodities. It was only proper, therefore, that the agreement should state the most appropriate authority to determine the details of these concessions. The question arose whether this should be done by Parliament or by such a body as the Tariff Board. I think “ that all honorable members are agreed that this Parliament is not a competent body to hammer out the details of a tariff policy. Honorable members are influenced in their tariff views by the electorates they represent. It was apparent, therefore, that if we were to have a consistent and what some would call a scientific tariff, the details of it would have to be evolved by an independent authority. The Tariff Board is, in my opinion, the best authority that we could use for this purpose. The members of that board have been engaged with tariff matters for a number of years. As between the Parliament and the Tariff Board there could be only one opinion as to the most suitable authority to deal with this business. The work should be done by the Tariff Board, but Parliament should retain its power of veto. Something has been said about the issuing of instructions to the board. In my opinion, instructions should be issued to it. The policy of the Government of the day should influence the decisions of the board. Supposing there was a high protective government in power for the time being. If the Tariff Board carried out its duties in a way that would make its recommendations of value, it would pay due regard to the general policy of that government. If a low tariff party were in power, it would alter its policy accordingly

Mr Fenton:

– That destroys the theory of the independence of the Tariff Board.


– “ Independence “ is a very fine word. Obviously, the Tariff

Board must examine all the relevant facts, one of which is the policy of the government of the day.


– Does the honorable member suggest that the Tariff Board takes a lead from the fiscal policy of the Government ?


– No.

Mr Forde:

– The honorable member suggested that the board took its instructions from the government of the day.


– I did not. I made my point perfectly clear. In the case of the Ottawa agreement, it is necessary to give some general direction ‘to the board as to the scale of tariff that shall be adopted. That general direction is contained in article 10, to which exception cannot be taken. The article reads -

His Majesty’s Government in the Commonwealth of Australia undertake that during the currency of this agreement 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, provided that in the application of such principle special consideration may be given to the case of industries not fully established.

Sir Littleton Groom:

– Will the Tariff Board interpret that instruction?


– Yes, but this Parliament will have the final determination. The Tariff Board is the proper body to make that determination, because, by reason of its divergent interests, this Parliament is not competent to do so. There can be no objection to giving British producers “ full opportunity of reasonable competition “, for those words are associated wilh the preceding words “protective duties “. Some honorable members have declared that Australian manufacturers will start off scratch with British manufacturers. The qualifying words “ protective duties “ make it evident that that is not so. The extent of those protective duties is indicated to the Tariff Board by the direction that the protection is to be given “ on the basis of the relative costs of economic and efficient production “. We should not countenance other than economic industries. To attempt to carry on an uneconomic industry is an economic fallacy. Unfortunately, we have too many of these industries in Australia, maintained at the cost of the people. It is quite logical to instruct the Tariff Board to frame its rates of duties having regard to the economic value of the industry concerned. The same remarks apply to inefficient industries, which are maintained only at the cost of excessive protection. Such industries have been a source of loss to Australia. They have grown up like mushrooms as a result of the exorbitant tariff schedule that was introduced by the Scullin Government.

It is because of that schedule that article 12 has been inserted in the agreement. I have heard no one make a defence of that article. At first, I had great difficulty myself in seeing the necessity, for it. But I realize that we must have regard, not only for our own point of view, but also for that of the United Kingdom. The Mother Country is prepared to make a bargain only if we give reasonable guarantees. Great Britain’s experience of the past few years is that we have made our tariff duties so high that, although preference to the Mother Country nominally existed, actually the duties were so high that the preferences were illusory and useless. If article 12 did not exist, any future government that was adverse to this agreement could circumvent its conditions by reverting to the high tariff of recent years. It guarantees that no new protective duty will bc imposed, and no existing duty will be increased on British goods beyond the recommendations of the Tariff Board. In the opinion of many, the present duties are extraordinarily high; in fact, they are the highest existing duties in the world. Surely that is high enough for anybody. Article 12 is a safeguard that they will go no higher during the period of the agreement.

The British Government is entering into an agreement for a period of five years. It is altering its policy and giving undertakings in writing that it will maintain the existing 10 per cent, duty under the Import Act, to the advantage of the dominions, give a special prefer- encc of 15s. per cwt. on butter, and also other preferences that are enumerated. Is it not entitled to a guarantee that. Australia also will carry out its part of the bargain? The Leader of the Opposition (Mr. Scullin) said that he objected to a binding agreement. Provided that nothing improper influences the making of an agreement, it should be binding, particularly when it is between the governments of countries. This is purely a business matter, which leaves no room for theorizing. There is no doubt that if the agreement is given effect, it will benefit the British dominions and all with whom we trade. In business it is most desirable that those with whom one deal? should be prosperous. I sincerely hope that the Australian people and those with whom we deal as a result of this agreement will obtain mutual benefit. The matter should, therefore, be debated from the national point of view, and not be subjected to the selfish party criticisms that have been heard here and in the British Parliament.


.- In introducing this agreement, the Minister for Trade and Customs (Mr. Gullett) drew attention to the fact that the purpose of the Economic Imperial Conference at Ottawa was to review the matter of preferential trade within the British Empire, and endeavour to establish it on a sound reciprocal basis. We are all quite prepared to agree that that was necessary, in view of the serious economic difficulties that have developed throughout the world, and affect the affairs of the whole of the people of the British Empire, whether engaged in primary, secondary, or any other form of industry.

The real problem is not what the Ottawa Conference has brought forward - this agreement - but what is going to be the outcome of the agreement. There is little doubt that the agreement will bc accepted by this Parliament, as it has been accepted by every other parliament in the British Empire that has reviewed it. If it is accepted, and becomes a treaty binding upon every part of the British Empire, we must ask ourselves where it is going to lead us, what benefits are to be received by various sections of the community from its operations, and what will be its effect upon other nations of the world.

Australia is a young nation, largely primary producing. It exports a considerable proportion of its products, and sells them upon the world’s markets, at world’s parity. That is admitted in this agreement. It is stipulated in black and white that whatever Australia has to sell must first be offered to Great Britain at world’s prices. There must be no artificial value placed on the product. We must, therefore, ask ourselves seriously are those who are engaged in the great primary industries of Australia, and producing 95 per cent, of our exports, going to receive any real monetary benefit from the agreement when it is actually in operation. On the other hand, will it be possible for the Empire, with all its power and all its resources, to carry out the agreement once it is ratified and brought into operation? We must remember that this is an imperial trade agreement, and, as such, is nothing more nor less than a declaration of commercial war against every foreign country in the world. We cannot disregard that fact. By this agreement, we virtually tell other nations that we are determined to do all the business we can within the British Empire: that, we will not do one pound’s worth of trade with them if we can do that trade with one another. Upon analysing our production, however, Ave find that, in regard to wheat, for instance, the Empire produces a great deal more than it consumes. A tremendous surplus is produced each year which must be exported, not from Australia to Britain, or from Canada to Britain, but to countries outside the Empire altogether. Canada has an annual exportable surplus of approximately 450,000,000 bushels, while Australia this year will have to export from 150,000,000 to 165,000,000 bushels. Britain imports only 250,000,000 million bushels of wheat each year, so that several hundred million bushels which are produced within the Empire must be marketed iu foreign countries. Does that fact not bring it home to honorable members that the Empire is attempting to do to-day what Australia tried to do in 1900, when federation was consummated ? At that time, Australia deliberately set out to create an artificial trade barrier for the specific purpose of preserving the trade of the Commonwealth as far as possible for its various component States. After thirty years experience of high protection, we must admit that it has not saved Australia from the economic difficulties which beset practically all countries in the world. We are in the same muddle, financially and commercially, as are the freetrade countries. Yet to-day, every portion of the Empire is being invited to do the very thing that Australia tried to do thirty years ago, at the time of federation. We are trying to prevent the entry of foreign goods into Empire markets if similar goods can be produced anywhere in the Empire. I do not say that is not necessary to preserve for the Empire as much as possible of our Empire markets; but we must look beyond this, and ask ourselves what we are to do with our huge exportable surplus of wool, wheat, and other primary products, and the secondary products of Britain, if we close our markets to foreign countries. Some of our wheat goes to Japan, and more of it to Italy and other European countries. Can we expect those countries to sit idly by while we adopt measures to prevent their goods from entering our markets? Surely, they will point out to us that, while we are doing our utmost to prevent any portion of the Empire from trading with them, we expect them to take hundreds of millions of bushels of our wheat every year, and millions of pounds worth of our wool. If those countries continue to take our goods, they must pay for them, and if we will not allow them to pay in goods, they must pay in cash. Normally, the bulk of the world’s trade is carried on by the exchange of goods, cash being used only to adjust balances. I was surprised to hear the honorable member for East Sydney (Mr. Ward) say that he would do everything iu his power to break down the Ottawa agreement; yet, he is one of the keenest supporters of an extremely high protective tariff. He, arid those who think like him, advocate in season and out of season, in Parliament and out of Parliament, the imposition of the very highest duties in order to prevent outside nations from selling their goods in Australia. Nevertheless, they invite those same nations to buy from us the raw materia! produced by our primary producers. This exportable surplus must be sold overseas in order to raise the finance required to keep the country solvent.

What applies to Australia must apply also to the Empire. When the union of the colonics was under discussion in 1900, practically the same arguments were used in support of federation as are now being used in support of the Ottawa agreement. We cannot escape from the fact that the decisions reached at the Ottawa Conference constitute a futile effort to preserve for the component parts of the British Empire the whole volume of Empire trade, to the exclusion of foreign countries. We must ask ourselves what is likely to follow an attempt to put this policy into operation. About one-third of the world’s workers are engaged in transport, that is, in transporting goods and people from one place to another. This idea of preserving trade from outside competition can be traced, in its final analysis, down to each individual hamlet or township throughout the country. Every country newspaper advises its readers to trade with local business people. Every suburb of every capital city runs campaigns urging the people to buy in their own suburb, and thus keep trade within that territory. Such a policy can get us nowhere. The Ottawa agreements are an attempt to defeat economic laws which ultimately must prevail. The answer to the Ottawa agreements will be a trade combination by several European countries; in fact, conferences have already been called for this purpose, and out of those conferences reciprocal trade agreements will emerge. The principle will be extended until eventually all trading countries are parties to trade agreements of one sort or another, and, perhaps, in this way tariff barriers will, after all, be broken down. It is a slow process to bring the whole world up to a higher plane, a plane which has already been reached by Australia and some other countries. Ultimately, this standard may be accepted by all

European countries, and later by other countries as well. However, for the time being, I am concerned with the serious risk of retaliation by foreign countries when the Ottawa trade agreements are put into force. The previous Government, under the leadership of the right honorable member for Yarra (Mr. Scullin), imposed very high tariff duties, and within a few weeks France imposed a prohibitive duty on Australian wheat. At that time I was Minister for Agriculture in the State of New South Wales, and it was my duty to take notice from day to day of the duties imposed by foreign countries on the wheat produced and exported by New South Wales. France imposed a duty of 6s. lOd. a bushel on Australian wheat, with the result that, from the day the duty was proclaimed, not one bushel of our wheat entered France. At the end of that year we had trade balances with various countries throughout the world, but, unfortunately, they were not all on the right side. In 1929-30 we had an adverse trade balance of £33,500,000 with the United States of America. We had a favorable balance with Germany, France, Belgium, Italy, and Japan, but our total credit balance in those countries was within £1,000,000 of our debit balance with the United States of America, showing that our purchases from America used up the whole of our credit with the other five nations. It is now proposed to discriminate against those six foreign countries in favour of trade within the Empire. I have no doubt that they will retaliate, as some of them did in the past, by imposing embargoes or high duties on our goods. The result will be that the volume of trade will fall away, mercantile fleets will be tied up, and unemployment will increase. The restriction of international trade is, I believe, largely responsible for the present economic depression and unemployment. I view the Ottawa agreement in its present form with some misgiving. I am not prepared to accept it as the beginning of a cure for our economic difficulties, or as a first step in the direction of returning prosperity for our primary producers. I feel that the primary producers will receive very little monetary benefit from the agree- ment. Article 5 of the Ottawa agreement is as follows : -

The duties provided in this agreement on foreign wheat in grain, copper, lead, and zinc on importation into the United Kingdom arc conditional in each case on Empire producers of wheat in grain, copper, lead, and zinc respectively continuing to offer those commodities on first sale in the United Kingdom at prices not exceeding the world price.

Under article 5 the Commonwealth Government contracts to bind the Australian exporters of grain, copper, zinc, and lead, to offer those commodities to the British Empire at world’s parity before they offer them elsewhere. The Commonwealth Government has no power to operate that article, and it is futile for us to enter into an agreement which we cannot carry out or enforce. I know of no law by which the Commonwealth Government can require that the exportable surplus of Australian wheat shall be offered first to the British people at world’s parity. The Commonwealth has no control over the export of wheat; it has a small measure of control over flour, but that is not mentioned in article 5. In return for the undertaking given in that article, the wheat-growers of Australia and Canada, the two largest wheatexporting portions of the Empire, are to receive the small advantage of a British import duty of 2s. per quarter, equal to 3d. per bushel, on foreign wheat imported into the United Kingdom. Bui Great Britain does not consume within 400,000,000 bushels of the amount of wheat exported by Australia and Canada. Therefore, the concession of 3d. per bushel will apply only to approximately 200,000,000 bushels of the 600,000,000 bushels that Australia and -Canada have available for export annually. That duty is to operate only so long as the Australian and Canadian exporters of wheat continue to offer their grain first to the United Kingdom at world’s parity. What authority has the Commonwealth Government under the Constitution to require any wheat exporting firm to conform to that condition? Yet if a shipper of wheat should sell a consignment to Japan without first having offered it to the United Kingdom, Australia will have committed a breach of the agreement.

The wheat-buyers have the right to export their wheat to any market in which they can get the best price. That applies also to the exporters of copper, lead and zinc. What is to prevent any of the corporations controlling copper, for instance, from selling on the best market available? The various portions of the British Empire interested in the Ottawa agreement must seriously consider whether the exporting dominions can enforce article 5 upon their own exporters.

Article 8 provides that the Commonwealth Government shall - invite Parliament to pass the legislation making the tariff changes necessary to give effect to the preference formula set forth in Part I of Schedule F.

Iti this regard I differ from the views expressed by the Government. The Ottawa agreement provides for a certain margin of preference to be given to the goods from various parts of the British Empire, and the Commonwealth Government is asked to introduce a tariff schedule to provide that preference. In accordance with article 8, the Government has introduced a tariff schedule which increases the duties on all foreign goods, but does not reduce the duty on British goods. That may be one way of complying with the preference formula, but the agreement is inconsistent, because article 10 provides -

His Majesty’s Government in the Commonwealth of Australia undertake that during the currency of this agreement the tariff shall be 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, provided that in the application of such principle special consideration may be given to the case of industries not fully established.

That article clearly intends that the duties imposed upon British goods shall not be prohibitive. Yet to give effect to article 8, the Government has introduced a schedule which makes no effort to comply with the requirement of article 10 that the duties shall be such as will enable the British exporter to compete under reasonable conditions in the markets of the Commonwealth. I cannot reconcile these provisions, nor can I see how they can be operated to yield to Australian industries the benefits that are expected of them.

According to article 12, the Commonwealth Government undertakes that “ no new protective duty shall be imposed, and no existing duties shall be increased on United Kingdom goods to an amount in excess of the recommendation of the tariff tribunal “. ‘ That represents a policy of “ heads, I win ; tails, you lose “. It ties the hands of this Parliament. The Tariff Board is supposed to be an independent tribunal to recommend to Parliament the duties to be imposed for the protection of Australian industries, but the agreement provides that the Parliament shall not increase any duty in excess of the recommendations of the Tariff Board. This, in effect, transfers power from Parliament to the Tariff Board. I agree that the board should not be allowed to increase the duties on British goods, thus defeating the object of the Ottawa agreement. Under this agreement, we are in danger of surrendering the functions of Parliament to an outside tribunal supported by an Empire treaty which may not be altered by a future parliament unless the Tariff Board which, as I have explained, is not representative of the people of this country, makes a recommendation to that effect. We may accept the vital principles in this agreement, because they happen to suit the policy of the government of the day. Would we accept the same principles if some future government, of a different political faith, allowed the power of Parliament to be further restricted, and really made it subservient to the Tariff Board or any other tribunal which might be set up? I disapprove of the provisions in article 12, because they make the Tariff Board, which is really a body of public servants, an authority superior to the Parliament of the Commonwealth. This is a position which cannot be tolerated.

Mr Scullin:

– If it were, we should have government by a bureaucracy.


– I have no objection to the appointment of boards to inform Parliament, but I have a very decided objection to Parliament being deprived of authority which the Constitution intended it to use.

The bill is bristling with anomalies. I fail to see how our various primary industries, which are tottering under very heavy burdens in the form of excessive costs and high tariff duties are to obtain any direct benefit from the agreement, or how they are to get relief in the way of reduced tariff charges. The agreement leaves the British preferential tariff where it was formerly, but it increases, definitely, the rates on foreign importations. While it provides for a definite margin between the British preferential and foreign duties, the agreement does not indicate clearly what will be the added cost of commodities imported into Australia. Although the duties on some items may range from 15 per cent, to 45 per cent., the actual cost to the consumer is multiplied, in some instances, by several hundred per cent.

When the bill is in committee, I propose to cite a number of items to illustrate the extent to which the cost of imported articles is increased before they reach the consumers. In some cases, the commodities are loaded to such an extent that their cost is almost prohibitive. It is to be regretted also that extremely high duties are imposed on articles that are absolutely essential to the health of the community. I refer particularly to the exorbitant duties on goods required by the dental profession. Practically the whole of their requirements are handled by a combine, partly foreign and partly British, and its organization is so effective that dentists iti Australia are forced to purchase the whole of their requirements from it.

Mr Jennings:

– That statement is not quite correct.


– It is so nearly correct that any inaccuracy does not matter. It is a fact that certain dentists are being penalized because they are not prepared to “knuckle down “ to this combine. Because of the manner in which prices for their supplies are controlled, dentists’ charges have not been reduced in recent years. In some cases they have been forced to increase their charges to the general public, and even then many of them are not showing much profit on their work. Many dentists are up against fi 11 ai ici al difficulties, but the combine which controls their supplies is not by any means in that position. It is the duty of this Government to ascertain to what extent this monopoly is controlling n service essential to Australia. Under the Ottawa agreement the tariff schedule is being used largely for the purpose of helping certain interests in this country and within the Empire, so there is an obligation on the Government to protect the people particularly with regard to the importation of patent medicines and drugs.

There are several other matters which I desire to mention briefly. One is the financial difficulty confronting not only those engaged in our various manufacturing and primary industries, but also practically every section of the community. It is suggested that if Empire peoples will agree to buy from and sell to each other, everything will be well. But, as we all know, the first thought of every section in a community is to improve its condition, financially, socially and industrially. In doing that, they increase the cost of production in their own industry. That increased cost is passed on to some other section, which ifthen faced with an increased cost of living for which it, in turn, has to be compensated. Many industries have approached the Commonwealth Government for a bounty. I refer not only to the primary industries, but also to many secondary industries. Let me take two extremes - the steel industry and the wheat industry. One is a large and important secondary industry, which is enjoying a bounty, and the other is a large and important primary industry which is seeking a bounty. Both industries require assistance to enable them to meet the obligations imposed upon them by the industrial section in its endeavour to improve its social and financial position. That is taking place throughout the British Empire. In nearly every part of the Empire there is unrest following on unemployment, and unemployment has imposed increased taxation on the nation, and an increased cost on both primary and secondary production. The restrictions which have been placed upon trade are gradually adding to the unemployment existing in the various nations. This agreement is the outcome of an important conference, which was attended by representatives of the various parts of the Empire. All these questions were considered at that conference, and we arcnow asked to accept this agreement, under which the trade of the Empire will bcconfined to the Empire. The primary producers have been told that they are to receive tremendous benefits under the agreement. Prior to the Ottawa Conference taking place, the Attorney-General (Mr. Latham) was reported in the press as having stated that the wool-growers would receive no benefit whatever, and that the wheat-growers expected nothing. After examining the agreement carefully, I have concluded that the AttorneyGeneral’s statement was, unfortunately, fairly accurate. The wool-growers, as wool-growers, will receive no advantage under the agreement, but, as meat producers, they may ultimately obtain some indirect benefit. That, of course, is problematical. We know that Great Britain can consume a large portion of Australia’s exports of beef, mutton and lamb; but, unfortunately, we are faced with the high cost of transport and storage, and the fact that we cannot place chilled meat on the British market. We are also up against the serious prejudice that exists in the Mother Country against the consumption of frozen moat. I fear that it will be a considerable time before any advantage will be derived from tlie agreement by the meat, producers of Australia. The meat storage facilities in Great Britain are glutted, and it will take six or seven months to dispose of the supplies in cold store. Australia is now almost overstocked with sheep in the settled districts. We have had a series of fairly good seasons throughout the Commonwealth, and the Federal and State Governments, and also the primary producers themselves would be well advised to recognize the fact that the rainfall records indicate that a drought is not far distant. We will have another drought sooner or later and must be prepared to face it by encouraging speculation in stocks. Lcave to continue given.~ Speculation in the purchase of various forms of primary products, both in the raw and in a partly manufactured state, has almost ceased in the purchasing countries of the world. They are buying their requirements from month to month. Financial institutions are not prepared to make money available for that purpose, because of the financial stringency which is partly artificial, and partly real. But the very fact that that form of speculation has ceased should cause governments to watch our position closely, because immediately adverse seasons visit the various parts of the world, we shall be faced with serious shortages of products and, perhaps, the return of abnormal prices, which will not be so beneficial as some people may imagine.

Debate (on motion by Mr. Forde), adjourned.

House adjournedat 10.29 p.m.

page 1896


The following answers to questions were circulated: -

Lucerne Fleain Onions

Mr Stacey:

y asked the Minister for Commerce, upon notice -

  1. Whether hisattention has been drawn to the action of the State Government of New Smith Wales in prohibiting the importation of onions from South Australia on account of the lucerneflea?
  2. Is it a fact that the lucerne flea will not live in onions?
  3. Will he look into this matter with a view to maintaining the principle of freetrade between the States of the Commonwealth?
Mr Stewart:

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

  1. Yes.
  2. The onion is recorded asahost plant for lucerne flea.
  3. The point concerned is not so much a matter of freetrade or restraint of trade between States as the protection of one State against infection by a destructive pest from another State. This is a matter of interstate quarantine in respect of which the States have powers as well as the Commonwealth. The whole question will be made the subject of full inquiry.

Cost of Exchange

Dr Maloney:

y asked the Treasurer, upon notice -

  1. Is it a fact that to remit to England Commonwealth interest amounting to £26,301,000, costs £6,674,000 in exchange?
  2. Could this huge expense be saved by sending to the High Commissioner debentures or treasury-bills to be sold in England to meet the cost of exchange?
Mr Lyons:

– The answers to the honorable member’s questions are as follow : - 1.The cost of remitting interest amounting to £26,301,000 due on Australian (Commonwealth and State) debts in England is approximately £6,674,000 at the present rate of exchange.

  1. It is not practicable to adopt the suggestion of the honorable member.

Secretary to Defence Department.

Mr Francis:
Minister in charge of War Service Homes · MORETON, QUEENSLAND · UAP

s. - Yesterday, the honorable member for Balaclava (Mr. White) asked the Assistant Minister for Defence the following question, without notice: -

Is it a fact, as stated in this chamber last week, that there is in existence an agreement between the Secretary to the Department for Defence and the previous Government? If so, will the Minister place the agreement on the table of the House?

I am now in a position to inform the honorable member that somewhat similar questions on this subject have previously been asked, and I would refer the honorable member to the replies given on the 15th March, 1928, vide Hansard, page 3793 ; on the 28th July, 1930, vide Hansard, page 4756; and on the 30th July. 1930, vide Hansard, page 4887, viz.: -

The appointment of Mr. M. L. Shepherd as Official Secretary in Great Britain of the Commonwealth of Australia was approved by his Excellency the Governor-General in Council on the6th January, 1921, with salary at the rate of £2,000 per annum. The Prime Minister at the time of Mr. Shepherd’s appointment was theRight Honorable W. M. Hughes, and the papers show that the decision to recommend Mr. Shepherd’s appointment for the approval of the Governor-General in Council was made by Cabinet. The papers do not, however, contain arecord of any definite agreement having been entered into regarding Mr. Shepherd’s salary, but the terms of the approved order in council are definite on this point.

Cite as: Australia, House of Representatives, Debates, 3 November 1932, viewed 22 October 2017, <>.