House of Representatives
9 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 state when we may expect to have presented to Parliament the report of the Wool Investigation Committee ?

Prime Minister · WILMOT, TASMANIA · UAP

– Because of the pressure of other business, Cabinet has not yet had an opportunity of considering the report. It is hoped, however, to make it available to honorable members at the earliest possible moment.


– Will it be available within the next fortnight?


– I hope that it may be available within the next week.

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– Has the Prime Minister any information regarding the progress of negotiations with the Premiers of the various States for the rationalization of railway services throughout the Commonwealth ?


– The Minister for Transport has informed me that, so far, only three States have replied to the circular issued to them, and we are awaiting replies from the others. Some difficulty has been experienced by the States in formulating replies, because the State Parliaments have not in all cases been sitting, and it may not be possible to have the matter dealt with before Christmas.

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– Will the Prime Minister bring under the notice of Cabinet the fact that a bounty paid to wheat-growers on the basis of the quantity of superphosphate used will not benefit a large number of growers in northern New South Wales? I have just received a telegram from Mr. Ratcliff president of the Farmers and Settlers Association at Manilla, which reads -

Paper reports fertilizer favoured instead bounty. Proposition no use northern wheatgrowers. Endeavour obtain bounty.

Another telegram from Mr. Hawker is in the following terms: -

Fertilizers valueless north north-west. .411 growers producing wheat heavy loss, therefore all should participate.

As this is a matter of great importance to wheat-growers, and as Cabinet is on the eve of coming to a decision regarding it, will the Prime Minister give particular attention to the facts I have mentioned?


– Cabinet is giving consideration to every aspect of the matter.


– In view of the rumours which have been in circulation, will the Prime Minister state whether the proposal to assist wheat-farmers by granting a subsidy on the purchase of superphosphate has been made at the suggestion of the Commonwealth . Bank, or influenced by bank overdrafts to the manufacturers of superphosphate?


– The matter of assisting the wheat-growers is under the consideration of Cabinet, whose decision will not be influenced by the opinion of any of the banks.

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– In view of the persistent rumours that unauthorized persons are using parliamentary railway passes for political organizing, will the Minister for the Interior recommend to the proper authority the withdrawal of the existing passes, and the issue of others of a different design?

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

– Consideration will be given to the honorable member’s suggestion.



– In the event of the shale oil industry being reestablished at Newnes, will the Government, in order to assist the industry in its initial stages of development, give consideration to a proposal for remitting the excise duty at present chargeable on refined motor spirit? .


– Consideration will be given to the honorable member’s suggestion.

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– I have received information that very large consignments of cheap slippers are being imported from Japan. One shipment of 10,000 pairs recently arrived at Sydney, and were sold at 7id. a pair. As there are over 4,000 boot-makers out of work, and as 75 per cent, of those employed are working only two to three days a week, will the Assistant Minister for Customs consider the application of the dumping provisions of the Customs Act to these imports.

Assistant Minister for Trade and Customs · BASS, TASMANIA · UAP

– The matter mentioned by the right honorable member has not been brought under my notice, but I shall make inquiries regarding it.

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Currency Report


– Has Cabinet yet received or considered the full text of the currency report adopted at the Ottawa Conference? If so, when will it be made available to honorable members?


– Cabinet has not yet had an opportunity of considering the matter, but the report will be made available as soon as .possible.

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Alleged Disaffection


– In view of the report which has appeared in the Sydney Baily Telegraph that a mass meeting of naval ratings has been held outside the Port Melbourne railway station, will the Minister representing the Minister for Defence persist in his statement that no discontent exists among naval ratings, and that they have no grievances to be rectified?

M r. LYONS. - Yesterday I stated that certain concessions had been made to men serving in the navy, but those concessions are in no way associated with reports of disorder among naval ratings.


-Will the Prime Minister state whether there is any truth in the press reports that there have been threats of a strike among naval ratings, or are such reports merely Communist propaganda ?


by leave - I cannot answer the honorable member’s question more satisfactorily than by quoting the following statement made by the Minister for Defence (Senator Pearce) in the Senate this morning : -

It lias come to the knowledge of the Government that, during the last few days, there has been an organized and determined attempt to cause dissatisfaction in the Navy by the spread of false propaganda. Honorable senators ave aware that by the Financial Emergency Act introduced by the Scullin Government, certain reductions of pay were approved by Parliament, and were applied to the Navy, the Army, the Air Force and the PublicService generally. There is in the Navy what is known as a welfare committee, which is representative of the lower ratings. That committee is recognized by the Naval Board as the channel through which representations shall be made regarding alleged disabilities suffered by those ratings. When the reductions were made, the welfare committee made representations to the Naval Board regarding what is claimed to be inequalities, and injustices consequent upon those reductions. . The Naval Board considered the matter, and made certain recommendations to the Government. When the additional salary reduction of £8 per annum was made, based upon a fall in the cost of living, the Government, bearing in mind the recommendations of the Naval Board, appointed a committee, consisting of the chief finance officers of the navy, army and air forces, to consider how those reductions should take effect in regard to the members of those forces. When the last salary cut was made, certain variations wore effected in respect of the Navy and Army, the result being that the lowest ratings in the Navy did not suffer that additional cut. A graduated scale was adopted, affecting only those above the lower ratings, and embracing the commissioned officers, whosustained the full reduction of £8 per annum. The Naval Board made further recommendations concerning matters which the lower ratings in the Navy believed to constitute an injustice to them when compared with the treatment meted out to members of the - Public Service. Those matters particularly affected travelling when on leave, child endowment, and the allowance made to a rating for rations when on leave. It was pointed out that, inrespect of the last-named matter, conditions in the Australian Navy differed appreciably from those obtaining in the Royal Navy. I shall not now go into details on the subject, as that can more properly be done when we are discussing the Estimates. It is sufficient to say that all of these matters were receiving the consideration of the Government last week. On the 8th November the Government arrived at the decision to rectify the anomalies in respect of the three matters to which I have referred, to give to naval ratines concessions in regard to travelling to and from their home when on leave, to increase the child endowment allowance for married ratines from £0 to £13 per annum, as in the Public Service, and to raise the allowance for rations made to- sailors when on leave, because, obviously, it costs a mau more to live when on leave than whim he is “ found “ aboard ship.

Unfortunately, a day or so before that determination was arrived at by Cabinet, the Government became aware of a movement, obviously organized and cunningly directed, to use these known grievances to seduce the nien of the fleet, and incite them to disaffection, and so bring about an organized strike or mutiny. The first outward manifestation of this was the publication in a Melbourne newspaper of the statement that the naval ratings had held a meeting, formulated un ultimatum, and forwarded it to the Federal Cabinet, that ultimatum purporting to convey the decision that unless the demands of the men wore conceded, they would refuse duty. Accompanying the ultimatum was a picture bearing a caption, which indicated that armed force might be used to achieve the object of the men, and depicting bluejackets with rifles ami bayonets, the suggestion being that the Navy would mutiny, or go on strike.

During the recent stay of the fleet in Melbourne, the ships were, as usual, thrown open for inspection, and, as is customary in British communities where the public takes great interest in the Navy, they were visited by a large number of persons. Those who were directing this conspiracy took this opportunity to distribute many hundreds of copies of a roneoed document among the ratings, suggesting that the men of the licet should organize nml join hands with their “ comrades ashore “ to bring about a strike or mutiny, in order to force the hand of the Government; and declaring that, while ashore it might be possible for the forces of law and order to control the situation, those forces would bo ineffective if the men in the Navy took the action suggested. The whole document was an incitement to disaffection, to mutiny or to strike. The newspaper article which I have mentioned has been referred to the Attorney-General, and, as certain action is pending in that respect, I. shall not deal further with that point.

At this point Senator Dunn interjected, “What is the name of the newspaper?” and the Minister proceeded -

T shall not at this stage give its name. The decision of the Government arrived at on the Rtb November was duly communicated to the Naval Board and, I presume, has been transmitted to the admiral commanding. But, naturally, it has not yet been promulgated in the ordinary way by regulation. That will bc done shortly.

When the Senate adjourned for supper at midnight last night, I was met in a corridor <of the Parliament House by two pressmen, who told me that they had received an intimation from the Argus newspaper, or that the’ Argus newspaper had received an intimation - I am not quite sure which - that in Melbourne yesterday afternoon 200- men. marched off the ships of the navy, which were then in harbour, ».nd held a stop-work meeting, at which it was advocated that they, and the remainder of the ratings on those ships, should refuse duty, but that eventually the resolution was carried that they should leave the matter in the hands of the Naval Board with an intimation that, unless their demands were conceded, further action would be taken. It is reported that the mcn then returned to the ships.

About an hour later several other pressmen camo to me with the same information, one stating that he had received it from Adelaide, through the Adelaide Advertiser. As honorable senators would naturally expect, as soon as possible this morning, I got in touch with Admiral Hyde, the First Naval Member. Admiral Hyde informed me that those statements were quite inaccurate, and that the fleet sailed this morning without trouble, in accordance with the pro-arranged programme.

I direct the attention of honorable senators, and of the public generally, to this sinister aspect of the matter: During last evening, Admiral Hyde received several calls on- the telephone from various quarters, but apparently all by arrangement, and he was told in each case that the fleet would not sail. In every instance the person who gave the message refused to disclose his name. Admiral Hyde, while investigating the matter, learned that newspapers in Melbourne had received anonymous messages yesterday containing the same statements as he himself had received, and stating that the fleet would not sail. Honorable senators will understand that one of the easiest ways to promote disaffection - as it was evidently hoped to do - is to create the impression that such disaffection already exists. In. the roneoed leaflets which were distributed in hundreds aboard the fleet while the ships were open for inspection, reference was made to the trouble which had occurred in the British Fleet at Invergordon, and it was stated that similar action would be taken in the Australian Fleet.

I have consulted the Prime Minister and have his authority for making this statement to-day. It is advisable that the people of Australia should know of this dastardly plot to foment disaffection in thai branch of our defence forces on which the safety of our country chiefly depends.

I shall only add that, although the statement has been made that the men left the ship -for the purpose of holding a meeting, we have received a definite assurance from Admiral Hyde that they did not do so. With the exception of one mam from each ship - such absence is a common occurrence - ali were on board at the proper time, and sailed with their ships as arranged.

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– Will the Prime Minister inform we whether there is any truth in the statement published in the press recently to the effect that the Government proposes to purchase another war boat in Great Britain through Mr. Bruce?


– There is no foundation whatever for the statement.

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– Does the report which appeared in last night’s Sydney Sun of the communication from the Minister for Commerce to the secretary of the Marine Stewards Union, indicate that the Government has reached finality in its consideration of the claims of Tasmania for relief from disabilities associated with the Navigation Act?

Minister for Commerce · PARRAMATTA, NEW SOUTH WALES · UAP

– As the honorable member was good enough to indicate beforehand the nature of the question he intended to ask, I am able to disclose to him the actual communication to the union representative mentioned from myself. The press report does not correctly reproduce my communication. Mr. Moate, the secretary of the union concerned, asked to be furnished with a copy of any proposals that the Government might have for amending or restricting the operations of the coastal provisions of the Navigation Act, and I replied to his request in the following terms : -

I have your letter of 2nd instant, referring to certain press rumours suggesting that it is the intention of the Government tomake amendments to the Federal Navigation Act, and asking to be supplied with copies of the proposal. In the first place the Government litis not yet formulated any definite proposals likely to operate to the prejudice of the interests which you represent. Furthermore, I am afraid it would not be in conformity with government practice to supply advance copies of such proposals to interested parties before submission to the House. However, you may rest assured that if, and when any amendments to existing legislation are contemplated adequate time for interested parties to make representations will be afforded between the submission of same to the House and their ultimate adoption.

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– Is the Prime Minister yet in a position to state what arrangements, if any, have been made by the Government with the tobacco manufacturers of Australia for the pur chase of next season’s tobacco crop, what quantity is to be bought, and at what price ?


– There has of necessity been some delay in this matter because of the illness of the Minister for Trade and Customs, but it has been taken up by the Assistant Minister and the Department, and there is to be a conference with the manufacturers, so that the negotiations may be carried a step further.

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– Is it a fact that the fee for wireless licences is uniform throughout Australia, and that the Western part of New South Wales suffers considerably because of the lack of a proper wireless broadcasting service? Will the Prime Minister make representations to the Postmaster-General, asking him to remedy this defect as soon as possible?


– I shall bring the matter under the notice of the PostmasterGeneral.

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– In connexion with the advances made by the Commonwealth to the States for the purchase of rabbitproof wire netting, is it a condition that the money must be expended on wire netting made in Australia?


– I shall obtain that information for the honorable member.

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Bank Circular


– Has the attention of the Prime Minister been called to the following paragraph in this morning’s Sydney Daily Telegraph: -

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” Curbhis Petulance.”

Minister’s Attack onBank’s Circular.

Resentment at the attack made by Mr. Archdale Parkhill on the Ottawa circular of the Bank of New South Wales was expressed in the Senate to-day by Sir Hal Colebatch (W.A.). “ I hope the Government will try to curb the petulance of a colleague in the House of Representatives,” said Sir Hal. “ When we have a comparatively junior Minister condemning a circular issued by such an important financial institution as the Bank of New South Wales the position is approaching the ludicrous,” he continued.

Did the Postmaster-General, who was in charge of the House at the time, voice the considered opinion of the Government in his condemnation of the circular issued by the Bank of New South “Wales in’ respect of the Ottawa agreement?


– The Postmaster-General made his statement after full consideration of the position, and I have no criticism to pass on the remarks he then made.

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– The Public. Service Board is holding competitive examinations in Sydney and Melbourne in order to test applicants for about 200 clerical vacancies. Is there any reason why those examinations should be confined to the States of New South Wales and Victoria?


– The decision of the Government is that examinations shall be held in all the capital cities of the Commonwealth.

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– In view of the repeated statement of the Prime Minister that the Pensions Department would administer sympathetically the recently amended Invalid and Old-age Pensions Act, I ask him whether he is aware that land which was of some value when the owner’s pension was originally assessed, is in some cases of no value at’ all now ? Yet, despite that fact, there has been a further reduction of 5s. in the pension.


– The difficulty referred to by the honorable member arises, not under the recent amendment of the act, but under the legislation as it previously existed. It is utterly impossible for the department itself to investigate every individual case.

Mr Beasley:

– But there has been a reduction of 5s. without any investigation being made.


– Any reduction that has been made must have been made because of the value placed upon the land. Pensions are reviewed every year, and, in re-assessing, allowance is made for any reduction in the value of the pensioners’ land. There has been no further reduction of pensions, by the deduction of land values, as a result of the passing of the recent legislation. A pensioner is at liberty to make representations to the department, if the value of his land has declined. It may be, as the honorable member has said, that the value of the land has, in some cases, disappeared altogether, but that would be taken into consideration by the department in assessing the pension. The department could not be aware of every fall in the value of land unless the pensioner concerned brought that fact under its notice.

Mr James:

– This matter has already been brought under the notice of the department.


– Apparently the pensioner has not been able to establish the fact that the value of his property has declined.


-The Chair must insist on the observance of the rule that questions may be asked only to elicit, information. The growing practice of continuous interrogation by interjection while a Minister is replying to a question, thus initiating an irregular debate, cannot be allowed to continue.


– Will definite action be taken immediately to permit pensioners to dispose of their property at full market rates to sons, daughters, or other relatives, without forfeiting their right to a pension? I understand that at present that is not permitted.


– A pensioner may dispose of his property with the consent of the Commissioner; but the law provides that if the proceeds of the ‘ sale, together with other property maintained against the pensioner, exceed £400, the amount of pension paid shall be recovered from such excess. There is nothing to prevent a bona fide sale of property at full value to a relative or to anybody else if the consent of the Commissioner is first obtained.


– Will the Treasurer urge the Commissioner to give immediate permission to sell to persons who desire to dispose of their property, in some eases in order to purchase smaller homes for themselves?


– I shall look into the matter.

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Formal Motion fob Adjournment.

Mr SPEAKER (Hon G H Mackay:

– I have received from the right honorable member for Cowper (Dr. Earle Page), an intimation, that he desires to move the adjournment of the House this afternoon for the purpose of discussing a definite matter of urgent public importance*, viz, - “ The necessity for reducing costs in both primary and secondary industries, and for lightening the intolerable burden due to the cumulative effect on industry of customs duty, primage and exchange, by amending the Customs Act to provide that when the amount of duty payable upon importation is being assessed, an amount shall be deducted from the rate of duty applicable, equivalent to an agreed upon proportion of the adverse exchange rate operating against the importer concerned.”

Five honorable members having risen in support of the motion,

Question proposed.


.The motion on which I have moved the adjournment of the House is an important one. This matter is of the most urgent importance to almost every section of the community. It concerns manufacturers, consumers, importers and exporters, and is of paramount importance to the future of the Ottawa agreement itself. I regret that I have to raise the subject during the absence of the Minister for Trade and Customs (Mr. Gullett), but it is important that a decision be reached by the Government before the tariff schedule which accompanies the agreement is dealt with by Parliament. Honorable members, and the people generally, were staggered by the announcement of the Minister for Trade and Customs, when he said, in answer to a question,, that he had instructed the Tariff Board to disregard primage and exchange when determining a fair protective duty. If this course is persisted in, and the Government takes no other action, if is evident that costs in Australia must “be kept at a high level indefinitely, and this will retard our economic recovery, and prevent the absorption of our unemployed.

Economic recovery in Australia, as elsewhere, depends upon bringing closer together the prices received for farm products and those of manufactured goods. Ever since the beginning of the depression in Australia the gap between those sets of prices has been widening, and if we are to remedy the position, some attention must be paid to the incidence of exchange and primage duties on the top of the customs duties as they affect costs. Exchange is not a problem of a few days’ duration only. Probably we shall be faced with an adverse exchange on sterling and gold for many years - certainly for the next two or three years. The recent behaviour of sterling, which has still further depreciated in relation to gold, lends colour to this opinion. Unless action is taken, the price of manufactured goods will remain excessively high for two reasons. In the first place, even those manufacturers who desire to sell their goods as cheaply as possible, will be prevented from bringing down prices because of the high cost of raw material and equipment; mid in the second place, those manufacturers - and unfortunately there are some in this country - who are prepared to exploit the protective value of primage and exchange, will be enabled to keep their prices at the highest possible level.

The importance of this matter may be understood if we analyse imports for the first two months of the present financial year. The figures for the first quarter are not available, but those for July and August show that the increase in imports as compared with the corresponding period for last year, is mainly in goods for industry - that is, for raw material and equipment. For July and August of 1931, goods for industry were imported to the value of £4,900,000, while for the corresponding months of this year the value of such importations was £7,225,000, an increase of £2,325,000. For the same period, the importations of consumers’ goods amounted to £1,975,000 for 1931, and £2,666,000 for 1932, an increase of only £691,000. The value of some of the goods imported is shown in the f ollowing table : -

All these articles constitute raw materials or the equipment of industry. Their value together amounts to £1,949,000, or 64 per cent, of the total increase in imports. The Tariff Board, in a recent report dealing with galvanized 1-in. iron piping, stated that the duty was 40 per cent., exchange 25 per cent., and primage 10 per cent., making a total of 75 per cent, protection, plus other charges. A hundred feet of such iron piping could be landed in Australia for £2 12s. 4d., while the price of the locally manufactured article would be £2 10s. Id., only just below the price of the imported article. Another instance given by the board was that of a 5-horse, 3-phase, power motor. The original cost, f.o.b. in Sweden, was £6 6s. ;. the exchange was £1 16s. 3d., and the primage duty and other charges brought the cost up to £18 4s., amounting to 190 per cent, protection. The local manufacturer sold a similar motor at £1S. The cost of a metal working machine overseas ‘was quoted at £132 f.o.b., the exchange at £33, and primage and duty £94 lis., making a total landed cost of £273, amounting to 107 per cent, protection. The cost of the locally manufactured power engine was £18 0s. 6d., again just below the cost of the imported article, while the cost of the locally manufactured metal working machine was £270. In these instances, the local manufacturers have availed themselves of practically the whole of the protection afforded by tariff, exchange, and primage duties. Since the Scullin tariff was imposed, wages have fallen from £4 odd to £3 3s., the cost of raw materials has fallen, coal prices have dropped, and freight charges in some instances have .also been reduced. Nevertheless, as the Commonwealth Statistician points out, the cost of manufactured goods is 10 per cent’, higher in Australia to-day than four years ago, while the price of primary products has fallen by 47 per cent. These high costs constitute a real danger, because they make it more difficult to obtain the essential equipment necessary for industry and cause overcapitalization and keep high prices for industrial products pegged at a high level. The Tariff Board, in its last annual report, refers to the serious effect on the unemployment situation of the high prices of raw materials and equipment for industry. It is evident that, so long as costs are kept at their present high level, the unemployment problem cannot be solved.

Not only have the costs of goods manufactured in Australia been kept at a high level, but essential imported goods are also dearer than they ought to be. For instance, window glass manufactured in Belgium can be bought there f.o.b. at £4 lis. Id., but after all charges have been paid the landed cost is Australia is £15 5s. 7d., which is equal to a protective duty of 235 per cent. The .overseas f.o.b. price of a band saw, which is not manufactured in Australia, is £43 14s. ; exchange amounts to £14 ls.; the duty on wrappings, packages, &c, to £27, which, with other charges, brings the landed cost up to £97, equalling 122 per cent, protection. A machine lathe imported from the United States of America can be bought f.o.b. in the States for £369. On this exchange amounting to £112 has to be paid, while the duty is £304. The landed cost is £864, representing 134 per cent, protection. In these circumstances, the criticism of the Tariff Board is peculiarly apt. In its last annual report the board states -

The board is faced with the position that high customs duties plus primage duty, exchange, duty on packages, in addition to freight and landing charges, frequently represent a protection of over 100 per cent, on the f.o.b. price. In the opinion of the board this position is dangerous and, as already indicated, is liable to result in the expenditure of capital on the installation of plant to manufacture in Australia commodities for which the demand is too limited or which for other reasons cannot be economically manufactured in Australia. Moreover, it may lead to the pegging of high prices for essential plant and material when the prosperity of the Commonwealth and the employment of the people are closely wrapped up with the reduction of prices of secondary products in keeping with the reduced spending power of the community.

The Country party suggests f/hat the Customs Act be amended so that, in assessing duties, the board should take into consideration the protection afforded by the exchange rate. That that is practicable has been indicated by the board’s report on galvanised iron. Pointing out that the exchange rate of 30 per cent., which existed at that time, represented a protective duty of £5 a ton, the board suggested that an alternative method would be to operate the duty on a sliding scale. For example, when the rate of exchange for telegraphic transfers from London is lower than 4 per cent., the board suggested that the British preferential duty should be 90s. a ton. It also gives rates of duty for various percentages up to “ 28 per cent, and over.” When the rate of exchange is over 4 per cent., but lower than C per cent., a duty of 83s. a ton is proposed; when 14 per cent., the duty falls to 48s. a ton. When exchange gets to 28 per cent, or over, it is suggested that the duty should be eliminated altogether, and the iron admitted free. A policy of this kind would tend to keep down prices, which is a vital consideration to those who need equipment for the development of either primary or secondary industries in Australia, and it would also destroy the pyramidal effect of the present policy of piling up duty, primage and exchange, which is important to everybody in the community. Under existing conditions none of the parties to industry know where they stand. The importers 3o not know where they are, because they do not know when the exchange rate may be altered. They have therefore to provide for both duty and exchange. The manufacturers do not know where they are, because, although the customs duty is some protection, they do not know when additional imposts may fall upon them, or when certain protection, other than that afforded by the tariff, may be lifted. It seems to me that the way to meet the situation would be for the Government to request the Tariff Board. to prepare a formula to provide for certain variations of duty in respect to industries which buy the whole or nearly the whole of their raw material in Australia, and to other industries which have to pay “duty on substantial quantities of their raw material. Rubber, for instance, is dutiable at 4d. per lb. Duties are also imposed on braids which are used in hat-making. In some cases the combined effect of the duties, primage and exchange is to increase charges by more than 100 per cent. I believe that the Tariff Board could’ suggest a formula which would provide for percentages in, say, three categories according to the proportion of imported raw material incorporated in the Australian manufactured goods. If this were done, importers and manufacturers alike would know exactly where they stood, and the consumers would get a far better deal than at present. I do not think that the adoption of such a policy would result in an excessive loss of revenue, because it would have the effect of stimulating exports and increasing imports of certain classes of goods, the greater volume of which, at a lower rate of duty, would give more revenue than the present restricted volume gives at a higher rate. Such a policy would also make possible the re-employment of many people who are now out of work. This, in turn, would result in reduced taxation for relief purposes, and in an increased purchasing power that would be beneficial alike to primary producers, wage-earners, and those engaged in general industry. It is only by the adoption of some such policy that Australia can regain her lost prosperity.


.- I second the motion, and strongly favour the adoption of the course proposed by the right honorable member for Cowper (Dr. Earle Page). In my opinion, it is absolutely essential that we should take into consideration the protective incidence of exchange and primage. At present a quartette of protective factors, operating in combination, is placing many in- dustries entirely beyond the reach of external competition. These factors are normal protection due to freight, insurance, landing and other charges, the existing rate of duty, which at present is abnormally high in many instances, the primage duties, which in most cases amount to 11 per cent, on the f.o.b. value, and exchange, which is equal to another 25 per cent. The cumulative effect of these four protective factors i3 to raise a fiscal wall which is almost unscaleable. We have been told that two of the factors - exchange and primage - are temporary; but that term may cover a month, a year, a decade, or even longer. For instance, we have been told that this building is temporary. Many of the embargoes imposed by the Scullin Government were said to be temporary, but they remained in force long enough to create vested interests in particular industries, and when they were lifted the people engaged in these industries proclaimed to the world that they would be ruined. Unfortunately, they came to regard embargoes as the normal, rather than the abnormal, state of affairs, and deeply resented the removal of them. The same thing is still happening, and may happen again over a far wider field, with a continuation of the almost complete shelter which these four protective forces, in solid combination, afford to certain industries. It is easy for industries incapable of existing in normal times to come into being under such hot-house conditions. Under such a policy we may develop many unsound industries, which, under article 9 of the Ottawa agreement, we specifically undertake not to do. We may also build up industries which do not know the meaning of the “ competitive conditions “ referred to in article 10 of the agreement. The protection of primage may be withdrawn when the government revenues begin to improve, and this would give a bad jolt to such industries. Later, exchange may fall, and these industries would, consequently, fail. I can imagine the representatives of such industries going post haste to the Tariff Board for protection of 100 per cent, or thereabouts to replace the protection by means of primage and exchange which had been withdrawn from them. The cry of the wheat-growers would be nothing to the cry of those engaged in these industries if the existing protection imposed by the exchange and primage were withdrawn. The annual report for 1932 of the Tariff Board gives some enlightening instances of inflated prices due to the abnormal and unprecedented combination of the price-raising factors to which I have referred. It is exceedingly dangerous for us in our own interests to allow the existing state of affairs to continue. The right honorable member for Cowper gave some examples of this nature from the Tariff Board report. I have received a letter from a hat manufacturer in Sydney which shows that the price of certain hat braids, which cost £53 9s. 2d. in Switzerland, was increased by £39 5s. 6d”. through exchange, and £16 16s. through duty, primage and other charges, making the total cost of them £109 10s. 8d., or 106 per cent, more than the cost price in Sydney before manufacturing and distributing costs commenced. A parcel of 424 pieces of ribbon cost £47 13s. at the factory in London, but duty and primage increased the price by £44 8s. 2d., exchange and stamps by £14 10s. 10d., and freight and casing by £4 9s. 7d., making the total cost £111 2s. 7d., or 133 per cent, more than the original cost price. These are alarming facts to which we cannot close our eyes.

In my opinion, there would be no insuperable difficulty in adopting the policy outlined by the right honorable member for Cowper, for it would not involve any temporary tinkering with customs schedules. The reduction of our customs duties is another matter altogether. Some of us arc very anxious to see a reduction in this direction, but that is not a factor in this proposition, for the policy of the right honorable member could be implemented without changing one figure in the customs schedules. It could be done by a small amendment of the Customs Act. Section 154 of that act provides the basis on which duty shall be assessed. It states, for example, that 10 per cent, shall be added to the f.o.b. value of all imports. The effect of this provision is, of course, to add one-tenth to every item in the tariff schedule. It would bc equally simple to insert a provision in the act that an agreed upon proportion of the prevailing exchange rate should be deducted from the duty. It would be necessary to make two or perhaps three classes of industries to carry out such a policy. In respect of industries which obtain all their raw material locally or import only negligible quantities of it, twothirds or three-quarters of the exchange rate could be deducted from the duty imposed on classes of goods coming into competition with the products of such industries. In connexion with industries which import a considerable quantity of their raw material, half the exchange rate could be deducted in the same way. The onus could be placed on the industries concerned to satisfy the Tariff Board as to the class in which they should come. Let us take the case of an industry in respect of which the British tariff was 35 per cent. The exchange rate would be 25’ per cent., making a total impost by exchange and duty of 60 per cent, on the British article. If we deducted 12i per cent, from the duty of 35 per cent., it would mean that the duty would be 22£ per cent., and this, with the exchange of 25 per cent., would give a protection of per cent., instead of 60 per cent. In the case of industries which import, all their raw material, or nearly all of it, a proportionate and equitable adjustment could be made. In connexion with goods entering under the foreign tariff, if the same formula were applied with respect to the enormous exchange rate, it might be argued that this would reduce the preference to an unreasonable extent or even wipe it out. There is an enormous foreign exchange at present in respect of countries still on the gold basis. The rate for America, for example, is approximately 85 per cent. If it be held that we should not interfere with the margin of preference between Great Britain and foreign countries to the extent of not even considering exchange, then I say we would be satisfied if there were deducted, in respect of such foreign goods, an amount based on sterling exchange rates instead of gold; but even if the same formula were applied to the foreign column as to the British, the total preference, taking into consideration exchange as well as duty, would still be greater than in normal times. [Leave to continue given.] I would also suggest that no deduction should be made from foreign duties where the British article is free. Obviously if a deduction were made in the foreign column, corresponding with a proportion of the exchange rate, and there were no duty at all in the British column, the margin of preference would be reduced. I suggest that provision for that should be made in a scheme of this kind, so that the margin of British preference would never be in danger. There is real danger in the continuance of the present. system of allowing the protective incidence of all these things which I have enumerated, to pile up on top of one another and to make an almost impassable trade barrier, at the same time still increasing the cost of manufactured goods. If some action is not taken by the Government on the lines that have been suggested this afternoon, then articles 9 and 10 of the Ottawa agreement will be a dead letter. I. do hops that the Government will give this matter the consideration that it deserves.

Prime Minister and Treasurer · “Wilmot · UAP

– As the right honorable member for Cowper (Dr. Earle Page) said when introducing this subject, it is so big and intricate that it is impossible to deal with it in the few minutes that are given by the Standing Orders for this discussion. What I propose to do is to indicate, generally, the views of the Government regarding it. From the beginning the object of our protective tariff has been to build up industries on an efficient basis, instead of on an uneconomic basis, which would permit this country to be flooded with goods produced uneco.nomically. It has been the duty of the Tariff Board to find the right formula for that purpose. This, however, is becoming infinitely more difficult. It has always been difficult to determine the right margin of preference in favour of Australian products ; to-day it is infinitely more difficult because of the new elements and special circumstances that have arisen. For instance, the imposition of the primage duty was a temporary expedient. The imposition of primage duty was not proposed by the last Government with the object of adding to the protection already given to our industries - a protection that was regarded by the Tariff Board and Parliament, as, at any rate, adequate. The object of the primage duty was to obtain revenue, and the effect has been to obtain revenue and to increase protection. The rate of exchange is settled by the play of economic forces throughout the world, and no tariff board can effectively control it. It is never fixed, and cannot be depended on to remain unchanged from month to month. We cannot control the economic forces which are operating to fix the exchange rate. The rate of exchange is among the temporary things which have to be considered by governments and by tariff boards ; but which make the position more difficult. All these matters are receiving the close consideration, not only of governments and economists, but also of those connected with our various industries whether primary or secondary. From time to time we have modified our views on this subject, and I think that has been amply demonstrated to-day by the speech of the right honorable member for Cowper who, on other occasions, has felt that there should be some definite reduction of customs duties against the increase in the exchange rate. To-day, however, he is suggesting that some formula should be found to meet the situation. The Government has had the advice of economists from time to time. We knew that the exchange was increasing the price of imports, and that it would have the effect of raising prices generally. We could see that it would increase the price of imported raw materials, and of all raw materials produced here exportable in their nature. This increases the costs of secondary industries in Australia. Again, the exchange rate has increased our burden of debt overseas. While we cannot ascertain exactly the increase in the cost of production in Australia in addition to the increase in the prices of imported commodities and raw material due to exchange, it can be safely said that prices are fixed, and costs are in some close relation to them. The effect of an increase in cost is slow. There is a certain lag, particularly in Australia, where we have a fixed system which controls industrial costs, mainly wages. That operates slowly. The increase in costs is slow, following the increase in actual prices, so that it becomes difficult for any one to decide what is the relation between the two factors; but it can be assumed that eventually they v/ill level up. On that basis the Government felt that one would cancel the other, and that the Tariff Board need not take into consideration what are merely temporary influences. The Minister for Trade and Customs, therefore, asked the Tariff Board when making its reports, not to take these things into consideration. Although the word “instruct” was used by him in this House, no definite instructions were issued to the board, and that body is free to take these things into consideration. The Minister was, however, entitled to ask the board to report on any particular phase of the matters referred to them just as any Minister in the past has been entitled to ask that body to take certain questions into consideration, and to supply information to the Government upon them. I have said that costs generally are slow to overtake increased prices. The right honorable member for Cowper (Dr. Earle Page) and the honorable member for Gippsland (Mr. Paterson) have not overlooked the fact that exchange, when it increases the prices of imports or exportable raw materials, at the same time increases the cost of Australian manufactures. There is no getting away from that fact. Exchange affects the prices of our primary products that are exportable. Actually, we consume, in Australia, 56 per cent, of our exportable products, as against 44 per cent, exported, and, therefore, one can see at a glance the effect that exchange must have upon costs in Australia. It is recognized that manufacturers do not get the full benefit of what appears on the surface to be a benefit to them. Therefore, it is necessary to take all these matters into consideration. Because these costs do not follow closely on the actual prices, an increased protection is given to our industries which they did not enjoy in the past. It is hopeless for any Government to attempt to arrive at a decision in this House. It would be hopeless for this Parliament, without the fullest information at its disposal, to do that. There is only ore body that nan advise us in this matter. To suggest to the Tariff Board that it should make a definite reduction in the tariff would get us nowhere. The board is composed of experts who have at their disposal expert opinion. Its members have been specially selected for the particular work that they have to do, and if the Tariff Board cannot arrive at some formula or technique that may be applied, it is hopeless for this Parliament to attempt to do so. In the past, we hoped that a simple solution would meet the situation; but that hope has not been fulfilled. The right course to follow is for the Government to refer the whole question and the principles involved to the Tariff Board for consideration. The board would be free to make recommendations, and Parliament would make the final decision.

Mr Riley:

– Surely the Government would not query the recommendation of the Tariff Board?


– Parliament would be entitled to consider and decide whether the recommendations were practicable. The more we discuss this matter, the mo ry difficult it becomes. I listened with interest to the right honorable member for Cowper, and the honorable member f-.r Gippsland. They suggested that the- .. should be various classifications in t.-ie tariff, and I suggest that every time wu examined the position wc would discover that more classifications were needed Those honorable members made it perfectly clear how difficult the position would be if we wanted, for instance, to preserve the preferential margins in favour of the United Kingdom. While we are prepared to allow the Tariff Board to report upon the whole matter, and, if possible, to discover some means whereby the balance will be held fairly, let me indicate how difficult will be the task of the board in spite of its special qualifications. For instance, we have the question of preference to Great Britain, and the margins that we provide in the tariff, and that will be provided under the Ottawa agreements. We have to ascertain what allowance under existing conditions and varying conditions, as time passes, is to be made to meet the exchange position between Great Britain and Australia, and what allowance will have to be made between Australia and Great

Britain on account of exchange and the price of sterling. On top of that, we have to keep under consideration the position of foreign countries, particularly in respect of the general tariff, and what allowance is to be made to them. The honorable member for Gippsland has said that where there is difficulty hi regard to preserving preferences in favour of Great Britain, he would be prepared to fix a rate taking into consideration the relation between sterling and the Australian pound. But that would not end the trouble, because the department, in operating that scheme, would have to take into consideration all the currencies of the world. If the principle, as enunciated by the honorable member, that we must make allowance in our tariff for the relative position between the currency of Great Britain and that of Australia is right, we shall have to make allowance between the currencies of Japan and the United States of America. The United States of America is on a gold basis, and naturally, if this principle is right, Ave would have a lower tariff against the United States of America than against Japan.

Mr Paterson:

– Not if the Government adopts my suggestion.


– The honorable member’s scheme would not get over the difficulty because, in relation to sterling, there is a variation among the different countries of the world. While I am quite prepared to refer this matter to the Tariff Board, I am pointing out the difficulties which will confront it. As soon as one is varied, its relation to all others is disturbed, particularly its relation to the preference we are bound to give to the United Kingdom.


– Not according to our suggestion.


– That would be all right if in relation to sterling the currencies of all other countries were equal, but they vary, and when we admit exchange and currency as factors to be considered in imposing customs duties, we must consider them in relation to all countries; otherwise, on a particular day similar goods might be landed from three or four countries and three or four different rates be levied on them. I am mentioning some of the practical difficulties with which we have to contend. All the time there will continue the complicated problem of maintaining, through these difficulties and variations, the agreed margin of preference to Great Britain against each other country. The Constitution requires that duties shall be uniform in all States, and I do not know how that provision would he construed iu relation to the imposition of different rates of duties on similar goods landed on the same day from various countries. This is an aspect which must be considered. We have been dealing with exchange as it affects generally prices and the protective policy, but it operates in two ways. It encourages exports, and discourages imports. If exports are to be encouraged and imports are not to be discouraged, Australia will have an increasing volume of imports to which a lower rate of duty will apply. The increase in imports will soon exhaust the overseas funds for financing purchases, and, in consequence, exchange will rise; and again the tariff will have to be revised.

Dr Earle Page:

– Our policy would stimulate exports.


– The right honorable member is aware that at the present time we are obliged .to restrict some exports because of the limited market overseas for them. It matters not what the exchange is, if there is no market for our products. The fact that increased exchange will magnify the financial difficulties of the Treasury is a practical difficulty which cannot be ignored. If

Ave remove the restricting effect of exchange upon imports, and admit greater quantities of overseas goods at lower rates, our revenue will decline, our expenditure will be greater, and we shall experience even more difficulty in balancing the budget. The Tariff Board will have to consider the probable effect of this proposal on the national revenue. Whilst one may cheerfully hope for some relief as a result of the suggestions made by the right honorable member for Cowper (Dr. Earle Page) and his colleagues, the problem is not simple. The closest consideration will have to be given to it by the expert Tariff Board, which may require to call to its assistance other skilled advice. The Government is pledged to balance its budget, and if the adjustment suggested by the right honorable member for Cowper should mean an increase in the expense of government and a reduction of the customs revenue, the budget can be balanced only by increasing taxation. Can we raise the rates of income tax, or sales tax? We have done what was possible to relieve the primary producer by lifting the sales tax from many of the commodities of which he is the principal consumer, but if we have to increase taxation, thus raising the cost of production, the whole purpose of the right honorable member’s proposal will be defeated. Honorable members must not think that we can wave a magic wand and snatch from the air a simple formula to meet the situation. I shall be pleased, indeed, if the Tariff Board, after an investigation, can suggest a method of achieving what members of the Country party have in view.

Mr Paterson:

– Will the right honor able gentleman refer the proposal to the Tariff Board?


– I undertake that the Government will refer to the Tariff Board, which is the most competent body to deal with the matter, the general question of exchange in relation to protective duties, in the hope that it may be able to suggest some formula or technique that may be effectively applied to meet the abnormal situation that obtains.


.- The matter raised by the right honorable member for Cowper (Dr. Earle Page) is too far-reaching to be dealt with effectively in the brief time available for the motion now before the House. But even though the subject is to be referred to the Tariff Board, the elect of the people are entitled to express themselves on the principles involved. The right honorable member has proposed an amendment of the Customs Act, practically with a view to instructing the Administration to deduct from the protective duties an agreed proportion of the exchange. Exchange is adverse or favorable according to the economic condition of the country in relation to others. An adverse exchange may be due to disparity in price levels, or to an adverse trade balance. Any relaxation of exchange, or reduction of duties commensurate with the rate of exchange, would lower the effectiveness of exchange as an economic factor in rectifying an adverse trade balance. It has been suggested that the exchangewould have corrected our adverse trade balance without the imposition of abnormal duties. I admit that it probably would have done so in two or three years, but in the meantime the country would have gone over the precipice of national insolvency. In such an economic crisis as that which faced us in 1930, only drastic measures would suffice. If conditions were allowed to run their normal course, exchange would undoubtedly adjust the trade balance, unless we offset its influence by borrowing overseas, but it would not immediately rectify a dangerous situation. After the trade balance has been corrected, the exchange factor must be allowed to operate to keep it correct. Exchange discourages imports; it also imposes a charge on governments and governing bodies in connexion with the remission of interest and sinking funds overseas, and thereby becomes an increasing burden on budgets. Offsetting to some extent these influences is the fact that it is in effect a subsidy to the exporter and to that extent is beneficial. To the extent that it imposes an additional charge on budgets, it is not beneficial; to the extent that it helps to rectify the trade balance, it helps to keep the country solvent. The first effect of reducing all duties to the extent of a proportion of the exchange would be to weaken the protective tariff. The protective tariff, whether it be high or low, is that which Parliament has imposed, and desires to be maintained. The proposal of the right honorable member for Cowper would undermine our tariff. An exchange of 25 per cent. is a charge to that extent upon imports, including those which are admitted free of duty, except the 10 per cent. primage. The free list covers approximately 40 per cent. of the tariff items, and 25 per cent. is added to the cost of those articles by the exchange. In respect of many articles, the exchange becomes a charge upon the manufacturer who has to bear the 25 per cent. additional cost of his raw material. The right honorable member for Cowper proposes that the manufacturer should at the same time lose a proportion of the protective duty. This proposal undoubtedly strikes at the secondary industries, and as a general principle cannot be accepted. Those honorable members who want low duties must seek to effect a reduction directly, and not in this round-about fashion.

Mr Paterson:

– That is a different matter.


– It is not. This proposal will do four things. First it will reduce revenue.

Mr Paterson:

– That is questionable.


– If 20 per cent. be deducted from existing duties onaccount of the exchange, the primage duty will immediately disappear, and the Treasury will lose £4,000,000 of revenue.

Mr Paterson:

– But revenue would be increased by greater imports.


– How are we to pay for increased imports with a limited amount of funds in London? How are we to stimulate our export trade?

Mr Beasley:

-When there are no markets.


– That is a pertinent consideration, but I leave it aside as abnormal. We are to stimulate imports by reducing the cost of production. How shall we reduce the cost of production ? By removing the protective duties from agricultural machinery?

Dr Earle Page:

– From equipment generally.


– The Auditor-General of South Australia examined the circumstances of typical farmers in four of the principal wheat-growing areas of that State, and he has reported that 50 per cent. of their cost of production is represented by interest. Reduce the interest burden and productionwill be stimulated. At least 40 per cent. of the existing imports are on the free list or subjected to revenue duties only. Another long list of goods is subject to only low duties, if imported from the United Kingdom, but to comparatively high duties if imported from foreign countries. Take such goods as bearing a 10 per cent. duty if coming from Great Britain, and a duty of 35 to 40 per cent. if from foreign sources. If the formula adopted to meet the effect of exchange were a reduction of 20 per cent. in duty, the margin of preference now given to Great Britain would almost disappear. The honorable member for Gippsland (Mr. Paterson) tried to counter that by saying that we should treat the matter on a sterling basis. Assuming that sterling was on a par with gold, or that the dollar came to the level of sterling, which is quite possible, as the United States of America was recently almost off the gold standard, then the margin of preference to Great Britain as against the United States of America would be reduced, and it would be necessary to introduce a further amendment of the Customs Act to restore it. It would be unsound to deal with exchange by such a method. If the honorable member were to suggest as an alternative formula a reduction of duty by 10 per cent., how would the revenue that we now get from the primage duty be made up? The Government could not raise £4,000,000 annually merely by stimulating exportation. By what means is it proposed to stimulate exportation? That must be a gradual growth. The only thing that will stimulate exportation is the increasing of the prices of the goods which we send overseas. We cannot increase the price of our wool sold abroad, and it is unlikely that the price of our wheat or the prices of the bulk of our other exports will be immediately increased. How, therefore, would we bring about a favorable trade balance? It is super optimism to suggest that the difficulty would be met by taking from 15 to 20 per cent, off the rate of exchange, inasmuch as our exports would then bc increased, because a portion of our revenue would consequently be reduced, and would have to be made up by additional primage and other duties. (Leave to continue given.]

I do not wish to be impolite to the members of the Country party, but I think that they are misleading the people whom they are here to represent. They do so by declaring that the difficulties and disabilities of those people are due to the tariff, or, in some cases, to the tariff and to wages costs, thus diverting their attention from the real burden that is crushing the farmers. In 1925, a special inquiry was made by the Tariff Board into this matter of the addition to the cost of production which may be due to the operation of the tariff on agricultural implements. It is the only report on the subject I can get.

Mr Paterson:

– We have not raised that issue to-day.


– Honorable members of the Country party have temporarily dropped it, because for the moment it tells against them. But they raise it on every suitable occasion. They have made so great an outcry against the duty on galvanized’ iron that one might think that the farmer ate galvanized iron, that he clothed his children with that article, and fed it to his stock. They have also raised a cry about the cost of galvanized pipes. It is significant that when there was a duty on galvanized pipes, and the article was being made in this country, prices came down, whereas when there was no duty, and no local manufacture, prices either went up, or remained as before. This is what the Tariff Board said upon the subject -

In the opinion of the Tariff Board, the prices of agricultural implements are, in all probability, much lower in Australia with protection and local manufacture than they would be under freetrade had no local manufacture existed.

The report gives striking illustrations, and, although it was made in 1925, the principle still stands. Here is a further statement regarding fencing wire -

In 1921, No. 8 black fencing wire was being sold in Australia from £46 to £50 per ton. When Bylands started to manufacture they placed their product on the market at £30 per ton. British prices then began to. drop. Rylands gradually came down to £22 10s. British prices fell to the same level. Rylands could only make black fencing wire, and it was noticed that it was in black fencing wire that United Kingdom prices were reduced, while United Kingdom prices for galvanized wire remained at a higher level. After local manufacture of galvanized wire became a factor in the supply of the Australian market, the United Kingdom prices dropped in the same way as those on black wire had previously dropped.

The report also makes a comparison of the price of agricultural machinery in countries where there is no protective duties and where yet prices are as high, or in some cases higher, than in Australia where we have an industry competing with imports. We are aware of the existence of cartels in the galvanized pipe industry and of the combination of importers. We know that, unless there is competition from local manufacturers we will be exploited by the importers. So that all this talk of reducing duties to stimulate exports is so much moonshine. The way to stimulate export is by reducing interest on land, and by getting better prices for our products. The Country party, however, would have us reduce our revenue and increase the costs of government, and would also reduce the protective in- cidence of the tariff and the margin of preference to British manufacturers.


– I probably should not have taken part in the debate had it not been for some of the remarks of the honorable member for Gippsland (Mr.- Paterson). I well remember, during a debate on the tariff last year, when I was a member of the Opposition, asking the honorable member whether, if he were a manufacturer, he would extend his factory or purchase a site to build a new factory simply on embargoes, 50 per cent, surcharges, primage duty, and exchange. He emphatically replied, “ No.” Yet this afternoon, when supporting the half-baked proposal which emanates from his leader, he would have the House believe that there are some people in the community mad enough to do what he declared he personally would not do. While I favour protectionist principles, I am prepared at all times to have matters investigated. The quotation that was made by the Leader of the Opposition (Mr. Scullin) was a pertinent one. Complaint was made by certain people in Australia that our farmers were being over-charged for the implements that they use on their farms. The Government said, “Very well, we will remit the matter to the Tariff Board.” On that board there was a member representing rural interests, Mr. Masterton. The decision of the board was unanimously in the direction referred to by the Leader of the Opposition, that implement makers had saved the farmers considerable sums of money. I am surprised that the honorable member for Gippsland should support the contention put forward by the right honorable member for Cowper (Dr. Earle Page) that this proposal should be accepted merely because of the existence of embargoes, surcharges, and so on. Everybody knows that those are merely temporary expedients and should not bc taken into serious consideration in connexion with what most of us hope will be a permanent tariff. With all due respect to the Prime Minister (Mr. Lyons), I do not think that the matter of exchange should be referred to the Tariff Board. It is one for the banks, and particularly the Commonwealth Bank.

Mr Lyons:

– It has been made quite clear that the banks will control exchange.


– I warn the Government that it will be treading on dangerous ground if it tinkers with exchange. I rose principally to call attention to the inconsistent attitude of the honorable member for Gippsland.


.- The remarks of the Leader of the Opposition (Mr. Scullin) impel me to refute some of the erroneous impressions that he conveyed to honorable members and, probably, to the farmers of Australia. He quoted the Tariff Board as stating that prior to the manufacture of No. 8 black fencing wire in Australia, the price was from £40 to £50 a ton, but that immediately after Rylands began to manufacture that product the price dropped to £30 a ton. The fact is that the higher price was due to war conditions, just as with calcium carbide, the price of which jumped from £10 a ton to £80 a ton, because of the dearth of Shipping. Before there was any suggestion that No. 8 black fencing wire should be manufactured in Australia, the overseas price was from £7 10s. to £8 a ton.

Some hyper-protectionists in this House persistently object to anything that will put our secondary industries on an equal basis with our primary industries. They insist that secondary .industries shall be maintained irrespective of the resultant poverty and persecution of primary industries. If that policy is persisted in, our primary producers will not be able to survive. This motion for the adjournment of the House is to help the Government to evolve a means of reducing the cost of secondary commodities to the people of Australia. The relative price levels are, roughly, primary 118, secondary, 200. That is the fundamental fact that this country must examine. Unfortunately, time precludes me from going into details, but the matter de- rounds the attention of our sane legislators. Under the Pratten tariff, we had duties which were practically higher than any obtaining elsewhere. Under the Scullin Government the tariff was made even higher, and embargoes, supertaxes, and primage duties also came to stay. Manufacturers are now loath to lose even one of those emergency advantages, which they promptly absorbed selfishly to themselves. Our high tariff was not introduced as a protection. The Eight Honorable W. Watt, the then member for Balaclava and Acting Prime Minister, imposed higher customs duties to bring in a greater revenue. The manufacturers, acting in conjunction with the workers, found a way of using those high duties as a protective medium. These costs have been mounting surreptitiously until the exporting industries are no longer able to pay the bill. Whether the Government likes to do the right thing or not, we have reached a position when costs must come down. If we hesitate, the crash will be worse- than it need otherwise be.


.- The policy of the Leader of the Opposition (Mr. Scullin) when he was Prime Minister was to keep down exchange and to raise tariffs. His real object seemed to be to increase costs in every way possible. He suggests that the Country party has been fooling the producers. 1 am surprised that the workers of Australia have been fooled so long by the Labour party. I cannot understand how a party which raises the cost of living against the whole community in order to benefit a small section, perhaps, not 10 per cent., can continue to pose as the friend of the wage-earners. The Country party has asked that the Customs Act be amended after the Tariff Board has given full consideration to all aspects of the matter. It appeared to me that the Prime Minister (Mr. Lyons) did not realize the full import of our request. The honorable member for Maribyrnong (Mr. Penton) seemed to think that the Tariff Board would be unduly influenced. It is not our desire that this should be so. Surely the honorable member for Maribyrnong should be familiar with the acts which he, as Minister for Trade and Customs, was called upon to adminis ter. It would appear, however, that he is entirely ignorant of the provisions of the Australian Industries Preservation Act, section S of which is as follows: - 8. - (1) If the Minister is satisfied, after inquiry and report by the Tariff Board, that the exchange value of the currency of the country of origin or export of any goods has depreciated, and that by reason of such depreciation goods have been or are being sold to an importer in Australia at prices which will be detrimental to an Australian industry, the Minister may publish a notice in the Gazette specifying the country as to the exchange value of the currency of which he is so satisfied, and the goods originated in or exported from that country to which in his opinion the provisions of this section should apply.

The Prime Minister would be well advised to pay some attention to the schedule of that act, which sets out the scale by which duties may be increased to meet depreciated currencies in other countries.

Mr Paterson:

– We wish to make it work both ways.


– Yes, and that is only fair. Honorable members are not justified in saying that high costs in this country are due to high wages. In Canada and the United States of America, where wages are higher than in Australia, agricultural machinery is only half the price it is here. The Tariff Board, in a recent report, pointed out that one Australian manufacturer of agricultural machinery had in two years made a profit equal to the whole of the paid-up capital of the company. Yet a man who goes out into the back-blocks to produce goods for sale overseas so that the nation may meet its commitments receives no help, and is called upon to foot the bill for the protection of Australian secondary industries. Surely honorable members are not serious in asserting that our manufacturers could not carry on without the additional protection afforded by the exchange rate and primage duty. I appreciate the promise of the Prime Minister that our request will be referred -to the Tariff Board, hut I should like the board to report at once.

Mr Lyons:

– I am afraid that the honorable member is asking too much.


– The work of the board should be expedited if it knows the

Anil of Parliament in the matter.


.- The right honorable member for Cowper (Dr.

Earle Page) has made a request regarding the incidence of primage and exchange, and the Prime Minister (Mr. Lyons) has agreed to refer his suggestion to- the Tariff Board for consideration. That promise will probably satisfy Country party members for the time being; but I cannot help asking myself whether, even if the Country party is conceded everything it has asked for, the position of the farmers will be any better than before.

Mr Paterson:

– We are not thinking only of the farmers.


– Well, I wonder whether any section of the community will be better off. There is nothing in the experience of the world to indicate that Australia, or any section of the community, will benefit even if the request of the Country party be granted. What has become of the agricultural population of Great Britain? That country pursued a policy of freetrade for generations, yet all the time her fields have been going out of cultivation. At the present time, the agricultural population in all countries in the world is suffering, irrespective of whether they are high or low tariff countries, or whether they have any tariffs at all. Take, for instance, the coffeegrowers of Brazil. They are not affected by a tariff; but they are pouring their coffee into the sea because world prices for their product are not high enough to enable them to live. What justification have we for assuming that the proposal of the Country party, even if given effect, will do more than deceive ‘the unhappy primary producers into a belief that they are being offered a means of salvation? No one can claim that the sugar-workers in Cuba receive high wages. These poor people work for the merest pittance; their standard of living is probably lower than that in most other countries; yet the sugar-fields of Cuba are going out of production, and the mills are standing idle, because the world’s markets cannot absorb their produce. We are merely deluding ourselves if we imagine that we can do any good by tinkering with proposals of this kind.

If we remove primage duty and other charges to which objection has been taken, revenue will decline, and money will have to be found through some other form of taxation. That would be merely giving something to the primary producers with one hand, and taking it away from them with the other. The problem before us, and before the world, is greater than this. Members of - the Country party have objected to the tariff as an odious form of taxation ; but it is not nearly so odious as the exchange.

Mr Gregory:

– If we could export some of the products of our secondary industries the exchange rate might be reduced.


– Half of the goods imported into this country are admitted free, or pay a duty of not more than 25 per cent.; but, on top of that, the banking corporations, through their manipulation of the exchange rate, have imposed a further charge of 25 per cent. This charge, be it remembered, is not imposed by any government, but by private institutions. Take the wool bales and corn sacks needed by the primary producers. These goods are admitted free of duty, but exchange at the rate of 25 per cent, has to be paid on the purchase money. What the primary producer gains by the exchange on the things he exports he pays out again in exchange on superphosphates, corn sacks, &c. Yet members of the Country party do not protest against this. The trouble is that we in this country refuse to face fundamentals ; we refuse to follow a new road, although the .old one has been proved to be wrong; we refuse to open our eyes, and accept a new policy at this time of national crisis. For that reason we are driven from one subterfuge to another; we block up one hole and open three more. Palliatives such as have been suggested by the Country party are of no use to the primary producers or the starving proletariat in the city. Eventually we shall be driven by sheer force of circumstances to the abandonment of our present policy, and the adoption of one more suited to the needs of the time.


.- The speeches delivered by the Leader of the Country party (Dr. Earle Page) and the Deputy Leader of it (Mr. Paterson) show that this proposal is a mere subterfuge and a misrepresentation of the real position.

Mr Paterson:

– That remark is objectionable to me, and I ask that it be withdrawn. The proposal has been made in all sincerity.


– I ask the honorable gentleman to withdraw the statement to which objection has been taken.


– I withdraw the word “ subterfuge,” if it is objectionable, and I shall say that the members of the Country party are merely pulling the legs of the farmers. They wish to create the impression that they alone of the parties in this House have the interests of the farmers at heart. It has been- shown clearly by the speeches delivered in opposition to this proposal that it is impracticable. The Country party is not willing to grant reasonable protection to the great secondary industries of Australia, but it is quite willing to ask for protection to the extent of 500 per cent, for certain primary industries. I am not at the moment discussing the merits or demerits of such a degree of protection. This proposal advocated by the Country party Ls impracticable, in the first place, because our tariff has been largely built up on Tariff Board recommendations, based on exchange at the normal rate, and minus primage duties. While I was Minister for Trade and Customs, I was frequently criticized by the members of the Country party for not accepting every recommendation of the Tariff Board, yet they now desire to ,go over the head of the board in this matter. Protection to industry cannot be based on exchange or primage, both of which, under existing conditions, are temporary factors, for this would make stability and real protection impossible.

J recently had a conversation with a big manufacturer who told me that if his firm could be sure of continued protection for the secondary industry in which he was engaged he would erect another mill, but conditions are, unfortunately, unstable in this regard. If we made exchange and primage an element in the fixation of protective duties the exchange rate might, fall seriously on some occasion when Parliament was in recess, and our manufacturers would thereby be robbed of the protection which they anticipated would be afforded to them. This proposal is another fanciful theory of the Country party, which evidently thinks that our customs problems can be dealt with by rule of thumb methods, lt has had. the attention of governments on a number of occasions, and has always been rejected on the ground that it is impracticable. For instance, manufacturers who use nonferrous metals buy at London parity,. plusexchange and primage. Again, it sometimes happens that two rates of exchange operate in the one duy - one rate in the morning and the other in the afternoon. The Country party appears to have forgotten (hat our Constitution provides that our customs duties shall be uniform, but I shall not spend time in discussing that aspect of the subject.

Another difficulty in putting this scheme into operation is that purchasers of goods from overseas sometimes pay for the goods three months before they are landed, sometimes on the day they land, and sometimes three months after they are landed. It will be seen, therefore, that under the system now proposed, two or three rates of duty might apply to goods taken from the same ship on the same day. The administration of our customs laws would be rendered almost impossible by the adoption of a policy like this. It would also be highly dangerous to permit protective duties to be affected by such temporary factors as primage and exchange, for we know very well that the Country party would like the exchange rate to be very greatly increased. They would like to see. it up to even 50 per cent.

Mr Paterson:

– We have never saia so !


– Country party members outside of this chamber have advocated such a proposal. What would be the effect of such a situation on the budgets of the Governments of Australia? The present rate of exchange involves the Commonwealth in the payment of an additional £8,000.000 iti connexion with overseas payments, and if the rate were increased to 50 per cent., the expenditure under this heading would be £16,000,000 per annum. This is an aspect of the subject that is never mentioned by them. The Country party has been silent in regard to the urgent necessity for a scaling down of the interest burden.

Mr Thorby:

– I have mentioned it.

Mr.FORDE. - I admit that the honorable member for Calare (Mr. Thorby) is one of the few enlightened members of the party who has discussed this aspect of the problem. Let us examine what another honorable gentleman, who is now a memberof the Country party in this House, thought about this subject a year or two ago. I refer to the honorable member for Riverina (Mr. Nock). He was a member of a sub-committee of four farmers which compiled an estimate of wheat production costs for the year 1930, at the request of the wheat committee of the Producers’ and Consumers’ Conference held at Bathurst, New South “Wales, on the 12th May, 1931. This estimate showed the cost of 400 acres of wheat cropped, including 250 acres of fallow. The net cost of production was £873, the cost of . interest being £386, or 45 per cent. After working for nothing the farmer concerned would lose £182 for the year. Every increase of 1 per cent. in the interest rate meant a difference of 3d. per bushel.

The Leader of the Opposition referred this afternoon to a report by the AuditorGeneral of South Australia, which gave certain particulars of wheat production costs compiled from returns from 43 farms in four principal wheat-growing districts of South Australia. The figures he quoted were as follow: -

Average size of farms- 480 acres.

Bushels per acre - 12.

Working expenses - 13.7d. per bushel.

Depreciation -4.35d.

Interest -16 per cent. or 44 per cent. of the total cost per bushel.

Taxes - 2.45d. per bushel.

Total cost -36.5d.

Price received - 31.68d.

The report offered the following comment on this table of costs and receipts: -

In many cases interest is more than half the per acre cost of production.

Yet the great cost of interest does not seem to weigh very heavily with the members of the Country party in this House.

As the honorable member for Bourke (Mr. Anstey) has pointed out, England, with a freetrade policy which goes back for a century, has not been able to protect the interests of her agricultural communities, and has now been forced to adopt other methods of building up her primary industries. It can hardly be said, therefore, that our exchange and primage duties are responsible for the plight of our primary producers. It is the same throughout the world. In other countries, such as Cuba, Fiji, and Java, the farming communities have been reduced practically to starvation.

The honorable member for Forrest (Mr. Prowse) accused the Leader of the

Opposition of quoting the war-time price of wire, but the right honorable gentleman quoted from the Tariff Boards report on agricultural implements. In order that there may be no mistake on this point, I direct the attention of honorable members to the following extract from that report : -

In 1921, No. 8 black fencing wire was being sold in Australia from £46 to £50 per ton. WhenRylands started to manufacture they placed their product on the market at £30 per ton. British prices then began to drop. Rylands gradually came down to £22 10s. British prices fell to the same level.Rylands could only make black fencing wire, and it was noticed that it was in black fencing wire that United Kingdom prices were reduced, while United Kingdom prices for galvanized iron remained at a higher level.

From what I have said, it will be seen that the proposal of the Country party is quite impracticable, and that they refuse to face the fact that the solution lies in monetary reform.


– The honorable member’s time has expired.


.- I hesitate to enter the lists with such gentlemen as the Prime Minister (Mr. Lyons), the Leader of the Country party (Dr. Earle Page), and the Leader of the Opposition (Mr. Scullin) ; but certain aspects of this subject should be emphasized. The Deputy Leader of the Opposition (Mr. Forde) has said that this proposal has been before Parliament on several occasions.

Mr Forde:

– I said that it had been before successive governments.


– That the intelligence of some honorable gentlemen is not sufficient to enable them to understand it even yet, shows that it is necessary to bring it forward again and again. The leader of the Lang group (Mr. Beasley), for instance, said, by interjection, that the proposal would mean the tabling of a new tariff schedule every week. That was an absurd remark. As the leader of the Country party pointed out clearly, it is not proposed to interfere with the existing tariff schedule. This was recognized by the Prime Minister.

The honorable member for Maribyrnong (Mr. Fenton) observed that there seemed to be a desire on the part of certain honorable members of the Country party to break down the protectionist policy of Australia. I contend that this proposal has nothing whatever to do with our protectionist policy. There may be some low protectionists in the Country party, but I make it clear that I am a protectionist. I am not in favour of all the existing duties, but that is not the point at the moment. It has been said in opposition to this proposal that it would oblige the officers of the Customs Department to deal with several rates of duty on the same classes of goods in the one day, but they do so at present. If a motor car arrives from the United States of America and another arrives from the United Kingdom on the same day, each is assessed at a different rate of duty. Similarly, if goods of the same class arrive from British and foreign countries on the same day, they are assessed at different rates of duty.

We do not suggest that this proposal is simple; but we contend that the difficulties connected with it are not insuperable. I fail to see that the adoption of this proposal would seriously affect the revenue. Under existing conditions an article dutiable at 30 per cent. is also subject to 10 per cent. primage duty, which makes the impost 40 per cent.; but the purchaser of it has to pay another 25 per cent. for exchange. This makes the total amount of duty 65 per cent. Our proposal is that a proportion of the exchange rate should be remitted. If half the exchange were remitted, the direct impost on the purchaser would be only12½ per cent. There is a customs duty of 30 per cent. and a primage duty of 10 per cent. If the customs duty were reduced by half, the position, because of the exchange, would be as before.

Mr Scullin:

– If the duty were reduced by 10 per cent., the primage duty would be abolished.


– The point that I am making is that the cost to the importer of 25 per cent. on account of exchange is not a matter of revenue. It represents the difference between our, currency and that overseas.

Mr Scullin:

– But if all duties were reduced by 10 per cent., just because the exchange was fixed at 25 per cent., the primage duty would be abolished at one stroke.


– I said at the beginning of my speech that I hesitated to enter the lists with the protagonists of our tariff policy. Admittedly a reduction of 10 per cent. in duty would represent a reduction in revenue to that extent. There is no doubt that the exchange adds to the cost of everything produced and consumed in this country, and it is time, as the Prime Minister (Mr. Lyons) has suggested, that the Tariff Board dealt with the matter. Many honorable members seem to have an intense sectional interest in respect of matters discussed in this House. They allow party consideration to obscure their general vision. We should represent the whole of the consumers of Australia, and not only one section of the community. We must reduce costs if we are to rehabilitate Australia and overcome our financial difficulties.

Question resolved in the negative.

page 2129


The following paper was presented : -

Arbitration (Public Service) Act - Determination by the Arbitrator, &c. - No. 19 of 1932 - Australian Postal Electricians’ Union.

page 2129


Second Reading

Debate resumed from the 8th November (vide page 2063), on motion by Mr. Gullett -

That the bill be now read a second time.

Upon which Mr. Scullin had moved by way of amendment -

That all the words after “That” be omitted with a view to insert in lieu 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 nf its power to give effect to the will of the people on general tariff policy.”


– I support the Ottawa agreement. Our representatives at the conference acquitted themselves with credit. They returned to Australia with an agreement the effect of which should be far-reaching, and of considerable assistance to our primary industries. For many years we have been seeking trade reciprocity with Great Britain, and this agreement is a step in that direction. I join with those honorable members who have expressed sympathy with the Minister for Trade and Customs (Mr. Gullett) who on his return from Ottawa became seriously ill. I sincerely hope that he will soon be restored to health and with us once again in this chamber.

It is our duty to seize every opportunity to build up our primary and secondary industries, which are of the greatest importance to this country. With the assistance of the Tariff Board and its recommendations, we should give those industries fair and reasonable support, at the same time ensuring that no undue hardship should be placed on any section of the community. Much has been said about the Tariff Board. I contend that we have little to fear in respect of its operations in the future. The board is a representative body, and its members have done their work well, and to the entire satisfaction of the people of Australia. I cannot see how members of Parliament could possibly usurp the functions of the board. If Australia is to prosper, Great Britain must also enjoy prosperity. The Mother Country is our bes): market, and unless it is prosperous how can we expect to prosper? Several honorable members have referred to the effect that this agreement is likely to have upon the rest of the world. They fear that in seeking reciprocity with Australia and the other dominions, Great Britain is doing something that will set the world against it. But there is not much ground for those fears, when we consider what that country has done to help other nations. Great Britain has always been the leading country of the world. After the war it made every endeavour to rehabilitate Europe. The Bank of England stood firmly behind the ex-enemy countries, such as Germany, Austria and Hungary. Great Britain has used every effort to stabilize the currencies of those countries, not for any selfish motive, but in order to rehabilitate the markets of the world. It has also assisted Greece, Belgium and India. Therefore anything that Great Britain does for the dominions should not be looked upon by honorable members as something that will re-act to our disadvantage in the future. That country has accepted the responsibility of policing the trade routes of the world, not for its own benefit but for the benefit of the nations generally. The trade routes are of vital importance to Australia. The obligatory points of passage such as Gibraltar, Malta, Suez Canal and Singapore are policed and controlled by Great Britain. If Great Britain were a thirdclass nation, how could we maintain our trade routes? How could we maintain our White Australia policy, which is undoubtedly irritating to the coloured nations bordering the Pacific? Let me contrast the action of Great Britain with that of two great republics - the United States of America and France. The world is in a state of chaos to-day, and the prices of goods on the markets of the world are lower than they have been for many years. There is an old and true saying that when gold is scarce goods are cheap. That is true to-day. Gold is scarce because the United States of America and France have adopted a policy of selfishness. They have built up reserves of gold to such an extent that there is a scarcity of gold elsewhere. That has brought about a decline in the value of products. World recovery will not take place until gold returns to circulation. It is the selfish attitude of those two great nations that has brought about the world-wide depression. If they were prepared to lend Great Britain £800,000,000 or £900,000,000 of gold at 1 per cent., there would be a revival of trade, and prices of goods on the world’s markets would increase, to the ultimate benefit of every one. England is the only first-class nation in the world that could put that amount of gold into circulation.

I come now to the Ottawa agreement and its effect upon Tasmania, the State which I represent. What the agreement means to that State it means also to the other States. Tasmania, for the last four or five years, has been paying particular attention to its primary industries. It has organized its Agricultural Department in such a way as to bring about greater and more economic production. The difficulty is, of course, to find markets for our goods. Recently we established a fat lamb industry. It was a new industry to Tasmania, and many people said that it would never be a success, particularly, as during the winter months, that State has to import fat sheep from the mainland. Nevertheless, we built up that industry. In the first year we shipped approximately 10,000 lambs, and in the second year 20,000. This year, owing to the improved outlook created by the Ottawa agreement, we expect to export 40,000 lambs.

Turning to the fruit industry, the Ottawa agreement assures our apples of an advantage of 4s. 6d. a cwt. on the British market. In Tasmania the production of apples has been practically doubled during the last four or five years, and orchards are still being planted in the Huon valley at the rate of 1,000 acres a year. I doubt whether in any other part of Australia primary production is extending more healthily than in that district. Until recently our orchardists were in difficulties, but they have improved the quality of their fruit, and in both appearance, grading and packing Tasmanian apples are 50 per cent. better than they were a few years ago. The American apple reaches the London market late in the season, and enjoys almost undisputed sway for from four to six months of the year. Owing to the ability to keep apples in cool storage for long periods, the American fruit is often selling in England when the first consignments of Tasmanian apples are arriving. Each year the first half dozen shipments from Australia to London have to encounter this competition. But, with the preference of 4s. 6d. a cwt., plus exchange, our fruit will be able to compete more effectively, and the Australian fruit industry will have an opportunity to develop further, to the material benefit of our people generally. In this regard the Department of Commerce can render valuable assistance to primary producers. It is essential to orderly marketing that reliable statistics of production and consumption shall be available. The Department of Commerce can collate and distribute this information to the growers and shippers through the agricultural departments of the States. In addition, advisory marketing boards, such as have been established in Tasmania, can keep in touch with the growers, advise them regarding the classes of goods to be produced, and regulate shipments to the markets of the world. Without this information and guidance, the market is liable to be glutted one week and starved the next. The Ottawa agreement will help Tasmanian primary producers considerably, and they accept it gratefully. The Australian delegates are to be congratulated on their efforts and achievements at Ottawa, andI hope that the agreement embodied in this bill will be accepted by Parliament.


.- For my own guidance I have collected the opinions of this agreement expressed by many of those who are most interested in it, and capable of judging its merits. The divergence of opinion is very great. For instance, the Minister for Trade and Customs (Mr. Gullett), when introducing this bill, spoke enthusiastically of the benefits which it will yield to the primary producers. He said -

The preferences confer upon the primary producers of Australia benefits which are equal to the anticipations of the delegation and the Government, and which will go far to enable our primary producers to survive their present difficulties.

I draw the attention of the House to the guarded statement of the honorable gentleman that the preferences are equal to the anticipations of the delegation and the Government; he did not indicate what those anticipations were. He continued -

We worked in the belief that, in fashioning the tariff in this country, the man on the land and his employees have hitherto come off second best. If we aid the man on the land, we aid every agency of industry and business and employment in the Commonwealth.

Those words are full of hope for members of a party that represents the man on the land; but they must be compared with the statement of the Leader of the Opposition (Mr. Scullin) that he sees in the agreement the complete destruction of “Australia’s national policy of protection “ and the ruin of our secondary industries. The Prime Minister (Mr. Lyons), in a speech in Sydney, assured the public that the manufacturers had nothing whatever to fear from the terms of this agreement. There have been resignations from the governments of both Great Britain and Australia; noted freetraders have resigned from the British Government because they object to the protectionist character of this agreement, whilst, in Australia, a high tariff advocate resigned from the Commonwealth Ministry because he regards the schedules as incompatible with his fiscal beliefs. Whilst the Leader of the Opposition characterizes the agreement as a blow to Australia’s national policy of protection, Mr. McKenzie King, the Liberal leader in Canada, has stated -

Delegates should have met in a proper spirit to bring about freer trade. The conference should have set an example to the world so that greater freedom of trade should take place.

An agreement which has produced such varying opinions from the great political leaders of the Empire must contain some good. Doctors are not the only people who differ.

The bill is rather involved. It consists Of only two clauses providing for approval of the schedule, which consists of sixteen articles amplified by detailed schedules A to H. Articles 1 and 2 and schedules A and B assure Australian primary products of entry into the United Kingdom free of duty and the imposition of duties on similar products from foreign countries. The most important of these duties are - 3d. per bushel on wheat, 15s. per cwt. on butter, 4s.6d. per cwt. on apples and pears, 10s. 6d. per cwt. on dried fruits;1s. to1s. 9d. per great hundred on eggs, and 2d. per lb. on copper. Article 3 and schedule C provide a preference of 2s. a gallon for Australian wine, whilst article 4 and schedule D refer to a list of goods in respect of which the existing preference of 10 per cent. in favour of Australia shall not be reduced without the consent of the Commonwealth Government. Included in this list are leather, tallow, corned meat, zinc, lead, flour, copra, and dried fruits.

The first provision that needs amplification is contained in article 5 which states that the duties provided on wheat, copper, lead, and zinc, are conditional in each case on Empire producers of these commodities continuing to offer them “ on first sale in the United Kingdom “ at prices “ not exceeding the world price.” Yesterday the Minister for Commerce (Mr. Stewart) sought to explain the meaning of the words “ on first sale,” but failed to do so. One-third of Australia’s exportable surplus of wheat is sold in Britain, a little more than onethird and a steadily increasing proportion is marketed in Japan and China, and the balance in India, and in Italy and other European countries. Does article 5 mean that the bulk of our exportable surplus is not to be sold to our various customers until Great Britain has purchased her requirements?

Mr Latham:

– It means only that the first offer in the United Kingdom must be at world’s prices.


– Any cargo sent to the United Kingdom must be offered at world’s prices.

Mr Latham:

– I do not think this provision will hurt us at all.


– So far as I can see, it is merely ridiculous. We have also requested an explanation of the phrase “prices not exceeding the world price,” and no honorable member has succeeded in furnishing it. Much of our wheat is shipped before sale and to an unknown destination. The price, purchaser, and port are determined after the vessel has left ports, and are communicated to it by cablegram or radiogram. It is inconceivable that the Government intends to interfere with trade of this kind.

Article 6, in conjunction with schedule 8, deals with imports into the United Kingdom of frozen and chilled meat, and is designed with the threefold object of fostering the livestock industry of Great Britain, raising the wholesale price for frozen meat in the United Kingdom, and assisting the meat export industries in the dominions. This is a complicated and exceedingly difficult task. It is small wonder that this schedule has been the subject of criticism, varying from lukewarm acceptance to violent antagonism. Those who look at the matter fairly will understand the difficulties which our delegation had to face, and will appreciate the results of their negotiations. Briefly, Australia agrees to limit the exports to the United Kingdom of frozen mutton and lamb in 1933 to an amount equivalent to the amounts exported in the year ended the 30th June, 1932, and not to increase its exports of frozen beef to the United Kingdom by more than 10 per cent. above the quantities exported last year. The British Government, on the other hand, has adopted a scale by which it will gradually reduce the imports of foreign meat from 90 per cent. in the first quarter of 1933 to 65 per cent. eighteen months hence, using the amounts imported in 1932 as a basis. As the Minister told us yesterday, the persistent fall in meat prices In the Old Country made it necessary to impose restrictions, even before the terms of article 5 came into operation. Pressure is being brought to bear on the British Government to put a duty on foreign meat, in the belief that the quota system will not adequately protect the home industry. It was stated recently in the House of Commons, that exports of frozen meat from Australia and New Zealand have risen from 4,400,000 cwt. in 1929 to 6.500,000 cwt. in 1931. In spite of this immense competition with her own industry, Great Britain’s representatives at the Ottawa Conference agreed to receive this increased quantity of meat from Australia, and to restrict the imports of foreign meat. Is it any wonder that the Financial Secretary to the Treasury, Mr. Hore-Belisha, said, “ It is hoped that the dominions will reciprocate by buying more British manufactures.” The Argentine, holding, as it does, the bulk of the chilled beef trade within Britain, is rumoured to be planning to upset the proposals of the Ottawa agreement. In that connexion, I should like to inquire whether the Minister for Commerce can place at the disposal of the House the reports of the Anglo-South American Chamber of Commerce, which has taken active measures in this matter.

Article 7 provides for preference to Australia from the British non-self-go verning colonies and protectorates. This trade is not great at present, but it is growing. We are talking of establishing a trade agency in the East generally, and the markets of Ceylon, the Straits Settlement, the Malay Straits, and Hong Kong, are worth cultivating.

Article5 and its schedules are of great importance, as they contain the formula for the margins of preference to be given in favour of Great Britain. I shall not now go over those margins of preference, as they are well known to honorable members. There are certain exceptions, but they are not very important. Preference to Great Britain is not by any means a new thing, but it is sometimes difficult to calculate what it has been worth to the Mother Country. From the customs point of view, the formula contained in schedule F is of paramount importance, and it has received almost universal approval. Not so the means by which its provisions have been implemented by the Government. I shall return to that later.

Articles 9, 10, . 11 and 12 represent the main points on which the agreement has been violently attacked, particularly by the official opposition. Apart from, as well as because of that, they deserve most careful examination and consideration. Article 9 specifies that Australia shall give tariff protection only to those industries which are reasonably assured of sound opportunities for success. As the right honorable member for Cowper (Dr. Earle Page) pointed out in another debate, that is a most desirable provision, although it is almost unnecessary, as only a very unwise government would attempt to protect any industries which are not reasonably assured of sound opportunities for success. Some critics have asked who is going to decide this matter? If our Tariff Board, which is so highly spoken of, is independent of Parliament, and composed of experts, is not able to give sound advice on the subject, it ought to go out of business.

Mr Forde:

– No doubt the honorable member knows that the hair cloth business which he and I supported was at one time considered as unsound, and without any reasonable assurance of success.


– If his memory is as clear as I think it is, the honorable member will remember that my reference to the hair cloth industry was to request that under the alleged new conditions, the item should be re-submitted to the Tariff Board for consideration and report.

Article 10 requires that Australia’s “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 economic and efficient production.” There is also a provision that “special consideration may be given to the case of industries not fully established.” I draw the attention of the House to the fact that that provision indicates that the mere newness of an industry does not debar it from protection, and bring it under the restriction stated in article 9.

The gravamen of the charge that has been levelled against article 10 is contained in the criticism of the term “ reasonable competition.” This criticism comes from the members of the Opposition, who are high tariff supporters, and claim to be protectionists. I think they could better be described as “ exclusionists “ “or “ prohibitionists “. I was brought up in a protectionist State, and have been taught protection from my youth up. Protection has always been held up to me as necessary to enable Australian secondary industries to compete with imported goods produced under conditions not so favorable as our own, and ‘by people not so enlightened as those in Australia. I submit that the schedule which was brought clown by the Scullin Government in 1929 is a prohibitive rather than a protective one. I have gone through it most carefully, and find that on a large number of articles the duty in existence in 1929 was doubled,- and in some cases, trebled. The purpose served was not protection. Yet those duties still remain, and it is contended that they should be retained.

Article 11 provides that a review shall be made by the Tariff Board, as soon as practicable, of existing protective duties in accordance with the principles laid down in article 10, also tha Parliament shall be invited to vary duties wherever necessary. Article 12’ undertakes that no new protective duty shall be imposed, and no existing duties shall be increased on United Kingdom goods to an extent in excess of the recommendation of the Tariff Board. This article has been assailed from two different angles. The Opposition objects- to it as taking away from Parliament and handing to the Tariff Board all fiscal responsibility. If it will result in continuity of tariff policy and obviate the changes that are usual with more or less rapid changes of government it should be of considerable advantage in promoting and stabilizing trade. Another contention is that the article does not definitely state, . though its language seems to imply, that Parliament may reduce duties below the level of the Tariff Board report if it so desires. I need not bother very much about articles 13 and 14.

Article 15 and schedule G contain a list of commodities on which Australia undertakes to grant certain preferences to the non-self-governing colonies, and protectorates, and mandated territories. Involved in this article is the vexed question of. the importation of bananas from Fiji. Anything that I desire to say on the subject must be colored by the fact that I understand that the Prime Minister said a day or two ago, that negotiations are in progress in connexion with the matter. Quite apart from that it seems to me that the suggestion that was made by the deputation for the substitution of a certain rate of duty, or margin of preference would, if carefully examined, be found to operate more to the detriment of our banana-growers than would the annual importation of 40,000 centals of Fiji bananas. Apart from that, the suggestion to bring in 40,000 centals of bananas at a duty of 2s. 6d. instead of Ss. 4d. a cental, is said to be equivalent only to the introduction of two Fiji bananas per head of our population per annum; also, that it represents only about 3 per cent, of our total banana consumption. On the other hand our banana-growers say that if this quantity of bananas comes in over a given period, it will upset their marketing arrangements. The Government has to consider the problem from all view-points. One must not forget that the Ottawa agree- ment contains many advantages which will strongly benefit the northern areas of New South “Wales, also the State of Queensland, both of which produce bananas.

It remains for me to discuss briefly the way in which this agreement has been implemented. I have already hinted my views on the subject. It was necessary to have a margin of preference for Great Britain. There are 82 pages in our tariff schedule. Going through them, I have taken out some figures, probably on different lines from those followed by other honorable members. These are the points upon which I desire to satisfy myself. In that tariff schedule, there are 75 items which this Government has reduced below the level of the Scullin tariff; yet, in many cases, they have not been reduced as low as the 1929-30 level. There are 469 items which were either increased by the Scullin Government and maintained by this Government, or which were not increased by the Scullin tariff, and have since been increased by this Government. One hundred and forty items were raised by the Scullin Government, and have been still further increased by this Government. Taking the point of view of the Leader of the Opposition, that method is entirely wrong. “When, in 1929, as Prime Minister, the right honorable gentleman was faced with difficulties, he imposed a very high tariff wall around Australia, as an emergency measure, to restore our balance of trade. That high tariff wall has been in existence over two years. It is now held by the Opposition that those are protective duties which should be maintained. In order to bring about a margin of preference, the present Government has maintained those duties on 469 items and actually increased duties on 140 items. This is not true protection, and a very much better method would have been to reduce the British duties where possible. It must not be forgotten that the raising of duties was not done on the recommendation of the Tariff Board. The height of our protective tariff wall has been constantly increasing. The Tudor tariff, the Greene tariff, the Pratten tariff, and the Scullin tariff, were all of them a little higher than those they replaced. At the end of 1929, and during 1930, very high duties were imposed, and they still remain. When considering the duties in the latest tariff schedule, it is interesting to recall the remarks of the Minister for Trade and Customs when introducing the Ottawa Agreement Bill. He said -

The passionate spirit of post-war nationalism implemented by soaring tariff walls, together with the influence of. the depression, has more or less closed many doors against us . . . The protective tariff as it was in 1920 before the changes made in November of that year (Scullin) - speaking broadly of course, and having regard to cost of production - was a reasonably satisfactory one.

In another part of his speech he referred to the abnormal level of tariff duties, due to the action taken at the end of 1929. Notwithstanding those expressions, however, he introduced at the same time a schedule perpetuating those abnormal duties.

Australia is in the position of a householder having a stranger living on one side of him and a’ relative on the other. The boundary wall between him and his relative is so high that the relative can barely climb over it, while that between him and the stranger is unscaleable. After a conversation with his relative, he decides to provide easier means of access for him, and his method of doing this is to raise a little higher the wall which divides him from his other neighbour, the stranger. This would be a very poor return to make to the relative whose front door had always been open to him.

The Minister for Trade and Customs claimed that the Government could not amend the tariff without reference to the Tariff Board, but the Scullin Government increased the duties without consulting the board, and it is competent for the present Government to reduce them on its own initiative to the level approved by the board. I do not feel any great enthusiasm regarding the result of the Ottawa Conference, but I approve of the spirit in which the delegates embarked on the negotiations. In fairness to the delegates, we must not insist too strongly on our own points of view, and condemn the conference as a failure, because ithas not provided us with everything we want. We should try to visualize the difficulties with which the delegates were faced, difficulties affecting, not only the

Empire, but the world at large. After all, we have made a good start towards achieving the ideal of intra-Empire trade. Although we have not got all we hoped for, everybody is getting something. If, in accordance with some of the articles of the agreement, our tariff schedule will be revised to make it more reasonable, we shall have reason to congratulate the delegation on the results achieved, and the Government for having taken a step forward in the direction of Empire preferential trade.

Sir LITTLETON GROOM (Darling Downs) 5. 55]. - Parliament is invited, when considering this measure, to consider also the whole question of Empire relations. This preferential trade agreement is really part and parcel of the trade relations between the various parts of the Empire. Lord Hailsham, speaking before thu members of the Bar Association at -Calgary, in Canada, made this statement -

By that act (the Statute of Westminster) every legal tie binding the Empire together, with the exception of allegiance to the Crown, was swept away. But the Empire was a living organism. lt could not stand still and many felt unless some new ties were evolved, the common allegiance would not endure.

Every party in this House has accepted the principle that efforts should be made to develop a policy of Empire trade. The Government, when entering upon negotiations such as took place at Ottawa, represented not any particular party, but the Australian people as a whole, and it was its duty to endeavour to achieve a result which would, as far as practicable, be acceptable to the Commonwealth at large. There is great diversity of opinion on the subject of tariffs, as we can see for ourselves in this House. Naturally a government would attempt to give effect to the will of Parliament, but it must consider also the will of the. constituency as expressed at the last elections. Trade preference constitutes only a part of our Empire relationships, and must be considered in conjunction with a whole series of voluntary movements on the part of the autonomous dominions, and of the United Kingdom, towards the realization of what Lord Hailsham described as a living organism, with power to act, and fulfil its functions in the world. Empire relationships embrace defence, communications, trade and commerce, &c. In the widest sense, we must consider the promotion of means of transport, Empire communications, marketing, &c, and agencies which make for increased Empire production on scientific lines, such as Empire forestry, and work of other committees. We have here a whole series of cooperative actions tending to bind the units of the Empire together. In Australia, of course, our first tie is sentiment. Inheriting, as we do, from the home of our race, the history, language, laws, and institutions of Great Britain, these things naturally colour our judgment and our natural inclination is towards closer Empire unity, even if that should involve some sacrifice. Still, when it comes to negotiating a trade agreement such as that now before us, delegates must remember who sent them, and whom they represent.

At the Colonial Conference held in 1907, Mr. Deakin, who represented Australia, stated the position very clearly in these words -

What wo suggest is a trade in preferences, in trade advantages which should be conceded to each other, on the usual principle of trade, that it should be to the benefit of both parties concerned. So far as I am aware, no one has yet fathered, or is likely to father, any such proposition as that this matter of business is to be dealt with to the advantage of one of the parties only. There is not any business of that character, or which is assumed to be of that character. It must yield mutual advantage, and of the value of that advantage each party must be the best judge.

In another part of his address, Mr. Deakin said -

That is why the goodwill cannot be disturbed. It must always be admitted that each of the parties to the bargain must be the best judge of its own gain. We may have a strong and clear opinion as to how the other bargainer should proceed, in his own interest, but after all, that is his affair. We may regret that we cannot do the business, but necessarily we must in every case bow to his decision. So, in the present instance, it appears to us to be possible for each to impose duties on a certain scale - putting .aside the advantage which may be gained from those duties - granting each other preferences under them without loss or risk of loss.

That was his method of approach to this problem. His idea was that a system of mutual preferences should be established, but his proposal was not accepted by the representatives of the British people. Immediately after the close of that conference, Mr. Deakin made a series of brilliant speeches that undoubtedly thrilled the people of the United Kingdom. He emphasized the imperial sentiment behind the negotiations. Although he spoke of conducting them on a business footing, his idea was not that the parties should negotiate as strangers. He recognized that the various parts of the Empire were bound together by ties of sentiment, and he proposed to use the system of trade preferences as one means of cementing the imperial bonds. He fired the people’s imagination, and stirred their feelings. He made them realize that, although there were commercial ties between the various parts of the Empire, there were other and deeper ties binding into one unit the Empire of which he was so proud, and for which he had done so much. After his return to Australia, the Government introduced the 1908 tariff. It was realized that there were many items upon which Australia could grant Great Britain a substantial measure of preference. At this time, Australia had only recently achieved federation, and become, indeed, a nation. It was the duty of the Commonwealth Government of the day on tha establishment of federation to co-operate with the component States. The matter of citizenship within Australia as a whole having been determined, a further step was to mould the destiny of Australia in its relation with the other parts qf the Empire. Mr. Deakin had to remember at that conference that Australia was a lonely island in the great Pacific Ocean. The then Government owed its first duty to the great primary producing industries of this country. The Liberal party, all through its history, held strongly to the principle of assisting primary industries, and did all it could to further that policy. I cannot remember a single instance of a departure from it. But Mr. Deakin’s Government had another great ideal entrusted to it, namely, the development of Australia as a great nation. It had to realize that this continent, being far from the centres of the Old World, must be developed so that the task of the

British Navy in protecting it would not be made harder than necessary. Consequently, Mr. Deakin ever bore in mind the need for prosperous and flourishing primary industries; but well developed secondary industries were needed to supplement them. The great natural resources and potential wealth of this country made it clear that valuable secondary industries could be established here. That ideal should still be kept in mind. I say deliberately, that those who suggest that there is any real conflict of interests between our primary and secondary industries, are not doing a service to Australia. These industries are not antagonistic, but complementary to each other. Both are essential to the building up of the nation. Mr. Deakin went to the colonial conference with these ideals in his mind. The Government of thi* United Kingdom had, of course, to consider her people and the colonies, and to do what she thought was best for the development of the natural resources of those parts of the Empire.

I believe that Australia was able to take the part that she did in the Great War, and to relieve the United Kingdom of undue anxiety on her account, largely because, years ago, she adopted the wise policy of encouraging both primary and secondary industries in the development of her resources. It was due to this fact that this country was able to equip her troops to a large extent with Australian goods manufactured from Australian material by Australian workmen.

Mr. Deakin pleaded for mutual preferences at that conference, but although great success was not achieved on that occasion, Australia has consistently emphasized the wisdom of such a policy. To-day, we are witnessing the realization, in part at least, of the high ideals of the great statesmen who first set the course which has led Australia into true nationhood. They saw 32 years ahead of their time. This agreement is a notable step towards the complete realization of their ideals. The ardour, enthusiam, and patriotism of Australia did not abate in the long period it took to bring the United Kingdom to appreciate the wisdom of preferential trading within the Empire. Our statesmen carefully scrutinized the industries of this country, and wherever it was possible to do so, they granted a preferential tariff to British goods. Although duties were put on foreign goods, British goods of the same class were, in very many cases, admitted free, or at a lower rate of duty.

The Minister for Trade and Customs (Mr. Gullett), in his speech on this bill, briefly reviewed the history of our fiscal policy in this connexion, and referred to the remarkable efficacy of our preferences as an aid to British trade in this market. The value of the preferences we have given to Great Britain has been variously estimated. I think the maximum figure at which it has been put down is £10,000,000. But the Australian people have never grumbled at the granting of these preferences. They have been glad to make this substantial contribution to the strengthening of the Empire. I say definitely that preferences have been granted to Great Britain deliberately for sentimental, and not for business reasons. This fact was realized at Ottawa.

In addition to the preferences granted to Britain in our customs schedule, we have also, through our great public departments,and particularly the “Works Department, shown a preference for British goods in the making of our contracts. This has been done, not as a matter of obligation, but of sentiment. There have been times, to my knowledge, when preferences amounting to as much as 10 per cent. or 15 per cent. have been granted to Great Britain in the letting of our contracts.

Mr Hutchin:

– Individual Australians have also pursued that policy.


– That is quite true. Taking everything into consideration, I am justified in saying that in this Parliament, as well . as in our ordinary administrative and business life, we have always shown a preference for Great Britain. It was in that spirit that our delegates approached the discussions at Ottawa.

For the first time in the history of the Empire, mutual trade agreements have been made between Great Britain and her dominions and colonies at a great imperial conference. Geographically, these agreements cover practically a quarter of the globe. That in itself is a marvellous achievement. There were risks attached to the holding of the Ottawa Conference between the great autonomous dominions of the Empire and the representatives of the Government of the United Kingdom who met in a perfectly free way, and without any legal obligations, for the purpose of considering the making of these agreements. If the conference had failed, the critics of the Empire would have declared that our imperial sentiments were worth nothing, as they were not strong enough to make possible the adoption of a constructive trade policy. It might have been said that the United Kingdom and her dominions had failed in their efforts to cooperate in regard to business matters. Had the conference resulted in this way, it would have been disastrous alike to Australia, and the other parts of the Empire; but fortunately, as the world now knows, every part of the Empire cooperated sincerely in the great effort to arrive at agreements.

Sitting suspended from 6.15 to 8 p.m.


– In 1907, Australian delegates attended a colonial conference in the United Kingdom. In 1932 our delegates attended the imperial conference at Ottawa, and entered into an agreement with Great Britain. They left for Ottawa with the goodwill of this Parliament, and naturally with the intention of conserving the interests of this nation. The delegates of the other dominions no doubt held similar views, and all, no doubt, had the interests of the Empire at heart. “We cannot minimize the difficulties which faced that conference. The delegates that attended it were meeting each other for the first time in such a conference. Each of the dominions was represented, and the delegates of the United Kingdom also represented the Crown colonies. The whole object of the conference was to arrive at common understandings. Conflicting interests had to be reconciled. The delegates represented countries with different climates, interests, and races. As one of the British delegates stated, there were three dangers ahead of the conference. The first was the danger of antagonizing the other nations of the world. The second was the danger that faced the United Kingdom in the imposition of burdens upon its poor consumers, and the third was the danger of jeopardizing the established industries of the dominions.

In regard to the first danger, Great Britain had at last realized that it was in its own interests to change its tariff policy, and for the first time at an# imperial conference its delegates con-‘ si dereel tariff matters from a new angle. Great Britain had realized what Lord Balfour wrote many years ago to the effect that the position of a freetrade country in a freetrade world would be very different from that of a freetrade country facing all the protected countries of the world. Cobden at one time predicted that within a certain number of years, the world would become freetrade. In refutation of that prophecy, the national and protective spirit of the countries of the world became intensified. Great Britain had to decide for itself what attitude it should take at the conference, and we know that it departed there from what had been its previous policy. Has the United Kingdom, by taking that action, antagonized the nations of the world? The other nations went on merrily raising their tariffs, while Great Britain stuck to her freetrade principles. The dominions enacted tariffs against foreign nations. I submit that every nation has the right to frame its own policy, and I do not think that Great Britain has antagonized foreign nations by entering into the Ottawa agreement. It may be that some nation may retaliate in a spirit of heat, but that is not likely to be a permanent policy. The great manufacturing nations do not, care from what country they obtain their raw products and, of course, Ave hope to become suppliers of many of the raw materials required by them. The desire of Great Britain and the dominions has been not to antagonize their neighbours, but to live on good terms with them, and to trade with them as far as possible, always keeping in mind the conservation of our national interests.

As regards the second danger, that of imposing burdens upon the poor people of the United Kingdom, may I say that Great Britain has a vast army of unemployed, and many of its industries are languishing, and it may be that in a desire to provide employment Great Britain has changed its fiscal policy.

The third danger is the jeopardizing of the established industries of the dominions, and that, of course, had to be taken into consideration by our delegates.

I come now to the agreement. It is fully realized that mutual concessions had to be made. Mr. Asquith, speaking at the Colonial Conference of 1907, said -

Sir Wilfred Laurier has often said that in this matter each community of the Empire must primarily pay regard to the interests of its own members, and I Avas very glad to hear that statement reiterated -with great emphasis and explicitness by Mr. Deakin more than once in the course of his speech. There we are all agreed . . . but particularly in the fiscal and economic matters the primary and governing consideration of every one of us- the first consideration - must be how does it affect the community with which we are more particularly connected, and which we have the honour here to represent?

Presumably, our delegates took a similar attitude. The concessions made by Great Britain relate mainly to primary products such as meat, dairy products, including poultry and eggs, fruits and quite a number of other products. The primary producers concerned are quite satisfied Avith their prospects under the agreement, and of course they are more competent to speak on that subject than any individual outside. Those are substantial and distinct benefits. The agreement also confers benefits in respect of wheat, base metals and other things. We already had from Great Britain a preference of about £3 12s. a ton on sugar, and our normal annual exportation may be estimated at 150,000 tons. That concession is to continue during the period of the agreement. The results are by no means satisfactory so far as two of our industries are concerned. North of Sydney is the largest area of the Commonwealth, and it comprises some of the richest land in the world. Subtropical conditions prevail there. When the Commonwealth was established the first thing Ave did was to define the basis of citizenship. The first serious conflict that took place in this House was on the definition of citizenship, and it Avas decided to preserve Australian standards of living and to give preference to our own kith, and kin. It was realized that a vast portion of Australia was subject to sub-tropical conditions, and that we had to develop and effectively occupy it. It was desired to encourage the settlement of our northern areas as far as practicable with people of our own race. The desire was that they should live under decent standards and engage in the industries most suitable for that area. As Dr. John Dunmore Lang pointed out years ago, the mission of Australia was to show that British people could effectively occupy its subtropical areas and make successful use of them. That is the national ideal of Australia to-day. It is unfortunate that two of our sub-tropical industries - banana and pineapple growing - did not receive at the Ottawa Conference the consideration that they deserved. It is pleasing, however, to note that the Prime Minister has adopted a sympathetic attitude towards them. He realizes the difficulties of those industries. “We hope that when future conferences take place, the claims of the growers concerned will not be lost sight of.

The Ottawa Conference should be the first of a series of conferences. The Ottawa agreement should become the basis of a permanent arrangement, modified and developed from time to time at further conferences. When fresh negotiations take place it is to be hoped that our delegates will bear in mind the conditions of our industries, such as the banana and , pineapple-growing industries, and realize that the northern part of Australia has to be effectively occupied in the interests of the preserva tion of the British Empire. In regard to the pineapple trade, it has been said that, that was a matter which Ave could not control, but we had already entered into a trade treaty with Canada, under which the pineapple industry received certain benefits. Since that treaty was entered into that industry had shown extraordinary development, but, as a result of the operation of another agreement, it is likely to receive a serious setback. Our delegates at Ottawa should have persisted in objecting to any action likely to injure the pineapple industry.

Generally speaking, the concessions that we have granted to Great Britain are based on a definite principle which is contained in the agreement. Article 10 sets out that principle in these terms -

His Majesty’s Government in the Commonwealth of Australia undertake that during the currency of this agreement the tariff shall he 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. . . .

So far, Australia’s policy has been one of protection, and that policy has to be borne in mind when considering any agreement entered into. That different interpretations are placed on the agreement is apparent from the following press report, dated London, the 3rd November : -

Moving the third reading of the Ottawa Agreements Bill in the House of Commons, the Financial Secretary to the Treasury (Major Hore-Belisha ) described the bill as a superstructure founded on the Import Duties Act, and the fulfilment of the electoral mandate to restore the adverse balance of trade. In principle the Empire had now abandoned protection, and in future there was to be free competitive opportunity among all sections of the Empire.

That is the interpretation put on the agreement by a British Minister. Lord Hailsham, speaking before the Bar Association in Canada, took a different view when, speaking of the establishment of competitive tariffs, he said -

Another achievement was the establishment of competitive tariffs. This meant that the consumer would not be burdened with unduly high prices, and the domestic producer would have the margin of protection necessary to fair competition.

What was the issue placed . before the Australian electors at the last election? The present Prime Minister (Mr. Lyons) made it very clear that his party stood solidly for protection, and. I understand he still holds to the policy which he placed before the electors. Speaking on the 2nd December, 1931, as reported in the Argus on the following day, the right honorable gentleman said -

Electors will bear in mind that on the Opposition side of the House there is no “ whipping “ on the tariff. Members vote as they please. One fact, however, shines out clearly. The Nationalist party, which is now included in the United Australia Party in the Federal Parliament has ever been, like its predecessor, the old Liberal party, staunchly protectionist. In fact, with very little exception indeed, the Nationalist and Liberal parties have been responsible for the protective tariff under which Australian manufacturing has grown up and flourished so impressively during the last 30 years. That policy is still maintained by the Opposition. The Nationalist and the Country party stood firmly behind the Pratten tariff.

The Prime Minister pointed out that the tariff would not be altered until after an inquiry had been made by the Tariff Board.

Mr Gregory:

– He said that later.


– No. The right honorable gentleman said -

Where the tariff has been raised to what may be considered excessive levels, without reference to the Tariff Board, we would submit cases for hearing as soon as practicable, and we would, in broad principle, abide by the recommendations of the board. We fully recognize, as the Nationalist and Liberal parties have done in the past, the great importance of local manufacturing, and of the dependence of a great section of our farmers who do not produce for export, upon the consumption demands of the industrial workers.

Similar views were expressed by the Attorney-General (Mr. Latham). The agreement is, to a certain extent, vague, and the question arises: Who shall interpret it? The Montreal Gazette of. Canada set out the position in the following terms: -

In the constitution of the new Tariff Board and in the proposal to clothe it with authority to decide what is and what is not fair competition as between British and Canadian industries, the Canadian Government has made an important concession, but has not gone as far as the United Kingdom delegation at one time desired. It does not intend delegating to the board a final authority, the authority which now rests with Parliament and, under our present system of government, must rest there.

Running through the New Zealand, Canadian, and Australian treaties is the same principle of a competitive tariff, but the agreements vary in their recognition of the powers of the Tariff Board. All parties in Australiaagree that there should be an inquiry by the Tariff Board; so that the only difficulty which arises is in connexion with article 12 of the agreement, which reads -

His Majesty’s Government in the Commonwealth of Australia undertake that no new protective duty shall be imposed, and no existing duty shall be increased on United Kingdom poods to an amount in excess of the recommendations of the tariff tribunal.

That is clearly a limitation; and, apparently, is so intended. There is no such limitation in the New Zealand agreement under which the Parliament of that dominion undertakes to institute an inquiry and, if it deems fit, to reduce duties.

Mr Maxwell:

– Ours is a self-imposed limitation.


– It is a term of an agreement between two parties, under which a limitation is placed upon this Parliament. Article 13 of the Canadian agreement reads -

The Canadian Government undertakes “ 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 as practicable of the duties charged on any commodities specified in such request in accordance with the principles laid down in article 11 (Aust. 10), and that after the receipt of the report of the Tariff Board thereon, such report shall be laid before Parliament, and Parliament shall be invited to vary wherever necessary the tariff on such commodities of United Kingdom origin in such manner as to give effect to such principles.

The agreement in article 14 also provides that -

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

Our Tariff Board performs two functions - first, it ascertains facts, and, secondly, it makes recommendations. The Tariff Board in Canada probably does the same ; but there the Government agrees to accept not its recommendations, but the facts as found by that body, and the Parliament then exercises its own discretion in accordance with the principles of the agreement. The Commonwealth Parliament, under the agreement, cannot increase duties above the Tariff Board’s recommendations, whatever they may be. That is distinctly a limitation of the powers of the Parliament which, in my opinion, is unfortunate, particularly as it is unnecessary. Do honorable members think that the Parliament of the United Kingdom would accept such a limitation?

Opposition Members. - No !


– It is unfortunate that that clause is in the agreement. I emphasize this point because, in any future revision of the agreement, steps should be taken to preserve the rights of Parliament.

It is objected that the agreementis binding. It ought to be binding. All international agreements must be binding; and they must be binding on subsequent parliaments, in honour, if not in law. A government cannot engage in international relationship if other nations cannot accept its contracts as binding on its successors. The same is true of agreements between the component parts of the Empire. Whatever our individual views, we must stand by an agreement once it has been lawfully entered into. We must, moreover, have long-term agreements because industry requires stability if capital is to be attracted and employment made possible. I shall support the measure.


– The honorable member’s time has expired.


.- The proposal from which eventuated the Ottawa Conference emanated from the imperial conference of 1930. When first mooted, the great majority of the Australian people looked to the Ottawa Conference with high expectations of beneficial results to the Commonwealth. There were several reasons for their optimism. There was then in power in Australia a government with strong protectionist tendencies which believed in protecting Australian industries. The Minister for Trade and Customs was the honorable member for Capricornia (Mr. Forde), who would have been an ideal representative at such a conference, because he would have gone to Ottawa as a 100 per cent. Australian to fight on behalf of Australian industries. Had he gone to Ottawa, we would not have been faced with the position which actually arose of Australia’s Resident Minister in London assisting the British Government’s seven Cabinet Ministers, and only one representative fighting half-heartedly on behalf of Australia.

Government Members. - Shame !


– The results prove the correctness of my statement. The Opposition believes in inter-Empire trade ; but it also believes that charity begins at home. In its opinion, the first duty of this

Government is to the people of Australia, and to that end, every endeavour should be made to make this country selfcontained. Naturally, there are many industries which cannot be conducted economically in Australia. In such cases, as well as in those in which commodities not produced in Australia are concerned, it believes in preference being given to other parts of the British Empire. During the last 25 years, Australia has granted preferences to Great Britain estimated to be worth £10,000,000 per annum. Britain did not grant to Australia any reciprocal preferences until 1919, and even then, the preference was only about 25 per cent. of the preference Britain received from Australia. For these reasons, and also because shortly after the 1930 imperial conference, the government of Great Britain was changed, and a government which believed in protection and inter-Empire preference was placed in power, there appeared every likelihood of Australia benefiting from the Ottawa Conference. But in December last, owing to political parties which were generally regarded as irreconcilable, uniting, the Labour Government was defeated, and the present Government was returned with a record majority in both Houses. The result was that, instead of representatives of the protectionist Labour party going to Ottawa on behalf of Australia, other representatives went there. Prior to their leaving Australia for Ottawa, the Government was asked whether Parliament would have an opportunity of discussing the proposals which would come before the conference. Honorable members generally understood that they would have the opportunity, and that the delegates would go to Ottawa, not as with an open cheque, free to act according to their own desires, but ask representatives with a knowledge of what Parliamentrequired. That discussion did not take place, and, consequently, the delegates who were alleged to represent Australia at Ottawa were not authorized representatives. They had not received any instruction from this Parliament as to what they were to do. Now we are told what has been done, and this Parliament, the highest political authority in the Commonwealth, is asked to register automatically what unautho rized and unrepresentative delegates did in Canada. The decisions of the conference will disintegrate rather than unite the Empire. Economic ties are much stronger than sentimental ties, but the Government is endeavouring to foist this bill upon Parliament by appealing to sentiment instead of endeavouring to convince honorable members of the material advantages of the agreement. When the Postmaster-General (Mr. Parkhill) was speaking on the bill he was several times asked to mention one advantage which Australia had gained at Ottawa; he excused himself by saying that he was not a school teacher. I expected the Government to make the strongest possible case for the agreement signed by its delegates, and to explain fully its incidental advantages, if any, and disadvantages, but this measure is to be forced through Parliament without any attempt to justify it or elucidate its real meaning. Throughout the Empire the results of the Ottawa Conference have been declared unsatisfactory to large numbers of people.

Mr Dein:

– Members of the Labour party.


– Not only to members of the Labour party, but also to the Progressives and Liberals in Canada. In the Canadian Parliament. 128 members voted for the agreement and SO against it. In the British Parliament, it was opposed by the Liberal and Labour parties, and 200 Conservative members are arranging a deputation to the Government in regard to the meat quota. In New Zealand and South Africa, as well as in Australia, there is great opposition to these proposals; yet we are told that the agreement will strengthen the silken ties of Empire. The unfavorable nature of this arrangement is the natural result of the attitude of the leader of the Australian delegation, the right honorable member for Flinders (Mr. Bruce) who, immediately on his arrival at Ottawa, placed all his cards on the table. The freetrade press of Australia and many British journals applauded him for his frank disclosure of his case to the Opposition, before he commenced to negotiate for concessions. The Canadian Prime Minister, on the contrary, fought to the end on behalf of the country he represented. The attitude of the leaders of the Australian delegation was, perhaps, not unexpected, having regard to the fact that the present Government immediately after its return to power commenced to break down the tariff, notwithstanding that in his policy speech, quoted by the honorable member for Darling Downs, the Prime Minister stated that the United Australia Party was staunchly protectionist, and that he did not believe that tariff-making should be left to an outside body. In this agreement that view has been abandoned. We are told that the main advantage Australia has gained from the agreement is the meat quota, but although this contract is supposed to have been made for a period of five years, the British Government has already been in communication with the Commonwealth Government with a view to altering that quota.

Mr White:

– That is provided for in article 16 of the agreement.


– Unfortunately, all such provisions are in favour of the United Kingdom. The Commonwealth Govern-, ment bases its recommendation of this agreement mainly on the assistance Australia will receive in respect of meat, and to a lesser extent, wheat, brandy, and wine, but that view is dissented from by a large number of members’ . and newspapers supporting the Government. The Brisbane Courier, the strongest antiLabour press organ in Queensland, stated in a recent leading article that the benefits which were alleged by the Commonwealth Government to have been obtained at Ottawa are largely illusory.

The fierceness with which the Commonwealth Government is continuing its insane political vendetta against the State of Queensland is remarkable. The attack commenced on sugar and was continued on tobacco, peanuts and timber; now it has been extended to bananas, pineapples and rum. In regard to the attack upon the Queensland producers of bananas and pineapples, the Queensland Producer, which is also an anti-Labour organ, says, in reference to a press message from Canberra to the Daily Mail -

The most illuminating statement, however, is to the effect that: “Western Australian members of the Country party frankly state that they do not caro where their bananas come from so long as they are cheap, but this point of view would have received little consideration, for it would have been regarded as part of the tirade against all things connected with tariffs.” ft is not alone the Western Australian members of the Country party that subscribe to this inherently selfish sectional view. As amatter of fact it is not confined to the members of either the United Country or United Australia Parties in the other States, as witness the peculiar attitude of two of Queenslaud’s representatives in the Federal Parliament. We refer particularly to the very belated announcement made by the Assistant Minister for Defence (Mr. Jos. Francis), and that of the Speaker in the House of Representatives (Mr. G. H. Mackay) as to where they stand. Despite their specious and unconvincing arguments, it is now clear that whatever the consequences to two of the State’s important tropical industries, it is their fixed intention to support the Federal Government’s action in having callously bartered them away at the behest of vested importing interests.

Seeing that they have chosen the ignoble part of placing the interests of party before those of Queensland, and that they have failed her in the hour of need, their wan ton betrayal carries its own condemnation. In the circumstances there is no occasion to say anything further in this connexion, for it may be safely left to the electorates they represent to deal with them as the occasion demands. Possibly, when they meet the irate electors in their respective constituencies they may be able to convince them as to the purely altruistic nature of their attitude. Unless we are very much mistaken all their political spell-binding will be unlikely to save them from the righteous wrath of those who have been so deluded, and we do not envy the task of the honorable gentlemen when they face the music.

There should be no need at this stage in Australia’s history for us to have to defend the “White Australia principle, but the Government’s hostility to Queensland’s industries is a definite attack upon that ideal. The Prime Minister’s statement to the deputation which waited upon him a few nights ago is significant. He said that the White Australia principle did not involve the protection of Australian industries against the competition of coloured people overseas; it meant merely the protection of them against the introduction of coloured labour into Australia. The representatives of the press were present, but did not publish the Prime Minister’s statement that the White Australia principle could not be expected to operate against the poor unfortunate natives overseas. If that is the ministerial party’s conception of a great Australian ideal, it will not find much favour with the vast majority of our people. Apparently through ignorance, if not deliberate intention, honorable members opposite are attacking this principle, and because they do not understand what they are doing when they jeopardize Queensland industries, they are more dangerous than people whose attacks are based on definite opposition to the White Australia ideal.

By the agreement, power is given to an outside tribunal, the Tariff Board, to decide what protection shall be given to Australian industries, despite the fact that in his policy speech, the Prime Minister said that he did not believe in that power being vested in any authority but Parliament. The honorable member for Maribyrnong (Mr. Fenton) when he resigned from the Ministry on account of the Ottawa agreement said -

It is all very well to talk of following the reports of the Tariff Board. It is a poor lookout for the political system if that principle is to bc adopted. It simply means that Parliament becomes a machine for the automatic registration of the decisions of an outside body. If you do that you might as well abolish Parliament and set up a series of committees to carry on the government of the country. I cannot agree to such a trend.

Those remarks express the view of the Labour party. This Parliament has the duty of legislating for and protecting our industries, and it should not give to an outside body powers greater than its own. The manufacturing nations overseas are fighting for markets. Australia is in a much more favorable position than most of the other industrial countries. Australia has a population of 6,500,000, to whom manufactured goods can be sold. Only in comparatively recent years have manufactures been carried on in this country on a considerable scale, and, naturally, it would be in the interest of British manufacturers to supply this market. But it is our duty to keep the Australian market for our own people, so far as secondary industries can be carried on economically. The Labour party, in fighting for the protection of local industries, is not battling so much for the manufacturers as for the employees.

Mr Hutchin:

– Is that not a selfish policy ?


– Not at all; I shall enlarge upon that point. The Queensland Chamber of Manufactures has shown more determination in fighting for the reduction of the wages of employees, and in opposing the principle of preference to unionists than for the protection of local industries. The manufacturers themselves are largely responsible for their present position, because through their organizations they threw their weight at the last election behind the party now in power.

Mr SPEAKER (Hon Gr H Mackay:

– The honorable member has digressed considerably. I now request him to confine his remarks to the subject of the bill.


– It is noticeable that prominent members of the British Government, including Mr. Baldwin and Mr. Neville Chamberlain, when speaking in support of the Ottawa agreement in the British House of Commons, used as one of their strongest arguments in its favour statements that the Australian tariff wall had been practically broken down. Much was made of the fact that British industries were to be allowed to compete with industries in Australia, and that, as a result of the agreement, there was to be more or less a system of freetrade within the Empire. Two matters of particular importance were to be dealt with at the Ottawa Conference, one was interempire trade, and the other, which I regard ‘as of paramount importance, was monetary reform ; but the latter subject received very little consideration, although a number of pious resolutions were passed. Mr. J. F. Darling, C.B.E., one of the leading currency experts of the Empire, has pointed out that the various governments represented at the conference neglected the subject of monetary reform, despite the fact that the Canadian Parliament, prior to the conference, had resolved that a discussion upon it should be initiated at Ottawa. When the agreement was presented to that Parliament, the Progressive, party submitted a motion criticizing the Canadian Government because it had not dealt with that aspect of the economic problem.

During the last 150 years, Australia, like other countries, has suffered a series of depressions, which occur about every eight or ten years ; but the present depression differs considerably from the rest, be cause it is due to a shortage, not of goods, but of currency power. Our preliminary duty is to tackle the problem of supplying sufficient currency with which to buy the goods that are produced. That is the subject which should have been first considered at Ottawa. I suggest to the Government that if it is really sincere in its statement that the people of Australia are in favour of the agreement, it should, by means of a referendum, give them an early opportunity to alter the Constitution, so that the fiveyears’ agreement provided for under the bill might be incorporated in the Constitution. This Parliament has a life of only three years.

Mr Hutchin:

– Would the honorable member agree to a referendum of the people on the subject of granting government assistance to the sugar industry?


– That is a very different proposition. The Ottawa agreement is practically an agreement between a number of separate nations; the sugar agreement is quite a different matter. I do not believe that the Government would risk submitting it to the people, because,’ despite its statements in this Parliament, it is under no illusion as to what opinion the people would express. The cost of holding a referendum would be slight compared with the vast benefits which, it is said, the Ottawa agreement will confer on Australia. Labour definitely intends to vary this agreement if returned to power, as it probably will be within the next couple of years. The Liberal party in Canada has pointed out that it does not consider itself bound by it, and that statement can be interpreted only to mean that if that party is returned to office, the agreement will be considerably modified. It has been stated in the British House of Commons that in several of the dominions changes of government are possible, and that in the event of such an occurrence the agreement might have to be altered. Professor Berriedale Keith, probably the leading constitutional authority in the Empire, in a letter to the Scotsman some time ago, , declared -

Inter-Imperial agreements arc as binding as foreign treaties, and it would be equally deplorable if such contracts were broken.

For that reason, the Government should not pledge itself if it cannot reasonably expect to perforin its obligations. This principle guided the making of past treaties, which were concluded only after protracted periods if both parties agreed about them.

Were the fact otherwise, a Labour government might conclude a protracted agreement with Russia as distasteful to the conservatives as the Ottawa agreements are to the opposition.

A five-year duration for the Ottawa agreements would be reasonable for Britain, as her Government can expect at least four more years of life, but the Australian case is different. Mr. Scullin is probably justified in his strong criticisms.

It would, therefore, be wiser to restrict the Ottawa agreements to three years, as such agreements are valuable only as long as they are welcome to the mass of the people here and in the dominions.

Thus they should be as flexible as possible.

It would be interesting to note the reaction of honorable members on the other side of the chamber if a Labour Government concluded a trade agreement with Russia for five or ten years. Yet the present Government wishes Australia to be committed to the Ottawa agreement for a period of five years. In the British Isles, Canada and South Africa, parliaments are elected for five years; but as the Commonwealth Parliament is elected for only three years, there are the strongest reasons why this country should not be bound as proposed under the bill. The Government apparently realizes that, in the last analysis, the people must decide this matter. According to the Minister for Trade and Customs (Mr. Gullett), the Ministry recognizes that the action of a Labour Government, if it repealed this legislation, would not amount to repudiation of the agreement. The Minister, in introducing this bill, said -

Moreover, we had to keep always before us that any agreements signed at Ottawa had to receive the endorsement of governments and parties, and in the last stage, of the people at the ballot boxes.

Therefore, the Labour party takes this opportunity of informing the people of Australia, and the other nations that are parties to the agreement, that immediately Labour is returned to power, it will vary the agreement. If the people give Labour a mandate in this regard, it will exercise its constitutional rights.


.- I intend to say a few words about the Ottawa agreement and kindred topics.

It is only fair, particularly in. an Australian Parliament, to admit how much we owe to those who first preached the gospel of preferential treatment between Australia and Great Britain. The staunchest of our early disciples were undoubtedly the Honorable Alfred Deakin and SirWilliam Lyne, both stalwart protectionists. To those men we owe a great deal. The honorable member for Darling Downs (Sir Littleton Groom) in referring to what occurred at that wonderful imperial conference and the remarkable campaign that was later conducted by the late Mr. Deakin in Great Britain reminded us of the fine old days when we took such great pride in reading of the splendid efforts of those early stalwarts. Unfortunately, it was the arduous nature of this great struggle with British Ministers in overcoming pronounced opposition and his triumphal campaign in Britain that precipitated the illnes from which Mr. Deakin never recovered. His premature death deprived us of the pleasure of listening to his silvery and eloquent voice in our legislative halls. Without doubt, Alfred Deakin was one of Australia’s greatest sons.

Something has been said about the British Empire. We who love it know that it was not through shouting the word “ Empire “ at every second breath that it became so great. It owes its influence throughout the world to the forthright, sturdy, common sense of its people. I have studied the list of names of those who represent Australia in this chamber and in another place. I do not know anything of the antecedents of those gentlemen, but my examination proves to me that they can all fairly claim to be descendants of either English, Irish, Scotch, or Welsh parents. That being so it is unfair to attribute disloyalty to any honorable member who may adversely criticize this treaty. On the other hand, if I find any one, either in private or public life, who is anti-British, he has my strong opposition. I am not a jingo or imperialist, but I stand solid as a rock and four-square for the unity of the British people. I love those two little islands in the North Sea which are marked red on the map, whence our grandfathers, grandmothers, or in some cases, our parents came - the British Isles.

Mr Gregory:

– Australia comprises other stock, too.


– I know, and I have no desire to be offensive to the sturdy sons of other countries. I have a deep love for the Old Land, and when I visited it recently it gave me great pleasure to go to the place in Kent whence my father came, and perhaps even more pleasure to go to Inverness, the home of my mother. But Australia is the land in which I was born. In the words of Scott, “ This is my own, my native land !” In my business transactions, I endeavour first to dispense my favours among the people of my own country and then to my kinsmen abroad.

We are dealing with a measure that has caused considerable dissention in this and other Parliaments in the dominions. And it will provoke further discussion in legislative halls elsewhere. I hope, however, that our debate will not be tinged with bitterness ; that we shall bear ourselves manfully, actuated by a desire for the good of Australia and of the Empire. I agree with the remarks made by the honorable member for Fawkner (Mr. Maxwell) some years ago. Paraphrased, it was that the people of the British Empire should be singing Kipling’s “Recessional” rather than “ Britannia Rule the Waves.” The blessings that we enjoy emanate not altogether from the men, women, and children who constitute the Empire, but from beneficent Providence - the Creator Himself. It was my privilege when in New York to address a meeting of bankers arranged by Mr. Herbert Brookes. I told those bankers that they had every reason to be proud of the United States of America, with its area of 3,000,000 square miles, its population of 126,000,000, and of the fact that it is almost self-contained. “But”, I said, “ do not make your comparison between the United States of America and that small area of the world’s surface known as Great Britain and Ireland. Make it with an empire of 14,000,000 square miles and a population of 450,000,000 - an empire with inexhaustible resources.”

I regard the schedule which is attached to the bill as something similar to the sugar coating of a pill. If we all analysed that schedule as did the honorable member for Werriwa (Mr. McNicoll) there would, perhaps, not be. much to complain about. But it is necessary to go back to the two short schedules that were previously introduced, one by the Minister for Trade and Customs before he left for Ottawa, and the other by the Acting Minister immediately prior to his return. I wish to record .my sorrow that illness keeps the Minister away from the House. I am confident that every honorable member ‘wishes that the honorable gentleman were in his place on the treasury bench, and that it will not be long before we again see him there. In the first of those schedules there were 69 reductions of duty; in the second a further 34 reductions. That is a foretaste of what we may expect, and it affords an explanation why the manufacturers to whom we appeal to provide employment should feel that they are in an insecure position. Quite a number of those manufacturers came here as a result of the appeals that were made during and immediately after the war. During that great upheaval, the Government of Great Britain asked Australia to do everything she could, as every ship possible was needed to convey troops, and provisions for those troops, to the other side of the world. We had difficulty in meeting some of the requirements because we were not manufacturing. sufficient of the goods that were required. But it is to the everlasting credit of British and Australian manufacturers that they rose to the occasion magnificently. I shall give an illustration. Coopers’ sheep dip is a preparation well known to graziers. When, during the war, it was found that there was an insufficient supply of it in Australia to meet demands, there was consternation among flock-owners and the people generally. Things were so desperate that quantities of dip were smuggled into Australia. Shortly after the then Minister for Trade and Customs, Mr. Massy Greene, had introduced the tariff which bears his name, he and I met, and in conversation he told me that the firm of Cooper and Nephews was to establish itself in Australia. It did come here, and manufactures now not only sheep dip, but also sprays and machinery required by fruit-growers and others. Industries similarly placed are now asking me and other honorable members where they will stand if their fellow manufacturers from the old country are to obtain a preference that will mean the closing down of Australian factories. These people have invested large sums of money in building sites and factories, and are employing many of our people. They have good reason to ask this Parliament where they stand.

Mr Maxwell:

– Do they object to reasonable competition?


– In reply to the honorable member, I contend that if he and five other lawyers were asked to interpret some of these articles, each of the six would give a different interpretation. If that degree of uncertainty exists in the legal mind, what must be the effect of the agreement on the minds of the manufacturers of this country? I do make a plea on behalf of those industries, numbering nearly 60, that have come to Australia from Great Britain and established themselves here; I say that, if any distinction is to be drawn, surely it should be favorable to them! Reference is sometimes made, mostly by members of the Country party, to what are termed “ back-yard industries.” The other day I visited the soldiers’ woollen mill at Geelong. Some members are aware of the difficulties that were encountered when that mill was being started. Certain preliminaries had to be satisfactorily settled before the promoters of the enterprise could obtain a grant from the Government. The returned soldiers had to be canvassed to enable a deposit of £10 to be made on the purchase of 14 acres of land on the Barwon River. A certain amount of capital was raised, and assistance to the extent of £60,000 was obtained from the Commonwealth Government. All but £20,000 of that advance has been repaid, and I believe that arrangements are now in train for the liquidation of the balance. That industry commenced in a very humble way, and would probably be characterized as a back-yard industry by my friends of the Country party. The manner in which it began operations, and in which it has expanded, is typical of many of the industries that are now firmly established in this country.

Mr White:

– In what year did it commence to operate?


– A few years after the termination of the war. The first building erected occupied nearly half of the original purchase of 14 acres. The size of the factory has since been more than doubled, and it is still being extended. I admit that probably the progress that has been made is due largely to embargoes and surcharges, and to a less extent to exchange and primage duty.

Mr White:

– It is due mainly to good management.


– The manager is an Australian, who received practically the whole of his training in this country. But for the existence of woollen mills under our protectionist system, it would not have been possible to produce such a splendid manager. Recently additional machinery was installed, and the remark made to me as I was shown over the mill the other day was, “Had we known the exact terms of the Ottawa agreement, I hardly think that we would have incurred the expenditure on this machinery.” I hope that what was agreed to at Ottawa will not affect adversely either this or any other of the splendid industries that are established in this country. Four years ago the value of the imports of woollen piece goods into Australia was £2,500,000. The latest figures procurable give the value to-day at £50,000. Thus Australian mills have filled the bill. A visit to them will satisfy honorable members that they are turning out materials which in colour, texture, quality and price arc as good as can be produced in any part of the world.

A couple of weeks before my departure for England, as Minister for Trade and Customs in the Scullin Administration, 1 tabled in this House what is now designated “the Scullin tariff.” I expressed the intention of visiting Bradford during my stay in England. Two days after my arrival in London, I received a letter couched in terms something like the following : -

I have no axe to grind, but it is only fair to inform you, Mr. Fenton, that we are turning out equally as good quality goods from our mill in Coburg, Melbourne, as we are from our mill in Shipley, Yorkshire.

I met the woollen manufacturers of Bradford, the great machinery manufacturers of Birmingham, and others. The view expressed to me by them was -

You have a country that is almost brimful of raw material, and you would be foolish, indeed, did you not turn it into the finished article. We have no objection to your doing that; but, in cases where you are dealing with foreigners, we should prefer you to divert your trade to us.

That is a sentiment of which we can all approve.


– That is what Ottawa was for.


– Ottawa, unfortunately, has had the effect of placing our industries in a precarious position, in a state of hesitancy, and almost of alarm. They will not stir on that account. It is admitted, even by honorable members

On this side, that if there is any set of employers in this country who can provide employment, it is those who are in control of our manufacturing industries. I wish to see an industrialized community based upon a prosperous agriculture: it is the most advanced and perfect type of modern State. Our rural industries, in production and employment, have done all that has been possible. To-day there are not many primary producers who are able to provide a greater amount of employment; yet 300,000 of our people are out of work. Only by the extension of our manufacturing industries will some of the unemployed be absorbed and taken off the dole.

I understand that this agreement must be passed as a whole. If that be so, I shall vote against it. I shall avail myself of every opportunity to defeat those articles, especially, which compel us to abide by the decisions of the Tariff Board. I have here a letter from an Australian manufacturer who asks a number of questions in an effort to arrive at some conclusion as to the likely effects of the agreement. He asks -

Does it mean that Australian engine makers, after succeeding in selling popular sized farming engines in Australia at the same price as English engines are being sold in New Zealand under low tariffs, are to bc passed out, causing hig increases in unemployment and more taxation ?

Docs it mean that hundreds of other industries in Australia will bc in the same position?

Does it mean that our opportunity for advancing our industry is to he blocked for all time by putting manufacturers outside Australia in a dominating position?

Does it mean that overseas makers will have the stranglehold on us?

If the answer to all these questions is in the affirmative, does it mean that there will be such a revulsion of feeling that the Empire sentiment, which has been strong here in the past, and has made. Australia one of Britain’s, best customers, will be sadly weakened?

I do not believe that there is any ground upon which the genuineness of that gentleman may be doubted.

I have no wish to belittle the protection that we have received from the British Navy and in other ways; but it is only fair to admit that, considering that we are a mere handful of people, we have acted very generously towards Great Britain. “While in England I had two or three long conversations with Mr., now Lord, Phillip Snowden, who was then Chancellor1 of the Exchequer in the Labour Government of the day, in regard to trade between Australia and Great Britain. iHe , I are at opposite poles fiscally, because he is an out-and-out freetrader ; but no one can deny that “ Phil “ Snowden, as he is popularly known, is one of the finest Britishers of recent years. The splendid fight that he put up at The Hague, on behalf of Great Britain and the British Empire, will not readily be forgotten. His claim to the title of a staunch Britisher is not questioned. Yet he in common with members of the British and Canadian Houses of Commons, and of other parliaments throughout the dominions, is opposed to the agreement. For the ten years, 1921 to 1930 inclusive, Australia imported from Great Britain goods to the value of £586,000,000. “We have it on the testimony of the Minister for Trade and Customs (Mr. Gullett) that at Ottawa, one of the strongest arguments the Australian delegation could use with the delegates from Great Britain, was the preference that had been granted by Australia to Great Britain over a period of 25 years. At a low computation, the value of those _ preferences may be assessed at no less a sum than £125,000,000. It is between 75 and 80 years since Australia began to borrow from Great Britain. According to figures that have been issued by.the Commonwealth Statistician, we have paid in interest alone during only the last 50 years, £550,000,000.


– We have had the advantage of the money that we borrowed from Great Britain.


– Of course we have. It would be safe to say that, including private borrowings, the interest payments have amounted to at least £600,000,000. Before we were able to manufacture, the British mercantile marine traded in every sea and entered practically every port in the world, including our own. In our early history nearly the whole of our bridge material and large quantities of our railway material came from Great Britain. But we are now in a totally different position. The right honorable member for Cowper (Dr. Earle Page) and I, a couple of months ago, participated in a wonderful ceremony on the Clarence river. My chest expanded with pride when I stood upon the Clarence river bridge and realized that, from the drawing of the first line of its design to the driving of the last bolt, everything in connexion with that structure was Australian. That illustrates the extent to which we have grown, and what Ave are able to do for ourselves. I know that it is said that our trade routes have to he kept open. It must be recognized, however, that it is incumbent on Great Britain to keep them open.

Government Members. - Oh, no!


– That is my opinion, and I give it without equivocation. In this matter I intend to speak unambiguously. This view is endorsed by Englishmen themselves. I attended a function in New York at which Lord Derby was being entertained by members of the Pilgrims Club. Replying to a toast, he said that the people of the United States of America, living as they did in a country practically self-contained economically, did not know what it was to live in one of which the population would starve in a fortnight if shipping were stopped. Mr. Ramsay MacDonald, speaking at the Naval Disarmament Conference, said that the people of Britain lived by the sea, foodstuffs to the value of £500,000,000 being imported each year. Surely our kinship with the people of Great Britain should count for something when it comes to purchasing supplies of food. We are already giving a substantial measure of preference to British goods. In fact, considering the reduced purchasing power of the people, it is surprising that we are able to buy so much from Great Britain. We shall have to consider whether we are not buying too much, because the trade balance is going against us.

The Colonial Secretary, Mr. Thomas, who was a member- of the British delegation at the Ottawa Conference, speaking in England in an endeavour to appease his former colleagues of the Labour party, said that the conference would lead to more migration from Britain to the dominions and relieve the unemployment problem in that country. I cannot see how this is to be brought about, unless we extend our industries in order to provide more employment. At the present time, we have 300,000 people out of work, and most of them must he re-employed before we can think of allowing more migrants to come to Australia. When we have provided for the wants of our own people, Ave should be only too pleased to furnish employment for the people from Great Britain in our expanding rural and manufacturing industries. When I was in England I made careful inquiries into the unemployment situation there, and, after examining the available statistics, I came to the conclusion that Great Britain was carrying at least 1,500,000 more people than she was able economically to carry. They constituted the surplus population. I mentioned this to a highly placed per*sonage in London, and he said to me that the figure was more like 2,500,000. The population of Great Britain has been steadily increasing, but the outlet to her dominions and America has been closed. Notwithstanding the large number of unemployed in Great Britain at that time, I Avas told that 400,000 more persons were employed than two years previously. I visited factories in Great Britain where 2,000 or 3,000 persons were employed, and every man and woman and every machine was busy. Great Britain’s trouble is that she has too many people. The population of Australia is predominately pf British extraction, and Ave would welcome our kith and kin from overseas if we were able to absorb them. We need population in this great con- tinent; but we can absorb only new arrivals by having a variety of industries, rural and manufacturing.

From the point of view of defence, it is necessary that the population of Australia be increased. A chain is only as strong as its weakest link, and there should be no weak link in the Empire chain. Our position is more dangerous than that of other portions of the Empire. Canada is comparatively safe, because of her geographical position, and so is South Africa, but Australia and New Zealand have to take special precautions. If the Empire is to be kept intact, we must take steps to provide for our own defence, and for this purpose it is necessary to have an adequate population fully employed. The Public Accounts Committee, which after the war inquired into the expenditure on munitions in Australia, stated -

The primary duty of the people of the Commonwealth is to defend Australia, and, if that duty is to be successfully and properly performed, safety in munitions supply is an object of urgent need, and one that should be attained asquickly as is consistent with a reasonable solution of all the problems associated with it. Hitherto, when Australian forces have been engaged in war they have been supplied with the major portion of their essential munitions by the British or allied forces with whom they have been associated. But an Australian defence policy demands that this country should be in a position to supply its own munitions of war.

The committee included the honorable member for Gippsland (Mr. Paterson), the honorable member for Maranoa (Mr. Hunter), Senator Needham, Senator Millen and Senator Bolton. Mr. Leighton was the head of our munitions department, and he proved himself to be a man of outstanding ability. He was sent to England to obtain plant and information, and while he was there the British authorities annexed him, and, so far as I know, he remained overseas until the war ended. He said that our Australian factories, properly equipped, could, with the available supply of raw material, furnish all the munitions needed for the defence of Australia, except guns of large calibre. We know that our factories turned out such excellent military equipment that Australia was able to send overseas a body of 300,000 of the bestequipped soldiers who participated in the war. We must develop our primary and secondary industries so that Australia may be able to carry a larger population. We cannot separate the interests of primary and secondary industries. Any man who seeks to set town against country is an enemy of Australia.

I do not believe that one parliament should enter into an agreement which assumes to bind subsequent parliaments. Speaking on this subject in Great Britain, Mr. Hore-Belisha said that there was nothing in the Ottawa agreement which took away Parliament’s legal right to remove duties at any time. The ratifying act, he said, could be repealed by any parliament. If Sir Herbert Samuel were returned with a large majority in the House of Commons, he would be entitled to remove the duties.

At a recent by-election in Canada, the Bennett Government chose to make the Ottawa agreement a vital issue. No fewer than five members of the Government took part in the campaign, and they said that the verdict of the electorate of South Huron would be the verdict of the people of Canada on theOttawa agreement. Notwithstanding this, however, the Liberal candidate, Mr. W. H. Golding, whom the Government opposed, was returned by a majority six times greater than that by which the Liberals had previously won the seat.

I have here the monthly report issued by Wigglesworth and Company Limited, of Trinity-square, London, which contains the following paragraph, referring to the Ottawa Conference : -

Briefly, the conference has devised a formula which permits fair competition amongst the various dominions, and with Great Britain. The protective duties are to be reduced to a level which will give United Kingdom producers the full opportunity of reasonable competition in the dominion markets on the basis of the relative cost of economic and efficient production. In this way, the standard of living is preserved to each, and protection for protection sake is supplanted by a system which approximates freetrade.

I intend to vote against the second reading of the bill, and also against some of the clauses when we are dealing with them in committee.

Mr.NOCK (Riverina) [9.42].- The people of Australia looked forward for months to the holding of the Ottawa

Conference, and at last we are dealing with a bill to ratify the agreement reached. I should like to commend the work of the delegates who represented Australia. They had a heavy task, and performed a great deal of work. Unfortunately, the results have not been as satisfactory as we expected. However, it is an old proverb that half a loaf is better than no bread, and when we cannot get what we want it is wise to take the next best thing. «On that principle I am prepared to support the bill for the ratification of the agreement.

We should remember the position which existed prior to the holding of the Ottawa Conference. Great Britain was allowing free entrance to practically all Australia’s products, but she was admitting the goods of most foreign countries on equal terms. That was not a concession to Australia because it did not cost Great Britain anything. On the other hand, Australia, in allowing British goods to enter at a preferential rate, is not losing anything. Australia is not giving a monetary concession to Great Britain, but is allowing her to extend her trade with this country, and also helping her to retain a .greater portion of that which she holds. We recognize that the bond of Empire, which depends upon sentiment, is apt to weaken if it cannot be strengthened by an increase of trade. It was with that object in view that the Imperial Economic Conference at Ottawa was held. It was expected that as a result of that conference direct concessions would be granted to Australian primary products, and that there would be greater preference shown to imports from Great Britain. The cost of living and the cost of production in Australia would have been reduced, and, at the same time, concessions could have been given to those engaged in primary production. The results are mostunsatisfactory to our major primary industries, in that those engaged in the production of wool, wheat and meat are not likely to receive any real or early advantage. When we consider the attitude of the representatives of the Commonwealth at this conference the decisions reached are not surprising. There are always two parties to a bargain. The attitude adopted by the members of the

Australian delegation was due, I think, to the fact that some promises were made before it left Australia that it would not reduce duties. I do not know whether that is so or not, but we do know that, as a result of the action of our delegates, the duties on 26 items in the tariff schedule have been reduced, while those on 440 items have been raised. The average increase in the duties on those items is 5 per cent., and the average rate of duty is now 43£ per cent. In these circumstances, we can understand why greater concessions were not given to Australia. There is an average duty of 43£ per cent, and, in addition, there is exchange, primage duty and transport charges, making the total protection almost 100 per cent, against British imports. What is the use of granting preference, or so-called concessions, if the tariff wall is so high that Great Britain cannot compete with our manufacturers? If a little more had been done in the direction of granting concessions to Great Britain our industries would have received more assistance. For instance, the duty on umbrellas has been raised by 10 per cent., bringing it up to 50 per cent. The duty on tinned fish has been increased by 17-J per cent., floor and roof covering by 10 per cent., making the total duty 65 per cent. In these circumstances there is reason to doubt the sincerity of the statements made by the representatives of the Government from time to time. In April last I received a letter from a government department to the effect that the policy of the Government is to bring about lower costs; but the tariff schedule adopted as a result of the Ottawa Conference, will not have the effect of lowering the costs of living or the cost of production to those engaged in Australian industries. When the Minister for Trade and Customs (Mr. Gullett) introduced the bill, he said that the agreement would be the salvation of those- engaged in primary production. An examination of the agreement discloses that it will be of no monetary benefit to our great primary industries. Those engaged in the production of wheat and wool will not receive any financial advantage, and it is a wonder that the Government would dare to increase the cost of living and the cost of production, as it undoubtedly has. If a preference of ls. a lb. were given on Australian wool exported to Great Britain, it would not have made a fractional difference in the price. A similar position applies with respect to wheat. Although Canada is a large wheat exporter and could supply Britain’s needs, a preference of 5s. a quarter would not have raised the price to either Australian or Canadian producers. The Australian graziers expected to derive some advantage from this agreement, but they will got nothing. They expected that the concessions which would have been given to Great Britain under a reciprocal tariff would have resulted in reduced costs. There is no doubt that the graziers are disappointed. There are many directions in which assistance could be given to them. “We are wondering how long the Government will take to come to a definite decision in the matter of assisting those engaged in the wool industry. “Why not help them by reducing the land tax or the tariff, by removing the super-tax, or increasing the exchange rate? Up to the present they have received no benefit. The decisions reached at Ottawa have been a fiasco so far as wool is concerned. The Australian meat producers, who were optimistic before the delegation left Australia, thought that even if they could not receive any advantage on wool, some practical relief would be afforded in connexion with their exports of meat. All they have . been given is a postdated cheque, and all they can expect is possibly some advantage in six or twelve months’ time. Before the Ottawa agreement become operative, the meat producers in the Argentine rushed supplies into Great Britain, where the market became glutted. There is insufficient cold storage in Great Britain to accommodate the large shipments of frozen meat that have been arriving. Cargoes had to remain in the ‘ship until they could be distributed. To this extent, the Argentine producers are getting the first advantage as a result of the agreement. To-day the cost of slaughtering, shipping and delivering mutton totals the value of the carcass. According to a statement made by the right honorable the Prime Minister (Mr. Lyons) yesterday, the price of mutton in London is 2£d., whereas the cost of slaughtering, shipping, and delivering on the London market is 2$d., thus leaving less than ls. a head to the producers in Australia, an amount insufficient to cover railage. In these circumstances there is some justification, for the disappointment which they have expressed. One wonders whether they would have been worse off than they are to-day without this agreement. “We hope that they will derive some future benefit, though at present none is likely. There is no prospect of the wool and wheat producers receiving any tangible benefit. We have also to consider the possibility of varying seasonal conditions. Australia has had three good seasons, during which our flocks have increased. To-day there are 110,000,000 sheep in Australia; but, unfortunately, rabbits arc increasing, and valuable pasture is being destroyed. Good seasons are usually followed by droughts, and there is always the possibility of a dry season coming upon the meat producers before they have an opportunity, of marketing their stock under the Ottawa restrictions. Nature holds the key, and will determine whether the meat producers will be able to market their product under favorable conditions, or whether the grazing industry will be faced with another tragedy. The wheat producers hoped that some preference would be granted, and that an embargo would be placed upon importations of wheat into Great Britain from Russia. Russia defaulted to Great Britain to the extent of £1,000,000,000, and to British traders to the extent of £300,000,000, making a total default of £1,300,000,000. The properties of the Kulaks were confiscated, and Russian wheat is now produced under conditions of slavery. Notwithstanding this, the Russian exporters were allowed to glut the British market, and to deprive the Australian wheat producers of the benefits to which they were entitled. At this time many Australian wheat-growers Were receiving only ls. 4-^d. a bushel for wheat.

Mr Ward:

– The honorable member’s statement concerning Russia is not supported by official documents.


– It ia.

Mr Ward:

– The honorable member should give the exports of wheat from Russia during the pre-war years.


– I am not a statistical record, and I have not the figures before me.

Mr Ward:

– Then the honorable member should not endeavour to make a comparison in the matter of prices.


– As a result of the additional supplies forced upon the British market, wheat was being sold by Russia at 3s. a quarter less than the ordinary market price, which was ruinous to Australian wheat producers. The Australian wheat-growers are entitled to some protection; it is impossible for them to compete with Russia under conditions such as I have mentioned. The dominion wheat producers are to receive a preference of 2s. per quarter, which was equivalent to 3d. a bushel, in the price of Australian wheat. Cargoes of Australian wheat may have been on the water for two or three weeks, expecting to reach the United Kingdom at the time of an improved market, yet 20 or 30 cargoes of Russian wheat may be shipped from the Black Sea and reach London first, thus giving the Russian wheatgrowers an advantage over the Australian growers. More should have been done to protect the interests of dominion wheat producers, either by a higher preference, or by imposing an embargo upon Russian imports. There is still a good deal of uncertainty as to the meaning of clause 5 of the agreement, which stipulates that the dominion shall continue to offer wheat in the United Kingdom at world’s parity, as a condition that the preference of 2s. per quarter shall remain. Nobody seems to know whether the whole of the surplus production of the dominions has to be first offered to the United Kingdom in order to secure that preference. If there should be a shortage in Australia, or in any of the dominions, owing to drought, resulting in a rise in the British market, there is nothing to limit imports from foreign countries. Great Britain is protected against high prices through short supplies in the matter of both wheat and meat, and, so far as I can see, the graziers or the wheat-growers are not likely to get any direct advantage under the agreement. When we come to dairy’ produce and our minor primary industries, we find that some advantages are given to Australia, and if the agreement is advantageous to any of our primary industries, even though not to that with which I am mainly concerned, I feel justified in supporting it. ‘ Butter will get a considerable advantage. Some months ago, a 10 per cent, preference was granted by Great Britain to Australian butter, but from the time the Ottawa agreement is confirmed the advantage will be 15s. per cwt. Some honorable members have said that stronger competition in butter may now come from Denmark, because -that country, being determined to retain her place on the English market, will force the price down. In my opinion, it is .not logical that Denmark will produce more butter to sell at an unprofitable price than she is producing to sell at a profitable price. The proposed 15s. a cwt. preference to Australian and New Zealand butter in the United Kingdom will undoubtedly raise the price to some extent and the British consumer will be contributing to that extent to the support of this Australian industry. Other advantages which the agreement will confer upon Australia are preferences to the extent of 4s. 6d. a cwt. on fruit, practically 10 per cent, on eggs, 7s. per cwt. on honey, 10s. 6d. per cwt. on dried fruit, and 1.5 per cent, on cheese. In consideration of the granting of these advantages, Great Britain was entitled to more consideration than she has received from Australia. To sum up the direct results of these sections of the agreement, wool will not benefit, wheat will receive only a small preference or reservation of the English market, and meat will receive no advantage whatever until next year; but dairy produce, wines, bacon, honey, eggs, copper, lead, bark, fruit, milk, and certain other primary produce of Australia will be granted a degree of preference at the COst of the British users.

Those may be said, to be the direct benefits of the agreement. Many of us were hoping that there would also be indirect benefits1 consequent upon an amendment of the tariff schedules which would result in a reduced cost of living, and production in Australia, but the position seems to have been securely tied in this regard. Earlier in my speech, I referred to the increase in duty of from 2£ per cent, to 17^ per cent, on 440 items, and pointed out that the average tariff rate would now be 43£ per cent., which, with exchange, primage, transport, and other factors would raise an almost prohibitory wall of 100 per cent. Yet honorable members on the - Opposition benches are continually harping upon the necessity for efficient protection, and the representatives of the manufacturers in various parts of Australia are saying that they must have effective protection for their industries. I submit that we need efficient industries and reasonable protection. Some honorable members seem to think that efficient protection means absolute prohibition. The spotlight which the Tariff Board has directed to a number of industries shows how necessary it is that we shall be careful in granting tariff protection to certain secondary industries. Many industries have been protected which are not natural to this country. Sir Otto Niemeyer told us that we were attempting too much in this direction, and that we should show discrimination. Protection should be granted only to those industries which have prospects of becoming reasonably successful. There was an opportunity at Ottawa to formulate a policy with this objective. Industries have been subsidized in Australia by means of the tariff which have proved very expensive to Australia. Attention has been directed recently to the Australian match industry which was costing the Australian people £192,000 a year.

Mr Gregory:

– Which was given to foreign shareholders !


– That is so. [Quorum formed.] There is no doubt that the Australian public has been exploited in consequence of the extreme shelter afforded to the match industry. The galvanized iron industry is another of the same description. ‘ The amount of bounty paid to this industry was sufficient to pay the whole of its wages bill; yet the people were paying more for locally manufactured galvanized iron than they would have paid for the imported iron. This is scandalous. The position in regard to tools of trade was also most unsatisfactory.

The Tariff Board has shown in its various reports how necessary it is that care shall be exercised in determining the rates of duty to be applied to different commodities. The provisions of articles 9, 10, 11, and 12 of the Ottawa agreement will safeguard the position somewhat in the future, and the inclusion of these provisions in the agreement is some compensation for the lack of greater advantages for our major primary producing industries.

The Deputy Leader of the Opposition (Mr. Forde) said, in the course of his speech, that the backyard industries of to-day will be the big factories of tomorrow, but the Commonwealth Statistician’s figures hardly bear out his contention, for 81.7 of our factories employ only 6.17 hands each, and only 3.16 of them employ over 100 persons each. Notwithstanding that for two years extremely high tariff duties, prohibitions, and embargoes have been in operation, 1,200 factories have been closed and S0,000 persons dismissed from their employment. These facts speak for themselves. We must pay more regard to efficiency in production and reasonableness in protection. In the past, heavy burdens have been placed upon the people, because those who have established new industries have obtained almost any degree of protection that they sought.

The tariff schedule which is now on the table will undoubtedly affect production costs in some directions. Not every item of it will have this effect, but many of them will do so. For instance, an article now being brought to Australia from a foreign country for £1 will not be .able to enter into competition with a similar article of British manufacture. This) means that the British article will be available in Australia, not for £1, but at some price between £1 and the price at which the foreign article would cost under the new duty. This will undoubtedly add to the cost of production.

I am particularly pleased that articles 9, 10, 11, and 12 appear in the agreement for they will, to some extent, safeguard the position. If they had not been there we should have had some cause for alarm. Article 9 provides that protection by tariff shall be afforded only to those industries which are reasonably assured of sound opportunities for success. Some objection has been taken to the wording of this article, but in my opinion it is fair and reasonable. Seeing that we have a body like the Tariff Board, free from party bias and political influence, and expert in its work, we should trust it. I believe that the Tariff Board will see that worth-while Australian industries are protected and given a reasonable opportunity of competing against even British goods on this market. Article 10 provides that duties shall be based on the relative cost of economical and efficient production. This also is an eminently reasonable provision. There is, of course, necessity to provide that infant industries shall be given reasonable protection, but infant industries should grow. They should not always need to be helped along. The Tariff Board should regularly review our tariff schedule with the object of keeping it upon a sound basis and of preventing the exploitation of the Australian public. Article 11 provides for a review, as soon as practicable, of our existing tariff duties. This also is very necessary. Article 12 sets out that no new protective duties shall be imposed and no existing duties increased on United Kingdom goods to an amount in excess of the recommendation of the tariff tribunal. Though these articles may seem to be unnecessary, we have been foolish too long in trusting a House elected by a democratic vote. Evidently this was the thought in the minds of the delegation, for we find the following statements in the concluding paragraph of the speech delivered by the Minister for Trade and Customs (Mr. Gullett) : - lt is no exaggeration to say that hitherto this Parliament has been in tariff and industrial legislation, a two-standard Parliament - a standard for the cities and another standard, very much inferior, for the country. This Ottawa agreement . . . makes an attempt … a sincere constructive and comprehensive attempt to adjust that unfair balance.

The Ottawa agreement proclaims the inherent right of the country people to have their interests safeguarded. The Minister went on to say -

It proclaims . . . the inherent right of the country people and their industries to equal economic consideration with the city people and secondary industries in this Parliament.

It does proclaim this right, but a guilty man may proclaim his innocence, and with no better results.

Next it recognizes the desperate plight of our primary producers and their imperative claim to assistance and relief. It is an acknowledgment too, of the plain unchallengeable truth that, had it not been for the magnificent fortitude and industry of out farmers and pastoralists and their unprecedented production and export during these years of adversity there must have been a total collapse of our whole financial and industrial structure . . . This agreement has been drawn in aid of the man on the land.

I have already stated that there are, in the agreement, provisions which make it inadvisable for this Parliament to reject the measure, although the advantages to be obtained from the agreement are small compared with what the primary producers of this country hoped would be obtained. The statement of the Minister is ground for some misgiving. He said -

It does not reduce the protective level of our Australian tariff, lt does not call upon the Australian Government to reduce that level. On the contrary, while it does not reduce the protective level against British imports, it very generally increases the protective level against foreign imports. . . . In reality it is done in the interests of the Australian primary producer. But in any case the Australian manufacturer has his protective level raised over hundreds of duties against the foreign manufacturer.

This is the conclusion of the Minister for Trade and Customs, and makes me afraid that we shall not get from the agreement anything like the benefits he predicts. The fact that it will enable Great Britain to market certain of her products in Australia will not mean reduced prices; on the contrary it will probably add to the cost of such commodities. I express pleasure that it provides for the removal of the surcharges, prohibitions and primage imposed by the Scullin Government. The sooner this is done the better. As regards the circular issued by the Bank of New South Wales, all I wish to say is that I admire consistency, and an entire absence of it is evidenced by the document referred to. A couple of months ago there was much talk about the restoration of confidence and the methods to be devised to increase the purchasing power of the primary producers so as to put them on an equal basis with our secondary industries. Then there was no suggestion of the probable rise in the prices of raw materials, and of its adverse effect on, say, a loaf of bread, or a suit of clothes, and we heard nothing about the probable repercussions in the wool market following any possible rise in the price of meat. We know from experience that market fluctuations in certain commodities do not necessarily have their direct effect on other goods. Wheat has fluctuated from 2s. 6d. a bushel to 6s. It was a3 high as 9s. in 1920 and had little effect on the price of bread. We have seen wool selling at 31d. per lb., and down as low as 6d. per lb., and we know that these fluctuations had little, if any, effect upon the cost of a suit of clothes. In the circumstances, we must take experience rather than the economist as our guide. I support the bill, although I am disappointed that it does not promise greater benefits to our primary producers.


.- I have been a member of this Parliament for many years now, and I have heard the honorable member for Maribyrnong (Mr. Fenton) make many declarations similar to his characteristically protectionist speech of this evening. What he failed to tell us was that the promises made in respect of every tariff alteration since 1920 have not been fulfilled. We all recall the fervid peroration delivered by Mr. (now Senator) Greene, when introducing his 1920 tariff. He spoke eloquently of the marvellous changes that would take place in the industrial outlook of Australia, and the magnificent prices which we would receive for our exports. The honorable member for Maribyrnong to-night referred to the United States of America, which I remind him, although not greater in area than Australia, has a population of 120,000,000, compared to the 6,500,000 in this country, due, in my opinion, to the fatuous fiscal policy of successive governments which have been largely responsible for the present dearth of employment. How is it that our manufacturers, although carrying on under an excessively high protection, are unable to find employment for greater numbers of our people ? The reason is that the carrying out of the policy he advocates has destroyed the only industries that gave them life. The honorable member was rather unfortunate in his illustrations this evening. He mentioned, among other things, the establishment in this country of the business of manufacturing sheep dip. I suppose these has never been a greater scandal in connexion with any Australian industry than that connected with that particular business. A little co-operative company making sheep dip was induced by the Government to undertake the provision of 75 per cent, of the sheep dip required in Australia, being assured of an embargo on imports, but very shortly it was in difficulties owing to the failure of the Government to honour its promise, and Cooper’s were able to buy up the plant and start here for themselves. The honorable member for Maribyrnong is consistent, undoubtedly, but his consistency in support of protective policies has not been of much advantage to Australia. Despite the marvellous resources of this country, we are unable to carry more than 6,500,000 people, and thousands of them cannot find employment. Our factories are now employing fewer people than during the period proceding the imposition of high duties in 1920. Surely every one will admit that there must be something drastically wrong with the fiscal policy of a country with such a record. The honorable member also declared that he would not be bound by this agreement, and asked what right had this Parliament to bind future Parliaments. We cannot bind future Parliaments; but does he forget that he was a member of a government which made an agreement with the sugar industry, extending over a period of five years, which cost the people of this country £7,000,000 a year? Although I made many efforts to have that agreement referred to this Parliament, I was unsuccessful. The Government of which he was a member decided that Parliament should not have an opportunity to discuss it. . A motion which I placed on the notice-paper was repeatedly blocked, with the result that Parliament has never had a chance to discuss the sugar agreement. Members on both sides in this debate have declared that they deprecate the right of Parliament being interfered with. There has been no greater offender in this respect than the preceding Government. The honorable member for Darling Downs (Sir Littleton Groom) eulogistically referred to one of the greatest orators that Australia has had - the late Mr. Alfred Deakin - and I endorse all that the honorable member said about that fine statesman. I have read something of the policies of members of this House who in those days classed themselves as ‘protectionists, and I am convinced that they would turn in . their graves if they knew of the things that were being done in Australia under the name of protection. I refer particularly to the embargo which was placed on the export of sheep-skins. If honorable members will examine the chart showing the values of export industries, they will find that values have declined considerably; and that although there has been a great reduction in the cost of wages, there has actually been an increase in the price of our manufactured goods. [Quorum formed.’]

I come now to the Ottawa agreement. When preparations were being made for the Ottawa Conference, and remembering the veiled threats uttered by Mr. Bennett, the Prime Minister of Canada, some time previously when in Great Britain, I had grave misgivings about the ultimate results of political trade bargaining between the component parts of the Empire. The agreement does undoubtedly benefit some of our primary industries, particularly luxuries such as wines, fruits, sugar and butter. There is not the slightest doubt that they will receive generous assistance, but little or no concessions have been given to the three great primary industries upon which the whole financial fabric of the Commonwealth depends ; I refer to the wool, wheat, and metal industries. One cannot overlook the controversies in the British press of recent date, and fail to note the animosity that has been aroused by this . agreement. In the Economist, a noteworthy British paper, the Statesman, and other journals, extremely bitter criticisms have appeared, not only of concessions granted, but also of the fact that the agreement ties the hands of the British Government in respect of trade agreements with other countries. The following statement appears in the Westminster Bank Review of last August: -

When responsible leaders address themselves seriously to consideration of world problems, certain ideas arise irresistibly, time after time, because they are axiomatic in modern economic life. lt is only when an international conference has ceased to think in corporate terms and having rc-dissolved into national entities is subject once again to the pressure of sectional interests (which no statesman in a democratic country can afford to disregard) that the clear vision of international duty disappears in the dust of battle before conflicting local forces.

The representatives of Great Britain attended the Ottawa Conference with the intention of discussing world as well as empire problems; but when actually at the conference, the dust of battle obscured everything, and the delegates were able to see only their own interests. Mr. Baldwin, before leaving England for Ottawa, said -

The object of the Government is freer trade. At Ottawa the objective was the expansion of empire trade to be brought about as far as possible by the lowering of trade barriers as between the several members of the Empire.

Is there anything in the agreement indicating that there is to be a lowering of trade barriers among the several members of the Empire? Is it likely that in Canada, while Mr. Bennett remains Prime Minister, there will be a lowering of tariff barriers? Does the quota which has been fixed for exports of meat to Great Britain tend to remove trade barriers? The answer is undoubtedly in the negative. Mr. Baldwin con tin ued -

This object can best be attained by assuring traders of markets for goods by the removal or limitation of existing barriers to trade, particularly arbitrary and erratic quota systems.

The British delegation at Ottawa was provided by Mr. Chamberlain with a series of resolutions which declared boldly and definitely that a diminution of tariffs was the objective that should guide its deliberations, and described the conference as the great pivot on which the freeing of the world trade from the curse of economic nationalism and isolation should be made to revolve.

Those resolutions were hotly challenged by the other delegates, and finally abandoned. Each delegation had to return and endeavour to make its people believe it had gained great concessions and given little away. The right honorable member for Flinders (Mr. Bruce) has pointed out time after time that our protectionist policy has received no injury as the result of the Ottawa agreement. It is a great pity that at the last election in Canada there was a change in government. The previous Government was a Liberal Government. I have quoted before in this House the budget speech of Mr. Fielding, a Canadian Minister, in which he pointed out that in 1923 the Government started to put its house in order, and that since then it had paid off 320,000,000 dollars of its public debt, while its taxation had decreased by 220,000,000 dollars, and that the whole cost of government had been met out of revenue. Canada was a high-wage country with the lowest tariff in the world. Mr. Fielding boasted that in 1929 Canada had exported more in the value of manufactured good3 than the total exports of all descriptions in 1914. Had it not been for the last change of Government in Canada, the Ottawa agreement would probably have been totally different from what it is to-day. It is pleasing to hear that the result of the elections in the United States of America is nine to one in favour of Mr. Roosevelt and his policy of a lower tariff. I am convinced that if there were another election in Canada the general desire would be expressed that Mr. Baldwin’s suggestion should be carried out, and effect given to Mr. Chamberlain’s desire for something in the nature of greater freedom of trade generally. Any person who studies economic conditions throughout the world must conclude that unless there is. a world revival of trade, there is little possibility of a sectional revival. We speak of the improvement that has taken place in Australia. What improvement has taken place is merely the psychological effect of the people’s faith in the honour of the present Government. We are not producing any more wealth than previously. Why do Mr. Baldwin and Mr. Chamberlain no longer advocate the principles which they previously espoused ? The following reply by Mr. Ramsay Muir, to a letter written by Sir Robert Donald, appears in the London Times of the 27th September : -

Sir Robert Donald’s case rests upon two arguments. The first is, whether they are good or bad in themselves, the agreements had to be concluded- and presumably must now be accepted in order to prevent the disintegration of the Empire. >

Evidently a hint was given that it would be wise to allow the dominion delegates to return to their homes having gained something for the dominions, as otherwise there was a danger of the disintegration of the Empire. If ever we get the true inner story of the threats, cajoleries and half promises of the Ottawa Conference,, it should make interesting reading. The first test of that conference will take place in connexion with the tariff schedule before us. I wonder what the opinion in Britain will be when it is analysed there. The London Times also contained the following report in a recent issue : -

After declaring that in some cases the duties on hosiery amount to 400 per cent., and even to 650 per cent., the federation says Australia has treated British hosiery and knitwear on lines which the most ardently protectionist countries in the world have never attempted, and should certainly be the last to benefit under any scheme of preference.

That is the opinion of a large body of manufacturers regarding this agreement.

Mr Maxwell:

– Does the honorable member think it would be possible to frame an agreement which would please every one?


– No. The British people wanted something in the nature of freetrade between Great Britain and the dominions, but the schedule before us gives no evidence that, they have achieved their desire. Australia owes a great debt to Great Britain. Because of the liberal constitutions which the British Parliament gave to her colonies, including Australia, it has been possible to build up tho great, democracies of the colonics and dominions. Australia was given absolute freedom of action, even to the extent of imposing duties or embargoes on British goods entering this country. During the 150 years that Britain has given us her protection no foreign foe has dared to set his foot on our soil. Realizing that it would bc a wise policy to settle our great unpeopled areas, Britain assisted us generously in our immigration policy. The Homeland is practically the- only market for our exports, other than wool, wheat and metals, the doors of most other countries being closed to us. What other country will accept our butler, fruit, sugar and wines? Tho doors of Britain have always been open to our exports. Britain can afford to offer us some concessions on luxuries; but can she afford to make concessions to us in respect of the food of her people and the raw materials required by British manufacturers? We must continue to look to Britain as our best market. It is well to remember that Britain pays higher wages than are paid by continental countries. What would happen if the cost of living in Britain, and the prices of the raw materials required by British manufacturers became so high that Britain lost her trade with other countries? Our duty to the Australian producers is to do all that we can to ensure a market for their products in England, and consequently we must not do anything which would cause Britain to fail.

I am with the Postmaster-General (Mr. Parkhill) heart and soul in his desire to see the great imperialistic dream realized. We must encourage Empire defence, Empire migration, and Empire trade. Although little can be done at the moment in the matter of migration, I hope that in the near future it will be possible to people our northern areas with settlers of British stock. We must do all that we can, not only to build up our own export trade, but also to see that no action of ours injures the export trade of Britain. In our attempts to solve the problems confronting Australia, we must have regard to economic conditions throughout the whole world. As the Bank of New South Wales has pointed out in one of its recent circulars, we must recognize the necessity for finding in other countries a market for our wheat and wool, and other products. If we do things which adversely affect other nations, we cannot wonder if they take retaliatory action.

The Leader of the Opposition said that article 12 of the agreement is repugnant to the rights of this Parliament. This Parliament consists of two chambers, and how much desire did the Scullin Government show to protect the rights of Parliament? Did not that Government, time after time, refuse to the Senate an opportunity to exercise its rights? By a misuse of the provisions of the Customs Act, the Government imposed an embargo on 80 items of imports, and thereby seriously restricted the trade of Australia. The Government also introduced an amending customs bill, and when I proposed an amendment requiring that embargoes should be imposed, not by proc- lamation. but by regulation which either House could disallow, honorable members of the present Opposition, who profess now to assert the rights of Parliament, opposed the proposal, and declared that embargoes should be imposed by proclamation, and that the Senate should be denied an opportunity to express^ its views upon them. By amendments of the tariff schedule also, the Scullin Government imposed heavy burdens on the people which Parliament had no opportunity to discuss, but had to be temporarily validated prior to the general election. For four years, Parliament was denied an opportunity to declare what customs duties should be imposed on the people. In regard to the sugar embargo, a motion submitted by me was placed low on the notice-paper, and the Scullin Government refused to allow Parliament an opportunity to express its opinion regarding the heavy special taxation that had been placed’ on Australian consumers.

Much has been said about the value of the preferences that have been given by Australia to the United Kingdom. All that Australia did was to erect a high tariff wall, surmounted by barbed wire in the form of regulations, and then tell the British manufacturer that if he could climb over it without injury to himself, he might enjoy a slight preference over his foreign competitors.

The Prime Minister has asserted that the Government has a mandate for its actions,, and in support of that claim, he quoted his policy speech during the last general election. His principal speech was that made in Sydney in the course of which he said -

I refuse to bid for votes by rosy promises. The export value of primary production is an infallible guide to the ..prosperity of every home in Australia.

What regard has the right honorable gentleman shown for the prosperity of those people in the hack country who, by their industry have, in spite of great difficulties, built up and maintained Australia’s export trade? While they have been neglected and allowed to fall into comparative poverty, valuable tariff concessions have been given to more privileged sections of the community. The export value of primary production may be an infallible guide to the prosperity of the people in the cities, but it does not reflect the deplorable state of those primary producers who have saved Australia from bankruptcy. The Prime Minister said also -

Not only ure those nien on the land to be kept there, but their work should be made more profitable.

To what extent has that promise been redeemed ? He continued -

The Nationalists- stand behind the Pratten tariff.

Had the present tariff been the 1930 schedule, the Government could not be accused of having betrayed its trust, but one cannot forget the speeches made by present Ministers when they were in Opposition. I recollect the AttorneyGeneral (Mr. Latham) quoting a portion of a speech made by the right honorable member for Flinders (Mr. Bruce) in 1929, when he declared that unless the cost of living and production were reduced, we would have to reorientate the whole of our national life. Instead of the promises of the honorable gentleman and his colleagues being fulfilled, embargoes, surcharges, primage, and high customs duties have been continued. In addition, the present Government was guilty .of an inexcusable action in connexion with glass and galvanized iron on the eve of the making of this agreement. The Government must be judged not by its declarations, but by its deeds, its fulfilment of its pledges. And the tariff schedule, not this’ agreement, is our response to the concessions which Great Britain has granted to us.

Great difficulty will be experienced in interpreting some of the provisions of the agreement. I support the Government wholeheartedly in regard to article 12. But I cannot understand why, as every intention of the British Government is stated clearly and in detail, this agreement contains nothing binding on the Commonwealth, except that it shall not increase duties without a prior recommendation by the Tariff Board. What is meant by article 9, in which the Commonwealth Government undertakes that protection by tariff - shall be afforded only to those industries which are reasonably assured of sound opportunities for success.

And by article 10 which says 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.

By arbitration awards and other economic interference with industry, we may so increase the difficulties of our manufacturers that it will be impossible for British manufacturers to sell their goods in our markets. I hope that, before the bill is passed, a member of the Government will give a clear interpretation of the meaning of articles 5, 9 and 11. The House might also ‘ be informed as to when the Government intends to fulfil the conditions of article 14. At the present time, the Government could well afford to remove the present surcharges and duties. I propose to support the agreement, but must oppose the ratification of the tariff schedule until tho Government submits the reductions which it proposes to make. If the Labour party should ever obtain political power again in this country, it might prevent the carrying out of the policy enunciated by the honorable member for Maribyrnong (Mr. Fenton).

Debate (on motion by Mr. Hawker) adjourned.

page 2161


Bill returned from the Senate without requests.

page 2161


Nationalist Organizers: Activities in Queensland - Royal Australian Navy : Alleged Disaffection.

Motion (by Mr. Latham) proposed -

That the House do now adjourn.

Wide Bay

Mrs. Goldsmith, president of the Queensland Women’s Electoral League, states that she has received advice concerning the statements made in this House recently by the honorable member for Oxley (Mr. Baker) about the activities of Nationalist organizers during State and Federal election campaigns in Queensland. She desires, through me, to correct those statements in the interests of the good name of the organization. She writes -

Mr. Baker claims that during the 1929 State elections campaign, in company with Mr. W. J. Copley (now member for Bulimba), he visited the house of Mrs. Service, a Nationalist organizer, and that in the discussion that ensued, when she saw that they were interested in politics, she volunteered the information “ believing that we were keen supporters of her party “ that she was a paid organizer for the Nationalist party, also, that in company with Mrs. Kidney, another Nationalist organizer, she canvassed for postal votes ; that, to quote Mr. Baker, “ one of them posed as a Nationalist organizer and the other as a Labour organizer, and by this means were able to capture 1,500 Labour votes in the divisions of Oxley and Brisbane. On Poppy Day, which occurred while the election campaign was in progress, one wore a poppy and one went without”.

Mrs. Service, who is the permanent organizer for the Queensland Women’s Electoral League, recalls the following incident: - During the 1929 State elections, while working one day in her garden, a motor car drew up outside the house, and two men came to the fence (a third man remained in the car) and made inquiries regarding the address of a certain man, for which Mrs. Service made unavailing search in an electoral roll. But no discussion on politics was entered into, other than the reply that was made to a question as to whatshe thought would be the result of the Kurilpa election. She made no reference whatever to the position she held as an organizer, nor to the number of postal votes recorded by her. Mrs. Service states that the two men(of whom Mr. Baker now claims to be one), advised her they were anxious to assist in the campaign of the Nationalist candidate for Maree, and gave names and address as electors of Maree, which were afterwards not to be found on that roll.

These particulars were submitted to the Nationalist candidate for Maree for the use of his committee, and he has confirmed their receipt. Also must it be emphatically denied that in company with Mrs. Kidney (one of our league’s temporary organizers), Mrs. Service has canvassed for postal votes, as they never work in the same district. The statement made by Mr. Baker (evidently with regard to the 1928 federal campaign) that “ one of them posed as a Nationalist organizer and the other as a Labour organizer, and by this moans were able to capture 1,500 Labour votes in the divisions of Oxley and Brisbane” is untrue.

Surely the honorable member for Oxley knows that, under the Commonwealth Electoral Act, a justice of the peace or other duly authorized person assists in the completion of a postal vote, and during a federal campaign our organizers are accompanied by a justice of the peace, and his remark, therefore, that “If it was found that the elector was really enthusiastic about voting, the interviewer posed as an organizer of the party which the elector supported” can hardly be taken seriously. The reference to two organizers that “ On Poppy Day, which occurred while the election campaign was in progress, one wore a poppy and the other went without “, is merely ridiculous, in view of the general wearing of that flower on that day. Its association as a party political badge is not understood.

Mrs. Service is worthy of the utmost respect. She has been a permanent organizer of the Queensland Women’s Electoral League for many years, her work being connected with our branches of the league, and she has never been employed by any other Nationalist organization. At election times she undertakes the greatest share of the postal vote canvass in the metropolitan area, and is accompanied by the same male justice of the peace throughout the campaign, who, as an honorary worker, assists the campaign, and he testifies to the able and conscientious work carried out by Mrs. Service.

I appreciate exceedingly the testimony given by the honorable member for Oxley (Mr. F. M. J. Baker), and through him by the honorable member for Brisbane (Mr. George Lawson) as to the remarkable organization of the Queensland Women’s Electoral League.

It will doubtless be of interest to federal members to learn that in the Brisbane press of the 27th and 28th October, 1932, appears a statement that no complaints regarding irregularities in postal voting had been reported to the Federal Electoral Office in Brisbane. The Telegraph, of the 27th October, says -

No complaints were received at the Federal Electoral Office in Brisbane concerning irregularities in postal voting alleged by Mr. F. M. J. Baker, M.P., to have occurred at the last federal elections. Spooking in the House of Representatives, Mr. Baker said that the votes of people in hospitals had been falsified in the interests of the Nationalists by Women organizers who specialized in this particular form of canvassing. He advocated that postal votes should be abolished.

Under the Electoral Act, before a person can secure a ballot-paperhe must make application on a form, which must be witnessed by an elector. A ballot-paper is then sent to him and he is required to have an authorized witness of his signature on the envelope in which he returns the ballot-paper to the returning officer.

An authorized witness must be a person of some status, and the envelopes sent out with the postal votes set out and the list of the callings and professions authorized to act as witnesses. The insistence of some sort of qualification for the task of witnessing postal votes is considered to be a safeguard against the possibility of abuse in this form of voting.

Mr. Baker’s allegations against the Queensland Woniens Electoral League have recalled the fact that in the Brisbane Courier of 31st March, 1932, appeared the following: -

William McAuliffe, of Church-street, Cannon Hill, an alderman of the Council of the City of Brisbane, was fined £2, with£ 11s. professional costs and 3s. 6d. costs of court, by Mr. J. S. Berge, P.M., on each of three charges that he signed his name to electoral papers, as witness to the signatures of voters, without first having seen them sign their names, in contravention of the federal electoral laws. Mr. J. S. Gilshenan, for the defendant, pleaded guilty, and said the papers were amongst a number of postal votes in the last federal elections. There was a rush of work at the time, and it was now impossible to remember which particular papers were concerned in the charges; otherwise he might have been able to bring some evidence in defence.

It is understood that Alderman McAuliffe was an active worker for Mr. F. M. J. Baker during the recent federal campaign.


.- I sympathize with the honorable member for Wide Bay (Mr. Corser). He has merely read the case as put to him by the Queensland Women’s Electoral League, and cannot argue one way or the other regarding the truth of the matter. I am, naturally, particularly pleased to obtain from such a source substantial corroboration of the statement that I made in this chamber on the 26th October. Honorable members will recollect that, in company with Mr. W.G. Copley, who is now State member for Bulimba, and a Mr. Marron, the organizer for Mr. King, now State member for Maree, we called, in May, 1929, upon Mrs. E. A. Service, a well-known Nationalist organizer in Queensland, at her home in Glenelg-street, South Brisbane. We had a long conversation during which, not knowing that I had been the Labour candidate for Oxley at the 1928 federal election, Mrs. Service boasted to me that she and Mrs. Kidney, one posing as a Nationalist organizer, and the other as a Labour organizer, were able to capture 1,500 Labour votes in the divisions of Oxley and Brisbane. Naturally, I was particularly interested in the matter. She told me that it was their custom to take with them a justice of the peace - usually Mr. Davey, who had been a Nationalist candidate for South Brisbane - and go through the electorates, usually taking a day and a half to collect application forms in each. They spent another day and a half in each collecting votes. The lady boasted that 99 per cent, of the matrons of the private hospitals in the area were friends of hers and had for several years assisted in securing votes for the Nationalist party, and rendering every possible disservice to the Labour party.

She said that there were 150 Nationalist postal votes in the Toowong State electorate, but added “ Of course we do not bother about those during State elections.” Toowong, by the way, is a very strong Nationalist seat in the State Parliament, carrying a Nationalist majority of about 3,000. The lady added that during federal elections, when the Brisbane seat was rather a shaky proposition, they went out and secured those 150 postal votes without loss of time. During the last election campaign I received a number of complaints. I did not pass them on to the electoral officer in Brisbane, for the obvious reason that, in the heat of the election campaign, I had not the time to secure the necessary evidence. I did not enjoy the facilities possessed by a sitting member. The Nationalist party had the advantage of the services of paid organizers. Mrs. Service and Mrs. Kidney went into hospitals and persuaded the inmates to vote Nationalist by telling thein if they did not do so that day, they were liable to a fine. We had been unable to counteract those tactics, because the Labour party in Brisbane employs only two girls and a paid secretary. The Nationalist party, with more money to spend, and a bigger organization, has been able to keep its list of postal voters up to date and, when the moment arrives, it goes right ahead with its campaign. It should be sufficient proof of my bona fides that I urged that postal voting should be cut out. Fairly obvious proof was afforded during the last election that there is something radically wrong with postal voting.Although there was such a pronounced swing to Labour, and I had a majority of 6,000 votes, I was beaten in the postal voting section by 3½ votes to one. It is logical to assume that all persons who are ill are not Nationalists, and that the tendency of postal votes should have been in the same ratio as in the other voting. In the Kurilpa section of my own electorate, in the 1926 elections, the Labour party was beaten by nearly nine votes to one in the postal voting section. We had not the organization that was available to our opponents. In 1929, when a young candidate entered the field, Mr. P. K. Copley, a brother to the candidate of the same name whom I have already mentioned, he was able to bring into existence a virile organization to combat the paid employees of our opponents with the result that the voting was practically equal, despite the 1929 swing against the State Labour party. In that election, when nearly two votes out of every three in Queensland were anti-Labour, the postal votes in Kurilpa were almost even. That is proof that, lacking the money of our opponents, we are unable to cope with their tactics except in extraordinary circumstances.

I am quite satisfied with the corroborative evidence that has been brought forward by the honorable member for “Wide Bay. It strengthens my case. Honorable members may have felt inclined to believe that my first explanation was too fantastic; that a lady organizer would not be so foolish as to do what I related. To-night’s explanation indicates that the Nationalist organization is likely to do the most foolish things.

Postal voting in the federal sphere was abolished in 1911, except for persons temporarily absent from a State. Seven years later the practice again came into force, and I believe sufficient reason exists for this Parliament seriously to consider again its total abolition. It certainly is subject to a great amount of abuse, and unduly favours the organization which has considerable financial resources.

East Sydney

.- Within recent weeks, many honorable members have endeavoured to gauge the accuracy or otherwise of press statements and rumours- concerning disaffection among naval ratings in the Australian Fleet. The Assistant Minister for Defence (Mr. Francis) has repeatedly denied that there is any suggestion of trouble among those ratings. Doubtless, he has based his opinion upon communications from the First Naval Member, RearAdmiral Hyde. I am now in possession of a letter written by one of the ratings on an Australian war vessel, and it furnishes information that either the Minister would not or was not in a position to supply. It reads -

Dear Sir,

In view of the false statement made in the House of Representatives by the Assistant Minister for Defence, Mr. Francis, who obtained the information from the First Naval

Member, Rear-Admiral Hyde, stating that there had been no discontent on the lower deck, I humbly beg to contradict. The statement of Rear-Admiral Hyde is false. No doubt RearAdmiral Hyde has in turn been deceived by the statements of commanding officers, who, ins turn protect their brother officers. If no discontent existed on H.M.A.S. Australia, might the honorable Minister for Defence be asked the reason for Captain Bradley clearing lower decks and speaking to the ship’s company, in addition, and what was the reason for the live half-day holidays (make and mends) which followed. Naval officers in their most benevolent mood do not give “ maR and mends “ for nothing. The origin of the discontent is to be found in the meagre pay of naval ratings. An able seaman receives 5s. 8d. per day, and a first-class stoker Gs. Id. In the Navy there are no eight-hour days, an able seaman or- stoker can be compelled to work 24 hours out of 24. The hours of an able seaman, deducting meal hours for a week at sea are over 90. If the report of the hours worked were tabled in the House, honorable members would have reliable information, and would see that this statement is no exaggeration. A report of ‘the hours worked has already been sent into the Navy Office. If a rating is down for watch on shore and does not go ashore, he is compelled to turn to in the dog watches if required, and must turn out of his hammock at 5.30 a.m. to scrub decks or do other’ work. Many mcn who cannot afford to go ashore to a restaurant and get a decent meal are compelled to remain aboard; hence seven days a week they have to turn out. The Minister for Defence will tell honorable members that the food is good. He has been told by senior officers who never eat this food, and who produce a menu to convince him. The names of the various dishes on paper certainly sound attractive. The bad food was the cause of the mutiny in H.M.A.S. Brisbane while away on duty at Hawaii for the Captain Cook centenary, and also caused the unjust dismissal of Stoker Molleneaux. A menu was tabled in the House of Representatives, and the wording of the menu sounded like a feast fit for a king. Members received the wording in its entirety; they did not see the food. Regarding “ justice “ in the Navy, you are not entitled to it. “AH officers are brothers” is well known. One officer prosecutes you, and his brother officer is your judge; if you speak in defence the master-at-arms orders you to “ silence “, and you have to obey orders and remain silent. Truly a “Nelsonian” type of justice - one-eyed. Senior officers will say that you can appeal to the next highest in rank. What is the use “ all officers are brothers “ and you are victimized. If a system involving trial by a civil judge ashore on matters which would affect a man’s rank, or rating, or his deferred pay, was brought into operation, a measure of justice would be meted out to us. As it is we have no hope. A long list of ratings deprived of their deferred pay is in the possession of the Navy Office.

Senior officers will inform members that article so and so says they are to be deprived of their deferred pay, and members agree, little knowing the original causes”. Surely we are not always in the wrong. Should the papers of the naval welfare request be tabled in the House, members will sec the real position through the eyes of the lower decks, and not through the eyes pf the senior officers. A copy of the King’s Rules and Admiralty Instructions, with all Admiralty Fleet Orders, and Australian Fleet Orders, should be kept in the ship’s libraries for the edification of ships’ companies, but this is not done, because they would enlighten the lower deck; yet if we disobey orders punishment is meted out. A man in the Navy is not_ allowed to whistle and feel happy and contented. He is punished for whistling and trying to feel a little happy, and under the same rules he should be rewarded for moaning, crying and making everybody miserable. A parrot or any other bird kept as a pet is allowed to whistle, for I presume naval regulations have not yet found a punishment for the bird. However, man is supposed to bc superior to all birds and beasts, yet ho is punished for trying to feel happy. This is only one of the petty regulations. There is no chance for us under these Nelsonian one-eyed regulations, many over 100 years old. A rating is punished with 00 days cells if caught bringing a bottle of beer aboard, yet officers may drink to their hearts’ content, come out and abuse ratings under the influence of alcohol. Cases have occurred where ratings have had a modicum of justice through the captain. However, many fear victimization, and tolerate it. Cases have been known where the captains have prevented excessive drinking. If the House of Representatives would have our requests and reasons tabled in the House for investigation, they would find that we are not only asking for a fair go, and not this stupid rot which was published in Truth. There is not even a rumour of mutiny. We gave our oath of loyalty to the King and Parliament. If our requests fail, what other alternative we have only time will tell.

What answer has the Minister to the statements that that letter contains? The rating who wrote it, for obvious reasons, has suggested that his name and the vessel on which he is serving should not be divulged. The Minister should be able to state whether his charges are capable of being contradicted. Can he say that Captain Bradley, of H.M.A.S. Australia, did not find it necessary to clear the lower decks and address the men, and that the authorities were not compelled, because of the fear of further disaffection, to grant concessions that were asked for by the men?

During the recent discussion of the Estimates for the current financial year, the honorable member for Bendigo (Mr. E. F. Harrison) and others stressed the disadvantages of the higher grades in the naval and military forces, and the disabilities under which they labour in regard to rates of pay, but not a word was said on behalf of the ratings. Can anything but disaffection be expected when such miserable rates of pay as 5s. 8d. a day, in the case of able-bodied seaman, and 6s. Id. a day for first-class stokers, are paid, especially as the men are at times compelled to work 24 hours a day, and when at sea the weekly number of hours worked by thom is 90, exclusive of meal hours?

From time to time, I have ventilated in this House the cases of men in the Navy who have been deprived of their deferred pay. Honorable members doubtless remember the case of a naval rating who, because he became involved in an ordinary brawl on the mess deck, was sentenced to a term of imprisonment, at the conclusion of which he was drummed out of the Navy and deprived of his deferred pay, without a fair trial. That he was a capable and efficient member of the Naval Forces is proved ‘by the fact that he was one of those selected to form the guard of honour at the official opening of the Sydney Harbour Bridge. Because a search of his locker revealed a Hansard in which certain statements by honorable members of the party to which I belong were underlined, the conclusion was drawn that he was a supporter of the Lang party in New South Wales, and evidently a disruptionist who was likely to cause disaffection in the Navy. His participation in the brawl on the mess deck was used a3 an excuse to expel him from the Navy and to deprive him of his rights.

The Minister may be able to answer some of the statements that I have read to-night. “ They certainly call for an answer. The mere denial of disaffection among naval ratings will not satisfy honorable members who sit in this corner. We have contacts in the navy among the ratings. They are men interested in the Labour movement, and anxious to better their own conditions, and those of other workers. We have been able to obtain special information, in view of which I think that a reply from the Minister is needed.

AttorneyGeneral · Kooyong · UAP

.- The honorable member for East Sydney (Mr. Ward) has done the House at least one service this evening in supplying it with information from a source, the nature of which may be judged by the character of the letter which has been read, from which it appears that there is not even the rumour of a mutiny in the Navy. There are always some discontented men in any large organization, and in every parliament there are members who are prepared to give publicity to grievances without making inquiry as to their truth, or even whether there is any foundation for them. It is unfortunate that there, should be members of this Parliament who take so light and slight a view of their responsibilities. I do not propose to reply to the farrago contained in the letter. Some of the statements are so obviously ridiculous and absurd as >to tend to discredit the other statements for which one might suppose there to be some foundation. The absurdity of such statements as that “ no one is allowed to be happy in the Navy,” or even to whistle, is so evident as not to need any reply. The mention that, at a court martial, the accused person is not even allowed to make a statement, but is ordered by the master-at-arms to be silent, is another absurdity. The honorable member’s own lack of knowledge of the subject is indicated by his reference to the rates of pay in the Navy. He made no reference to the rations received, to the clothing provided, to the allowances, the deferred pay, child endowment or other benefits received by the men. He spoke of a wage of 5s. 8d. a day as if that constituted the sole reward which ratings received for working, it was suggested, 24 hours a day. One thing is of paramount importance, not’ only to the Navy itself, hut to every citizen of the country, and that- is the maintenance of discipline in the Navy. There are few more successful methods of undermining discipline than for persons occupying what are understood to be responsible positions to make themselves the mouthpiece of unverified grievances when proper methods are provided for the ventilation of such grievances. There is in existence a welfare committee representing the lower ratings in the Navy, the purpose of which is to bring grievances and complaints to the authority in control. That is the proper channel through which such complaints should be made, and I regret that the honorable member for East Sydney should have pursued the course he did to-night.

Question resolved in the affirmative.

House adjourned at 11.24 p.m.

page 2166


The following answers to questions were circulated: -

Federal Capital Territory

Mr Price:

e asked the Minister for the Interior, upon notice -

  1. What is the total area of the Federal Capital Territory?
  2. What is the total population of the Territory?
  3. What is the approximate population of Canberra?
  4. What is the number of houses in Canberra?
  5. What is the number of unoccupied houses, if any, in Canberra?
  6. Does the Government own any houses in Canberra; if so, how many?
Mr Perkins:

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

  1. Five hundred and seventy-six thousand acres.
  2. Eight thousand three hundred and eightysix (as at the 30th June, 1932).
  3. Seven thousand and forty -five (as at the 30th June, 1932).
  4. One thousand three hundred and nineteen.
  5. Thirty-four.
  6. One thousand one hundred and fifteen.

Pasteurization of Foods

Dr Maloney:

y asked the Minister for Health, upon notice -

  1. With reference to the question asked by the honorable member for Melbourne on the 27th October, will the Minister state where the pasteurizing utensils mentioned are obtainable?
  2. Is pasteurized milk a better food for human beings than milk heated to the temperature of boiling water?
  3. What is the temperature necessary to pasteurize milk?
Mr Marr:
Minister for Health · PARKES, NEW SOUTH WALES · UAP

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

  1. The utensils are procurable at leading hardware stores.
  2. Yes. The pasteurization of milk interferes less with its food value than boiling.
  3. Efficient pasteurization requires heating to 145 deg. Fahr., and holding at that temperature for 30 minutes, then rapidly cooling.

Japanese Occupation of Manchuria


n asked the Minister for External Affairs, upon notice -

  1. Whether, in the Treaties of Washington, 1922, the signatory nations, which included Australia, China and Japan, did not guarantee the territorial integrity of the nations parties to the treaties?
  2. Has his attention been directed to the occupation of Manchuria, a part of Chinese territory, by Japanese troops?
  3. Whether any representations have been made, by or on behalf of the Commonwealth, concerning this breach of the treaties?
Mr Latham:

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

  1. By the “ Nine-Power “ Treaty relating to matters concerning China, the signatory nations, including Australiaand Japan, agreed to respect the sovereignty, independence, and territorial and administrative integrity of China, but did not guarantee the territorial integrity of that country.
  2. Yes.
  3. The Commonwealth Government has been, represented at the various meetings of the Assembly of the League of Nations, at which the question has been discussed. It has also been in constant consultation with His Majesty’s Government in the United Kingdom, and has concurred in certain action taken by the Government in the United Kingdom. It has not considered it useful to make any separate representations.

Oil Leases


en asked the Minister for the Interior, upon notice -

Whether steps were taken to bring the question of uniform legislation on conditions governing oil leases before the recent Premiers Conference, in accordance with a statement in a letter to the honorable member for Kalgoorlie by the Minister on the 13th September last?

Mr Perkins:

– The matter has been listed for attention at the next Premiers Conference. The conference which was held recently dealt mainly with financial questions.

Cockatoo Island Dockyard

Mr Rosevear:

r asked the Prime Minister, upon notice -

  1. Have the tenders for the proposed lease of Cockatoo Island Dockyard definitely closed ?
  2. If so, how many tenders were received.?
  3. Before accepting any tender, will the Governmentgive the House the opportunity of dealing with the whole question of the leasing of the dockyard?
Mr Lyons:

– The answers to the honorable member’s questions are as follow : - 1 and 2. The term during which the Government stated it would receive offers has expired. No definite offers have been received.

  1. Full opportunity for discussing this question was given and utilized during the debate on the Estimates. Negotiations are proceeding. The Government is of opinion that a further discussion, as proposed, would greatly prejudice any negotiations.

Export of Eggs

Mr Stewart:

t. - Information is being obtained in reply to a question asked by the honorable member for Ballarat (Mr. McGrath), upon notice, regarding a report on eggs packed for export.

Cotter River Reservoir

Mr James:

s asked the Minister for the Interior, upon notice -

  1. Is it a fact that fishing is prohibited by law in the Cotter River reservoir ?
  2. Under whose charge is the boat in the reservoir?
  3. Is it a fact that a party of men, including an officer of his department and certain members of this Parliament, used the boat for fishing purposes on Monday last, and took fish from the reservoir to the Hotel Canberra?
  4. If so (a) by whose authority was the boat used, (b) what are the names of the persons in the party, and (c) did the members of Parliament have licences to take fish?
  5. If his department cannot furnish infor mation on the matter, will he request the Attorney-General to obtain a report from the Investigation Branch ?
  6. If the facts are as stated, and the Minister has no objection to members of Parliament obtaining fish from the water supply, will he supply similar facilities to the unemployed of Canberra to obtain food from the same source?
Mr Perkins:

– The answers to the honorable member’s questions are as follow : - 1, Yes. 2 to6.I was not aware that usewas made of the official boat on the Cotter reservoir on the occasion and for the purpose referred to. it has since been ascertained, however, that a party, which included two members of Parliament, all of whom held licences to fish in the Territory, were informed by an officer that permission could be granted to use the boat and to fish in the reservoir, and that such permission was actually granted. Inquiries are being made as to who the officer is who granted this permission, with a view to taking such steps as will ensure that there shall be no recurrence of the breach.

Invalid and Old-age Pensions.

Mr Lyons:

s. - On the 27th October, the honorable member for Dalley (Mr. Rosevear) asked the following questions, upon notice:-

  1. Is it a fact that the New South Wales Government intends to make the receipt of invalid and old-age pensions part of the permissible income of families in receipt ofthe “ dole “ with a view to excluding them from the “dole”?
  2. Is it a fact that the Commonwealth Government is of the opinion that children should maintain their aged parents?
  3. If so, what action does the Government propose to take to protect the pensions against the action of the New South Wales Government in its attempt to force pensioners to keep their children?

I am now able to furnish the following replies : -

  1. The following informationhas been furnished by the Chief Secretary’s Department, New South Wales : - “ In calculating the income of applicants for unemployed food relief, any amounts received as old-age pension are not taken into account, nor is the pensioner included in the family for the purpose of arriving at the family income. In all other cases amounts received from all sources, including invalid pensions, are taken into account when calculating the income of applicants.”
  2. It is the policy of the Government that in allcases where pensioners have children, who. having due regard to their other responsibilities, are in a position to maintain their parents and do not do so, they shall make such a contribution to the revenue as their means will permit, and thus reduce the burden of the pension on the ordinary taxpayer. Recent amendments to the invalid and old-age pensions law were made to this effect.
  3. The Government is not aware that it is the intention of the New South Wales Government to force pensioners to keep their children.

Air Mail Contracts.

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

s). - Yesterday the honorable member for Newcastle (Mr. Watkins) asked to be furnished with the dates upon which the existingair mail contracts will expire. I am nowin a position to inform the honorable member that the existing air mail contracts will expire on the following dates : -

Perth-Derby.- 9th June, 1933.

Derby- Wyndham. - 9th June, 1933.

Perth-Adelaide.- 1st June, 1934.

Brisbane-Camooweal-Cloncurry-Normanton. - 9th June, 1933.

Camooweal-Daly Waters. - 18th February, 1933.

Destruction of Emus.

Mr Lyons (for Mr Francis:

s). - Yesterday the honorable member for Calare (Mr. Thorby) referred toreports published in the press that emus are being hunted in Central Australia by persons using machine guns, and asked by whom the cost washing borne. I am now in a position to inform the honorable member that a deputation of soldier settlera on . the fringe of the wheat belt in Western Australia waited on the Minister for Defence recently, and pointed out that, owing to the dry spell inland, thousands of emus wore damaging rabbit-proof fences and devastating crops by rolling on them. The settlers pointed out that ordinary firearms were useless to atop the inroad of the emus, as the birds quickly dispersed when attacked, and only a few of them were destroyed. They suggested that Lewis guns wouldbe more effective, and the Minister agreed to several machine guns, with the requisite personnel, being made available, on the understanding that the cost thereof would be borne by the State and the settlers jointly. The machine guns have since been returned to Perth.

Cite as: Australia, House of Representatives, Debates, 9 November 1932, viewed 22 October 2017, <>.