13th Parliament · 1st Session
Mr. Speaker (Hon. G. H. Mackay) took the chair at 10.30 a.m., and read prayers.
Licence and Patent Fees
– Will the PostmasterGeneral, when considering the Estimates for his department for the next financial year, consider the urgent necessity for reducing the fees charged to wireless listeners?
– The matter will certainly he considered when the Estimates for the next financial year are being prepared. But although the amount received in fees has exceeded the cost of broadcasting operations in this country during the past two years by £173,000, there would not have been a surplus had the proposed relaying stations and other extensions of the system boon proceeded with. Steps have been taken to end the charge of 3s. per listener’s licence to cover patent fees, and this reduction, which will take effect from March next year, will be considered in connexion with any proposed reduction oflicence-fees. Naturally, the Government desires to reduce the charges where possible; but it must not be forgotten that about two years ago Parliament deliberately decided to utilize the post office as a tax-gathering agency, to improve the national finances, which were in a serious position. Nevertheless, so soon as circumstances permit, the funds earned by the post office will be utilized for the improvement and reduction of the cost of its services.
– Is the PostmasterGeneral aware of the propaganda now being indulged in as a result of the Government’s decision to withdraw from an arrangement made with Amalgamated Wireless Australasia Limited? Is he aware that those who are dealing in apparatus used in connexion with wireless broadcasting have expressed the fear that wireless listeners may be penalized because of this withdrawal ?
– It was only after a thorough examination of the position that the Government gave notice that it would discontinue the payment of patent fees. It is aware of the propaganda which is being indulged in as a result of the steps taken, and it expects that much more propaganda will yet be indulged in on this subject. The matter is being watched closely, and honorable members may rest assured that the exaggerated fears which have’ been expressed regarding the possibility of the users of wireless listening sets being adversely affected will not be realized.
– Has the attention of the Prime Minister been drawn to a statement just issued by the President of the United States of America (Mr. Roosevelt) and the Prime Minister of Great Britain (Mr. Ramsay MacDonald), jointly, in which they say, inter alia -
Central banks should by concerted action provide adequate expansion of credit and every means be used to get the credit thus created into circulation. Enterprise must be stimulated by creating conditions favorable to business recovery. Governments can contribute by the development of appropriate programmes of capital expenditures.
If so, can the right honorable gentleman say what part the Commonwealth Government will play in the general work of rehabilitation ?
– The statement referred to has been noted by the Government, and Ministers are carefully following the conversations which are now taking place, and the conclusions which are being arrived at. The Government is fully alive to the necessity for something being done to improve world conditions.
– But it is doing nothing.
– What the honorable gentleman and the Government of which he was a member wanted to do would have put Australia out of step with the rest of the world. The present Government is not prepared to take action along such lines. It hopes that out of the world economic conference which will follow the present conversations proposals for the improvement of world conditions as a whole will arise. It hopes further that such proposals will enable Australia to play its part in improving world conditions. If a policy for restoring prosperity and employment throughout the world should be decided on, honorable members need not fear that any preconceived ideas whatever will prevent the Commonwealth Government from participating to the full in any effort to give it effect.
– The press reports of the conversations which have recently taken place between Mr. Ramsay MacDonald, the Prime Minister of Great Britain, and President Roosevelt, of the United States of America, reveal a proposal for a further modification of tariffs. Will the Prime Minister give an assurance that the Resident Minister in London, who, it is understood, will represent Australia at the World Economic Conference, will not agree to any further modification of tariffs by Australia?
– Any undertaking that the Resident Minister in. London, or any other representative of Australia, may give at the World Economic Conference, will be given only after full consultation with and after the approval of the Commonwealth Government.
– Has the Government yet received, or will it receive, the full text of the agreement entered into between the British and the Danish Governments, especially in relation to a number of products in which Australia is vitally interested? If the full text of theagreement has not yet been received, will the Prime Minister seek to obtain it, in order that this Parliament may know what has occurred?
– The Government has no official information regarding the agreement, but it has already prepared a cable asking for a copy of it.
– In view of the growing feeling throughout Australia that the wages of our people have fallen as low as should be permitted, will the Prime Minister consider the advisability of not passing on the latest reduction based on the reduction in the cost of living index figure, even though it may be legal to reduce wages accordingly?
– Tribunals have been set up to deal with these matters, and the Government does not propose to interfere with them. As I have already stated, the Government will give full consideration to any representations made by public servants, and all the circumstances surrounding their particular case will be taken into consideration before any decision is arrived at.
Motion (by Mr. Lyons) agreed to-
That the House at its rising adjourn until
Wednesday next at 3 p.m.
Consideration resumed from the 27th April (vide page 1049), on motion by Sir Henry Gullett) (vide page 1167, volume 135) -
And on motion by Mr. White (vide page 29) - ]. That the Schedule to the Customs Tariff Proposals introduced into the House of Representatives on the thirteenth day of October, One thousand nine hundred and thirty-two, be amended as hereunder set out.
Group 6. - Amendments made by the present Government which are supported by Tariff Board reports.
Item 145 (Iron and steel plate and sheet).
.- Yesterday, the Minister promised that he would move an amendment to-day in regard to the duty on gum boots.
– That matter may not be discussed on this item
– I desire to make a personal explanation regarding the matter to which the Deputy Leader of the Opposition (Mr. Forde) has just referred. The honorable gentleman should know that a customs resolution is never introduced early in the day, because, obviously, to do so would be to give the persons concerned the opportunity to withdraw goods from bond before the new duties came into operation.
– I merely sought information ; I did not know that a new customs resolution would be tabled.
– The promise I made yesterday will be adhered to.
Item agreed to.
Item 152, sub-item (c) -
Wrought iron and malleable cast iron fittings for pipes, and cast iron fittings for pipes of less than 2 inches internal diameter -
.- The Government has selected this subitem for a reduction of 30s. a ton in the duties. All the others are subjected to a reduction of 10s. a ton. It is difficult to understand why, from its inception, this industry, which was established in . Australia at the request of the Commonwealth Government, has been subjected to constant investigation and harassing conditions by this Government. The company has been ever ready to comply with customs regulations, and has been frank in answering inquiries by the department. During the war, when distributing agents raised to £80 a ton the price of galvanized iron already in the country, we heard no complaints. Had this company imposed exorbitant charges, there would be reason for complaint, but that has not been the case.
– The honorable member must confine his remarks to the question before the Chair, “ That item 152 c be agreed to.”
– Item 152 o deals with wrought-iron and malleable castiron fittings for pipes. Honorable members who support the Government appear to have an objection to this great concern, which is spending £1,000,000 to establish an industry which gives extensive employment to Australian workmen.
– Where is the company getting the money?
– Not from the source resorted to by exploiters of war mothers and widows, who invested their ill gotten gains in war bonds. This splendid industry should receive encouragement in the form of adequate protection. It is about to construct plate mills costing anything up to £1,000,000, which will provide more employment for Australians. I trust that the item will not be interfered with. Actually, the duty is insufficient adequately to compensate those who are courageous enough to spend £1,000,000 to establish a worth-while industry. I trust that the committee will not listen to those who are only too prone to attack any Australian enterprise.
.- This is one of those extraordinary duties which were imposed originally by the honorable member for Maribyrnong (Mr. Fenton), that arch prohibitionist, when he was Minister for Trade and Customs. It is scandalous that each little piece of iron that is imported should have to be weighed and submitted to a prohibitive duty of so much per lb. One would think that we were dealing with gold dust, or some expensive drug. In order to foster the establishment of a “glorious” industry, on which the honorable member for Newcastle (Mr. Watkins) declares £1,000,000 is being expended, an impost of1s. per lb. duty was placed upon fittings for water pipes, gas pipes, and such like. I wonder where that £1,000,000 went? It appears that somebody has been able to “ nobble “ one Government and obtain a fairly good hold on another. It is ridiculous that a duty of 5d. per lb. should still be placed on water fittings. During the regime of the Scullin Government the duty on a 3-in. bend costing 3s. 6d. was 13s. 6d., plus exchange and other charges, to which had to be added the profit of the agent. Just imagine the hardship imposed on the farmer who desired to carry out a little irrigation work, or the householder who wanted to install water pipes or gas fittings! It is monstrous that such excessive burdens should be imposed on the community. It is equally absurd that when a motor chassis is imported it has to be taken to pieces so that each part may be weighed and a duty at the rate of so much per lb. imposed. Only recently when a boring plant was admitted under concession rates, it had to be taken to pieces so that the bolts and nuts could be counted and weighed for the purpose of ascertaining the amount of duty chargeable. The position- is intolerable. I remember that, a short time ago, the essential tools which were imported with a machine had to be shipped in a separate case; other wise the tools and casing would have been dutiable. There are some 5,000 different types of pipe fittings, of which only 261 types are made in Australia. Special fittings are required in small quantities for certain work, and it is essential that agents should stock them, for they cannot be made in Australia. It would be much fairer if an ad valorem duty were imposed on such articles. The present rate of 5d. per lb. would amount to about £50 a ton.
– Why not move to that effect?
– I intend to do so.
– Do not be rash.
– Is not the honorable member for Maribyrnong ashamed to think that he imposed a duty on these pipe fittings amounting to £112 a ton? Originally the duty was1s. per lb. British and1s. 6d. per lb. foreign. That has been reduced to 5d. and 8d. respectively. It is a monstrous charge to place on ordinary rough fittings that are required constantly in connexion with home construction, irrigation and garden work. Such duties hamper the development of the country. Every effort is being made to induce men, and even women, to take up small holdings for the purpose of growing vegetables, flowers and other products. Should one of those persons desire to install a small water scheme, he would be mulcted in heavy costs by reason of the excessive duties imposed by this Government. The whole thing is a gross scandal. Surely the exchange affords an adequate natural protection. In the old days it was considered that a protection of from 25 per cent, to 30 per cent, to the local industry was a fair thing. The Australian workman is equal to any in the world, and does not need this wretched interference by Parliament and trade unions. I move -
That the fixed duties be omitted.
.- This item presents to me some peculiar characteristics, and there appear to be cogent reasons for its division into two sections, one covering malleable cast-iron fittings and the other wrought-iron fittings, each of which is worthy of further consideration by the Tariff Board. According to the last report of the board, the malleable portion of the industry is considerably older than the wrought iron section of it.
Although a few years ago only a small percentage of Australia’s requirements of malleable cast-iron fittings were met by the local industry, the high protective tariff that has operated has enabled such progress to be made that to-day the figure is from 87 per cent, to 90 per cent. That, however, does not apply to the wrought iron section, which is a comparatively new venture.
Another peculiar feature is that malleable fittings have been imported, not from Great Britain, but from foreign countries, principally Switzerland and Germany; whereas the wrought-iron fittings required in this country have been imported almost exclusively from Great Britain. That fact affords a justification for the reference of the matter to the Tariff Board for its further consideration. The official statistics make no distinction between the importations of wrought and of malleable fittings. It is the older industry in which I am particularly interested, and I am somewhat fearful of what may happen to it if a further investigation is not held. It is admitted on all sides that the malleable industry is conducted most efficiently at the present time. The Tariff Board states that the consumer has benefited from that efficiency, by having been able to procure his requirements at reduced prices. I make the following quotation from the Board’s report: -
Regarding malleable cast-iron fittings, after carefully examining the evidence tendered at the inquiry, the board is satisfied that as to those lines the local production of which is economic the selling prices of the Australian manufacturers are reasonable.
The quality of the article produced in Australia admittedly is good, although a prejudice against it exists in some quarters, as it does in the case of other Australian products. That, however, has recently been broken down very largely. For a number of years the local manufacturer of malleable fittings has endeavoured to conform to the standard that is most suitable for Australian requirements. That practice is not always adopted by overseas manufacturers, who frequently market a lighter and an inferior article, hoping thereby to evade the tariff. A considerable volume of labour is necessary in this industry, mechanical devices so far not having displaced the manual element, with the result that the cost of production is high in all countries. In Australia, where the arduous nature of the work has been given due weight by the tribunals which fix wages, those who are engaged in the industry receive a reasonable remuneration. The Tariff Board has referred to the fact that malleable fittings do not come from Great Britain, and has made certain other remarks which I consider are -worth referring to. It says -
The first consideration, therefore, is to determine the rates of duty required under the general tariff to provide reasonable protection to local manufacturers of malleable iron fittings. On the basis of the prices of the principal oversea competitor - a Swiss manufacturer - the board finds that, in the ease of galvanized fittings, a duty of 8d. per lb. would be sufficient for this purpose. In fact, providing high quality and efficient distributing methods were maintained, the local manufacturer should, with his present prices, be at a definite advantage under such duty. Taking representative lines of galvanized malleable iron fittings as a criterion, it is found that a duty of 8d. per lb. has an average ad valorem equivalent of about 05 per cent. The imposition of a specific rate lower than 8d. per lb. would, in the opinion of the board, merely divert the trade to cheaper makes of imported fittings, and would not benefit the Australian manufacturer.
That clearly shows that a duty of 8d. per lb. is absolutely necessary if the local manufacturer is to be protected against the foreigner. But the remarkable feature to me is that the board has arbitrarily decided upon a duty of 5d. per lb. . for the British preferential tariff. In my opinion, the difference between the British and the general tariff rate - 60 per cent. - is unwarranted. The result of it is that our principal competitor - a Swiss company - has begun to establish a factory in Great Britain, in order that it may benefit from the lower rate of duty. That seems to furnish a logical reason for the reconsideration of the matter by the Tariff Board. The malleable fittings used in Australia number hundreds; but the big majority of them, which come under that portion of the item which is characterized as “n.e.i.” are adequately protected.
In New Zealand, malleable fittings are admitted free of duty; yet the selling price in that dominion is not lower than it is in Australia. If Australian manufacturers find themselves able to hold the local market under a reasonable duty, they expect to be able to market their products in New Zealand. I believe that they could do so; but they would need to be assured of a considerably augmented output. The firm which specializes in the manufacture of these articles has given the guarantee that, as production increases, prices will be reduced. Under the circumstances, I hope the necessary action will be taken to protect this important industry.
.- The fixed rates of duty provided for under this item are’ a mistake. No one can say what effect they have on the cost of these articles, which are required throughout Australia. An attempt is being made to increase rural production, by the prosecution of schemes for the reticulation of water. Large schemes of that character are being undertaken on the river Murray and other inland rivers. Inaddition, these fittings are required for sewerage systems and for other reticulation schemes in country towns and on the farms. The community is burdened by this excessive and unreasonable tariff. I admit that the locally-manufactured articles do not reflect the whole of the extreme protection in the price, but the amount which they do reflect is excessive, and it imposes a burden on all who require these commodities. I have pleasure in supporting the amendment.
.- The duties imposed by the last Government having been substantially reduced, I expected the Minister to justify the action that had been taken. Surely he is prepared to give the committee some information! While I was Minister for Trade and Customs the honorable gentleman was an assiduous advocate of ministerial statements. “ Now, however, he adopts the policy of remaining silent, in the hope that the items will slip through.
Malleable iron fittings are manufactured in Australia from raw materials that are wholly of Australian origin. Australian factories are to-day capable of producing our requirements in all lines, which number 769. Local production means lower prices; that was clearly proved by the evidence that was given before the Tariff Board. The representative of E.W. Fittings Limited stated that, as the annual turnover in the wholesale selling value increased, corresponding reductions would be made in the price to the consumer. The report of the board contains a table which sets out the position in that regard. It is as follows :-
That shows the importance of keeping this work in Australia, to enable the local manufacturers to increase their output, reduce their overhead costs, and lower their prices. In New Zealand, where there are no local manufacturers, the prices charged to merchants are about the same as those in Australia for this class of goods. This proves that all the talk about local industries causing prices to rise is so much freetrade propaganda. The following are instances in which the prices of local fittings are lower than those charged for imported fittings prior to November, 1929 :-
I could go down the whole list, showing the reductions that have taken place as the result of the local industry meeting Australia’s requirements. Substantial development has taken place in this industry, and I regret that the duties have been reduced, because the industry draws its raw materials largely from the Newcastle Iron and Steel Works. This makes it possible for those works to reduce their prices on a number of other lines which are the raw materials for many Australian secondary industries. Only if we manufacture all we can in this country have the primary producers any hope of obtaining cheaper wire, galvanized iron, and other products from the Newcastle works. The local manufacture of these fittings has been of distinct advantage. When the duties were increased by the last Government, there was an immediate increase to the extent of 30 per cent, in employment, in a period of depression when unemployment was rampant. The Associated Master Plumbers, Sanitary, Steam, and Hot Water Engineers of Victoria, in a letter written to the local company, in regard to its attitude to a reduction of the duties, said -
In reply to your inquiry as to the attitude my association intends to take up at the tariff inquiry on the 5th instant, into the question of malleable fittings, I am directed to state that my members do not intend to oppose Australian malleable fittings as they appear to be giving general satisfaction to the trade.
That is typical of other communications received by the manufacturers. They have been giving the public of Australia a fair deal, and instead of the duties imposed by the last Government having resulted in an increase of prices, the prices have been substantially reduced. Local competition will prevent undue inflation of prices in Australia. We should not encourage imports into this country at a time when we have difficulty in rectifying our adverse trade balance. Our chief consideration should be how best to put people back into jobs.
.- The Deputy Leader of the Opposition (Mr. Forde) has invited me to say something regarding this sub-item, and I think that it is perfectly obvious that some reduction of the duties was necessary. The Government cannot accept the amendment of the honorable member for Swan (Mr. Gregory), who desires to delete the specific duty. He knows that this duty is necessary in order to frustrate attempts to depreciate prices. The ad valorem duties, with the exception of an increase of 5 per cent, in the general tariff to conform with the Ottawa agreement formula, are similar to those operating under the 1921-30 tariff. No fixed rate was imposed under that tariff. As compared with the previous Government’s proposals a reduction is made in the specific rates on galvanized fittings of 1 per cent. British preferential, and 10 per cent, general, and, on other fittings’, 5 per cent. British preferential, and 5 per cent, general. The last Government’s rates were imposed before the matter was referred to the Tariff Board. The board has now submitted its report after a complete inquiry into the industry, and has recommended the duty now proposed. The investigation made by the board shows that the previous Government’s fixed rate of ls. 6d. per lb. on malleable fittings, represented an ad valorem equivalent of from 128 to 190 per cent. Those duties were more than sufficient to protect the local manufacturers. The proposed rate of 8d. per lb. represents an average of 65 per cent., and is sufficient under present conditions to enable the local manufacturers to compete against the importation of malleable fittings, which are mainly imported from Switzerland and Germany. The honorable member for Lang (Mr. Dein) said that a Swiss factory had been established in England, but that is a matter over which we have no control. If foreign manufacturers operate in Britain under British conditions, they are entitled to be regarded as British manufacturers.
– But do they operate under British conditions?
– There are labour regulations in the British engineering trade, and employees in Britain cannot be sweated there any more than they can here. That Swiss factory has an extraordinary range of malleable fittings. Undoubtedly the Australian manufacturers are making some lines excellently; but I do not think that anybody will claim that they cover anything like the range of the company that has had the bulk of this work. The importations from the United Kingdom were princi-‘ pally wrought fittings, and on figures submitted to the Tariff Board the duties which would be necessary to bring the cost of imported wrought iron fittings into line with the Australian, manufacturers’ prices for such fittings would- be excessive. The Tariff Board has taken into account the fact that these wrought fittings are essential to the man on the land, and also to the building industry, which has been very much depressed, and that it is necessary to bring down the prices of building materials. The rate of 5d. per lb. is not intended to be sufficient to protect the local manufacturers of wrought iron fittings even under present exchange conditions. The duties are necessary, however, as a protection against the importation of malleable fittings.
Cast-iron fittings for pipes of less than 2 inches internal diameter are also covered by this sub-item. The importations are very small, and average only about 80 tons per annum. No evidence regarding such fittings was tendered to the board, and the board could see no reason for differentiating between the duties. Practically all the cast-iron fittings for building purposes are made in Australia. Being of large diameter, the local manufacturer is able to compete against any importation. The honorable member for Lang has asked for a differentiation to be made by the Tariff Board between malleable and wrought iron fittings. I believe that he asked a question in the House; at any rate, there has been some correspondence on the matter. 1 referred it to the Tariff Board, which has replied to-day that, on the figures submitted, the proposed duties represent over 60 per cent., and that, as these rates are higher than those recommended by the board in the case of other metal manufactures, which average from 35 per cent, to 45 per cent., they should afford sufficient protection for an efficient industry. The board is, therefore, not prepared to vary its previous recommendation. If, however, the honorable member for Lang, or the factories concerned, can advance any other reason why greater protection should be given in regard to malleable fittings, their representations will be considered.
.- The remarks of the Minister show clearly what has happened in this case. It is merely necessary to ask again, and to keep on asking, and there is not the slightest doubt that, in the end, a manufacturer who is seeking a duty will get something of what he wants. In 1927, the local manufacturers of these fittings went before the board and asked for duties of 9d., 10d., and1s. per lb. respectively, and the Tariff Board turned them down badly. The last Government probably said, “ We suppose these are fairly decent manufacturers. They are spending £1,000,000, according to the honorable member for Newcastle, and they will pay good wages. We may as well try to make ourselves popular. They ask for 9d., 10d., and1s.. We shall give them1s. and 1s. 6d.” And they did.
– The Leader of the Opposition (Mr. Scullin) is proud of it.
– We are always proud of being Australians first.
– The following evidence was given before the Tariff Board by a representative of the local company : -
Question by Mr. Brookes. - Are you making a loss now?
By Mr. Masterton. - If you got the additional duty would you still further reduce your prices on the base of the increased output?
Answer. - If we could get an increased output wo would certainly reduce our prices. We would do so the same as we did last year, when we dropped our prices considerably.
By Mr. Brookes. - You think that reduction in price would tempt the people who now purchase the imported fitting to buy the local article ?
Answer. - I am perfectly sure it would, because 75 per cent, of the plumbers would buy on price, not on quality.
That shows that the company was not making a loss in 1927, and the Tariff Board, after going carefully into the whole matter, recommended that no alteration of the duty should be made. Although the company asked for a duty of only 9d. per lb., it was given1s. per lb., and, in the case in which it applied for a duty of1s. per1b., it was given 1s. 6d. per lb. I suppose the poor devils in the country can pay, pay, pay!
– Most decidedly.
– But the prices went down.
– The manufacturers were so able to increase their prices with the high duty that was granted that there was no difficulty in subsequently reducing them. But what I am questioning is the necessity for these high duties. Wages have been considerably reduced, as has also the cost of the raw material. The following lines taken at random in galvanized malleable fittings give some indication of the effects of the duty at the fiat rate of1s. per lb.: -
Those duties have now been reduced, but the protection still amounts to 150 per cent., plus exchange and natural protection. The Tariff Board, in its report, summed up the situation in these words -
Out of over 5,000 sizes and varieties of fittings for which there is a demand, only 261 are made in Australia, even after the duties have been in operation for 17 months.
Owing to the variations in weight relative to value, the goods affected are totally unfitted to the application of a duty based on weight.
The proposed duties impose an intolerable burden particularly on essential materials of primary producers for irrigation purposes, entailing the payment of prices frequently many hundreds per cent, above the true value of fittings which are not made in Australia.
The Tariff Board, in 1929, after an exhaustive inquiry, recommended no alteration of the rates then pending. Since then there has been a big reduction of wages, so that the same high rate of protection should not be necessary. Why do the Leader of the Opposition and the Government want to grease the fatted pig?
– Can the honorable member prove that it is being done?
– I have been able to point out, in relation to industry after industry, how exploitation is taking place. Only recently, I showed that it was being done in the woollen industry. The Leader of the Opposition himself stated in this House that a pair of boots which cost11s. to manufacture, was sold to the public at from 25s. to 30s.
– That is accounted for by the costs of distribution. The same thing applies to imported boots.
– Such things are possible because high tariffs have destroyed competition.
– If the honorable member had his way, there would be no Australian factories.
– I remind the honorable member that thriving secondary industries were built up in former years under very low protection, or without any at all. I instance the case of Hoskin’s foundry at Lithgow, which was able to compete against the products of the whole world, and so prospered that Mr. Hoskins became a millionaire before he died. Then there was Thompson’s foundry at Castlemaine which, until it was ruined by bad legislation, was a most thriving concern, although situated in a small town 70 miles from the seaboard. That firm sent machinery to every mining camp in Western Australia in previous years, but is not able to supply the market now.
Mr. Phillip Snowden, when Chancellor of the Exchequer in Britain, stated in 1924-
Protection is the most corrupt influence that could be introduced into political life. Witness the most violent, corrupt, lying campaign that followed my proposals regarding the McKenna duties. If we could have that when a comparatively small industry was affected, it does not require much imagination to conceive what a hell the political life of this country would be if every industry in the country were protected.
Mr. Baldwin, referring to the appointment of a Tariff Board, stated that he would take care to make it crook-proof. But despite the Tariff Board’s report, duties even higher than those asked for were given to this industry. There is something wrong if it is necessary to place such high duties on what is practically raw iron; a duty of so much per lb. as if the stuff were gold dust. I regard this and similar legislation as nothing but a scandal.
– I listened with interest to the remarks of the Minister, and to the statement prepared for him by the Tariff Board. With my limited knowledge, I cannot see why, if a duty of 8d. per lb. is necessary to protect ‘the Australian industry against the Swiss manufacturers, a duty of 5d. per lb. should be regarded as sufficient protection against the British product. The position is, of course, that malleable fittings have not in the past entered Australia from Great Britain, and I do not think that the Tariff Board considered competition from that country at all. It considered only the duty necessary to protect the local industry against foreign products, and then arbitrarily recommended the duty to be imposed against the British product.
The honorable member for Swan (Mr. Gregory) pleaded the case of gardeners, orchardists and other primary producers who would be affected by a high duty on these goods, but he seemed to overlook the fact that those employed in the iron industry in Australia use part of their wages to buy the very products put on the market by the orchardists and others to whom the honorable member has referred. In my opinion, this industry is still in danger from outside competition under the present rate of protection. I have in mind particularly the manufacture of these articles in Britain by a Swiss firm. Notwithstanding what the Tariff Board has said in the remarks quoted by the Minister this morning, I feel that this industry is endangered, and the livelihood of the workers threatened. We should not do anything, at this time particularly, to throw out of employment those now in work. If we do, the purchasing power of the community will be reduced, and the primary producers will suffer with the rest.
.- I regret that these duties have been reduced. I cannot understand why the Government will not leave well alone. There is no proof that there was exploitation under the previous duties, which admittedly were high, and were deliberately made so in order to give the trade to Australian manufacturers. If the industry is expanding, and taking an increasing share of the Australian market, there is nothing wrong, so long as there is no exploitation. I cannot understand this persistent meddling with a system which has been found to work well.
– The Ottawa agreement has to be carried out.
– That is rather an argument against the Ottawa agreement than one in favour of the reduced duties. If the Ottawa agreement means that Australian industries, which are employing Australians, must have a percentage of their work robbed from them, and some of their employees thrown out of work, that merely proves our contention that the Ottawa agreement is a menace to Australia. I agree that the whole purpose of the agreement is to admit overseas goods to the Australian market, and to give overseas manufacturers a larger share of the Australian trade. The object of our protective duties was to give the Australian manufacturer a larger share of the Australian market, and, when they could supply the market effectively, and at a reasonable cost, our purpose was to give them the whole of the Australian market. We make no apology for that. The honorable member for Swan (Mr. Gregory) jibed at me, saying that I seemed to be proud of the high duties imposed by my Government. I am proud of any action my Government took to provide work for our people. If the facts actually were as stated by the honorable member for Swan, there would be some argument for the reduction of the duties; but the honorable’ member was careful to make only general accusations without giving specific instances. He said that we should stop the exploitation of poor people on the land, but he did not prove that there has been any exploitation. I ask the honorable member to furnish me with an instance of exploitation by any local manufacturer under protection, and I shall be prepared to meet him. Evidence has been adduced, and has not been refuted, that reductions of price have taken place since the duties were imposed. The honorable member for Swan tried to counter this by saying that there had been a general downward trend in prices. He admits the downward trend, and admits that the price of these goods has followed it. He says that there has been a reduction of wages, and that prices, therefore, should come down. I agree, but hasten to remind the honorable member that prices have come down. By way c,f illustration, ;the , honorable member quoted a remark of mine about the difference between the cost of manufacturing a pair of boots in Australia, and the price at which they were sold to the public. It is true that there is a very great discrepancy between the prices. Undoubtedly, in many instances, the price which the public has to pay is double the manufactured cost of the goods; but that is not due to protection. If the honorable member will follow the cost of imported boots from the time they are landed on the wharf until they get to the shop, he will find that the position in regard to them is worse. Investigation has shown that the distributor gets a bigger profit on imported articles than on locally manufactured ones, and that is why the distributors as a body are opposed to the effective protection of local industries. The honorable member for Swan (Mr. Gregory) said that we should have competition. If he examined this matter with the intelligence that I know he possesses, and if his mind were not confused by his obsession in regard to the tariff, he would recognize that the imposition of protective duties has created competition that hitherto did not exist, and has resulted in the bringing down of prices. I remind honorable members that the f.o.b. prices of imported goods has no relation whatever to the price the consumer is’ called upon to pay for them. Honorable members have complained of 200 per cent, duties. I know of cases, and I can prove them if necessary, in which the profit on imported goods has been anything from 300 to 500 per cent. When we establish industries in this country for the manufacture of the goods concerned, the prices come down. Take, for instance, fancy soaps formerly imported from the Continent. The honorable member for Swan (Mr. Gregory) mentioned gold dust, but one would certainly think that a bit of scented soap imported from abroad was gold dust, judging by the price demanded for it. When such soaps came to be manufactured in Australia, prices immediately fell.
The honorable member for Swan also made some loose statements about the foundry at Castlemaine, which, he said, had previously thrived without protection, and was now practically defunct. There are two misstatements in that. It never carried on without protection, but always operated under a degree of protection which was effective. We must remember that what constituted effective protection fifteen or twenty years ago is not’ effective now under the present abnormal conditions, when overseas countries are prepared to dump their products in Australia at less than cost price. The honorable member spoke of how the industry thrived in the early days, but’ he should remember that those were the days when mining was booming. When the mining industry declined, those firms engaged in the supply of mining machinery fell upon evil times. The honorable member said that the Castlemaine foundry had formerly furnished machinery _ to every mining camp in Western Australia, but; was now unable to supply the market. The honorable member’s statement shows that he has not examined the position carefully. When the revival in the goldmining industry took place, new methods of gold saving and production were introduced, and it will take the industries engaged in the supply of equipment some time to get back into their, swing. In spite of that, Australian manufacturers are supplying a large part of the mining machinery used in Australia, and I hope they will in the future supply an increasingly larger part.
Instead of making a number of general statements, in which they allege that the Labour party stands for monopolies and exploitation, honorable members who have criticized the tariff policy of the Government which I had the honour to lead, should examine the facts. _ We arc prepared to join with them in any effort to carry legislation to alter the Constitution with a view to preventing the exploitation of the people by any form of monopoly in Australia.
– Why did not the right honorable gentleman take action in that direction in connexion with the match industry ?
– The honorable member must not, by interjection, introduce a subject that is irrelevant to the question before the committee.
– Although I may not be in order, I shall be glad to answer the honorable member. AH I need say, in passing, is that the action taken by this Government has resulted in a saving to each individual in the community of Jd. per month in the price of matches, but the effect of the lowered duties will be to reduce the basic wage, so there is not a great deal to be said for that aspect of this Government’s tariff policy. The duty on matches is one of the most trumpery things which the honorable member could think of. It can, however, be said for the match industry that it did not increase its prices as a result of the protection given to it.
– The honorable member must discuss the item before the committee.
– The manufacture of iron and steel is one of our key industries. “We have in this country all the necessary raw.materials, and the industry gives employment to a large number of skilled operatives. If our engineering industries are wiped out, as is threatened by this interference with the duties under which they were established, one of the most serious difficulties which Australia will have to face,- in the event of trouble arising will be the shortage of men skilled in the various branches of engineering. There is no substance in the case put forward by the honorable member for Swan (Mr. Gregory). I regret that this Government did not leave well alone. Our manufacturers were not taking advantage of the duties which my Government gave them, and they were doing their best to supply the requirements of the home market. I am sorry that this Government has interfered with the duties, because I am satisfied that the result will he an increase of importations.
– The honorable member for Lang (Mr. Dein) mentioned that . a number of Swiss and other foreign firms had set up factories in Great Britain. I am certain that the Tariff Board is not taking cognizance of this development in industry, and I am afraid that competition from foreign manufacturers established in Great Britain will be our most serious menace. “While the engineering industry in the Mother Country is working under the restrictions with regard to conditions of labour which obtain in Australia, other workers are working at any old rate. This aspect of the industry is deserving of consideration, because, quite recently, Mr. Chamberlain, the Chancellor of the Exchequer in Great Britain, stated that no fewer than 250 foreign firms had been established in Britain since the imposition of protective duties. These foreign firms are, to a large extent, employing their own nationals, and, as I have explained, they are not working under strict trade union rules. Nevertheless, they enjoy the advantage of the preference in the Australian market given to British manufactured goods under the Ottawa agreement. This will not receive the endorsement of the pe’ople of Australia.
– Foreigners have also been imported to work in some Australian industries.
– A certain number have been brought here in special circumstances; but in every instance they have been employed under Australian conditions and have received the Australian union rates of wages. As, apparently, the Government expects us to accept willy-nilly the recommendations of the Tariff Board, that body should take into account the circumstances I have mentioned, in framing its reports and recommendations. But I have never admitted that we should accept the board’s reports without question, and I do not intend to do so in future. No outside body should have the power to say what should be done in this Parliament. This duty devolves upon the elected representatives of the people. If Parliament in every instance accepts the. reports of the board, it WL abrogate its undoubted privileges and rights. For this reason I impress upon the Minister the need for instructing the board to give attention to the circumstances I have mentioned.
– I ria* only to reply ‘ to the honorable member for Maribyrnong (Mr. Fenton), who has made a number of loose statements about the condition of the engineering industry in Great Britain. If the honorable gentleman believes what he has said, namely, that employees in the engineering trades in Great Britain are working under any old conditions, let him go before the Tariff Board and give evidence.
– Parliament is the places where these matters should be discussed.
– The Tariff Board takes sworn evidence from interested parties on both sides. From my personal knowledge I know that wages are . regulated in the engineering trades in Great Britain, but if the honorable member really believes that ‘the conditions there are as he has described them, he should tell the board. He has made a number of generalizations. He should be more specific, and mention a particular industry. He has not told us whether the conditions which he has described obtain in the pipe trade, which is affected by this sub-item.
Question- That the amendment (Mr. Gregory’s) be agreed to - put. The committee divided. (Chairman - Mr. Bell.)
Majority . . . . 14
Question so resolved in the negative.
Sub-item agreed to.
.- I move -
That the item be postponed.
I am sorry that the Minister has seen fit to reduce these duties. Under the 1921-28 Customs Tariff, the rates of duty on. churns were 22 per cent. British and 35 per cent, general. The Scullin Government made the duties 45 per cent. British and 60 per cent, general, in keeping with the machinery duties generally. Surely that was only reasonable protection for the Australian industry. Practically the whole of the churns imported into Australia come from Denmark. The issue, therefore, is whether there should be a higher general tariff than 40 per cent.
I realize the futility of moving for any increase in the British rate of duty for the Minister would say that the Ottawa agreement made it impossible for him to agree to an increase, but there is no reason why the general rate should not be increased from 40 per cent, to 65 per cent., and the British rate left at 22½ per cent. If the general rate were increased, the British manufacturers would he given more encouragement on the Australian market, while the Australian manufacturers would be protected from unfair foreign competition. The local manufacturers hold the view that a prohibitive duty is necessary to force the users of churns to install the locally-made article. With the exception of the wood, which is of New Zealand kauri, all the materials used in the manufacture of churns in Australia are of local origin. This industry gives employment to a number of Australian mechanics and engineers. I had the privilege some time ago of inspecting a number of Australian factories in which our artisans are making churns, and I found them well equipped in every way. Although the dairying industry of Australia is highly protected, probably no section of our people is experiencing a worse time than the dairyfarmers. In some of the States, notably Queensland and New South Wales, the majority of the butter factories are cooperative organizations, but in Victoria proprietary concerns are still operating to a considerable extent. If the duty on churns were left at the rate imposed by the Scullin Government, no injury would be inflicted upon our people, for a definite assurance was given before the Tariff Board that in such circumstances, no increase would be made in prices. Although the value of imported churns is only about £7,500 per annum, the use of these churns very often leads to the use of other imported dairy equipment, so that the resultant loss to the Australian industry is greater than may at first appear. At one time, the United States of America was the chief competitor of the Australian manufacturers of churns, and supplied the Simplex type of churns, through James Bell Proprietary Limited; but that company had the foresight eighteen years ago to begin manufacturing churns of the Simplex type in Australia. Dealing with the efficiency of this industry the Tariff Board in its report dated 12th May, 1931, stated-
The evidence is conclusive as to the high quality and efficiency of Australian-made churns, lt is gratifying to know that many important improvements in the design of churns have originated in Australia. Iu several cases the value of such improvements has received wide recognition - a proof of which is that leading manufacturers in Denmark, the United States of America and New Zealand have secured rights to use the designs. ‘
Those remarks were very complimentary to the industry. The Australian churns are being placed on the market at a rea.sonable price, and there is consequently no justification for the reduction of the duty proposed by the Government. Any saving in wages or costs of material has been passed on to the public. I have already said that the dairymen are having a bad time at present. I hope that the Government will take steps before’ very long to establish Commonwealthwide marketing organizations for dairy products, but whether this is done or not, the dairymen are not likely to be helped by a reduction of the duty on churns. The manufacturers of dairying equipment believe in the Paterson butter scheme, but they also believe in the preservation of the Australian market for their products. We all know that a number of boys are apprenticed to the dairying equipment manufacturing industry every year. If we allow foreign competition to take away the market of the Australian manufacturers, what is to become of the boys who, under existing conditions, are finding employment in this local industry ? I hear the honorable member for Forrest (Mr. Prowse)’ interjecting, and I have no doubt that that honorable gentleman, with his anti-Australian outlook, would be glad to bolster up overseas manufacturing enterprises to the benefit, incidentally, of the boys of the countries concerned; but should we allow Chinese and Indian manufacturers to have the free run of our market as is desired by gentlemen of the fiscal outlook of the honorable member? I regret that the Government has seen fit to whittle away the protection which the Scullin Government afforded to this industry, and I ask the Minister to explain why this has been done?
.- The Tariff Board has submitted a report on this industry, which justifies the reduction of duties now proposed. It is pointed out in the report, that Australia requires about £90,000 worth of churns annually, and that the local manufacturers provide all, except about £5,000 worth, of this market. Denmark, which is the principal overseas competitor, supplies only about £1,000 worth of churns annually to Australia, various other countries and the United Kingdom dividing the remainder. The Tariff Board stated in its report that this Australian industry is efficiently conducted, and is producing a high quality product. It also states that 83 per cent, of the materials used in the manufacture of churns in this country are of Australian origin, the principal imported material . being kauri pine, which comes from New Zealand. It is also pointed out that the rates of duty under the Customs Tariff of 1921-30, ‘together with other charges, which go to make up the landed duty-paid cost of imported churns under a normal rate of exchange, represent a total protection approaching 80 per cent. In the past three years, local manufacturers have supplied at least 90 per cent, of the Australian market, and have made reasonable profits. The board also reports that somewhat similar conditions apply to pasteurizing and other dairying appliances. The industry is able to sustain itself, and, consequently, if odd factories desire a little variety, and, therefore, install Danish’ churns, on which they have to pay a high rate of duty, no harm is done. The duties now proposed are reasonable, and sufficiently high to allow the local manufacturers to hold the bulk of the trade.
.- I cannot understand the reasoning of the Minister. He has said that Australia requires about £90,000 worth of churns annually ; that our manufacturers are now able to supply 90 per cent, of our requirements, and that the duty may. therefore, be reduced. But why should it be reduced? Why interfere with the present satisfactory position? We should not risk any dislocation of this industry. I cannot understand the argument that, because our manufacturers are holding the local market, we should reduce the duty. I could understand the contention, if local manufacturers were not able to supply the whole of our requirements in certain directions, that a reasonable duty should be imposed, to allow the deficiency in our supplies to be met. It is not commonsense in reducing duties for the reason advanced by the Minister. The Tariff Board has made it clear that the industry is not exploiting the public, for, in its report, it states -
At the date of the inquiry the selling prices were as follow: - 25-box churn, £460; 40-box churn, £525. Until a short time before the inquiry the selling prices were £495 and £575 respectively.
As churns are being marketed at a lower price than previously, we should not reduce the duty. The rate of duty which has given the Australian manufacturers the market, and also given work to the people of this country, should be retained.
Question - That the item be postponed (Mr. Forde’s motion) - put. The committee divided. (Chairman - Mr. Bell.)
Majority . . . . 20
Question so resolved in the negative.
Item agreed to.
Item 168, sub-item (b), agreed to.
Item 176 (d), (f1, 2) (Cement-making machines, &c, machines and machinery, n.e.i., refrigerators, &c).
.- Will the Minister explain why it has been found necessary to reduce the duties on machines and machinery under sub-item f1?
– In respect of sub-item f1, the Tariff Board in the second part of its recommendation said-
That more liberal consideration be given to requests for the admission of machines, machine tools and appliances for use in connexion therewith under departmental by-laws, and that the following action be taken to extend the list of machines admissible under by-laws: -
The board in its report states -
The board has frequently urged the necessity for lower costs of production in Australia, because it is only by reducing costs that our export industry will be able to maintain production while the world prices of our exportable commodities remain at the present low level. Costs of production, including freight and distribution charges in the export industries are greatly influenced by the cost of products from the secondary industries, particularly by the cost of essential tools, plant and equipment. But the manufacturers of the equipment and commodities required by the export industries are unable to make reductions in the prices of their products, if and when, in their turn, they pay unnecessarily high prices for essential machinery. The benefits to he derived from cheaper machinery are so far-reaching, that access to such machinery should be made possible, firstly, by limiting the excess costs which users pay for machinery manufactured in Australia, and, secondly, by enabling manufacturers to import, free of all duty, machinery which cannot be purchased in Australia within the limit so fixed.
What has been done by the Government in connexion with the second part of the recommendation of the Tariff Board in respect of this particular sub-item? I know, of course, that a fairly long list of machines and parts has been set out in group 8 of this schedule for free admission under item 174. They are goods which nominally would be dutiable, but now are to be admitted free under a sort of permanent by-law. But I do not know to what extent the Government has actually carried out, if at all, the recommendations of the Tariff Board ; whether, for example, the Government has invited applications in specific terms from interested parties through the public press for the admission of machines under by-laws.
.- The Acting Leader of the Country party (Mr. Paterson) has referred to a specific recommendation of the Tariff Board. I draw his attention to the fact that the Government has taken action to clarify the tariff by enumerating items relating to machines and machinery under group8 of the schedule. That group contains 378 classes of machinery which were, -in the past, admitted free under by-law. They are now shown definitely in the tariff, so that manufacturers abroad may know what classes of machinery which cannot be produced economically in Australia are free of duty. A suggestion has been made that an independent authority should be appointed to advise the Minister in respect of doubtful cases. That may be a good suggestion, but who would be the independent authority?
– The Tariff Board now has the right to call in expert opinion.
– That is so. Every case is carefully investigated. When I first took over the portfolio of Minister for Trade and Customs, I carefully scrutinized by-law admissions, and was satisfied, from my knowledge of (ho. evidence given before the board, and from inquiries that were made, that the statements of manufacturers were not taken for granted, and that a careful investigation was made of every application for free admission of machinery under by-law. The whole of the recommendations of the Tariff Board will be considered by the Government, to ascertain whether any further improvement can be made, but I do not suggest that the recommendations will be adopted in their entirety.
The Deputy Leader of the Opposition (Mr. Forde) has asked me to make a statement in respect of sub-itemf 1. Let me inform him that the duties proposed are the same as those provided under the tariff of 1921-30, with the exception that the general tariff rate has been increased by 5 per cent, in order to conform to the Ottawa agreement formula. They represent a reduction of 10 per cent, on the rates imposed by the previous Government. The Tariff Board has recently submitted a report on the goods covered by this sub-item, and it recommended that no alteration be made to the duties imposed under the Customs Tariff of 1921-30. The board went fully into this matter, and when I mention that the transcript of evidence given at the inquiry takes up 405 typewritten foolscap pages, it will be seen that this matter is one which cannot be decided on any particular machine which is included in the item. Where a machine of an exclusive type is required, and patterns, jigs, tools and dies have to he- made for it, it is not fair to the industry concerned, whether primary or secondary, that a high duty should be placed upon it. The machines covered by these duties are used practically in every industry, and the average annual importations are valued at approximately £3,000,000, of which more than half is admitted under departmental by-laws. The Acting Leader of the Country party has asked whether the Government has accepted the Tariff Board’s recommendation that applications for the free admission of goods should be advertised in the Commonwealth Gazette and the public press. But surely he knows that the manufacturers and others are not backward in making application for free admission under bylaw of any machinery- that they require. If it were found necessary to make the application more widely known, the Government would facilitate its publicity. At the evidence submitted at the inquiry, the board was satisfied that the proposed rates would be sufficient protection for the machines, which can be economically manufactured in Australia. Under the rates of 1921-30, the engineering industry obtained 70 per cent, of the Australian trade. Many of the machines covered by this item are such that the demand is small, and could not be manufactured even under considerably higher rates. The fact is that, during 1930-31, when the rates imposed by the previous Government - exchange, which ranged from &i per cent, to 30£ per cent., and primage duty - were operating in favour of the local manufacturer, duty was paid on £400,000 worth of machines under this sub-item. No evidence was submitted that the local manufacturers had taken advantage of the duties in order to charge unnecessarily high prices. Any addition to the duties would affect only those machines which would have to take full advantage of the duty, and that would consequently increase the cost of plant which other industries require at as low a price as possible for the economic production of their goods. The Government is satisfied that the duties of 45 per cent. and 65 per cent, provide sufficient protection for the Australian manufacturers in respect of those lines for which there is a definite demand and which can be produced economically. Machinery in most manufacturing industries forms a big item in the cost of production, and any unnecessary increase in the cost of machinery is reflected in the ultimate cost to the consumer of the finished article. The local manufacturers, by confining their activities to those lines which they can produce competitively under the rates of 45 per cent, and 65 per cent., should be able to reduce their costs, because by experimenting with machines which are not in demand the general overhead cost is materially increased. The rates of 55 per cent, and 75 per cent, are too high on what is actually the main capital charge on our secondary industries, and if a local manufacturer cannot compete under the proposed duties, then the added cost to the industry concerned outweighs any advantage gained by the machinery manufacturer. As has been previously stated, the Government’s policy is to protect industries which can be economically established and efficiently carried on in Australia. There is no doubt that this industry comes within that description. But the Government considers that any increase over the proposed duties is unwarranted. As previously stated, more than half the machines covered by this item are admitted under departmental by-law.
– The Minister’s reply does not go quite far enough to satisfy me. I gather from his remarks that he has not yet invited applications iri specific terms from interested parties through the press. He mentioned the Commonwealth Gazette; but I would point out to him that the Tariff Board recommended that the daily papers circulating throughout the Commonwealth should be made use of for that purpose. The Commonwealth Gazette has a very limited circulation. ‘ The Tariff Board has recommended -
Does the Minister propose to carry out that recommendation? This procedure would throw the onus on the manufacturers to prevent the inclusion in the free list of those machines which they can produce commercially. The board also proposed the appointment of an independent authority to advise the Minister on all doubtful cases, and that the authority so appointed should include a competent engineer. Mr. Ferguson, federal secretary of the Australian Association of British Manufacturers, suggested that the panel should he composed of three members, one nominated by the Associated Chambers! of Manufactures, one nominated by the Associated Chambers of Commerce, and one, preferably an engineer of undoubted qualifications, by the Institute of Engineers. He added that it would be important to provide that no member of the panel should have any pecuniary interest in either the importation or local manufacture of machinery. This matter is sufficiently important to warrant the appointment of such a body. It need not be a whole-time hoard, but would function when required. It would be obvious in many cases that certain machines should be admitted under by-law because they could not be commercially made in Australia. Only in a limited number of cases need the panel be convened to advise the Minister. I urge that action be taken on the lines suggested by the Tariff Board in paragraphs i and ii of recommendation B. That report is dated the 14th October. Six months have elapsed, and surely the Government has had time to make up its mind in regard to the very reasonable proposal of the board.
.- The proposal of the Tariff Board, which the honorable member for Gippsland (Mr. Paterson) has urged the Minister to adopt, would throw all the onus on the local manufacturers, and none upon the applicants for admissions under by-law. The Minister is advised to invite applications from persons who want to import machinery free of duty. Surely those who desire by-law admissions will apply without being invited to do so. They have never been backward hitherto; every Minister for Trade and Customs has received shoals of applications of this character, some justifiable and others not. Why the Minister should now invite applications from the interested parties I cannot understand.
– In order to compile without delay a complete list of machines that may be admitted under by-law.
– I am certain that the department has already an exhaustive list of applications. On receipt of applications, as suggested by the board, the Minister is to notify by advertisement in the metropolitan daily newspapers and the Commonwealth Gazette that the items covered by the applications will be added to the by-law list. All the importers have to do is to apply for the admission of these goods and, ipso facto, without inquiry by the department, the Tariff Board, or the Ministry, they will be added to the by-law list. The local manufacturer, concentrating his attention’ on the business of production, will have to keep his eye on the advertising columns of the newspapers and the Commonwealth Gazette, lest he awake some morning to find that goods similar to those he is producing are being admitted free of duty. That is an extraordinary recommendation to emanate from the Tariff Board.
– The proposal is very fair.
– In the opinion of freetraders, but of nobody else. If there is one feature of administration which the Minister for Trade and Customs must carefully watch, it is the endeavour to have goods admitted under by-law free of duty. The present method is practical and efficient. Applications are made by those desiring the admission of goods under by-law, and inquiries are made by the department to ascertain whether local manufacturers can supply those goods. After due inquiry the Minister decides the application. Now the Tariff Board proposes that without examination or inquiry a long list of machinery shall be placed on the free list, merely because interested parties have asked for this concession. This recommendation by a body of so-called experts makes one more than ever convinced of the folly of a policy that would surrender the rights of this Parliament to any board.
.- Although the Government has not yet agreed to adopt the procedure suggested by the Tariff Board, I do not admit that its recommendation is unsound. At present all applications for by-law admissions are advertised in the metropolitan daily newspapers, trade journals, and the Commonwealth Gazette. Any person desiring to protest against the granting of the applications may do so. The procedure suggested may be an improvement, and it will be investigated, but, so far, the Government is of the opinion that it would be more cumbersome than the existing system.
– But the Minister will promise to consider the proposal carefully.
.- I am surprised that the Minister did not state definitely that he would give no further consideration to this recommendation of the Tariff Board, whose fiscal outlook has obviously altered considerably during the last few years. The Minister is advised to invite applications in specific terms from interested parties for the admission of these machines, and thereupon he is to advertise in the metropolitan daily newspapers and the Commonwealth Gazette, that the items covered by the applications will be added to the permanent by-law list unless prima facie evidence is produced that the goods can be commercially manufactured in Australia. The intention is to throw the onus of proof entirely on the Australian manufacturer, who will have to employ staffs to keep a watch on the advertising columns of the newspapers and the Commonwealth Gazette. In the past the applications for by-law admissions have been so numerous that they would fill aspecial issue of the Commonwealth Gazette. Not infrequently a Minister on returning to Canberra after a few days absence has to consider 100 or more of these applications. If all of them had to be advertised in the daily press, the expense to the Commonwealth would be considerable, and the newspaper proprietors would reap a rich harvest. Many manufacturers have cut their overhead costs as low as possible, and’ are making every effort to economize in order to produce machinery at minimum prices, and they should not be involved in the expense of watching the newspapers for applications by interested importers for the admission of machinery free of duty. This is an extraordinary and unreasonable proposal from the Tariff Board, which, we were told, was originally appointed to increase the protection of Australian industries. That body is now proposing a means by which many importing agents could introduce, free of duty, machinery that can be commercially produced in the Commonwealth. Of course, many local manufacturers are handicapped by the preference given to British firms. For instance, certain branches of the textile industry require a type of machinery which is most efficiently produced in Germany. I have in mind one secondary industry in Sydney which imported from Germany a machine similar to that used by two of the biggest textile manufacturers in the United Kingdom. No machine of the same quality is made in Great Britain; one machine which is produced there has been discarded by British manufacturers, because it is not up to date. Yet, because a British manufacturer had stated that the machine imported from Germany could be made in Great Britain, the Sydney firm has been loaded with duties amounting to 82$ per cent. I submit that an Australian manufacturer is entitled to import free of duty any machine that cannot be made in Australia or the United Kingdom. Sitting suspended from 12.45 to 2.15 p.m.
– Machinery which cannot be commercially manufactured in Australia or in the United Kingdom should be allowed to come in under tariff item 415a 1 - free British, and 15 per cent, foreign. Cases have come under my notice in which the representatives of British manufacturers stated that their principals were able to manufacture certain classes of machinery required. On investigation, it was found that an altogether different ‘ kind of machine was meant; but the effect was to force enterprising Australian business people who desired to use this modern machinery to pay a duty of 15 per cent. I know that it is difficult to check all these applications, and to ascertain definitely whether the kind of machinery required by an Australian firm can be manufactured in Great Britain. I know that in some instances British manufacturers whose agents in Australia have said that they could supply certain machinery have bad to go to Germany to get the machines required. But if an Australian firm were to import a similar machine directly from Germany, it would have to pay a substantial duty on it, because the representatives of the British manufacturers would claim that the machine required could be obtained from England. I regret that the Government has seen fit to reduce these duties, because they were reasonable. Many Australian engineering firms have greatly improved in organization and efficiency during recent years, with the result that their output has grown immensely. Instead of scaling down the protection afforded to these firms, the Government should have directed its attention to a reduction of the interest rates on Australia’s overseas indebtedness. Our’ annual interest bill on that indebtedness amounts to more than £80,000,000, and a reduction of the prevailing rate of 5f per cent, would have a beneficial effect on Australian industries generally. I hope that the Minister will avail himself of every opportunity to inspect some of the big engineering workshops in Australia, and- to see for himself their high standard of efficiency and the excellent quality of their product. I realize that he will not be able to increase this duty in view of the Ottawa agreement, but I hope that he will regard the industry sympathetically, and not allow heavy importations of machinery of a class which can be commercially manufactured in this country. These engineering works are of great value to Australia; in the event of war, or other circumstances which prevented the importation of machinery, it would be well to have factories in this country to manufacture our requirements. If we do not place our orders with our own engineering firms they cannot possibly carry on.
– I should not have spoken were it not for the suggestion of the Acting Leader of the Country party (Mr. Paterson). Many honorable members on this side of the chamber, shocked at the freetrade tendencies of the present Government, felt that there were great dangers ahead. This recommendation of the Tariff Board, which is so heartily supported by the Country party, more than justifies our fears. If it is taken seriously, the whole of the engineering and metal trade establishments in Australia may as well go out of existence. During the last ten years these firms have been afraid to extend their plant, or to manufacture new lines, because of the repeated requests to the Government to allow machinery to enter this country under by-law, notwithstanding that it could he made in Australia; and investors have been afraid to advance capital for the installation of new plant for fear that their good intentions would be frustrated in that way. Another reason why this recommendation should not be regarded seriously is that there has always been the suggestion that the only danger which Australian manufacturers have to face is the possibility of a Minister exercising too freely the power vested- in him to admit goods free of duty under by-law. In the past successive Ministers have made , a minimum use of that power; but here is a proposal that opens the way for almost the wholesale admission of goods under by-law. I have heard members of the Country party on different occasions advance strong arguments against government by by-law. They have pointed out the dangers associated with such a practice. But now they favour the suggestion that that power may be used extensively.
– It suggests an open list free of duty, which is quite different.
– Surely there is danger in the clause providing - “ The local manufacture of machines, machine tools and appliances, not to be considered commercial unless the selling price is equal to or less than the landed duty-paid cost of comparable imported goods with duty calculated at the rate applicable to the goods concerned, under the normal tariff classification.”
– It is the most reasonable thing that could be said.
– Local manufacturers would have to prove that they could manufacture similar machines, at a price not greater than that at which they could be obtained from well-established English manufacturers.
– Plus the duty.
– That is not sufficient. Our experience shows that, when importers know that Australian purchasers cannot get tools of trade, excepting by importing them, they charge unnecessarily high prices for them. This recommendation opens the door to the exploitation of the public. Australian engineering firms, such as the Sunshine Harvester Works, Thompson and Company, and others, have shown that they can manufacture Australia’s requirements. This recommendation of the Tariff Board is one of the worst attacks ever made on local manufacturing industries. It pre-ordains that Australian manufacturers must always be alert to see that undue advantage is not taken of the power to admit machinery free of duty. It certainly , is a clever device to get past Parliament; an easy method of putting into operation a freetrade policy. I hope that the Minister will not seriously consider this dangerous proposal. Already the engineering establishments of this country are having a struggle for existence, and, if this recommendation is accepted, it will be impossible to obtain investors willing to invest capital in new plant or machinery.
.- Honorable members may have noticed in the press particulars of the treatment costs of the Lake View gold mine, where new methods and high-power machinery are in operation, enabling the company to treat 40,000 tons of ore in one month. The operations of two of the big mining companies in Western Australia have increased the number of miners employed in that State to about 4,000, and made possible the circulation of large sums of money. Every effort should be made to build up industries of that kind. I have here a letter from one of the engineers associated with the Lake View company, in which he says -
I desire to support you in every way possible on behalf of the gold-mining interests with which I am associated, in the hope that you may be able to convince the Tariff Board that the imposition of heavy duty on crude oil engines and other high-class machinery which is not, and cannot be, satisfactorily manufactured in Australia, is a mistake, and should be removed. I am consulting engineer for the Wiluna Gold Mines Limited and Lake View and Star Company Limited. These two companies are supported by the strongest mining financial nouses in London, and we undertook to demonstrate that low-grade ore, which was unpayable under existing conditions, would become profitable under modern methods and the introduction of modern machinery.
Huge sums of money are available for the opening up of low-grade ore deposits if the Commonwealth Government, through the Customs Department, ‘will allow this machinery to enter Australia at reasonable rates of duty. The letter continues -
We anticipated that the Federal Government would appreciate that our efforts, if successful, would be of enormous value to the Commonwealth, and confidently expected they would permit our modern high-class machinery to be imported free of duty, particularly as we purchased locally every item or unit of plant which it is possible to procure from Australian manufacturers.
Some items we were successful in importing, but on many units duty was imposed, and we were obliged to pay over f 100,000 import duty. Our applications were refused on many items, through Australian manufacturers reporting, that they could supply similar or identical machinery, but on investigation wo found that similar plant was not at all suitable to our purpose, and that they could only supply identical units by permits from those holding patent rights. In many cases, they had never manufactured any of the requisite units’ before, and in some instances they themselves would bc obliged to install machinery to produce certain parts of the manufacturing. This merely serves as another emphasis of the necessity for a drastic revision of the tariff regulations.
Further on, the letter states -
Since the installation of high-class machinery on the Wiluna and Lake View and Star mines, duty has been imposed on some items of machinery which were permitted to land duty free to us. This is altogether wrong, and would tend to convince probable investors that the Commonwealth Government is opposed to> the expansion of an industry which will rapidly expand if encouraged. My own principals will extend their activities when their present ventures are soundly established. We have already proved that costs can be reduced so that low-grade ores can be treated profitably; but, in such undertakings, very highclass and expensive machinery is essential-, and every inducement should be afforded investors by the Government.
I want to impress upon the Government that a copy of this communication was sent to the Right Honorable J. H. Thomas, Secretary of State for the Dominions, under a covering letter which begins -
In view of your impending visit to Australia to discuss the many questions arising out of trade between the two countries, we wish to draw your attention to a concrete instance arising out of our endeavours to obtain reasonable trade facilities.
I shall not bother the committee with the remainder of that letter. It merely serves to show that efforts have been made in many directions to impress upon this Government the need to do something to encourage these industries. As I pointed out some little time ago, the railway system in “Western Australia was extended into the interior, and enormous additional costs were incurred because of the customs imposts on iron and steel of every description. How is it possible to develop the potentialities of this country in such circumstances? I hope that the Government will seriously consider every phase before placing these excessive imposts upon production, and see whether it cannot alter its present policy drastically in the near future.
– I support the argument advanced by the Acting Leader of the Country party* (Mr. Paterson), and the honorable member for Swan (Mr. Gregory). On previous occasions, I have urged the Government to assist to make machinery required for industry as cheap as possible, especially when there is no doubt that it cannot be made in -Australia. As mentioned in the letter read by the honorable member for Swan, it is a common practice for almost every Australian industry to buy everything possible in Australia if the article will do the work efficiently and is reasonably priced. Some months ago, I was asked to handle a matter connected with confectionery machinery, which comes within the scope of this item as being n.e.i. The firm of Cadburys in England, in improving it3 process, required some machinery which could not be produced in Great Britain, and consequently, purchased it from Germany and installed it in its Bourneville factory. The Australian factory established by Cadbury Limited, which is served by the expert advice anil the accumulated experience of the parent concern, also desired to install one of these German machines and, as it could not be manufactured locally, sought to have it admitted under by-law. The matter was taken up with the Customs Department, and the machine was imported and put in bond. “When the department received the application, it conceived it to be its duty to hunt about in Australia endeavouring to ascertain if anybody here could make something like the machine which it was proposed to import. In this instance, it received assurances from a firm known as the Sydney Machine Company. This firm had never made one of these machines, and understood nothing of its nature or of the joh of work it was intended to do. Therefore, it could not, by any stretch of imagination, be claimed that the importation of this machine from Germany was depriving Australian manufacturers of an opportunity, or Australian workers of work. In the long run, Cadbury Limited had to take a definite refusal from the Customs Department, and pay duty on the imported machine, thereby loading the industry with additional costs. The principle is a most important one. It would not be too much to ask that the matter should be reviewed and the duty rebated. It is of fundamental importance that the capitalization of industry shall be kept at a low point, and that efficiency shall be kept at a high point. Here there is the opportunity to do both of those things, without giving cause for complaint to even the stoutest supporter of Australian industry. In fact, such action would deserve commendation, because it would raise efficiency and thereby increase the competitive power of the industry concerned, which, in turn, would lead to the provision of a greater volume of employment. I urge the Minister to take up the case that I have mentioned when the present pressure of work is removed from his shoulders, and also to consider the desirability of adopting this very sound principle on every occasion.
.- I give the honorable member for Denison (Mr. Hutchin) the assurance that I shall look into the case to which he has referred, if he considers that an. injustice has been done. The investigations in every such case are uniform. There is hardly an honorable member who, at some time or other, has not sponsored applications for certain machinery to be admitted under by-law, frequently for the benefit of country industries, such as dairying machinery, electric lighting plant, mining, tanning, and other machinery. Group 8, as I have already pointed out, contains a long list of machines which, although previously admitted under permanent by-law, are now scheduled as free. This will leave no room for doubt in the mind of either the buyer or the seller. It is not quite an accurate statement of the processes through which the matter passes, to say, as did the honorable member for Denison, that certain firms are almost urged to make machinery which is not at the moment being made in Australia. Reports are obtained from various machinery firms, and it is necessary for proof to be furnished that a particular machine can be made economically in Australia, before an application for its admission under by-law is rejected. I shall quote portion of a letter written to an honorable member with respect to a machine recently admitted under bylaw, to show that this matter is handled sympathetically, and how such entries can stimulate employment. The firm in question writes -
We write to inform you that, as a result of this machine being admitted under by-law, we have decided to enlarge our premises by 50 per cent, and install not only the gas oven, hut later on, a considerable amount of new plant, which we trust will be the means of providing not only temporary, but permanent employment for a considerable number of hands.
The department is anxious to increase, wherever possible, the volume of employ.ment in industry, whether it be in rural or in secondary industry. If there are cases such as the honorable member for Denison has referred to, let them be submitted to the department. I feel sure that no Minister for Trade and Customs would wish to continue to shoulder this responsibility if the matter could be dealt with equitably in some other way. At the present time, however, no alternative is offering. The recommendation of the Tariff Board is partially carried out ; and any other factors will receive consideration. The Government is not impressed by what it considers the more or less cum- bersome system which has been suggested in substitution for the present practice.
.- I endorse the remarks of the honorable member for Swan (Mr. Gregory), in regard to the difficulties that have been experienced in the past in connexion with the importation of highly specialized machinery for some of the larger industries, and the uneconomic practice of charging a duty on such machinery. No matter how greatly people may be in favour of the protectionist policy, as such, they must admit that there are certain machines which it would be entirely uneconomic to manufacture in Australia, because only one of a given type might be needed. Those companies which are compelled to use highly specialized machinery will not take the risk of having it made in Australia under circumstances such as those, because too much money is involved. Consequently, they have to pay the duty for which the tariff provides. The Wiluna Gold Mine paid duty amounting to something like £50,000 on machinery that it was obliged to import. That is altogether too much to ask any company to pay when, in the opinion of men who are in a position to know, it would not be in their best interests to run the risk of a locally-manufactured machine failing to link up as a unit with the rest of their machinery. A haphazard method has been adopted in the past. Usually, the matter of urging the claim to the admission of machinery under by-law is left to an honorable member, who has to use every endeavour to convince the Minister that the company concerned has a valid case. That is sometimes very difficult. I trust that a simpler method will be adopted, so that consideration may be given in the direction that I have indicated.
.- When the item “mining machinery” was being debated, I mentioned that in. 1929 and. 1930 mining machinery to the value of £2,433,644 was admitted into Australia free of duty. The Wiluna Company was one of the largest participators in that concession. It is not right ‘that machinery should be admitted under by-law when it can be economically manufactured in Australia: There are, in Bendigo, Ballarat, Castlemaine, and other mining centres, engineering firms which turn out machinery most efficiently. Thompson’s, of Castlemaine, have sent their mining dredges as far as the Malay States and other foreign mining fields. Instead of generalizing, honorable members should study this matter more carefully with a view to ascertaining where the obstruction really lies. If any honorable member has a case that he considers ought to be investigated, let him place it before me.
Sub-items agreed to.
Item 177, sub-item (a 2) agreed to.
Item 178, sub-items (d) (e) (Motive power machinery and appliances).
.- I hope that the Minister will reconsider the duty on crude oil engines, which are made by Walker’s Limited, Maryborough, Queensland; Morts Dock and Engineering Company Limited, Sydney; Ronaldson Brothers and Tippett Proprietary Limited, Ballarat; and A. H. McDonald and Company Proprietary Limited, Richmond, Victoria. This industry came under the consideration of the last Government. The British preferential and general rates on crude oil engines up to and including 100 horse-power were increased by the last Government from 45 per cent, and 60 per cent, ad valorem respectively to 55 per cent, and 75 per cent., and the duties were reduced by the present Government to 45 per cent, and 65 per cent, respectively. On engines exceeding 100 horse-power, the ad valorem rates were increased from 45 per cent, and 60 per cent, to 55 per cent, and 75 per cent., but the present Government reduced them to free and 15 per cent. The duties on engines “as prescribed by departmental by-laws “ were raised by the Scullin Government from 45 per cent, and 60 per cent, to 55 per cent, and 75. per cent., but they were lowered by the Lyons Government to “ free “ in both columns. On engines “n.e.i.”, the ad valorem rates were increased by the last Government from 45 per cent, and 60 per cent, to 55 per cent, and 75 per cent., but they were reduced by the present Government to 45 per cent, and 65 per cent. This industry was established as the result of the duties previously imposed. The firm of Walker’s Limited, Maryborough, went to a great deal of trouble in sending to Great Britain two of its senior officers, who now superintend its operations at Maryborough. They spent the whole of 1920, and portion of 1930 at the works of the English company of Mirlees, Bickerton and Day Limited. These overseas manufacturers were exporting engines to Australia, and Walker’s Limited secured a licence to manufacture similar engines in this country. The firm’s senior officers had commenced to do good work at Maryborough, and a large number of men were employed in the manufacture of diesel engines until the reductions of duties made by the present Government produced disastrous results. Up to the 18th April, 1932, five engines totalling 700 horse-power had been turned out by Walker’s Limited, while engines totalling o’60 horse-power were in course of construction. The value of the engines that are imported is approximately £100,000 per annum. For many years, this Queensland firm made scores of railway engines, and its works are well equipped with machinery, a great deal of capital having been expended in that direction. Some of the best mechanics in the world are employed by this firm, which has carried out large contracts for railway engines. It saw an opportunity to change over to the construction of diesel engines, and it now has the right to obtain plans and specifications of these engines from the parent company in Great Britain. It keeps thoroughly up to date in regard to improvements in manufacturing methods. I hope that the Minister will postpone the consideration of these sub-items until the representatives of the industry, who are now on their way to Canberra, have an opportunity to place their case before him. I am sure that the honorable member for Wide Bay (Mr. Corser), who is interested in this matter, will be glad to see the duties put back to the rates fixed by the last Government. An earnest attempt has been made by the local manufacturers to supply Australia’s requirements of diesel engines. It would be a pity to kill an industry which would give employment to 300 or 400 Australians, if the local company could obtain the market for stationary engines up to 1,500 horse-power and marine engines up to 200 horse-power.
– The alteration of the duties on crude oil engines has prevented Walker’s
Limited from continuing the construction of diesel engines; but I do not wish to discuss this matter at the present stage, for the Minister for Trade and Customs (Mr. White) has kindly consented, on my representations, to postpone the consideration of these sub-items. A deputation from Queensland, which is now on its way to Canberra, is not likely to arrive until we meet on Wednesday next, when the Minister will receive the deputation and listen to its request. I trust that he will do what he can to assist the industry.
– When the Deputy Leader of the Opposition (Mr. Forde) received the call a few moments ago, I was about to mention that I had” been informed by the honorable member for Wide Bay (Mr. Corser) that a deputation from Queensland was on the way to Canberra, and that another deputation was coming from another State for the purpose of making representations regarding these duties. It is only right, considering the expense which the deputations will incur in coming to Canberra, to hear what they have to say. I, therefore, suggest that the consideration of the sub-items be postponed.
Item 179, sub-items (b) (c) (d 1, 2) -
Electrical Machines and Appliances -
Alternating current machines -
Exceeding 150 horse-power - the rate of duty shall be the percentage rate under subclause (a) reduced by 1 for each horse-power above 150 horse-power with minimum of ad valorem, British free, general 15 per cent.
Converters, motor or synchronous rotary -
Direct current machines -
For the purpose of the foregoing paragraph (1) of sub-item (d), horsepower shall be determined as prescribed by Departmental By-law. In converting horse-power into kilowatts, one horse-power shall be taken as equal to 0.746 k.w.
Amendment (by Mr. White) proposed
That that portion of the tariff resolution introduced into the House of Representatives on the 8th March, 1933, relating to sub-item b of item 179 be incorporated in the present proposals as on and from the 9th March, 1933, in lieu of sub-itemB of item 179 of the tariff resolution introduced into the House of Representatives on the 13th October, 1932.
.- Sub-item b refers to electrical machines and appliances, and the Government has . reduced the duty from 65 per cent, and 70 per cent, to British, free, and general, 15 per cent., notwithstanding the fact that the duties under the Pratten tariff were British, 45 per cent., and general, 50 per cent, on practically every item. The Minister has not furnished any explanation for this drastic reduction. The electrical manufacturing industry is of such vital importance to Australia, both in peace and in the event of war, that the fullest encouragement by way of effective protection would naturally have been expected. The greatest care was exercised in connexion with the Tariff Board investigation of July and August, 1932, to separate items of commercial manufacture from the remainder. In good faith manufacturers indicated those lines which should be imported free from Britain, and their suggestions were adopted in the resolution of the 8th March, in sub-items 179 b 1 to 6 inclusive. On the other items in sections 179 b and c the maintenance of the rates operating prior to October, 1932, was urged. Not only were the rates reduced to 10 per cent, above the 1921-28 tariff, but on ironclad switch gear the flat rates were entirely removed, and the ad valorem rates reduced in addition. This is a drastic alteration, and one which, it is feared, will have far-reaching effects on this section of the industry. Some idea of the importance of the electrical manufacturing industry in Australia may be gained from the following figures: -
A fair and reasonable protection for electrical switch gear should not be less than that provided in the May, 1932, tariff proposals; and with respect to ironclad switch gear, the flat rates of 4s. British and 5s. foreign, as recommended by the Tariff Board, should certainly be imposed. These rates represent a” 50 per cent, reduction on those previously operating. It is obviously not in the. best interests of Australia that an industry of such importance and magnitude, and employing 1,770 persons, should be subjected to severe competition from abroad.
Electrical switch gear, as now covered under tariff items 179 b and c, which is being commercially manufactured in Australia, includes circuit breakers above 15,000 volts, and with rupturing capacity of 250,000 kva. or higher; lever switches, slow break and quick break; field switches; isolating switches; air break switches or gangoperated switches; switchboards, including control boards, flat-back switchboards and many others. Provision should certainly be made in the tariff for ironclad switch gear, and it is strongly urged that the recommendation of the Australian electrical manufacturers to the Tariff Board, be adopted. This was as follows : -
The flat rate basis suggested is 50 per cent, lower than previously operated, and is the only form of protection that will adequately safeguard this section of the industry.
– The greater number of articles covered by these subitems are not made in Australia, as was admitted by the Australian manufacturers before the Tariff Board. Those not made here include circuit breakers, lightning arresters, &c, and they have now simply been put in the tariff as British, free, and general, 15 per cent., instead of being admitted under by-law, free British, and 5 per cent, general. Drastic reductions have not been made, as has been suggested by the Deputy Leader of the Opposition (Mr. Forde).
Amendment agreed to.
Amendments (by Mr. White) agreed to-
That that portion of the tariff resolution introduced into the House of Representatives on 8th March, 1933, relating to sub-item (c) of item 179, be incorporated in the present proposals as on and from the 9th March, 1933, in lieu of sub-item (c) of item 179 of the tariff resolution introduced into the House of Representatives on the 13th October, 1932.
That that portion of the Tariff Resolution introduced into the House of Representatives on 8th March, 1933, relating to paragraph (1) of sub-item (d) of Item 179 be incorporated in the present proposals as on and from the 9th March, 1933, in lieu of paragraph (1) of sub-item (d) of Item 179 of the Tariff Resolution introduced into the House of Representatives on the 13th October, 1!)32.
Amendment (by Mr. White) proposed -
That that portion of the” Tariff Resolution introduced into the House of Representatives on 8th March, 1933, relating to paragraph (2) of sub-item (d) of Item 179 be incorporated in the present proposals as on and from the 9th March, 1933, in lieu of paragraph (2) of sub-item (d) of Item 179 of the Tariff Resolution introduced into the House of Representatives on 13th October, 1932.
.- The ad valorem duties imposed in this sub-item will, I fear, seriously affect the Australian industry. Importations of dynamo electric machines in 1929-30 amounted to £421,000, in 1930-31 to £182,892, and in 1931-32 to £134,421. A few years ago a number of Australian manufacturers, encouraged by the high rates of duty then operating, extended their plant and employed a considerable number of additional workmen. There is now grave risk of their being forced to discontinue the manufacture of certain lines because of the increase of importations; as a consequence, a number of trained men, many of whom were encouraged to attend technical classes so as to acquire the most scientific knowledge available in Australia, will lose their employment. The manufacture of alternating current electrical motors commenced in Australia in 1922. From 1929, when the protection was 45 per cent., to November, 1931, when it was £5 a motor plus 15s. per horsepower, the average increase in the selling prices to Australian users was only 2 per cent., which proves conclusively that the manufacturers were not in any way exploiting the Australian public. This is a highly interesting industry. Nine out of every ten boys leaving school would, if the opportunity were given to them, prefer to engage in electrical engineering. If we were dependent to-day on imported motors, Australian users would have to pay substantially increased prices to cover exchange at 25 per cent, and primage 10 per cent. The prices of Australian-made motors have not been increased to cover these factors. It may be of interest to compare pre-war prices of 3-phase induction motors with to-day’s prices to users in Australia. The figures are as follows : -
Australian factories manufacture, and can give prompt delivery of, 3-phase induction motors in sizes from 1 horsepower to 125 horse-power, and with speeds of 320, 360, 410, 570, 730, 960, 1,440, and 2,880 revolutions per minute in a wide range of patterns, all of which were formerly imported. They offer to Australian users a selection of thousands of sizes, speeds, patterns and types which can be delivered promptly. It is impracticable for importers to stock even a small percentage of the ranges manufactured locally. The development of the industry is the result of the protectionist policy of previous governments, and particularly of the Scullin Administration.
– The industry is adequately protected now.
– In my opinion, the ad valorem rate represents a substantial reduction of the rates imposed by the Seullin Government, and I hope that the Minister will give the sub-item further consideration. The output of Australianmade motors since 1922 now totals 35,000 machines, with a total output of 300,000 horse-power. The local factories are capable of dealing with the whole of the requirements of Australia for alternating current electric motors within the ranges I have mentioned. Unfortunately, because of the Ottawa agreement, there is little hope of an increase of the duties against the British manufacturers, but I trust that the Minister will authorize another survey of the industry as soon as there is an increase of. importations from overseas.
Amendment agreed to.
– As these duties affect a very important industry, I cannot allow the remarks of the honorable member for Capricornia (Mr. Forde) to pass unchallenged. In these duties, the interests of the manufacturers of certain lines of electric motors, and also of the users, have been carefully safeguarded, which is more than can be said of the duties imposed by the previous Administration. The duties it levied on some items seriously reacted on a number of Australian industries. The proposed duties are in accordance with a recent recommendation of the Tariff Board. That body made a thorough investigation of the duties on dynamo electric machines, and its report embraces all types and sizes of electric motors. The report, which is a comparatively lengthy one, shows how essential it is to have such a body as the Tariff Board in order to collect and collate facts relating to the varied classes of goods covered by this item. I am satisfied that the board, in recommending these duties, has given Australian manufacturers adequate protection on the types of motors manufactured locally, and has also fully safeguarded them from competition by machines not manufactured locally, but. which, if admitted free of duty, could be substituted for the types of machine made here. It has also ensured that motors, which are not manufactured in Australia, and are not likely to be for some time to come, will be available to users at as low a price as possible by admitting them free of duty from the United Kingdom.
Electric motor manufacturing is undertaken by at least five Australian firms which employ at least £180,000 of their capital on this section of their activities, and provide work for 130 persons whose wages bill amounts to £22,500 per annum. The principal motors manufactured locally are alternating current induction motors from 1 horse-power to 125 horsepower. The Australian manufacturers can supply all sizes, speeds and patterns of this type of motor within that range of horse-power, and the board was satisfied that the quality of the local article was excellent. The fixed rates provided by the previous Government represented from 117 per cent, to 154 per cent, of the landed cost without duty. Those rates were excessive, as they exceeded by as much as 54 per cent, the total sum of direct wages, factory overhead, and administration; and although the question of recommending fixed duties was considered, the board finally arrived at the conclusion that ad valorem duties were best suited to this class of goods. The fixed rate as applied by the previous Administration on the horse-power of the machine was unscientific, as by increasing the speed of motors the horse-power can be increased. Consequently, the fixed rates operated more harshly against the highspeed machines. The horse-power is not indicative of the cost of manufacture. From 45 per cent, to 60 per cent, of the materials used are admitted free of duty from the United Kingdom. These machines- are charged duty when incorporated in complete imported . machines. When’ this is taken into consideration it will be realized that the protection afforded on the work performed in Australia is in excess of the rates shown in the item.
Direct current machines are, generally speaking, not manufactured locally; but protection has been granted on a few’ types such as fractional horse-power motors, traction motors, and motors up to 50 horse-power for gearless lifts. The rates proposed on these lines are those requested by the local manufacturers. The proposed rates should provide adequate protection to the local industry and allow a fair return on the necessary capital:
The subject with which we are dealing is extremely technical, and, while it may not be interesting to honorable members, it is certainly important to the industry. I therefore make the following comments on each type of motor covered by this paragraph : -
Sub-item 179 (D) (1) Dynamo electric machines, viz. : -
Sub-item 179 (d) (1) Dynamo electric machines, viz.: -
Alternating current machines -
These machines are not manufactured locally, except in fractional horse-power sizes, and. the reason for the exclusion of such machines under 2 horse-power is to protect the local manufacturer. Such machines under 2 horse-power are dutiable under sub-item 179D1d as “ n.e.i.” at 45 per cent., British preferential tariff, and 65 per cent., general tariff.
Sub-item 179 (d) (1) Dynamo electric machines, viz. : -
Alternating current machines -
These machines are not manufactured locally, but as machines up to 125 horsepower might be substituted for those manufactured locally, moderate rates are provided to ensure that they are not substituted. Should it be shown that machines of this type are essential for a particular purpose, and that the duties provided are a hardship, full consideration will be given to admitting them under by-law.
Sub-item 179 (d) (1) Dynamo electric machines, viz. : -
Converters, motor or synchronous rotary -
Many small converters are being manufactured in Australia, and the board has recommended protective duties on those up to 10 k.w., which should give adequate protection to the local industry. Converters over 10 k.w. are not manufactured locally, and are therefore to be admitted free from the United Kingdom.
Sub-item 179 (d) (1) Direct current and universal machines - (c)
These machines are used principally on electric trains and tramcars, and are usually ordered in quantities, and can be manufactured economically in Australia.
Sub-item 179 (d) (1) Direct current and universal machines -
These machines are manufactured locally. Such machines over 50 horse-power are in small demand, and cannot be economically produced in Australia.
Sub-item 179 (d) (1) Direct current and universal machines - (c)
Several types under 20 k.w. are being manufactured in Australia, although not all types; but the higher duties are provided for protective purposes, and the by-law provisions of the tariff are available for those types not manufactured locally.
Sub-item 179 (d) (1) -
This item covers all other dynamo electric machines. The protective rates are provided, as certain machines being manufactured locally are not included in the above groups. For those machines which are not being manufactured in Australia, the by-law provisions of the tariff are available.
What I have said indicates clearly the wisdom of having these matters investigated by the Tariff Board. I consider that the board has justified itself if only by this one inquiry. It would be impossible for the Deputy Leader of the Opposition (Mr. Forde), or any other honorable member, to deal adequately with these subjects in the ordinary way, but the committee may rest assured that the Tariff Board has taken care to protect both the local manufacturers and the users of these machines.
.- Considerable development has occurred in Australia in the manufacture of static transformers, which are covered by subitem 179 d 2. Our importations under this heading were valued in 1929-30 at £143,913; in 1930-31 at £50,143; and 1932-33 at £1,914. It is worthy of comment that the imposition of the Scullin duties on this sub-item did not increase the price of these transformers to the public. Although I do not suggest that the manufacture of static transformers was first commenced after the Scullin Government assumed office, I assure honorable members that the industry, which was established in 1923, developed considerably under the encouragement’ afforded it by the Scullin tariff. There are now five fully-equipped factories manufacturing static transformers in Australia. The duties applicable to this machinery have varied as follows : -
The output of transformers from Australian factories has now exceeded 1,000,000 k.v.a., and the whole of the requirements of the Commonwealth are being met by the local manufacturers. While the duty . on these transformers has been successively increased, the price of them to the users has been materially decreased, until to-day the Australian purchasers can buy Australian-made transformers at a price lower than that which existed before protection was afforded to the local industry. This is another instance of the protectionist policy of the Commonwealth proving beneficial to our people. From reports that I have received, I am afraid that the action of this Government in reducing these duties may lead to unemployment in this industry at a time when we ought to be doing everything in our power to increase employment, and to provide congenial openings for the young men of this country. This industry offers to our young men expanding opportunities, and not a dead-end occupation, for the display of their great natural abilities.
Sub-items, as amended, agreed to.
Item 180, sub-items (b) (c) (e 3, 5, 6, 17, 22, 23, 25, 26) (k) (Electrical and gas appliances).
– Under this sub-item, the duty on gas meters and gas-meter parts is being reduced by 10 per cent, in both the British and general columns; but there are special features in connexion with the industry affected which I hope will induce the Minister to agree to the postponement of the sub-item. This is a relatively small industry which, in normal times, gives employment to about 600 men, but which, at present, is providing employment for only 400. The trouble is that the men who are at present out of work in the industry are specialists who cannot be absorbed, even in normal times, in other industries. It is quite impossible to absorb them in other industries at a time” like this.For the last 20 years, the gas companies of Australia, both public and private, have been manufacturing gas meters and gas-meter parts. The Metropolitan Gas Company, of Melbourne, has been making and repairing meters for at least twenty years, but four or five years ago it entered into a contract with Messrs. Parkinson and Cowan, a company which specializes in this work, and whose head-quarters are in Sydney. One clause in the contract stipulated that the meters must be made in Australia. In 1928, the Victorian Government made a special inquiry into this industry to ascertain how it affected the price of gas, and it reported, among other things, that any interference with the duty would upset the balance of the industry, and be injurious to the Australian people. A reduction of the duties by 10 per cent, will seriously upset the balance of this industry. The volume of work does not fluctuate,, and therefore employment is comparatively regular. Any loss that takes place as a result of these reductions of duties will be fatal to the local manufacturers, because the increased overhead cost will unbalance the trade and make the manufacture of meters unprofitable, while the small advantage which they will give to the British manufacturer is negligible. The industry carries on under piece-work. It has a regular quota of apprentices who are trained to be specialists in this particular work; but they are not general specialists in sheetmetal operations. This is too small an item to be considered in the light ofthe Ottawa agreement; it is not worth while to the British manufacturer. The companies which have started manufacturing in Australia are offshoots of British companies. Pour years ago, when the Metropolitan Gas Company, of Melbourne, entered into a contract with Messrs. Parkinson and Cowan, this firm immediately brought out from England twelve experts and their families, with a view to making gas meters. The Metropolitan Gas Company has its regular workshops, but there are other shops at Brighton, Ballarat, and Bendigo, where meters are made and repaired. Normally, 600 men are employed in the industry.
– There are 70 men employed in Adelaide.
– That’ is so. The industry is not exploiting the public by charging excessive prices for i’ts product. The firm of Woodhall and Duckham recently started the manufacture of gas meters in Australia. It used to import special parts, but is now manufacturing them. At one time, special parts for wet and dry meters had to be imported, but since the contract has been entered into with the new companies for the manufacture of meters both classes of meters are being manufactured in Australia. Special machinery wag installed to enable the companies to manufacture both wet and dry gas meters, and any interference with the industry by way of reduced duties will place it in grave danger. I move -
That the sub-items bo postponed.
If the amendment is carried, it will be an instruction to the Government to restore the rates imposed by the Scullin Government.
.- The honorable member for Melbourne Ports (Mr. Holloway) need have no fear regarding this industry. Of course, to many honorable members, a change of tariff causes great alarm, but I can assure the honorable member that this industry was investigated by the Tariff Board at the request of the Deputy Leader of the Opposition (Mr. Forde), when Minister for Trade and Customs, on the application of Mr. J. C. Eldridge, then a member of this House. The report of the Tariff Board i3 interesting, and there is no reason why its recommendations should not be adopted. The change effected by the present item as compared with the tariff of 1921-30 is an increase of the rates on gas meters from 27£ per cent.
British, and 40 per cent, general, to 45 “per cent, and 65 per cent, respectively. In addition, express provision has been made for gas meter parts at approximately the rates provided for such parts under the tariff of 1921-30. Those duties were 27£ per cent, and 40 per cent., and as the honorable member who has a knowledge of the engineering trade must admit, they were accepted by the metal trade generally as adequate. The proposed item reduces the rates on gas meters imposed by the last Government by 10 per cent. On parts which were not admitted under by-law the rates imposed by the previous Government have been reduced by 27^ per cent, and 30 per cent. The rates now proposed are in accordance with the recommendations of the Tariff Board, with the exception that the general tariff rate has been increased by 5 per cent, to conform with the Ottawa agreement formula. Briefly, the board’s reasons for the imposition of increased rates of duty on complete gas meters were -
The honorable member for Melbourne Ports evidently referred to a sheet metal gas meter which is being made for the Metropolitan Gas Company of Melbourne, but that is only one aspect of the manufacture of gas meters. The board’s reasons for recommending that the rates operating under the tariff of 1921-30 on parts of gas meters be not altered were -
This industry has been thoroughly investigated, and I believe that the duties recommended by the board will operate satisfactorily and give adequate protection in respect of all those parts which can be economically manufactured in Australia.
.- I regret that the Minister has not accepted the suggestion made by the honorable member for Melbourne Ports (Mr. Holloway), who is very conversant with this industry. Between 500 and 600 workers are involved, and there is considerable unemployment in the industry at the present time. The workers first asked for the prohibition of the importation of all completed meters and parts, but were prepared to accept what was proposed in the tariff resolution of the 26th March, 1931. Unfortunately, the present Minister is not prepared to reconsider his attitude. He tried to cast blame upon me for the reduction of duties by mentioning that, as Minister for Trade and Customs, I had referred this matter to the Tariff Board . for investigation and report. No grave injustice was done to the industry by that reference. The injustice consists in the present Government’s acceptance willy-nilly of the recommendation of the board. Section 15 of the Tariff Board Act allows the Minister no option but to refer these matters to the Tariff Board. It provides -
The Minister shall refer to the board for inquiry and report the following matters: -
If the Minister were to adhere strictly to the letter of the law, he would not propose any new or increased duties until the Tariff Board had inquired and recommended. But when I was Minister for Trade and Customs, I took the view that the adequate protection of Australian industries could not be delayed until each had been inquired into. Every Minister refers matters to the board; in fact, the department follows a certain routine in that regard. But if a recommendation of the board did not accord with the policy of the Scullin Government, it was disregarded. There was not one chance in a thousand that the board’s recommendations in regard to meters and many other matters would have, been accepted by me. Prior to the making of the Ottawa agreement, the tariff policy was entirely the responsibility of the Minister and the Government, but now no British duties may be increased without a recommendation of the Tariff Board. In this way, tariff policy, which the Parliament and the Government should determine, is handed over to an outside body.
.- I endorse the remarks of the honorable member for Melbourne Ports (Mr. Holloway). It is strange that the Government should be proposing to decrease by 10 per cent, the duty protecting an industry that was started in recent years by the old-established British firm of Parkinson and Cowan.
– British leading hands were brought out here to do the work.
– Often in the establishment of new industries, the introduction of leading hands from abroad is essential. But that is justifiable, because they train Australian workmen, and, by starting a new industry on expert lines, increase employment for our people. The Victorian Government had to import six German engineers to install certain briquette machinery at Yallourn. They erected the plant and taught Australians how to operate it. Parkinson and Cowan established in at least three States factories to conduct manufacture which previously was not carried out in Australia, and this has created a considerable amount of employment. There is no reason why the Minister should not postpone the further consideration of this sub-item in order that over the week-end he might ponder the representations which have been made this afternoon.
That is a reasonable request. A number of British firms were induced to establish branch factories in Australia. The honorable member for Melbourne Ports mentioned the firm of “Woodlands and Duckham. That firm established a branch in Australia as a result of the visit to this country of Sir Arthur Duckham two years ago as one of the “ Big Pour “. He thought so much of Australia’s future that he induced his own firm to start here. A reduction of duties would penalize the very firms which did what we desired them to do - establish factories in Australia and provide employment for Australians. Notwithstanding that the Tariff Board has investigated this subject, a further inquiry is desirable, and, therefore, I hope that the Minister will agree to postpone the item with a view’ to restoring the duties previously in operation.
.- This item concerns not only those engaged in the making of gas meters in Victoria and New South “Wales, for in my own electorate numbers of men are engaged on similar work. A reduction of the duties would do them a serious injustice. These men are skilled workers, and it would indeed be unfortunate if they were deprived of their means of livelihood. The action of the Minister would appear to be a deliberate attempt to give a preference to those who manufacture cast-iron meters. This is not a time to do anything which might throw men out of employment, and, therefore, I suggest that the Minister would do well to accede to the reasonable request of the honorable member for Melbourne Ports (Mr. Holloway), supported by the honorable member for Maribyrnong (Mr. Fenton), for the postponement of the item so that the full facts relating to this industry may be considered. Any precipitate action by the Government will severely injure this trade. I do not think that the Minister is so unreasonable as not to be prepared to allow honorable members an opportunity to present further substantial facts in support of their contention. I shall not say more now, for I hope that the Minister will accede to the reasonable request made to him ; but if he will not do so, I shall, at the first opportunity, present to him information which, I feel sure, will influence him to take an opposite view.
.- I do not know what the honorable member for Hindmarsh -(Mr. Makin) means byfurther evidence; at all times I shall be glad to hear evidence which may assist any Australian industry. Nevertheless, for the reasons which I have given, and because this -matter has been thoroughly investigated by the Tariff Board, I see no necessity to postpone the sub-item.
– I am deeply concerned about this sub-item, because I represent 500 families whose livelihood depends on the making of meters.
– That is an exaggeration ; there are not that many workers engaged in this industry.
– In my electorate, and in the electorate of Maribyrnong, there are quite 500 people engaged in the manufacture of meters in normal times. At present, numbers of these workers are unemployed, and I fear that if the Minister has his way their fellowworkers will soon join their ranks. The Minister said that in these meters there are 300, or more, separate parts, some of which are not made in Australia. Most of them can be made here. One Australian firm - Parkinson and Cowan - imported a special plant to make parts which previously had to be imported from England. In any case, there is no reason why these special parts could not continue to come from England, leaving the remainder of the work to be done in Australia. The firm which I have mentioned has a contract with the Metropolitan Gas Company, of Melbourne, to make parts for both wet and dry meters. Those who specialize in cast-iron meters desire to have meters of that material installed in place of those now in use. The Minister’s statement, that the importation of the goods covered by this item are small, proves that most of this work can be, and is, done in Australia. In that case, why increase the imports by reducing the duties, or change the type of meter merely to give the work to another company? The various gas companies throughout Australia, which have been subjected to considerable criticism of late, are not likely to be satisfied with goods which cannot be competitively made in Australia. Parkinson and Cowan brought out to Australia a number of experts in the making of meters, and these men and the Australian workmen associated with them are turning out goods of high quality. Among the apprentices in this industry are the sons of men who have been making meters for twenty years. There has been no complaint that the Australian manufacturers are charging too much for their product, and I do not know why either the Tariff Board or the Government should be willing to injure them in order to assist some one else. Any meter part which cannot be made satisfactorily in Australia in competition with similar parts from Britain could still be imported, but there is no necessity to reduce the duties all round. I thought that the Minister would postpone the item, as I know that he is familiar with the industry, which is not one that will affect the cost of production. It is a small industry that does not fluctuate, and employs specialists who cannot be transferred to any other line of business. In the circumstances, I cannot understand why the Government, wants to interfere when the only result of its interference can be loss of trade and increased unemployment. After all, this is a mere bagatelle, and will not in any way affect the operation of the Ottawa agreement. The companies which are making meters are more or less branches of parent concerns in Great Britain. The Victorian State Government held an inquiry to discover whether meters or parts could be made cheaper, and found to the contrary. In its report, that Government suggested that any interference with the industry would be injurious to Australian workmen. The Melbourne Metropolitan Gas Company followed that up with a statement that all its new meters would be made in Australia. That company has a name for being rather parsimonious in its transactions, and if it is satisfied to make such an arrangement, I see no reason why the Government should interfere with the duties. As an intimation to the Government to reinstate the Scullin duties on these products, I must press my amendment, “ That the sub-items be postponed “.
– I wish to direct attention to one matter relating to employment which is mentioned in the report of the Tariff Board. I am aware that the industry is in the electorate of the honorable member for Melbourne Ports (Mr. Holloway) who, I think, rather overstated the position and the importance of the production of these parts. The Tariff Board report states -
Inquiry by the Tariff Board has been made as to the employment given by the Metropolitan Gas Company in the local production of parts for new meters, and it has been found that such employment is inconsiderable. Figures given show that for the year 1927, the ‘amount expended on labour represented less than a normal yearly wage for one man.
I merely add that the industry is adequately protected.
.- When I stated that 500 persons are employed in making gas meters, I did not wish to imply that they all worked in South Melbourne; they are located in different parts of Australia. The Metropolitan Gas Company does its own repairs, but it has. entered into a contract with Messrs. Parkinson and Cowan to have all the new meters it requires made in Australia.
Question - That the sub-items be postponed (Mr. Holloway’s amendment) - put. The committee divided. (Temporary Chairman - Mr. Prowse.)
Majority . . . . 15
Question so resolved in the negative.
Amendment (by Mr. Guy) agreed to -
Thatthat portion of the tariff resolution introduced into the Houseof Representatives on 8th March, 1933, relating to paragraphs (3), (5), (6), (17), (22), (23), (25) and (20) of sub-item (e) of item 180 be incorporated in the present proposals as on and from the 9th March, 1933, in lieu of paragraphs (3), (5), (6), (17), (22), (23), (25) and (26) of sub-item (e) of item 180 of the tariff resolution introduced into the House of Representatives on the 13th October, 1932.
– I move -
That the schedule to the customs tariff proposals introduced into the House of Representatives on the thirteenth day of October, one thousand nine hundred and thirty-two, as proposed to be amended by the customs tariff proposals introduced into the House of Representatives on the eighth day of March, one thousand nine hundred and thirty-three, be further amended as hereunder set out; and that, on and after the twenty-ninth day of April, one thousand nine hundred and thirtythree, at 9 o’clock in the forenoon, reckoned according to standard time in the Territory for the Seat of Government, duties of customs be collected in pursuance of the said customs tariff proposals as so amended. That, excepting by mutual agreement or until after six months’ notice has been given to the Government of the Dominion of New Zealand, nothing in this resolution shall affect any goods the produce or manufacture of. the Dominion of New Zealand entering the Commonwealth of Australia from the Dominion of New Zealand.
The present rates on gum and wading boots, under the proposals now before the committee, provide for ad valorem rates of 30 per cent. British preferential tariff, and 50 per cent, general tariff. The amendment that I have just moved, which provides for cumulative rates of duty on these articles, is based on the recommendation of the Tariff Board. The board recommended rates of1s. a pair, and 20 per cent, ad valorem, British preferential tariff, and 3s. 6d. a pair and 30 per cent., general tariff. The additional ad valorem rate recommended under the general tariff has been adjusted to 371/2 per cent, in order to give effect to the Ottawa agreement preference formula.
The Tariff Board found that the present duties, plus the 50 per cent, surcharge, had succeeded in enabling the local manufacturers to meet competition against the better-class products that previously came from Canada and the United States of America. Within recent months, however, J apanese competition has been felt keenly. The Japanese currency is depreciated as compared with the Australian currency, and this factor has assisted Japan to flood the markets of the world with her manufactured products. The local manufacturers of gum and wading boots are also handicapped by the heavy revenue duties on their principal raw mateirials - for example, petrol and rubber. Wages in Australia, too, represent a large item of cost.
The local manufacturers requested the imposition of duties much higher than those now proposed, but the Tariff Board considered that the duties requested would, if imposed, result in an undue burden being placed on dairymen, farmers, miners, and others. The duties proposed will not entirely eliminate Japanese competition. It would, I think, be wrong to eliminate competition. There is ample scope for local manufacturers to review their production costs, and to reduce prices while still maintaining a reasonable profit. These duties will afford a measure of relief against Japanese competition, and it rests with the local manufacturers to do their part in reclaiming the trade that they have lost.
I may mention that the department is at present inquiring into the question of the dumping of gum and wading boots.
A deposit is required on shipments in anticipation of dumping occurring.
Cost ok Living Index Figure - Northern Territory : Land Laws : Liens.
Motion (by Mr. Latham) proposed -
That the House do now adjourn.
.- I desire to raise a very important question. This morning I asked the following question, upon notice: -
In view of the serious effect the continued reductions in wages are having upon the industrial life of the whole community, will the Government have an investigation made into the methods by which the cost of living index number is ascertained, and also its application by the Arbitration Court!
The Prime Minister replied that the matter would receive consideration. I urge that it be given early and favorable consideration. The assessment of the Statistician’s figures, upon the information obtained, is not challenged. But there are two aspects that furnish cause for very grave consideration. One concerns the source of the information that is obtained; but the other, and the more important, is the method by which it is applied by the Arbitration Court. Honorable members well know that when the 10 per cent, cut in real wages was made by the Arbitration Court, it was said that the workers generally would benefit as a result of the reduction of the cost of living; but, in addition to that 10 per cent, cut in real wages, the workers have suffered further reductions of wages with every reduction of the cost of living. These reductions are becoming cumulative; and as the effect is proving disastrous to the whole of the industrial life of Australia, I urge that the matter be generally investigated, particularly the method by which the court applies the cost of living index figure. Without going into the details of this matter, for it is technical and involved, I may say that the method of ascertaining this figure is to take a regimen of articles which are said by the Statistician to represent approximately 60 per cent, of the cost of living in an ordinary household. The basic wage is thus determined upon the cost of that 60 per ‘cent, of the household requirements, and it is assumed that any rise or fall of the cost of that. 60 per cent, applies to all household requisites. In normal times, such a. method may be fairly accurate, although actually it has never been tested. In abnormal times, however, it is not reliable, and, by one or two illustrations, I think I can show that it is operating detrimentally to the interests of the man on the basic wage. The effect of any great reduction in the cost of any of those lines that come within that 60 per cent, is to reduce the basic wage by considerably more than the actual reduction of the cost of living. For instance, a reduction of the price of sugar by id. per lb. has recently taken place. On 12 lb. that would amount to a saving of 6d. in the ordinary household, yet the effect of that reduction is to bring about a reduction of the basic wage “by lOd. It has been estimated that the average weekly consumption of sugar by a man, his wife and three children is 6 lb. There is thus a saving in the household bill of 3d. per week, but that saving reduces the basic wage by 3d. Therefore, instead of deriving any advantage from a reduction of the price of sugar, the wage-earner is actually losing by it. Surely that cannot be considered just. Again, in some of the tables on which he bases his figures the Statistician shows fractional reductions of prices in regard to certain goods, such as -Jd. per lb. on meat; but householders are well aware that in practice those reductions are not passed on to them. A proper test would be to investigate household accounts carefully to see if the cost of living has come down to the extent calculated by the Statistician.
Another and more important aspect of the matter is that house rents are said to be responsible for a large proportion of the reduction of the index figure. Probably a majority of wage-earners are home buyers ; they certainly are not getting the benefit of rent reductions. It is true that they have received some relief by a reduction of interest rates, but that represents nothing like that estimated by the Statistician as the reduction of the cost of rent.
– And the interest reduction does not apply all round.
– Quite so, but even to the extent that it does, it does not represent anything like the estimated extent of rent reduction. Therefore, the wage-earners who are the worst off to-day are those who are endeavouring to obtain homes of their own. Committed to payments for the purchase of houses bought when prices were high, they are nevertheless called upon to live on wages that are ridiculously low. The basic wage in the various States will now be - Sydney, £3 5s.; Melbourne, £2 18s. 6d.; Brisbane, £2 14s. 6d. ; Adelaide, £2 15s. ; and Perth, £2 17s. It is npt reasonable to suggest that the household bill of the working man has come down since 1929 by 32s. a week; yet the basic wage has been reduced to that extent.
I should like honorable members to consider this matter, also, from the wider aspect. In January, 1931, the Arbitration Court ordered a 10 per cent, cut in real wages. The court set out its reason very fully. This was that, owing to the indisputable fact that the national income had fallen because of the fall of world prices, this country could not carry the wage tha’t was previously being paid Shortly after that there were further reductions of the cost of living, and, before the middle of 1931, the total reductions of nominal wages amounted to 20 per cent., the reduction of real wages being 10 per cent. At that time a general survey of Australia’s position was made by a group of economists, financiers and others, and it was considered that there would have to be a 20 per cent, cut all round if Australia was to pull through. The outcome of that decision was the formulation of what came to be known as the Premiers plan. It was considered that a 20 per cent, reduction all round would see us through. It was held that, as the workers in private industries, or most of them, had already suffered a 20 per cent, reduction of their wages, there should be a 20 per cent, cut in government expenditure all round. The plan which was accepted provided for that 20 per cent, cut on the following scale - Some 12$ per cent, or 13 per cent, on pensions, from 18 per cent, to 20 per cent, on public servants’ salaries, and 22i per cent, on interest. By those who drew up the plan that was regarded as a fairly equitable adjustment. Since then, however, one section of the community has suffered further reductions; that is, the section comprising the wage-earners, who, because of the automatic reduction of their incomes following upon falls in the cost of living, have actually been penalized to the extent of fully 35 per cent. If wage-earners have benefited by reductions of the cost of living, so have all other sections of the community, with this difference: They have not suffered a corresponding reduction of income. I consider that the time has passed for an all-round restoration of the cut in real wages. A grave injustice is being done to the workers when, on top of the 10 per cent, cut in real wages, they are asked to submit to every automatic reduction due to a fall in the cost of living,, even if the figures are accurately ascertained; and we have reason to believe that there is ample justification for investigating the present method of determining the index figure of the cost of living.
Turning particularly to the position of public servants, who come immediately under our control, the Prime Minister (Mr. Lyons) said to-day, in answer to a question by myself, that it was not the intention of the Government to interfere with the tribunals. The Government need not interfere with any tribunal in order to adjust the position so far as the public servants are concerned, because, being the employer, like all other employers, it can pay any amount it likes over the rate fixed by the court. Two principles were laid down by the previous Government in dealing with the Commonwealth Public Service which I commend to the consideration of this Government. One was that there should be no reduction of the real basic wage. My Government adhered to that principle throughout the difficult times which it experienced, and they were much more difficult times from a governmental point of view than those experienced to-day. No reduction in the real basic wage of any public servant was made when the last Government was in office. The second principle it laid down was that, where percentage reductions were to be made in salaries that were above the basic wage, future reductions of the cost of living should not be applied until those percentage reductions were absorbed. That principle should apply not only to public servants, but also to all workers. I suggest that those principles are just, and should be acted upon. The question of adjusting Public Service salaries will come up on the 1st July. If these cost of living figures are applied automatically public servants will suffer a further reduction. They have already made their contribution to the sacrifice of the country. A sliding scale for percentage cuts was made after adjustments in connexion with the cost of living. The basic wage worker suffered no cut apart from the cost of living adjustments, but there was a reduction of 3 per cent.. on salaries of £220, the reduction increasing to 24 per cent, on salaries of £2,500. It is not just to keep on applying the cost of living reductions to salaries in addition to the percentage cuts made to meet a special emergency which existed because of the disastrous fall in the national income of Australia.
Let us consider the general effect of these continual reductions of wages. They are not only affecting wage-earners directly; every one in business in Australia is likewise affected. The purchasing power of the people is being steadily reduced. They have suffered, not only a reduction of 10 per cent, in real wages as a result of the court’s decision, but also further reductions as a result of the fall in the cost of living. Moreover, I maintain that they are suffering a greater reduction in real wages than 10 per cent., through the method of assessing the cost of living on 60 per cent, of the expenditure of an ordinary family.
Then there is another matter to be considered. When the sales tax was imposed, a wide field of exemptions was made in respect of essential foodstuffs and other necessaries used by basic wage earners. That was done in order to prevent the tax-bearing too harshly on the great mass of the people. However, while those exemptions have had the effect of keeping the cost of living down, they have also kept the basic wage down. The tax, applying as it does to other commodities not included among the basic foodstuffs, has meant that those commodities have gone up in price by the full 6 per cent, without being taken into consideration in raising the basic wage. The intention of the legislature was good, and if we had to go through it again we should probably have to make the same exemptions, because there is a large body of people whose wages are not fixed by the Arbitration Court, nor governed by variations in the cost of living, though they may be receiving an income not more than the basic wage. These include the self-employed people on the land, and those in small shops. These people would have suffered if the sales tax had applied to basic foodstuffs and other items which have been exempted. It is true, however, that those who are on the basic wage have not gained, but have actually suffered, by the sales tax exemptions, just as they have suffered as the result of the reduction of prices of sugar and other articles within the regimen. The time has arrived for an investigation. We should investigate the source of the information upon which the Statistician compiles his figures, and we should particularly investigate the method by which that information is applied. If the Statistician’s figures are to be accepted they should apply to all items of expenditure, not to some of them only. The cost of living figures should not be fixed on the assumption that what applies to 60 per cent, of a family’s expenditure would apply in the same ratio to 100 per cent.
If the Government says that an investigation would not disclose much hardship, I should be inclined to disagree, but, in any case, if what is alleged is not true - and I think it largely is - the investigation should be made in order to remove the feeling of unrest that exists to-day.
– The right honorable member’s time has expired.
.- The Leader of the Opposition (Mr. Scullin ) has opened up an important subject. I do not know whether it is right to discuss the matter at this stage when the Arbitration Court has just concluded the taking of evidence regarding it, and is now considering its decision. However, the right honorable member has had more experience in such matters than I, and I shall follow his lead by saying something on the subject. It is a fact that the court has adopted a system, and has followed it for many years, of fixing wages on the cost-of-living figures. When the cost of living was rising there was some anxiety among employers as to whether this system was sound. In those days the employers were not slow to follow the matter up, and inquiries elicited information which went to show that the system followed by the Arbitration Court had the merit that, at least, it was no worse than any other known system, and, therefore, could not reasonably be called into question. I have had contact with several government statisticians, and have investigated the matter in detail. I feel convinced that, although the range of subjects does not cover all the requirements of working men, the result is just about what the result would be if we took everything into consideration. In fact, I think we get a more favorable reflex to-day from the point of view of the working man than during times of rising prices. There are so many forced sales of goods these days at prices which represent an enormous sacrifice that the working man and his wife, if they buy wisely, can take advantage of them, and thus reduce the cost of living. In Melbourne, at the present time, there is a score or more of open auctions where things are being literally thrown to the people, and I, myself, have made bargain purchases, which show that it is possible in this way to effect important savings.
In 1920, the Arbitration Court altered its system of fixing wages on cost-of-living figures to the extent of adding 3s. - the Powers’ 3s. it was called - to the figure arrived at on the cost-of-living formula. Constant efforts have been made by the employers to have this additional 3s. taken off, it being contended that there was never any justification for its being added. However, it is still being added, and when the 10 per cent, was deducted by the Arbitration Court from the basic wage it was deducted from an amount which included the Powers’ 3s. Therefore, the reduction of 10 per cent, does not constitute a reduction of wages which has 100 per cent, relation to the costofliving figures.
I deplore the present serious fall of wages which has taken place due to the steady decline in the cost-of-living figures. I do not think that it is healthy. It is, in my opinion, evidence of a vicious circle producing effects the opposite to those previously produced. 1 do not think that low wages is an ideal which we should set before us. Low wages are of no use to a young country like this, and I should like to see this decline arrested. However, there are difficulties in the way. We are so much out of balance, and wages and conditions in the cities among the industrial population are so different from those prevailing in country districts, that it is hard, in fairness to the latter, to say that wages in the city should be increased. We know that it is a fact that the people in country areas, who more and more are dependent on payment by results, are, at the present time, at the mercy of the economic storm. This condition of affairs has arisen out of the steady policy of high protection which Australia has followed. This policy has resulted in the people being congregated in cities, leading what I might describe as false lives, chasing false ideals, and, finally, as disclosed by the events arising out of this depression, getting themselves into a mess. Had we not followed this policy we might not have satisfied ourselves so well regarding theories, but we might have got more out of life, and might not be so economically sick to-day.
It is a fact that, in many instances, the reduction of the fixed charges which have to be met by working men in the purchase of their homes has lagged behind the fall of wages. Men in that position belong to one of the most worthy sections of the community, and they are having the greatest difficulty in meeting their obligations, notwithstanding the interest reduction legislation which has been designed to reduce their burdens.
Speaking broadly, it may be said that some industries can well afford to forgo the 10 per cent, reduction, and the suggested reduction announced in the press yesterday. But the right honorable the Leader of the Opposition (Mr. Scullin) should remember that the election of 1929, when his party was returned to power, turned on the question, whether or not the Arbitration Court should he continued; and as the right honorable gentleman and his colleagues in the Labour party stood for the court, they should be prepared now to take the good with the bad. The court itself is more practised in the consideration of this involved question than is any other body. Its chief occupation is the consideration of this problem, and, since it has acquired a great deal of experience and knowledge, there is now no justification for setting up any other organization to deal with it. The court is quite able to do that. Had not unionism in Australia relied so slavishly upon arbitration, it would not now be in its present position. Trade unionism in this country, through its strict allegiance to arbitration, has chained itself to a bedrock wage. Actually it never gets any good out of the system when prices are rising, and when prices are falling, it gets it “ in the neck “. I repeat what I have said on other occasions, that the sooner employers and employees are prepared to sit down and discuss their troubles among themselves, and reach an agreement as to the wage which industry can pay, the sooner will there be a prospect of an improvement in our present economic industrial position. With increased efficiency, Australian industries will bc able to pay a better wage than is now possible. Under existing conditions no employer is inclined to give ground. All are being dragged along at the heels of the Arbitration Court, which hurts the employer when prices are going up, and hurts tho employee when prices ure coming down. There is no need to set up another tribunal when already we have one fully competent to conduct any special investigation that may be necessary. We should all learn a lesson from the events of the last few years, namely, that the sooner we push the Arbitration Court into the background, and have both sides working together, the sooner we shall be on the road to prosperity and happiness in industry.
.- I support the request of the right honorable the Leader of the Opposition (Mr. Scullin) for a thorough investigation into the manner in which the index figures are prepared, and also their application to industry. The Ministry led by the right honorable gentleman did initiate action along the lines which he now suggests, and there is every justification for the course which he is advocating. His consistency on this matter cannot be challenged. There is no doubt that the system sought to be altered has given rise to very serious anomalies because of the wide discrepancy between the cost of -living wage, as determined by State tribunals, and the amount fixed according to the figures prepared by the Commonwealth Statistician. This question came before the Board of Industry in South Australia recently in an application by employers that the cost of living index figures for that State should be reviewed with a view to a reduction of the State basic wage. After a thorough investigation, the board decided that the rate, which is £3 3s. a week, should not be interfered with. Consequently, it remains at that figure, but employees working under federal awards are now to be subject to a further reduction. The Commonwealth basic wage in South Australia is £2 15s. 6d., after allowing for the 10 per cent, real wage reduction. The discrepancy between the State basic wage and the amount fixed by the Commonwealth, namely £3 3s. as compared with £2 15s. 6d., is conclusive evidence thatsomething is wrong with the system under which the figures arc tabulated. By the application of the latest Commonwealth cost of living figures Commonwealth public servants will be further penalized. Surely the Government realizes the unfairness which would result if a further reduction were made following the present cost of living figures prepared by the Commonwealth Statistician. But bad as the position may be in South Australia, it is worse in Brisbane, where the State basic wage is £3 14s. as compared with the Commonwealth basic wage for that city of £2 15s. lOd. Justice is not being done to wage earners when there exists such a wide discrepancy between the figures prepared by two tribunals. I trust that the Government will realize the necessity for action being taken along the lines suggested by the Leader of the Opposition, and will especially appreciate the need for action not only to arrest this downward tendency in wages and prices, but also to increase wages and commodity prices with a view to ensuring economic stability. The Government might very well set an example, and, with a view to restoring prices and increasing confidence in the community, determine not to apply the cost-of-living reduction to those persons under its jurisdiction. I am hoping that another tribunal will also acknowledge this principle in its judgments; but, as the honorable member for Denison (Mr. Hutchin) has said, it may not be strictly proper for us to offer any direct observations in that connexion at this juncture. I will content myself by saying that a gesture to this effect at this moment by either the Government or the tribunal that I have in mind would be most helpful in the effort to restore better conditions, and bring a feeling of greater security and well-being to the great mass of the people of Australia. There is a great need for a restoration of confidence in the public mind, and no authority can set a more effective example in that respect than can the Commonwealth Government.
The Leader of the Opposition was fully justified in stating that the method of computing the cost of living figures at present in operation is not just. He pointed out that the calculation was made on a 60 per cent, regimen, and that the other 40 per cent, was calculated from the figures covering the 60 per cent. But in calculating the 60’ per cent, consideration is not paid to many commitments in which there is practically no fluctuation, such as the superannuation payments of public servants, the lodge fees of other workers, fares, rates, taxes, and the payments which people are making under various housing schemes. A very large proportion of the people of Adelaide have entered into commitments for the purchase of homes through the State Bank or some other agency, and in consequence of the reduced wages that are now payable they are finding it extremely difficult to honour their obligations. Any further reduction of wages will be a serious blow to them.
An endeavour was made by the honorable member for Denison to show that a disparity existed between the conditions of persons following rural pursuits and those of persons following city occupations; but my contact with workers in our cities, and my knowledge of those who follow rural pursuits, leads me to assert without hesitation that many of the people living in our city areas are just as unfortunately situated as the people who are living in country districts. It must he remembered, also, that, unless the conditions of our city workers are such that they can afford to buy the products of the primary producers, additional suffering must fall upon country people. The Government should do everything possible to stabilize wages. Certainly nothing should be done at this stage that would reduce wages. If prices are to he raised, it is imperative that wages shall not further recede.
.- I have no desire to criticize our industrial tribunals, but I point out that a few days ago the Chief Judge of the Arbitration Court, in referring to a statement by Mr. Mundy, of the Engineers Union, to the effect that, according to medical evidence, the 10 per cent, reduction of the basic wage had brought about such a condition of affairs that the health of the people living on the basic wage was being undermined, deplored the existence of such a state of affairs. It is regrettable that a gentleman in such a responsible position as that of Chief Judge of the Arbitration Court should feel prompted to make such an observation. Our people should at least be assured of a wage sufficient to enable them to purchase things which are really necessary to keep them in normal health.
The Prime Minister (Mr. Lyons) said to-day, in answer to a question by the Leader of the Opposition (Mr. Scullin), that the Government would not interfere with the court, or with other industrial tribunals. It is rather a pity that it has not always followed that standard. We know very well that some time ago, when the Public Service Arbitrator awarded an increase of wages to certain Commonwealth public servants, the Government took steps which resulted in the disallowance of the award. When there is a likelihood of wages being reduced, of course the Government will not interfere.
The honorable member for Denison (Mr. Hutchin) said just now, and has said previously in this House, that he believes in round-table conferences. So do I. The best results can be achieved, I believe, when the employers of labour meet the representatives of their employees at round-table conferences. The employers are willing to do this when wages are rising, but when wages are falling they prefer to place the onus of reductions on the industrial courts. For years, in
Queensland, the majority of the industrial awards were made by consent. In other words, the parties met in conference, with or without an order from the judge of the court, and settled as many matters as possible. Frequently only two or three of the major issues were left for determination by the court. Many of the awards governing the big industries of Queensland were drawn up before the judge knew that the parties were in conference. In such circumstances reason is allowed full play, and decisions are likely to be more lasting and satisfactory. After all, these questions must be settled by reason. “When decisions are reached at round-table conferences it is probable that the parties will loyally abide by them. There is certainly less risk of the industries concerned having to work under court decisions which are unpopular with both sides.
When the 10 per cent, reduction of wages was made by the Arbitration Court the Chief Judge said that the reduced wage would result in the employment of more people. I have always disputed that view. On many occasions in this House, and ‘ before I became a member of this Parliament, I declared that industry would only employ the number of people necessary to do the work that had to be done, and that employment would not be affected to any extent whether wages were 15s. or £5 a week.
– Surely that would not apply in an exporting industry.
– It would apply in any industry. People only employ sufficient persons to do the work that has to be done. When I was a young man I worked on stations for 15s. a week, and no more people were employed then than were employed later, when wages were £3 10s. and £4 a week.
– How can people employ men when they have not the money to pay them?
– Of course, persons without money cannot give employment; but the people with money employ only enough labour to do the work that has io be done. They do not employ extra hands simply because wages are low. Recently, in Queensland, a fine was inflicted upon some waterside workers for a breach of an award. They were carrying heavy ingots of lead, and the work became so laborious that they stopped for a smoke-oh. That action was against the award and they were fined for taking it, although the medical evidence showed that the work was of such a character as to make a smoke-oh necessary. That Judge Beeby admitted the justice of the claim may be assumed, because he said that the belief of the court was that the employers would do the right thing to their employees. Unfortunately, however, there was no specific clause in the award providing for a smoke-oh. The matter is again before Judge Beeby, and he will determine whether such a provision should be made. I cite that instance to show that the employers would not do the right thing, although the court indicated that it was expected of them. It is that kind of thing, more than anything else, which is likely to bring about ill-feeling between employers and employees. This Parliament is entitled to voice its opinion as to what is the right thing to be done by the Arbitration Court. We have the right to voice our opinions, and they should be listened to as representative of a large number of people with ‘ definite opinions. The honorable member for Denison “ has had experience in the Arbitration Court. His opinions are of some value to the people he represents, since he was an advocate in the court on many occasions. He was put in that position because he was believed to be a suitable man, and he did what he believed tb be the right thing. No doubt he offered suggestions which were of decided benefit to the party which he represented. The same thing can be said of men who represented the opposite party. I claim that the views of experienced men should be heeded and respected by those in the control of the government of this country.
– I support the request of the Leader of the Opposition (Mr. Scullin) that a review of the whole situation affecting the basic wage and the cost of living figures should be made before any further reduction of wages takes place. Something drastic must be done to prevent further reductions, even before there is a full inquiry into the method of calculating the cost of living figures. I know that for a long time there has been discontent concerning the method of ascertaining the value of the figures collected by the Statistician, but there is no suggestion that that officer or his staff arc to blame. Many people think that the real fall in the cost of living figures is not being reflected in the retail purchases of the workers, but only in their wages. I was glad to hear the honorable member for Denison (Mr. Hutchin) put the position clearly before this House. He frankly put his cards on the table. He spoke with experience of the Arbitration Court. This is the first time that I have heard a representative of the employers, which the honorable member for Denison was at one time, admit publicly the true position as it exists to-day. I agree wholeheartedly with him in saying that the workers lose when prices are rising, and, again, when they are falling; but instead of saying that we are chasing a vicious circle, I prefer to say that we are following along a one-way track, the end of which is nothing but absolute poverty. We are getting more and more into difficulties, and that is being proved every day. Wages are reduced because the cost of living figures fall. First of all we tried to balance the budget by reducing wages by .10 per cent. We thought that Oy making a national sacrifice we would help to overcome the difficulties of this nation. I am certain that the AttorneyGeneral (Mr. Latham) will agree that the result of the 10 per cent, reduction has not been what it was expected to be. That reduction has decreased considerably the spending power of the workers, who represent more than 80 per cent, of the community. We took from the workers much of the purchasing power upon which business depends. -I would say that over £100,000,000 has been withdrawn from the wage fund. The decrease of wages naturally curtailed the demand for goods, and that in turn brought about a fall in the cost of living. As the cost of living has fallen, so wages have been automatically reduced, until we are rapidly approaching the position where the worker will have practically nothing to spend. In 1929, his basic wage was £4 10s. ; to-day, it is £2 18s. 4d. in Victoria, and less than that in some of the other States. How can a man, with a wife and three children, living on such a wage, be a real asset to the business activities of the community? In 1929, when his wage was £4 10s., he entered into contracts such as that for the purchase of a home on instalments, which he has now to meet out of a wage of £2 18s. 4d. His transport expenses from his home to his work have remained the same, although his wage has been reduced by £1 lis. Sd. We must consider this problem from a business, as well as from a humane, point of view. The employer, who would like to pay higher wages, is forced to pay award rates because of the iron law of competition. If one employer pays a wage higher than that paid by another, he is forced to the wall. We have to examine this problem from a scientific and economic stand-point, because the further we reduce the cost of living and automatically adjust wages, the further wc get into difficulties. We have reached the stage when the Government and this Parliament should give some lead to the community. We gave it a lead when we asked it to accept, in the national interests, a reduction of 10 per cent, in wages. But we thought that that reduction would work out differently from what it actually has. I do not believe that any member of the Government realized what would happen. We all thought that we were making a temporary sacrifice. The Government which made the reduction in wages and salaries, said that no further reductions would be made until the original reduction had been absorbed by the fall in the cost of living. The Government did not intend that the reduction should be permanent, because it knew that that would have the effect of injuring business activities generally. We are drying up all the sources of business by cutting off the spending power of the greatest consuming section of the community. The workers, because of their numbers, are the real consuming power. I have been in correspondence on this subject with Mr. Kent Hughes, M.L.A., of Victoria, who agrees with mc regarding the shocking anomalies that are daily occurring as a result of unemployment and the decline of the spending power of the community. Families are sitting about the tables discussing whether the daughter of the house shall give up her employment, so that her father may become eligible to draw sustenance. In other cases because the aged mother receives the old-age pension the son gets no sustenance allowance, and the pension becomes the income of ‘the family. They are weighing carefully the relative advantages of. withdrawing the daughter from her employment - thus probably ruining her future, because she may be too old later to be re-engaged - and of doing without the sustenance that would be available if her wages were not entering the home; others are thinking seriously of giving up the pension and going on the dole. People are considering ways and means in this fashion, not because they want to do wrong, but because they have to adopt whichever course will bring the most food into the house. Last week a young man in South Melbourne told me that he could not draw sustenance because he lived with his mother, who is collecting an old-age pension, which is regarded as income. The fundamental reason of the sad anomalies in the economic life of the people is the contraction of the spending power of the community, thus reducing the demand for goods and services, and forcing business people to the verge of insolvency.
– Last night I urged the Government to order a reappraisement of rural lands in the Northern Territory and to postpone the collection of the debts due by primary producers to the administration. The Minister for the Interior (Mr. Perkins), in the course of his reply, compared the rents charged in North Australia with those charged in Queensland and Western Australia. He said that the comparison was much in favour of the Northern Territory. I believe that that argument was based, not on a mere desire to disprove my contentions, but solely on ignorance of the conditions existing. In the north-west, meat works are operated by the Western Australian Government which assists in every possible way the marketing of the produce of Wyndham and the Kimberley districts. In Queensland, the cattle areas have direct communication with the coast, but in North Australia, the cattle stations are up to 800 miles from the nearest point of the southern railway system, and their stock, after reaching the railway, has to be carried 1,000 miles at a cost of approximately £3 per head. The land in the Northern Territory is, undoubtedly, cheaper, but do the prices charged permit of a profitable production? In no other country, and certainly in no other developmental project, does the controlling body charge the same rent for bad land as for good land ; yet that is occurring in North Australia. Many pastoralists with a considerable number of cattle find it impossible to market their stock at a profit, because of “the long distances it has to travel and conditions of the market. In consequence of these conditions, the rents of some of the lessees are in arrears, and the administration is pressing for payment. The lessees have offered to give a lien on their stock and the proceeds of any sales effected, but even that is not acceptable to the authorities. I am unable to see that any good purpose is served by adopting these methods. I plead with the Minister to make it possible for these men to remain on the land, because under normal conditions they can do quite well. In regard to the smaller farmers, one man produced and marketed, last year, 4,101 lb. of peanuts. The cost of marketing was £51 7s. 3d. It is estimated that this year the Northern Territory will produce 700 tons of peanuts. On the basis of the already mentioned marketing costs, £19,504 will be distributed by these producers in the Northern Territory in freights, handling, and other charges, exclusive of land and interest. Surely this sum is worthy of consideration, and when men are indebted to the Government to the extent of only £30 or £40 it is folly to force them off land which will not be bought by others, but will merely revert to its natural state. According to the last report of the Administrator, the receipts of the Primary Producers Board exceeded the expenditure by £613 15s. lOd. As this enterprise is showing a profit, the Government can well afford to show leniency and even sympathy to the settlers. I mentioned last night that one man who owed £47 had given to the Government a mortgage over his house in Darwin, but the Administration was not satisfied, and asked for a second security.
As a sample of the curt and peremptory manner of the Administration towards settlers, I quote this letter from the chairman of the Primary Producers Board -
With further reference to my PP.229 of the 31st December, 1932, and subsequent reminders relative to memorandum of mortgage over your agricultural lease, I desire to inform you that if my request is not complied with by return mail the matter will be referred to the Crown Law Officer with instructions to take steps to enforce my demands.
This stand-and-deliver attitude is not conducive to the settlement of the north. When the Primary Producers Board is showing an annual profit of. over £600 there is no need to force settlers off the land because they owe small amount’s to the Administration. Men have been deprived of their ploughs, scarifiers, and other implements of production. They endeavour to cultivate the land without them, but owing to the growth of weeds their efforts are wasted. Meanwhile, the tools of which they have been deprived are stored in the police station. For the sake of the development of the north, the Minister should personally investigate these grievances. It is imperative that North Australia be settled. A beginning in that direction can be made only with the aid of a sympathetic government.
– We have had a short but interesting discussion upon an almost inexhaustible subject, which possesses infinite aspects and is of the most profound importance. The people of Australia have determined that wages, at least in industrial avocations - and that is a limitation which it is not unimportant to notice - shall be determined, not by the higgling of the market, or by the will of employers or employees, insofar as either section is in a position to exercise its unrestricted will, but upon principles which are designed for the protection of the employee, and. equally, of the fair employer against the unfair employer. Machinery has been devised for the purpose of determining the standards of wages. These standards, highly valued by the people of Australia as a whole, not merely by those who happen to be in receipt of the wages which have been so fixed, are regarded as both a testimony and a tribute to the enlightened character of Australian legislation and policy. With but few exceptions the people of Australia have believed in the maintenance of some method of dealing with these matters other than the competition of the market. There have been, it is true, many differences of opinion, even in the recent past, as to what those methods should be, but there have been few, if any, who would maintain that there should not be some control of the standards of wages. Human values are more important than material values, and human interests than wealth in itself; but it must be recognized that human welfare is conditioned by economic factors, and that it is quite useless, and, in the long run, a disservice to the interests of men and women, to attempt to disregard economic factors under what is regarded as the prompting of a humanitarian impulse. However high we may desire wages to be - and I concur with other speakers regarding the benefits of high real wages - we must recognize that the wages paid in a country are limited by the economic capacity of that country, and that wages come out of the produce of labour, together with other factors. There are those who would disregard the other factors, as, for instance, those who think that we can get along without paying interest or rent, or, I am sorry to add, without allowing for depreciation and replacements. I sometimes think that one of the things that Australia needs as much as anything else is a campaign of education regarding the necessity for making adequate depreciation provision. The real effects of the neglect in that direction in Australia are among the most deplorable instances of our Australian economy at the present time. That, however, is not the subject with which we are dealing now. It is impossible to disregard economic factors under the urge of a humanitarian impulse. If wages are increased beyond some limit - and I admit that it is most difficult to determine what that limit should be - the result is an increase of prices, with a corresponding diminution of sales, followed by a .reduction of the demand, then by an increase of unemployment, and, in the long run, a reduction of the total wages paid. In saying that, I am not referring to any cast-iron doctrine of a wage fund. Effect follows cause with inflexible certainty in the series of event§ to which I have referred. Accordingly, when it is said, as some speakers have suggested, that by increasing wages we shall increase the purchasing power of the community, and, therefore, help the revival of industry, we must ask ourselves whether a mere fiat increasing wages will produce that result, if it increases the price of goods which already are so difficult to sell. The problem is complex and involved.
The point raised this afternoon relates to the utilization of what is called the cost-of-living index, which really is the method which we have adopted to determine the standard of wages. It is important to understand how this standard is applied. I suggest that there is a common misapprehension with regard to it - a misapprehension which has not been absent from some of the observations made this afternoon. In 1907, Mr. Justice Higgins, the then’ President of the Arbitration Court, determined what was a fair wage at that time. He fixed 42s. a week, or 7s. a day, as a fair wage, and, on the whole, that standard was accepted by most of those concerned. It certainly was accepted by the wage-earners at the time as a fair fixation of the wage. ‘ That standard has been accepted as a basis for the court ever since. The amount of the wage has been varied from time to time, in accordance with any variation in what is known as the cost-of-living index. In his wellknown work, A New Province for lawand Order, Mr. Justice Higgins explains precisely the function of this costofliving index, which is so often ‘misunderstood. He said -
The Statistician lias taken some 47 staple articles of food and vent as consumed by all classes of the community, and has found the changes in price of those articles; and he very properly adheres to the same articles and assumes that they are consumed in the same quantities. He does not, as some people fancy, pretend to show the cost of living in a wage-earner’s family; but he shows the depreciation in the value of money as regards the selected commodities, and as he says, “ In normal circumstances properly computed index numbers of food and groceries and house rent combined form one of the best possible measures of those variations in the purchasing power of money which affect the cost of living. Then the court comes in, and, until the contrary is shown, infers that the depreciation in the value of money which is found in relation to the selected commodities is to be found also in relation to the other commodities.”
At the present time the value of money in relation to these matters is rather an appreciation than a depreciation. Mr. Justice Higgins continued -
This method is in accordance with the views and intentions of the Statistician; for he says, “ Once a standard of living or living wage has . been fixed, the tables published
can be legitimately used as showing the variations in the cost of living.” No party is bound by these tables as by a matter of absolute irrefutable law, but they are on the right method, and the court makes use ot them until it can find better evidence. The criticisms made hitherto on the Statistician’s findings are made under a misapprehension.
The important point is that the costofliving figure does not pretend to represent the cost of living in any particular family at any given time, for the purpose of fixing wages. , A base was taken in 1907, and the variations in cost of living have been measured by the index figure and applied to the base. So long as the lame facts are taken into account in each quarter and year, we have something which is a fair approximation to the variation in relevant factors.
– Assuming that the base maintains the same ratio to the whole?
– I can deal separately with that point. This method has been criticized and challenged from time to time, in particular by reason of the fact that it professes to deal with only 60 per cent, of the expenditure of the workers, it being assumed that the other 40 per cent, varies directly with the 60 per cent. Even the 60 per cent, is not complete, for it professes to represent only samples, and not all the articles which are used by an ordinary family. Those samples are regarded as fairly representative and least likely to extreme variation. It must be admitted that the 40 per cent, does not vary in the same manner as the 60 per cent.
The Leader of the Opposition gave an example showing how the decrease in the price of sugar operates not only in relation to the 60 per cent., of which it is a part, but also in relation to the 40 per cent., to which it has no direct relation. I could give an example the other way. The destruction of the potato crop in Tasmania three or four years ago caused an alteration to the cost-of-living index figure which is said to have added some £3,000,000 to the wages paid throughout Australia. However highly we might value potatoes from Tasmania, I think that £3,000,000 would have bought the crop over and over again. The result is that although the figures are open to criticism, they work in one way at one time and in another way the next time, and appear to have been fairly well evened.
The effect of the cost of living is to keep real wages at an approximately constant value. I share the feeling of the honorable member for Denison (Mr. Hutchin), that though we must have some rule in the matter, this method of fixing wages has the actual result of making it difficult for the worker to obtain a real improvement. When I have said that to some audiences, I have been howled at for opposing the interests of the workers. I have often pleaded for a less mechanical method of dealing with these matters,” but I shall not go into the old controversy as to the value of the Commonwealth Arbitration Court and its methods. So long as the cost of living went up, this was regarded by the trade union movement of Australia as a wonderful method. [Leave to continue given.] In those days, some of us pointed out that there would be a different story when it worked the other way. It is now working the other way. There is the real difficulty that has been referred to, particularly by the honorable member for Denison, that in our existing system, certain parts are rigid, and others are flexible; some are moving and others are fixed. The lack of correspondence between the variation of such items as wages and payments to lodges and building societies is one of the greatest difficulties confronting the community. Interest generally is a relatively fixed item.
As to the proposal that there should he an inquiry, I point out that every speaker who has supported the suggestion made by the Leader of the Opposition has called attention to some criticisms, actual, or possible, of this manner of fixing wages, but. T listened in vain for an alternative suggestion. It certainly was suggested that the method of collecting the figures might be examined.
– Also their application.
– I shall say a word on that in a moment. Obviously, we are not able to discard this standard until we get something else. A very interesting criti cism was written on the prevailing method by Mr. P. J. Clarey and Mr. H. C. Gibson, of Melbourne, and the Scullin Government asked the Acting Commonwealth Statistician, Professor Giblin, to examine the whole subject. I venture to remind honorable members of the publication entitled Wages and Prices, a short examination of the accuracy of the retail price index-number used in the adjustment of wages. It was published by the Government Planter in 1931, and is available to honorable members. Therein we have the result of an examination of the subject by Professor Giblin who was, I suggest, quite as competent as anybody else that we are likely to find to deal with the task.
– Without disparaging Professor Giblin, it is admitted that he did not have the opportunity to go fully into the subject.
– I shall read only one short extract from his report. In dealing with one of the most important criticisms, he wrote -
The “ regimen “ has nothing to do With any standard of comfort-
It is a common misunderstanding that it has. Professor Giblin continued - it is simply a choice of goods selected as most suitable for measuring as accurately as possible the movement in retail food prices. There is no evidence at all to show that the price index *o made has worked prejudicially to the wage-earner. It is not of course a perfect measure of the variation of consumers’ costs for all individual consumers or for all classes of consumers. But where it is against a consumer in one movement of prices, it favours him to an equal extent when prices move the opposite way. We are all naturally sensitive to present ills and forgetful of past benefits.
– When the figures were going up the workers never had a chance of getting ahead of them. Where is the advantage to them?
– I have shown that in the case of potatoes there was a gain, whereas in the case of sugar there was a loss.
I conclude by saying that, so far as the Public Service is concerned, there will be a reconsideration in connexion with the preparation of the budget of the reductions that have been made by the late and the present Governments. Honorable members are well aware, of course, that the determination of a standard, and its application, in connexion with the fixation of other wages, rests entirely with the Arbitration Court, and that this Parliament has no power whatever to legislate upon that matter, nor to affect in any way the action taken by the court. It would be possible to have some sort of further inquiry. I suggest, however, that the court is as well equipped - particularly after hearing the evidence of all the interested parties - for the determination of this matter, as anybody that could be discovered in the Commonwealth. An inquiry into this very matter has just been held by the court. Both sides were represented upon it by, I presume, the strongest advocates procurable. Evidence was placed before the court, and it will make a determination with respect to the matter. Shouldt he court require, or indicate that it would be desirable to have, further statistical assistance, or an additional economic inquiry, I assure the House that the Government will most favorably consider the matter. But in view of the fact that a fairly exhaustiveinquiry was recently made by the Acting Commonwealth Statistician, Professor Giblin, and that the matter is now under the consideration of the Arbitration Court, the Government is not prepared at the present time to make any announcement indicating that there will bo any other form of investigation. The discussion this afternoon, however, has been useful, in that it has perhaps assisted in some degree towards the elucidation of a most difficult and interesting problem.
Question resolved in the affirmative.
House adjourned at 5. 38 p.m.
The following answersto questions were circulated: -
s. - Replies will be furnished at an early date to questions asked upon notice by the honorable member for Echuca (Mr. Hill), in regard to the supervision of grants to the States under the Federal Aid Roads Act.
n asked the Prime Minister, upon notice -
In view of the serious effect the continuous reductions in wages are having upon the industrial life of the whole community, will the Government have an investigation made into the methods by which the cost-of-living index number is ascertained, and also its application by the Arbitration Court?
– This matter will receive the consideration of the Government.
n asked the PostmasterGeneral, upon notice -
Will he immediately remove the administrative difficulties which prevent the issue of free wireless listeners’ licences to blind and invalid pensioners?
– The Government is naturally sympathetic in this matter, and the cause of withholding free licences is not one of administrative difficulty, which could be removed as the honorable member suggests. Nevertheless, asI have already intimated, the subject will be examined again in connexion with the budget for 1933-34.
s. - The honorable member for Kalgoorlie (Mr. A. Green) has asked certain questions, upon notice, regarding the production of mother-of-pearl shell at ThursdayIsland, Darwin, and Broome. Replies will he furnished as soon as possible.
Surplus Military Clothing.
s. - On the 26th April, the honorable member for Newcastle (Mr. Watkins) asked whether the Government intended to distribute surplus military clothing and stores for the relief of the unemployed.
I am now in a position to inform the honorable member that all surplus army clothing has already been distributed. A small quantity of unserviceable, clothing and camp equipment becomes available from time to time, and this is handed over free of charge to the State governments in each State for distribution to persons in necessitous circumstances.
North-West Aerial Mail Service.
s. - On the 26th April, the honorable member for Kalgoorlie (Mr. A. Green) asked the following question, without notice- : –
Does the date of the contract entered into for the north-west aerial service in Western Australia expire in June next? If so, what steps are being taken to renew the contract?
I am now in a position to inform the honorable member that the term certain of the con’tract for the north-west aerial service expires in June next, but it is proposed to maintain the existing service until it is possible to give effect to the policy recently determined by the Government, based on the report and recommendations of the inter-departmental committee which recently investigated the question of air communications within and beyond Australia. This policy provides for inviting tenders in due course for all the services decided upon.
Coal Dump at Newcastle.
– On the 26th April, the honorable member for Newcastle (Mr. Watkins) asked the following question, without notice: -
In view of Hie fact that it quantity of British coal dumped at Newcastle is gradually deteriorating, because of exposure to the weather, will the Prime Minister instruct the officer in charge of the dump to release some of the coal so that the unemployed may have a little warmth during the coming winter? 1 am now in a position to inform the honorable member that, during 1931 and 1932, some quantities of coal were released for charitable purposes, and sympathetic consideration will be given this winter to applications from local organizations at Newcastle for the issue of coal for the relief of distress. Such application’s may be made to the Mayor of Newcastle
s - On the 26th April, the honorable member for Hunter (Mr. James) asked - the following question, without notice: -
Will the Prime Minister make an inquiry and inform me whether Major Morice, commanding officer of the 1st Cavalry Division of Signallers, has invited citizens serving in that division of the Citizen Military Forces to become members of the New Guard? Will the right honorable gentleman also ascertain whether any such citizens have become members of that organization upon the recommendation of this officer?
I am now in a position, to inform the honorable member that Major K. M. Morice is an officer of the Citizen Forces, and it is not within the province of the! Prime Minister to demand a reply to such an inquiry as the honorable member has asked for. By enrolment in the Citizen Forces, citizens are not required to surrender any of their rights of citizenship when not in uniform or in the performance of their military duties.
Cite as: Australia, House of Representatives, Debates, 28 April 1933, viewed 22 October 2017, <http://historichansard.net/hofreps/1933/19330428_reps_13_139/>.