1st Parliament · 1st Session
The President took the chair at 2.30 p.m., and read prayers.
In Committee (consideration resumed from 8th July) :
Division VI. - Motels and Machinery.
Item 79. -Rails, fish-plates, fish-bolts, tieplates, switches, points, crossings, and intersections for railways and tramways, ad valorem, 15 per cent.
Upon which Senator Clemons had moved -
That the House of Representatives be requested to amend item 79 by adding the words “and on and after 1st August, 1902, 10 per cent.”
– I desire to corroborate the remarks of Senator Styles with regard to privatelyowned railways in South Australia. The Glenelg railway line, which was taken over by theGovernment, cost the State just twice as much as would have been required to purchase the land and build the line in the first instance. The Government should adhere to their proposal to impose a duty of 15 per cent, upon rails and railway material, because it is only by this means that the Commonwealth can exercise any control over syndicate-owned railways in the various State’s. A movement is on foot in South Australia at present to grant concessions to a syndicate, in consideration of their constructing a railway line from Oodnadatta to the Northern Territory. When such concessions are granted, they are generally of a sufficiently liberal character to enable those who obtain them to easily pay such a small duty as that now proposed. The spikes used in railway construction are not included in the item, but I suppose that they would come under the head of “fasteners.” Railway spikes, bolts, and fish-plates are being manufactured within the Commonwealth at the present time, and they should certainly be subject to a duty. The item we are now considering will not affect the States Governments, because if they have to pay a duty of 15 per cent, upon any railway material they may introduce they will be credited with the amount collected. On the other hand it will enable us to protect the iron industry and to secure some revenue from those who own private railways or engage in other enterprises in which railway material is employed. If no duty were imposed upon rails, or even if the imposts were reduced as proposed, it would be possible for the State Governments or private individuals to import railway material to the prejudice of any State-owned or other iron works which might be established in Tasmania or elsewhere, and I hope, therefore, that the 15 per cent, duty will be adhered to.
– I should like to have the opinion of the Vice-President of the Executive Council with reference to this proposal in its relation to section 114 of the Constitution, which reads as follows : -
A State shall not, without the consent of the Parliament of the Commonwealth, raise or maintain any naval or military force, or impose any tax on property of any kind belonging to the Commonwealth ; nor shall the Commonwealth impose any tax on property of any kind belonging to a State.
When this matter was discussed in another place the opinion was expressed that railway material imported for the use of the States Governments could be taxed by the Commonwealth, but, in my view,anysuch proposal would beobjectionablefrom two stand-points. In the first place, we should be creating work for the High Court, and causing unnecessary friction between the Commonwealth and the States ; and, secondly, it would be against the interests of public morality and of the finances of Australia generally if we taxed importations by the States Governments, because the price of railway material would be increased, and the States Governments would require to borrow considerably more money for the purpose of carrying out railway works. They would, in effect, borrow large sums of money in order to pay duties which they would afterwards pass into their own pockets as ordinary revenue. A more outrageous proposition could carcely be submitted. Referring to some remarks made by Senator McGregor, the States Governments have not always paid excessive prices for the railway properties which they have taken over from private companies. I had charge of a Bill which was passed by the New South Wales Legislature, authorizing the construction of a private railway in the vicinity of Sydney for a length of 12 or 15 miles. The construction of that line cost £50,000 - one bridge involved an expenditure of £15,000 - and, although the whole twelve miles were never built, the more expensive portion of the line was, and the Government bought the entire undertaking, lock, stock, and barrel, for about £22,500. In New South Wales for many years Bills have been passed authorizing the construction of works of this character, but all measures of this nature which are now passed by the New South Wales Legislature contain a limitation, authorizing the Government, after a few years, to take over the works at cost price, with 10 per cent, added, if it so desires.
– Does the Act having reference to the construction of the
Silverton tramway contain any such provision ?
-Col. NEILD.- I think it is exceedingly probable that in respect of the Silverton tramway no such proviso was enacted. The Act sanctioning the construction of that line was, I believe, passed before the New South Wales Parliament adopted the practice of authorizing the Government to take over such undertakings at cost price plus 10 per cent. .1 do not know whether I shall be able to secure any information from the Vice-President of the Executive Council in regard to this matter, as he is still absent from the chamber, and if not I shall vote for a reduction of the duty. Either this is a proposal to tax State property, or it is not. If it is not, the amount to be collected under it is unworthy of consideration ; but if it is, it is objectionable, first, because it seems to conflict with section 114 of the Constitution, and, secondly because it is unwise to place the States under the necessity of borrowing money to pay customs duties. The section to which I have referred contains the words, “ any tax on property of any kind.” Surely rails come under the heading of “property”; to use a legal term, “chattel property.” Moreover, a decision was recently arrived at in another place which forbids any hope being entertained that the iron industry will be established within the Commonwealth for a long time to come. Certainly no State Government is likely to embark upon the production of iron, and private enterprise cannot do so if it is to be subjected to such serious disabilities as the possibility of State Government opposition, or competition. Quite recently people who had command of large capita], who had ordered machinery and who had everything in readiness to carry on the industry, came out from England to New South Wales with the intention of commencing operations upon a very large scale. However, in consequence of the decision which was arrived at elsewhere, they became frightened, cancelled all arrangements, and are returning to the old country.
– The subject to which Senator Neild has referred was brought forward in the debate of yesterday, and all the points which he has endeavoured to make were made by Senator Pulsford, not perhaps with so much rhetorical fullness, but still with precision, and in a sufficiently clear manner to be understood by all members of the Senate. I stated last evening that the better opinion up to the present time is that the expression “property,” in- section 114 of the Constitution, does not cover imports of this kind. During the bookkeeping period, if duty were collected upon State imports, it would be returned to the States at the end of each month, so that they would not be placed at any disadvantage. Senator Neild thinks that the Government proposal is a very objectionable one, because rails would be imported and paid for out of borrowed money, and a certain amount would go to the States by way of revenue. What is objectionable in that 1 A great many enterprises are carried out in Australia by means of borrowed money, and I have never yet heard the argument advanced that the people who undertake those works ought not to pay whatever duty the States have levied upon the material imported. We have been reminded that up to the present the raw material has not been produced in Australia. That is true ; but we hope that it. will be, and the Government propose that for a time, at all events, the raw material shall bear a duty of 10 per cent. Under these circumstances, is a duty of 15 per cent, upon the manufactured article excessive? Last night I asked the Senate to contemplate the probability of the great iron industry becoming established. If it is the intention of Parliament to take certain steps to assist in bringing about that result, is it desirable that at the present time we should ‘ refuse to give the proposed ‘ encouragement to works which are already established? There is an iron foundry at Lithgow, in New South Wales, which, I believe, is in a somewhat precarious position, and the probability is that a duty of 15 per cent, might enable it to continue operations. Whilst we are contemplating the establishment of this great industry, is it wise that we should go out of our way to hasten the downfall of works which are already in existence ? I think not. If we take any step, it should be in the direction of ensuring the maintenance of the iron industry. No enterprise’ can, in a sense, be considered more valuable to a country than can the iron industry, for the reason that it is the base of nearly every other industry. If we wish to build up a nation, we cannot too early endeavour to secure the firm establishment of that industry.
– ThePostmaster-Generalhas spoken as if it were a foregone conclusion that Parliament would adopt certain duties which are proposed in the Tariff, and that the Bonus Bill would be passed in an acceptable form. But the Bonus Bill may not be passed at all. We cannot be blind to the fact that at present that measure is in a very precarious position. The motion now before the committee is in perfect consonance with the decision which has already been arrived at by the Senate concerning a reduction of the duties proposed by the Government upon certain lines. We know that in New South Wales the iron industry has existed for a number of years without any adventitious State aid. Surely, therefore, a 10 per cent, duty will be of material assistance to it. I think that logic is entirely in favour of the duty proposed in the motion. Whilst I recognise that it is desirable that industries should exist in the various States, I wish to see those industries flourishing under healthy, and not under artificial, conditions. I am convinced that the resources of our States are such that if these industries are only allowed a fair field, they will become securely established, and will be able successfully to compete either in their own markets in the States or in the markets of the world. If theBonus Bill be carried, and Parliament considers that some additional duty should be placed upon this particular class of metals it will be entirely in its hands to deal with the matter at a future period. But if -that measure be not passed, we shall be charging 15 per cent, upon rails, fish-plates, and fish-bolts, whilst upon machinery generally we shall be levying only 10 per cent. I hold that we should not handicap any of our industries. Take, for instance, the case of our coal mines ; they lay down a good many miles of railways. There is an industry which is at once interested in the price of rails, fish-plates, fish-bolts, &c. The Government proposal, therefore, constitutes a severe tax upon that industry which is doing immense good in the interests of the States generally. Then, as Senator Neild has pointed out, we have to consider what would be the effect of this proposal upon the construction of railways. The point came up when the Customs Bill was under consideration, and it was urged that it would be very much better to allow the States to build their railways at the lowest possible price, rather than to add fictitiously to the charges. If we charge a duty of 15 or 20 per cent, on the materials imported by a State for railway construction that duty will, during the bookkeeping period, be refunded to it, but the original cost which stands as a debit against the State would be increased. That is not reasonable. The question of whether the States are liable to pay these duties will no doubt be determined by the High Court, and is not to be put aside in the light and airy manner adopted by the Postmaster-General just now, when he said that so-and-so was the law. The Constitution provides that the Commonwealth shall not tax the property of a State, nor shall a State tax the property of the Commonwealth. That provision, to my mind, applies as much to material which may be imported by a State Government as it does to real property, and we know that whatever legislation we may pass must come within the powers given to the Parliament.
– That is not a factor in this discussion.
– It has been introduced, but we may put it aside, because it is a matter which will be determined byandby. I submit that a duty of 10 per cent, on these materials which would place them on the same line as mining and agricultural machinery - and we have to remember that mines require the benefit of rail way communication with main lines and have to provide it at their own expense - would be a reasonable one, and I hope the committee will agree to the motion.
Senator Lt.-Col. NEILD (New South Wales). - I cannot allow the exceedingly lax proposition submitted by the PostmasterGeneral to pass without a reply. It is really astounding that an honorable and learned gentleman who has been trained in the highest school of thought should say that there is no difference between a private work, constructed with borrowed money, being carried out with rails upon which duty had been paid, and borrowing money to carry out a public work on the materials for which duty would also have to be paid. Cannot the honorable and learned senator see the difference between an actual charge, and a fictitious one? The actual charge would occur in the case of the private work in connexion with which the duty would be compulsorily paid, and would be part of the total. But in the case of materials required for a public work the duty would be -paid by and refunded to the very persons who were carrying out the undertaking, that is to say, the Government. They would themselves receive and use as cash the duty which had been paid with borrowed money. There is a great difference between the two things, and it is an unreal proposition that they stand on the same plane.
– I do not intend to discuss the question of the right of the Commonwealth to tax the property of a St’ate, for when I find eminent lawyers disagreeing as to the meaning of the section of the Constitution, I feel that to a certain extent it would be presumption on the part of a layman to give any definite opinion upon it. The question, however, is not altogether novel ; it has cropped up in America. I would remind Senator Neild that there is another section in the Constitution, which provides that when a law of a State overrides a law of the Commonwealth, the Commonwealth law shall prevail, and that I think has a bearing on the subject. However, as the Postmaster-General has pointed out, we need not trouble ourselves about the question, for when the proper time comes the law will be interpreted by a tribunal which will not only command respect but be able to enforce its decision. Senator Gould’s argument would be very good if rails, fish plates, fish bolts, and other articles mentioned in this item were not made here. We know, however, that in several of the States the industry has been established, and that it is struggling. It has been pointed out that rails have been manufactured at the Eskbank iron works, New South Wales, but I join issue with Senator Gould and other honorable senators from that State, when they say that the industry there has not enjoyed the benefit of any duty. In one sense that statement is true, but although the industry in New South Wales has not enjoyed the benefit of a protective duty, we know that the proprietors of the Eskbank Iron Works have been materially assisted by an arrangement entered into with them by the New South Wales Railway Commissioners. Under that arrangement the industry has received to a certain extent the protection which it would have obtained under a customs duty. Mr. Sandford has said over and over again, that but for the concessions received from the Railway Commissioners, and the peculiar position in which the industry is placed, they would not have been able to do anything.
– Those concessions were given to the industry at the expense of the community.
– Certainly ; but I think it would be better to help the industry by means of a customs duty. Rails have also been manufactured in Victoria at the Victorian rolling mills, West Melbourne, at Forman’s foundry, South Melbourne, and by Thompson and Co., of Castlemaine, who have special machinery for the purpose. If these firms receive some encouragement, they will be able, with the assistance of the machinery they possess, and aided by the experience they have gained, to supply, to a large extent, the demand for these materials. I am told that rails have also been manufactured at Brown and Brown’s foundry at Pyrmont, Sydney. Taking all these circumstances into consideration, I think we shall be justified in doing something to aid this industry. A 10 per cent, duty would be simply a revenue one, but nothing less than a duty of 15 per cent, can be of any assistance from the stand-point of protection. As pointed out by Senator Gould, there is some connexion between this item and one which we shall have to discuss later on, but whatever may be the resul t of the Government proposals in that direction, I think it is manifestly our duty to protect this industry, which is already in existence.
– I should like to invite the attention of Senator Neild to a few figures. He made what was seemingly a good point, but like many other free-trade arguments it will not bear examination. He said that a railway might be constructed by a State at a cost of £1,000,000, but nowadays we do not make railways costing so large a sum.
-Col. Neild. - We do in New South Wales.
– We used to do so a long time ago ; but we will assume that in New South Wales they propose to construct a railway 250 miles long at a cost of £1,000,000. That would be at the rate of £4,000 a mile, which is not a very great price, considering that in New South Wales the average cost is over £14,000 a mile.
-Col. Neild. - If the honorable senator looks at the latest returns, he will see that the cheaply constructed lines have reduced the average cost from £14,000 to something like £12,000 a mile.
– I do not know that that is of very great consequence. I wish to point out that even if 250 miles of railway could be constructed for £1,000,000, the permanent-way iron required for it would cost £165,000, on which a protective duty of 15 per cent: would amount to £24,750. A duty of 10 per cent., to which Senator Neild and his honorable friends are willing to agree, would amount to £16,500 on the same material; so that if I had taken the honorable senator’s own figures he would have been in a mess. The difference between a protective duty of 15 per cent, and a revenue duty of 10 per cent, on the material required for this 250 miles of railway would be only £S,250 ; so that all this fuss is made about a difference of £33 a mile. Does any one mean to tell me that of £33 a mile is going to make any material difference in the construction of a line costing £4,000 and upwards per mile ? What absolute nonsense it is to suggest such a thing. I desire to direct the attention of my honorable friends of the f ree-trade persuasion to a cablegram which appeared only the other day in the Age. When I read it I felt ashamed that the people of Great Britain, and more especially of England, the birthplace of the railway systems of the world, should submit to anything of the kind. The cablegram is as follows : -
London, 3rd July. Messrs. Nevins and Sons, a leading American firm, have obtained the contract for the construction of a line of electric railway from Manchester to Liverpool with branch lines, which will bring the total length of rails up to 147 miles. The contract price is £4,000,000. The conditions provide that all the materials shall be of American manufacture, but that only British labour shall be employed.
The British people are to do the drudgery of the work while the. astute American takes the cash. All the materials for the work are- to be imported from America into” free-trade England. I have no desire to reflect upon the Americans. I think they deserve every credit; but I do desire that our free-trade friends shall understand the effect of their policy upon the country from which most of us have sprung. I repeat that when I read this cablegram the other day I felt ashamed that the people of
England should submit to such a bargain with any foreign country
– I remind the honorable senator that Mr. Kingston admitted that if duties were imposed upon articles of this kind in the early life of the industry, the effect must be to raise the price. The effect being to raise the price, is it not manifest that it is our duty, in the interests of State development, to see that the States pay as little as possible for this material 1
– They get it all back again.
– The honorable senator forgets that the money will be returned upon a per capita basis after the .first five years from the establishment of the Federation, when the States will not get it back in the proportions in which they have contributed it. Western Australia may be building £1,000,000 worth of railways, and paying £50,000 in duties upon railway material ; but when the revenue is returned on the per capita basis she will not get back anything like the amount she will pay. I do not believe that the Commonwealth has any power to tax goods imported for the use of a State, because in the United States, without any provision of this kind and without any direct prohibition, the courts have held that no such imposition can be maintained. However, I do not think that comes into the question. The real question for us is this : Assuming that the States have to pay this duty, are we going to ask them to pay 15 per cent, or 10 per cent? Surely every industry in Australia, farming, squatting, mining, timber - getting, and every other industry, is dependent upon the development of railway communication? That being so, I shall record my vote in favour of the lightest tax which can be placed upon the shoulders of the States, in connexion with their development of the resources of the country by means of railways.
– Senator Ewing is very emphatic about imposing a low duty with a view to preventing the States paying a reasonable amount on the railway material they use.
– Not a reasonable amount, an unreasonable amount.
– I think 15 per cent, is not an unreasonable amount, and I should not think 20 per cent, unreasonable, if we mean to encourage the development of industries already in existence, and if we mean to give some heart to those who are thinking of investing their capital in this industry. I am as anxious as any honorable senator present to relieve my own State of unnecessary burdens ; but, as I said last night, there are private railway companies carrying on operations in Queensland and in some of the other States. Acts have been passed in my own State empowering mining companies to construct railways, some of them of considerable length. One of these railways, the Chillagoe railway, is almost completed, and is 90 odd miles in length. When speaking last evening, it was in my mind that there was a provision in the Acts empowering the companies to construct these railways that the materials used should be admitted duty free ; but I found upon looking over the Acts to-day that there is no such provision in any of them. I am very pleased that is so, because I think that the companies formed to open up these mineral fields arc entitled to pay a reasonable duty upon the materials they require in order that encouragement may be given to establishments such as that at Lithgow, and to others which we hope to see established at an early date. We have had New South Wales free-traders continually telling us that this industry has grown and developed until it has reached, importance in that State, without any aid or encouragement at the ports. We have heard the same statement again from Senator Gould to-day. We know that it is not a fact, and that, on the contrary, the industry in New South Wales has been encouraged in a variety of ways, as has been stated by Senator O’Connor time and again. There are on the Queensland statute-book several Railway Construction Acts which were passed at the instance of private mining companies. There are Acts authorizing the construction of the Gladstone to Callide railway, which will be 70 miles in length ; the Albert River, Burketown and Lilydale tramway - this is called a tramway because it is a line upon a narrow gauge, but will extend for a long distance ; the Normanton and Cloncurry line, about 200 miles in length; the Glassford Creek tramway, a line of considerable length, and the Mount Garnet Freehold Mining Company’s railway, another line of considerable length.
All these lines were projected by private companies, and why in the name of common sense should not those companies pay a reasonableduty upon the materials they will require ?
– Have these lines been built ?
– The Chillagoe line is nearly if not wholly completed., In some cases the necessary preliminary arrangements are being made with a view to construction, and I think the company interested is nearly ready to make a start with the line from Gladstone to the Callide coal-fields. I do not care where in the Commonwealth iron works are established, encouragement should be given to place them upon a substantial footing. I do not think a duty of 10 per cent, will be at all adequate for the purpose, and personally I should prefer that the duty should be even higher than 15 per cent.
Question - That the House of Representatives be requested to amend item 79 by adding the words “ and on and after 1st August, 1902, 10 per cent.”- put. The committee divided -
Ayes … … … 13
Noes …. … …8
Majority … … 5
Question so resolved in the affirmative.
Item 80. Rolled iron or steel beams, channels, joists, girders, columns, trough and bridge iron or steel, not drilled or further manufactured ; shafting, cold rolled, turned, or planished ; also bolts and nuts, advalorem, 15 per cent.
Barbed wire, ad valorem,, 10 per cent.
– I move -
That the House of Representatives be requested to amend item 80 by adding to the duty “ Rolled iron or steel beams …. ad val orem, 15 per cent.” the words “and on and after 1st August, 1902, 10 per cent.”
The articles which are dutiable under this item are mainly what is known as structural iron. They include girders, columns, and other materials used in the construction of large buildings. The duty, as it stands, is a very heavy bar against development. It ought not to be contained in any reasonable Tariff framed with the idea of allowing natural and proper development to take place.
– This item differs very much from that which wo have just discussed, inasmuch as previously it was proposed to put a duty upon an article which had practically been admitted duty free in all the States. But now the proposal is to put a duty on an article which has been taxed in every State except New South Wales in the past. Under the protection of such duties, industries have been established in a number of the States. The duty in Victoria has been £3 per ton, in Queensland 25 per cent., in South Australia £2 per ton, in Tasmania 20 per cent., and in Western Australia 15 per cent. Considering the duties which have been charged in the States previously, 15 per cent, is very moderate, and if it is cut down the result will certainly be an increased importation, and the destruction of industries.
Question put. The committee divided -
Ayes … … 11 .
Noes … … … 9
Question so resolved in the affirmative.
– I venture to say that barbed wire ought to be added to the list of exemptions like wire netting, but in view of the fact that we want to get on with business, and that the duty proposed is only 10 per cent., I am willing to let that part of the item pass.
Division VIa. - Metals and Machinery.
To come into operation on dates to be fixed by proclamation, and exempt from duty in the meantime, except as to iron, galvanized, plate and sheet. Proclamation to issue so soon as it is certified by the Minister, that the manufacture to which the.proclamation refers has beensufficiently established in the Commonwealth, according to the provisions of any law relating to bonuses for the encouragement of manufactures or to the establishment of manufactures under the direct control of the Commonwealth or State Governments, but no proclamation to issue except in pursuance of a joint address passed on the motion of Ministers by both Houses of Parliament, stating that such manufacture is sufficiently established.
Item 81. Iron and steel -
Scrap iron and steel, and pig-iron : ingots, blooms, slabs, billets, puddled bars and loops, or like crude manufactures less finished than iron or steel bars, but more advanced than pig iron (except castings) ; bar, rod, angle, tee, sheet, plate, wire and hoop, except galvanized plate and sheet, 10 per cent., ad valorem
Galvanized and tinned plate and sheet, ad valorem, 10 per cent.
Machinery, machines, and parts -
Reapers., and binders, ad valorem. 15 per cent.
Other machinery, machines, or parts, rereferred to in proclamation, ad valorem, 15 per cent.
Wire netting, advalorem, 10 per cent.
Iron and steel tubes and pipes, not dutiable underDi vision VI.,advalorem, 10 per cent.
Spelter, ad valorem, 10 per cent.
Senator PULSFORD (New South Wales). - It is very desirable that the whole of this division should be eliminated from the schedule. There are many reasons why the committee should, not accept it in its present form. In the first place, under the preliminary paragraph, legislation is proposed that is not to come into effect to-day nor even next year, but at the expiration of a period during which bounties are to be given, and which has not yet been agreed to, and seems very likely not to be agreed to at all. Surely the committee will not put itself into a foolish position by seriously entertaining a proposal of that nature. Even if the division is carried as it stands, the duties provided for in it can take effect only upon the resolution of both Houses of Parliament, so that several Parliaments may come and go before it has any practical operation. But why should we attempt to tie the hands of those who will come after us? Why should we take an action which is so unusual, and so repugnant to the ordinary principles and usages of legislative bodies ? Furthermore, we are obviously very much in the dark as to what the future development of the iron industry will be. We do not know, indeed, what the value of the iron ore of Australia is, or that it can be manufactured into iron as satisfactorily as we hope. Then, again, we do not know that the Commonwealth has anyright to impose duties upon materials imported by the States. The powers of the Commonwealth and the privileges of the States in that matter will not be absolutely known until the High Court has been established, and has dealt with the question. I believe, that notice of appeal has already been given by the Government of New South Wales against the imposition of duties upon railway material imported by them. That is another reason why we should postpone the consideration of this matter. The division involves the whole subject of bonuses, which is a very debatable one, and one which occupied the attention of the members of the House of Representatives for some days. If this Chamber has a desire to finish the consideration of the Tariff as soon as possible, it will, therefore, content itself with dealing only with such duties as can immediately become operative, and not spend any time in discussing proposals which can have effect only in the future, and which may never have effect at all. It is against the public interest that we should occupy time in discussing remote contingencies. It has never before been proposed in Australia to impose taxation upon pig-iron, and this does not appear to be a good time to begin to do so. I should like to know, too, how the Government can, by proclamation, impose duties upon articles which the committee decided shall be free. Under this division an attempt is made to impose duties upon reapers and binders, which every one whose judgment is to be relied upon thinks should be admitted free, and to impose a duty upon wire netting, which the committee decided last night should not be taken off the list of special exemptions. The Government have erected outside these buildings, to be illuminated to-morrow night, the motto of the Cobden Club -“ Peace on earth ; good-will to men.”
– Did the Cobden Club suggest those words to those who first used them?
– I hoped that the adoption of that motto by the Government was a sign of repentance, but I find that it is not. I move -
That the House of Representatives be requested to omit, on and after 1st August, 1902, the introductory note to Division VIa.
– Senator Pulsford has not occupied much time in giving reasons for his motion, and to me it appears that he has not gone more than skin-deep into the question. He does not seem to have realized that Division VIa. provides for not only the coming into force upon proclamation of protective duties, but the whole system by which the Government propose to encourage the manufacture of iron. Perhaps the honorable senator does not see the importance of these proposals because he does not understand them ; but I regard the division as one of the most important in the Tariff. That portion of the division which provides for the coming into force of duties at a future date is a necessary portion of the Government policy for the encouragement of the manufacture of iron. The honorable senator’s suggestion that the proposals are out of order can be refuted in one sentence. What we provide in the Tariff is that until this division comes into operation certain duties specified in other divisions shall have effect, and that when it comes into operation they shall cease to have effect. The Tariff must be read as a whole, and it provides that the articles to which Senator Pulsford has referred are to be admitted duty free until a proclamation with regard to them as issued under Division VIa. The honorable senator says that it is improper for us to endeavour to tie the hands of future legislators. That objection involves the whole policy underlying these proposals. The Government wish to provide for the granting of bonuses for the production of the various articles mentioned in the division ; but when, by the operation of these bonuses, the industry attains a sufficiently prosperous condition to enable these articles to be produced at reasonable rates, duties will be imposed which will give the manufacturers protection against the outside world, and the bonuses will cease. I think it will be admitted that, of all industries, the manufacture of iron is the most inportant. It is the backbone of all other industries. It is admitted that in regard to the amount of employment afforded, and its diversity, no enterprise can be compared with the iron industry. No nation can be said to have advanced to any fair degree of prosperity without being in a position to utilize its own natural supplies of iron and manufacture’ a large portion of its requirements, and in no country has the iron industry ever been established without the assistance of either protective duties or bonuses. Inasmuch as it has been worth the while of America, and Canada, and other countries to either subsidize the iron industry, or to impose very heavy protective duties for its encouragement, we are justified, in following the same policy here, in assuming that the same results will follow. Why is it necessary to offer encouragement for the establishment of the iron industry at this early stage? Because the manufacture of iron under present-day conditions necessitates the employment of very expensive plant and machinery. The best of labour and timesaving appliances have to be used so that the product may be turned out at the lowest possible cost, and it is only by the expenditure of a large amount of money that this result can be attained. It is estimated that the value of the plant that will have to be laid down in any ironworks that may be established here will amount to anything from £500,000 - at the very lowest - to £1,000,000. The capital required to carry out the works now projected at Lithgow will amount to something like £750,000, of which £350,000 will have to be spent upon new plant. In other places it may cost more, and perhaps in some instances it may cost less, but. in order to establish anything like an efficient plant for utilizing our native ores from £500,000 to £1,000,000 will be required. Then we have to consider whether it would be worth the while of capitalists to invest such a large amount of money without protection or encouragement of any kind. What is the position ? As we all know, pig and other iron in an unmanufactured form is brought here for the most part in sailing ships. A comparatively small proportion is conveyed here in steamers. It is frequently used as “stiffening” in the loading of sailing ships, and is subject to no freight charge whatever. In some cases freight may be charged, but the ratesare not comparable with thoselevied on, other classes of cargo, and the great bulk of the pig-iron and other rough classes of iron brought here from abroad are not subject to a charge of more than1s. or 2s. per ton for freight. Therefore, these classes of material may be landed here at a cost of 1s. or 2s. over and above the price f.o.b. in the home ports. This would apply to American iron as well as to that which comes from England, Scotland, or Europe. Under these circumstances, what my freetrade friends are so fond of calling the “natural protection “ practically disappears. The freights upon iron imported from abroad have, when we are discussing the position of our own manufactures, to be compared with those which would require to be paid for conveying the local product from one part of Australia to another. I take it that any local ironworks, if they are to be successful, must have an Australian business, because no enterprise of the kind would have a sufficient scope for its operations in the market of any one State. It is highly probable that different classes of iron will be manufactured in different parts of Australia, and that the products of the various works will be conveyed from one State to another, according to their suitability for a given purpose. The iron made at Lithgow, for instance, may be specially adapted for some work, but may not be as good for other purposes as that which it is intended to manufacture at the Blyth river. We will assume that pig-iron is being made at Lithgow, which will be suitable for manufacturing purposes in Brisbane, Adelaide or Melbourne. Certain freight and railway charges will have to be paid to secure the con veyance of the Lithgow iron to these places. I find that it would cost at least 7s. 6d. per ton to convey pig-iron from Lithgow to Melbourne, as against the1s. or 2s. per ton charged for the conveyance of the same class of article from, say, England to Melbourne. The railway charges and freight upon pig iron conveyed from Lithgow to Fremantle would amount to 17s. 6d. per ton, whilst upon pig-iron conveyed to Brisbane the charges would probably amount ‘to 7s. 6d. per ton. If the local manufacturers of iron are to carry on an Australian business, it is necessary to compare the freight and other charges which they will have to pay with those to which iron brought from other parts of the world would be subject, and it cannot be gainsaid that the natural protection that is so often spoken about is hardly a reality in the case of English, American, or Scotch iron. On the other hand, the local manufacturers will be placed at a great disadvantage in the matter of freight and charges.
– It would cost nomore to send iron from the Blyth River works to Melbourne than from England to Melbourne.
– I do not suppose that the whole of the Australian business in iron will be carried on by the Blyth River Company. No doubt their business will be very extensive, but iron manufactured in other places will probably be found more suitable for certain purposes. At Blyth River there are greater facilities for shipping than at Lithgow ; but in the case of iron shipments from the Blyth River to Fremantle, or Brisbane, or to any of the northern Queensland towns, where iron is largely used, the freight would be considerably more than from England. Assuming that a factory capable of turning out pig-iron were established at Melbourne, the freight upon that .product from Melbourne to Fremantle would amount to I83. per ton. The freight to Sydney would be 7s. 6d. per ton, to Launceston 7s. 6d. per ton, and to Hobart 10s. per ton. That is the position in which we stand in regard to one of the most important items intended to give what is called “ natural protection.” Another matter is the cost of production. Mr. Jaquet, the expert who has been employed in New South Wales to report upon the question of iron production, estimates that the cost of producing a ton of pig-iron at Middlesborough in England, is £2 12s. The cost of the production of a ton of iron at Pittsburg is £1 12s. 5½d., whereas at Lithgow it is £2 7s. 7d. At -the latter place, therefore, the cost of production is 5s. per ton less than that at Middlesborough, and about 5s. more than that at Pittsburg. When one remembers the freight charges upon iron brought from England and America to Australia, it will be seen that the difference in the cost of production places our manufacturers at a still further disadvantage as compared with the American, and that, although the local cost of production is less than that of English iron, it certainly does not more than compensate for the extra freight charged between the various ports of Australia. Therefore, before spending from £500,000 to £1,000,000 in an enterprise of this kind, any person would naturally be careful to study the position in which he would stand in regard to competition with the outside world, and would want to be assured that he would gain a large portion of the Australian market. Unless he were absolutely certain of securing that market, either immediately or in the course of a few years, it would be idle for him to enter upon an industry of this character. Where he has - as in the case of America and England - practically an unlimited market, the case is quite different ; but where the market is a limited one, and a manufacturer would have to contend with the rest of the world, undoubtedly he will hesitate before investing a large amount of money in an enterprise of this kind. The only way in which we can secure the Australian market to our own people is by imposing such a heavy protective duty upon the manufactures of iron as will prevent any effective competition from outside, or by granting a bonus for a certain period to enable them to compete upon something like favorable terms with manufacturers all over the world who are sending their “material to these States. There .is one very strong reason why we cannot at once apply the protective method. As we all know, iron, is the raw material of an immense number of industries. Perhaps it will assist honorable senators to realize the extent of this industry if I give a few illustrations of the quantity of pig-iron which is involved in certain classes of imports. I have in my hand a list - which is at the service of any honorable senator who desires to peruse it - dealing with all the principal heads of iron manufactures imported into Australia. Let me take the class of imports with which we are most familiar, namely, that of agricultural machines and implements. Taking the value of pig-iron landed in Australia at £2 15s. per ton, I find that in 1.899 the net value of the agricultural implements imported into Australia was £343,205. A gentleman who is the manager of one of the leading iron foundry businesses here, and who is a thoroughlypractical man, estimates the quantity of pig-iron contained in manufactures of that value at 7,550 tons, which are worth £20,762. The value of fuel and material he calculates at £154,440, and the added value given to it in the course of other processes - chiefly by labour - at £188,765. Let me take another large item, namely, that of iron, galvanized and sheet, which is the class of iron now being manufactured at Lithgow from scrap. The value of the imports of this class of iron in 1899 was £819,558, involving the use of 53,000 tons of pig-iron, worth £145,750. The value of fuel and other material used in its manufacture is estimated at £368,802, and that of labour at £450,756.
– Those figures exceed the total you have given.
– There is, I see, a mistake somewhere. From these figures senators will realize what an immense quantity of pig-iron is involved in our annual imports of manufactures of iron, and what an enormous amount of labour must be employed in obtaining it. According to the figures used by the Minister for Trade and Customs in the other House, these imports in 1899 aggregated a value of £5,521,501, involving the use of 330,876 tons of pig-iron. When we find that the conditions under which the iron manufacturer must start operations in Australia are such as. to place him at a disadvantage in many cases as compared with the manufacturer of iron in America and other places, it will be seen that it is impossible for him to predict with any safety that if he invests £500.000 or £1,000,000 in this industry he will secure a large share of the Australian market unless State aid of some kind is extended to him. The reason why it was evident to the Government that it is impossible to protect the iron manufacturer by the immediate imposition of a protective duty is that the first effect of any such duty must necessarily be to considerably increase the price of that commodity to the consumer. All protectionists admit that the initial effect of a protective duty, before there is an extensive local production, must be to raise the price of any article. Therefore, the immediate effect of imposing a sufficiently heavy duty to protect the iron manufacturer would be to materially enhance the price of the raw material of many industries in which thousands of citizens of the Commonwealth are employed. It is impossible to begin in that way. The Government therefore adopted the only other method possible, namely, that of offering a bonus for the production of iron until the industry had been put upon its feet. Then, when it has become fairly established, we may fairly impose a duty which the consumer will not feel, but which will be a guarantee to the manufacturer who has embarked his capital and energy in the enterprise that a certain measure of protection will be continued to him. The system must be a continuous one. In the first place, therefore, we propose to offer a bonus to assisthim to put his factory in a stable condition, and afterwards we purpose imposing a protective duty to enable him to carry oh his industry and to successfully compete against the influx of pig and other iron from other parts of the world. That being so I think that if the honorable senator who offered this objection looks at the matter fairly, he will see that this is not a case in which we are anticipating what other Parliaments will do, or one in which we are interfering improperly with the discretion of future Parliaments; but that it is a case in which we are following the only method that can be adopted in order to give practically a guarantee on the faith of the nation that this protection and this advantage shall extend for a certain number of years. We cannot expect any person to invest a large amount of money in such an industry as this if the policy of the country may be changed from year to year. Unless we have some permanence, some stability about our policy, we shall not attract any capital into the industry.
– The capital is going the other way now.
– I hope that it will come this way if we pass a proposal of this kind, and I hope that amongst other things the lessons of the last few years will come home very strongly to the minds of those who desire to confine the energies of the Commonwealth to the very few occupations which they term the primary industries. If there is any lesson to be learned from the seasons which we have experienced recently, it is that the more diversified the employment of the people, the less they are likely to be directly dependent upon the seasons - although, of course, we must always be more or less dependent upon them - the better it will be for the prosperity of the community.
SenatorFraser. - Unfortunately we are killing some of the industries that ought to flourish.
– Unfortunately that is so. But we have to do the best we can, and this is a question which ought to be looked at from the point of view of the employment of the people of Australia. It does not involve any of the disputed questions of free-trade or protection to such an extent that any honorable senator may not depart from the rigid lines of either freetrade or protection in order to carry out a policy of this kind. What could be more important to the Commonwealth than the means of employment of its people ? What could be more important than that our own people should be put in the way of developing the vast and rich resources of this continent, which cannot be opened up unless an opportunity is given to the labour of the country to operate upon them ? They must lie as useless as the most barren piece of country could possibly be, unless our policy is so arranged that they can be used profitably. The experience of all countries shows that we cannot expect the growth of the iron manufacturing industry without some artificial encouragement either by way of bonus or protection, or both. Let us look for a moment at the illustrations afforded by other countries, which establish beyond all question the proposition I laid down at the beginning, that, so far as we know, no country has ever started prosperously the manufacture of iron unless under some system of protection or bonus. As we all know, Great Britain established her iron works under a protectionist regime, and the manufacture of iron from iron ore there had acquired a very considerable development before the era of Cobdenism. Is it possible to suppose that America would have developed her iron industry as she has done without the high duty in force there?
– It has taken America 100 years to develop it.
– Undoubtedly, and America would not have developed the industry in 200 years but for the protective duties which were imposed, and which shut out iron from other countries. The case of Canada is even stronger. Although the iron industry had been in existence in that country for a number of years, nothing much was done with it until it was encouraged by a bonus and a protective duty. The bonus began to operate in 1883, and I think the protective duty came into force in 1879.- From the time at which the bonus system began to operate, the development of her iron ore has certainly been very remarkable. The bonus was 3 dollars, or about 1 2s. per ton on pig-iron made from native ore, and 8s. per ton on that made from foreign ore. The greater quantity of the foreign ore came from Newfoundland, which, at that time, was not within the Dominion, and therefore was classed as a foreign country, although geographically it was as much within the Dominion as Tasmania is part of Australia. Probably theretheimportof the rawmaterialfromNewfoundland would be very much in the same position commercially as the import of iron pre from Tasmania would be here. Of course the Canadian Government desired to give greater encouragement to the production of iron from the native ore, and for that reason made the difference of 4s. per ton between the two classes. The result of that bonus has been an enormous increase year by year of the output of manufactured iron.
– Has the honorable and learned senator got the quantities?
– I think I have. Canada has become an exporter of pig-iron as well as a manufacturer of it for its own use. I find that the export of pig-iron from Canada in 1892 was only 3 tons; in 1893, 12 tons; in 1895, 259 tons; in 1896, 1,940 tons; in 1897, 2,627 tons: in 1898, 2,403 tons ; in 1899, 2,188 tons ;and in 1901, 5,623 tons.
– Five thousand tons at £3 per ton would be only £15,000, which seems to me to be most contemptible.
-The honorable senator appears to forget that I am dealing only with the quantities of pig-iron exported from Canada, but the manufacturers there also supply a very large proportion of the local requirements. In addition to that, the export of iron, in the way of agricultural implements and machinery, from Canada to Australia and other places is in itself very large, and involves the consumption of a large quantity of pig-iron. There can be no question that in the course of a very few years the increase in the production of pig-iron there has been very large indeed. I have been dealing with exports, and I propose now to show the increased production which has taken place since the granting of the bonus. The manufacture of pig-iron from native ore increased from 29,000 tons in 1883, up to which time there was no bonus, to 34,000 tons in 1900. In 1883 no pig-iron was manufactured in Canada from Newfoundland ore, but in 1900 the output consisted of 67,000 tons, making a total increase of about 72,000 tons in the output of iron manufactured in Canada in 1900 as compared with 1883. That result is certainly by no means contemptible. If we wish to place the iron industry here upon anything like a reasonable footing, and to give that measure of permanence and certainty to our policy which is necessary before we can induce capital to be invested in such an enterprise, it is necessary not only to encourage it by offering bonuses, but to afford a continuance of that encouragement, when the bonuses are no longer necessary, by means of a protective duty. This is a question in which every part of Australia is interested. I have already referred to Lithgow, and it is well known that in the Orange district, and other parts of New South Wales, there are rich and very extensive deposits of iron ore. We know already that the Blyth River iron ore - which is in some respects, I suppose, the best in Australia - is very accessible, being within some 7 miles of a port; and that the conditions there are such as make cheapness of production and ease of carriage a matter of certainty. In portions of Queensland - in Cloncurry, for instance - we know that there are large and rich deposits of iron ore.
– Cloncurry is about 300 miles from the coast and from a railway.
– That is a very strong reason why some bonus or encouragement should be given.
– What would it cost?
– I am not dealing with that particular iron just now ; I am simply pointing out how important it is for Australia that some kind of encouragement should be given to the industry ; that not only New South Wales and Tasmania, but other portions of Australia, are affected by this proposal. Surely honorable senators do not desire to decry and sneer at the riches of their country? It may be that the deposits of iron ore at Cloncurry are at the present time a long way from a railway, but I hope that if these industries are established on a fair and reasonable footing, means will be found to make production pay in all these parts, We have the best possible guarantee in regard to these deposits in Australia in two of these places. We know that the working of the Lithgow deposits has been practically assured, subject to the passing of this Bill in its present form and of the Bonus Bill. We know that, subject to those conditions, a company has actually been formed to carry out an undertaking involving an expenditure of capital to the amount of £750,000, and other expenditure in machinery, bringing the amount up to very nearly £1,000,000. I dare say honorable senators from Tasmania will bear me out with regard to the Blyth River mine, that it has been stated that if this policy is established there will be no difficulty in floating a company to take up that project also. The operations in both these places will give employment to a large number of men. The employment of at least 3,000 men in the works at Lithgow, and I presume a similar number at the Blyth River is absolutely assured, if some protection and encouragement of this kind is given. I shall probably, later on, have something to say in answer to the criticisms which may be offered upon this proposal ; but I do ask the committee to consider this matter from an Australian point of view. I ask.honorable senators to consider it from the point of view of securing diversity of occupation, and of giving employment to as many as possible of the citizens of Australia. I ask them to consider that this is. a matterin which the interests of every portion of Australia are deeply involved. We ought now to be prepared to lay down some system which shall be continuous for a certain number of years, in order to induce the investment of capital in this industry by insuring a market here for its products. Without that it will be impossible to have capital invested in it. I hope that this proposal will pass in its present form. Allow me to say, before I sit down, with regard to a suggestion made by my honorable friend opposite, that in the first place, this provision, in its present form, does not necessarily depend upon the bonus, proposal being carried out in the particular form embodied in the Government Bill.
Whatever the proposals of the Bonus Bill may be, whether they apply to individuals, or to a Government, either of a State or of the Commonwealth, they will be read into this provision. The position, therefore, is this : If the Bonus Bill is passed, either in the form of assistance only to a State or Commonwealth industry, this provision will apply ; and if it is passed in such a form that it will apply to individuals as well as to State industries, this provision will also operate in that case. For these reasons it is not necessary for me now, or at any part of the discussion upon this division, to enter upon the question of the particular form which the Bonus Bill is likely to assume. It will be seen that the matter is not left to the Minister, but that no proclamation is to be issued except in pursuance of a joint address passed upon the motion of Ministers by both Houses of Parliament, stating that such manufacture is sufficiently established. So that it will be for Parliament to discuss the whole of the circumstances; and to consider whether the industry is so established, that iron may be obtained from these factories in such quantities that the numberless industries which depend upon iron as raw material shall not suffer in any way by the imposition of the duty. Both Houses will have the whole of that question open to them, and there, therefore, need be no fear that this will be given effect to at a time when the manufacture has not been sufficiently established, or at a time when it will be likely to press hardly upon any persons using iron as the raw material of their manufactures. I repeat that I hope that this portion of the Government proposal will be carried as it is. If it is carried there will be no more important provision in the Tariff, and none which will lead more directly and extensively to the employment of the people of Australia.
Senator PULSFORD (New South Wales). - I wish, in the first place, to put myself right with the committee. In regard to the first division which took place it was left for me to arrange a pair for Senator Fraser, who could not be present, but unfortunately I neglected to do so. The division then taken, instead of being decided by thirteen to eight, should have been decided by twelve to eight. The fault was wholly mine, and I apologize to Senator Fraser and to the committee for it. With regard to the matter now before us, it appears that all my efforts fail to keep the debate within reasonable limits. When I referred to this matter, I did so in very brief terms ; but Senator O’Connor chided me for having dealt with it so briefly. It is not the first time by several that I have made propositions in very brief terms, with a view to saving the time of the committee, and have been reproached for having spoken with such brevity. I was very much struck with Senator O’Connor’s remark that he hoped there would be works established all over Australia. If there is any one fact fairly well established, it is that one large establishment of this kind is capable of producing enough iron to supply the requirements of the whole of Australia. That is. not a matter open to question. It is a practically accepted fact, and therefore we need not, for a mement, be under the delusion that if the scheme of the Government is carried out, works of this kind can be established in many places, or that even one can be established in each State. That is absolutely impossible, and the only result of the scheme the Government have in hand may be the establishment of one large works which will supply the whole of the Commonwealth. One State will be benefited, and every other State will have to contribute to the maintenance and success of that establishment. Honorable senators will see how unnecessary it is that we should proceed to burden ourselves in the way we are asked to do, with a view to the establishment of this industry. In New South Wales some time ago, a free-trade Government entered into ‘ negotiations with a Mr. Mitchell, and it was proposed that New South Wales should buy 150,000 tons of steel rails, delivery to be at the rate of 15,000 tons per year for ten years. The price was to be the London price, plus the cost of importing. This agreement would have been carried out, and the works would now have ‘been in existence, if the consumption of this material in Australia had been larger. If the whole of the railway wants of Australia had had to be provided for, the works would have been established, but the New South Wales Government could not buy more steel rails than New South Wales herself required. For this reason, after a long time,, the proposal resulted in failure; but if there had been a sufficient demand, those works would have been established in New South Wales at that time, without any bonus ,and without any protective duty.
– What is the honorable senator’s authority for that statement ? It is utterly unfounded.
– I am sorry the honorable senator should say so. The position was as I have stated it, and the works would have been established if a larger demand could have been guaranteed. My authority is found in the records of New South Wales, which may be seen by any one who cares to refer to them. Senator O’Connor agrees that the imposition of duties upon the materials named in this list will, at first, cause an advance in the price. It is admitted now that the imposition of duties will raise the price. If anything, at all has been noteworthy in the course of the Tariff debates, it has been the remarkable disappearance of the mysterious and generous foreigner who has always been relied upon by protectionists to pay the duty. We have always been told that we need not trouble about the duty, because the foreigner pays it. He has disappeared now, and we are face to face with the fact, which is more or less admitted by the Government at last, that if a duty is imposed, the people must, as a rule, pay it. Senator O’Connor qualifies the statement by saying that they must pay it at first ; but that after we get our grand protective scheme the goods will be sold at the old price. If they can be sold at the old price, they can be produced at the old price ; and if they can be produced at the old price, why should we be asked to subject ourselves to this extra taxation? I. grant the importance of the iron industry. I grant its power of giving, a great amount of employment; but we must remember that iron and iron-ware areused in every industry throughout Australia, except, perhaps, in the soft-goods trades. Are we to put the whole of the producing industries of Australia under a burden for the benefit of one industry ? The great principle which we free-traders are fighting against is that of taking every industry in order that one may be benefited. The Government are taxing everywhere in the hope that from universal taxation universal prosperity may result. With regard to freights, Senator O’Connor said that it cost 17s. 6d. a ton to carry iron from Sydney to Fremantle, and 18s. a ton to take iron from Melbourne to Fremantle, whichrates are far and above the cost of bringingiron from England to the same port. He, therefore, argued that the people of Western Australia ought to confer a big benefit upon the eastern States instead of being able to take advantage of low freights from Europe. Such considerations are ‘ necessarily involved in schemes like this, if we will not allow trade to take its ordinary course and to flow in the various channels of commerce which have been followed for so many years, but embark upon schemes which will make dearer the materials consumed, and will increase the cost of the rail ways constructed. The greater the cost of the railways, the greater must be the freights and fares paid to bring into the Treasury the amount of money required to meet the interest due. This is a scheme for taxing the people in order to benefit one given industry, in the hope that prosperity may thereby be evolved. I submit that the scheme is one which, instead of promoting the prosperity of Australia, will, by taxing its industries, lessen its prosperity. I therefore hope that the committee will not entertain the proposal of the Government.
– The honorable senator who has just treated the committee to a second oration tells us that the proposed scheme will increase the cost of all iron manufactured in Australia by opening up the Lithgow valley mines. I gave an illustration a little while ago of how protectionist America is sending steel and iron to England, and a few days ago I gave another illustration of how Americans constructed the underground “ twopenny tube,” as it is called, from the Bank to Shephard’s Bush in London, the whole of the metal and material for which was brought from America to free-trade Great Britain. Iron, like cotton, is one of the two great necessities of Australia, the production of which within the Commonwealth is necessary to make this country self-contained. During the year 1899, exclusive of iron and steel in machinery, £2,750,000 of iron was imported into the Commonwealth. That importation took place under rather exceptional circumstances, there being no great railway works going on in any of the States at the time. Senator Pulsford, no doubt, thinks he made a great point when he said that the Vice-President of the Executive Council had admitted that protection increased prices. But Senator O’Connor was referring to this particular item, and not to other items. It was very wrong to apply his remark generally as Senator Pulsford did. But with the obtuseness so characteristic of the prominent free-trader, he either did not understand Senator O’Connor, or wilfully misconstrued his remark. The statement of Senator Pulsford about the 150,000 tons of steel rails not manufactured in New South Wales is correct up to a certain point. The Right Honorable G. H. Reid, leader of the free-trade party in Australia, entered into negotiations with the promoters of the ironworks in New South Wales, but there was a difference between them as to the price per ton for rails. Mr. Reid, the great free-trader, was willing to pay more for rails manufactured in New South Wales than the price for which they could be imported. What a pity it is that we have not in Victoria the magnificent and illimitable resources in the way of iron and coal possessed by New South Wales ! We should by this time have established an industry capable of supplying the whole Commonwealth, and of employing thousands of men, instead of sending money to Sweden, Germany, Great Britain, and the United States for our iron and steel. While Senator Pulsford was speaking, another matter Game into my mind. In 1896-7 the New South Wales Government called for tenders for supplies, but they attached the condition that everything that could be grown or produced in New South Wales was to be furnished hy the contractors, and they would not accept supplies from Victoria, or any other outside country. That was in free-trade New South Wales under the Reid Government ! Senator O’Connor, when referring to Canada, hardly made as much as he might have done of the facts. In 1894 the production of pig-iron in Canada was 45,000 tons. In 1901 - eight years after - it was 245,000 tons, say, a quarter of a million tons. But Senator O’Connor missed the strongest point in regard to the increase this year. In the first eight months of the fiscal year just ended, Canada has exported 6S,669 tons of pig-iron, valued at 661,531 dollars, or, in round figures, £138,000.
– Where did it go to ?
– I do not know - probab’y to a large extent to England, the country for which I blushed when mentioning the extent to which the Americans, had been able to import to it their iron work. Another aspect of the matter, upon which Senator O’Connor did not touch, is that rails are protected in Canada to. the extent of 30 per cent., fish-plates and ties to the extent of 33s. 4d. per ton, and other permanent-way iron and steel to the extent of 30 per cent, ad valorem. This protection is given in addition to the bonuses to the manufacturers. For the year ending June, 1903, the bonuses are to be equal to 28 per cent, on pig-iron. The bonuses are gradually diminishing year by year. For the year 1904 they amounted to 23J per cent.
– Who pa)’ those bonuses?
– The Canadian people, and I hope we shall do the same before long< The Canadians are not altogether stupid. Canada is one of the greatest countries in the world, and its people know perfectly well the side on which their bread is buttered. In 1905 the bonuses will be 17 per cent., in 1906 11 per cent., and in 1907 6 per cent. So that for the year ending June next, Canada has an import duty on rails and other permanent-way material of 30 per cent., in addition to a bonus of 28 per cent, on pig-iron, which would mean a great deal more on steel rails. The proposal of the Government, which the committee is now considering, is a mere trifle compared with what has been done in Canada with great success.
– It is the thin end of the wedge.
– I think I have heard that remark before. A free-trader is never original. He follows the effete doctrines of a man named Cobden, who lived last century, and, -considering the disastrous influence which his works have had upon the country from which I came, it would have been better if he had never lived at all. Senator Pulsford has declared that we have no right to tie the hands of future Parliaments, but I heard him say, only the other day, that Parliament is all powerful, and that the legislation passed by one Parliament can be repealed by any of its successors. I hope that the committee will support the proposals of the Government, and give the people of Australia an opportunity to spend their money amongst themselves. It cannot be said that I support these proposals solely for the benefit of Victoria, because I believe that if they are carried into effect nearly the whole of the iron work required by the Commonwealth will be manufactured in the Lithgow valley, and, if that happens, a great many of those now employed in various iron-working industries in Victoria will probably leave this State, and emigrate to New South Wales.
– I have given notice of my intention to move a motion in regard to this division, but as the amendments made by the House of Representatives in the Bonus Bill render it unnecessary, I shall not proceed with it. I congratulate the Government upon the amendments made in the Bonus Bill, and upon the position which they have taken in regard to this division of the Tariff. I consider it the most important division of the Tariff. The establishment of the manufacture of iron in Australia will have much further reaching effects than any mere fiscal legislation. The free-traders have, time and again, opposed the imposition of duties upon the ground that they benefit only sections of the people ; but, as the establishment of the iron industry within the Commonwealth will benefit the whole people, I think that to be consistent they must support the present proposals. It is chiefly owing to the development of the iron industry that countries like the United Kingdom, the United States of America, and Germany are so prosperous; and their people would have been still more prosperous if the industry had been started there as. it is proposed to start it here. AVe know what immense fortunes have been made from the manufacture of iron in England, Scotland, and the United States. No other industry has created so many millionaires. The last dividend declared by the Carnegie Steel Company was 87 per cent., while the American Steel Trust, which is a combination of all the iron works of America, has declared a dividend of onehalf of its total income. It has been proved by the report’s of various State officials that we have an ample supply, of iron ore in Australia, and we have also limestone and coal. It is true that our coal supply is in many cases at a great distance from our deposits of iron ore, but the distances are not so great as the distances which iron ore has been conveyed in America and in Europe. For many 3’ears the English iron trade has had to import Spanish ore, while the United States have imported ore from Cuba, and in some cases, for mixing purposes, from Spain. All who know what has been the state of affairs in New South Wales know why the blast furnaces at Lithgow and Mittagong were failures. In the first place, an attempt was made there to establish the industry upon a very small, and therefore a very expensive, system of working. Furthermore, in the case of the Mittagong works, the coal had to be brought all the way from what is known in New South Wales as the South Coast. Then again, the manufacturers were subjected to the competition of the manufacturers of the world. I was working in one of Mr. Mitchell’s coal mines when he was making strenuous attempts to establish the iron industry in New South Wales, and, from conversations which I. have had with -him, I know pretty well the cause of his failure to do so. He made two voyages to England to attempt to float a company for the manufacture of iron ore in New South Wales, but, after comparing the rates of wages in Scotland and England with the Australian rates, he came to the conclusion that, no matter what price he got for his iron, it would be impossible for him to compete in the open market against foreign manufacturers. The drawback to his enterprise was,, not that his market would be too restricted, but that in Australia wages in this industry would be three times as high as in the old country. I know that in the west of Scotland, before I left that country, the very best iron was being produced at a cost of only about 10s. per week for unskilled labour. I do not think that men will be found in Australia to undertake for less than 7s. a da)’ such laborious work as is connected with the manufacture of iron, and, knowing the nature of the work, and the climatic conditions of the country, I do not envy those who undertake it at that rate.
– The cost of the labour involved in producing a ton of iron is put down as 3s. in England and 6s. in Lithgow.
– I think that the cost of labour in Australia is rather more than that. I should like to read a few extracts from Mr. Jaquet’s admirable report, to show that we have excellent ore here, and that what is required to establish the iron industry in our midst is a sufficient amount of protection. Of course, to give protection to this, as to any other industry, will mean a considerable cost to the country. With regard to the iron ores of Victoria, on page 148, Mr. Jaquet says -
In 1875 a series of samples of Victorian iron ores were sent to England, and examined by a Mr. Houlsam, a gentleman engaged in the iron trade. Referring to the ores imported into England from county of Antrim, Ireland, he declared the Victorian ore was very similar.
The ore from the county of Antrim is among the very best sent to Scotland, and if the Victorian product is as good, there is no reason why we should not make iron equal to the best in the world. Regarding the Tasmanian ores, Mr. Jaquet says -
The Blyth River hematite is one of the finest and purest in the world, ranking with the famous Spanish, Algerian, and Cuban ores, which arc now exported in large quantities to the United Kingdom, United States, France, and Germany, for the manufacture of Bessemer steel. . . It is, too, most favorably situated for economical working, the steep sides of the river f orgo giving exceptional opportunities for mining y open quarrying. The ore could be lowered to the river by self-acting, railways; or by shoots,, in some places by gravitation. The cost of mining ought ito be very cheap.
The Blyth River ore has been declared by men well able to ‘express an opinion to be of the very highest quality. In Western Australia, I ‘ believe, we have larger iron” deposits than exist in any other part of the Commonwealth, and from some of the Western Australian ores hematite iron of ‘ fairly good quality, well suited for the making of Bessemer steel, has been produced. There can be no doubt that we have any quantity of ore suitable for the manufacture of iron. In New South Wales we possess an ample supply of coal for smelting purposes, and we also have plenty of limestone for fluxing. The cost of coal production is a very important matter in connexion with the manufacture of iron, and upon this point our mines bear very favorable comparison with those in other parts of the world. I find that in the United States the average cost of coal production is 5s. 4d. per ton. Australia comes next- with an average cost of 6s. Id. per ton, Great Britain following with 6s. 2d. per ton, Germany with 6s. 4d., Belgium with Ss., and France with Ss. 7d. According to figures recently published, the cost of producing iron in America has been greatly reduced, owing to the improved methods of smelting adopted there. It is stated that one blast furnace can produce something like 5,000 tons of iron per month. When I was working in the iron trade in the west of. Scotland fifteen or twenty years ago, the average capacity of a blast furnace was 600 or 700 tons per week. It will thus be seen that in the interval a great improvement has been effected. Mr. J. M. Swank, general manager of the American Steel and ‘Iron Association, gives the following figures for 1901 -
Four hundred and six blast furnaces produced 24,812,037 tons of pig-iron ; 9.1. steel converters made 12,938,000 tons of steel blooms ; 527 rolling mills produced 23,220,350 tons of rolled iron and steel.
The Prime Minister recently said that he hoped to see ironworks established in every State of the Commonwealth, but in vie’w of the fact that the whole of the requirements of Australia could be supplied by one great ironworks, it would be foolish for us tomultiply the number of works so as to provide one for each §tate. I believe that two blast furnaces, two rolling mills, and one steel converter .would suffice to meet all our requirements. That is, as- suming that we adopt works of the most modern, type, and produce iron upon the. same scale as in America. Notwithstanding their possession -of ample supplies of coal, iron ore, and limestone, the people of New South Wales have not been able to establish the iron industry under free-trade conditions, and this shows that some assistance must be given by us. I am rather pleased that the iron industry has not yet been established in New South Wales, because we should have had greater difficulty in initiating State-owned works such as I desire to see. We are now in a position to establish the industry on the most satisfactory basis, and New South Wales should be best able to take advantage of the opportunities, presented. Even free-traders should view with favour a proposal for the establishment of State ironworks, because any profits that may be derived will be appropriated for the benefit of the whole of the people, instead of going into the pockets of one or two millionaires.
– I am sorry that this question has not been brought before us in a somewhat different shape. We are asked to sanction the imposition of duties for the protection of ironworks after they have been established under a bonus system. So far we have had no measure before us providing for the payment of these bonuses; although we are aware that a Bill has been considered by the House of Representatives, and that it is now before that Chamber in a form somewhat different from that in which it wasfirst submitted. It is provided that a proclamation with regard to these duties is to issue so soon as it is certified by the Minister that the manufacture to which the proclamation refers has been sufficiently established in the Commonwealth according to the provisions of any law relating to bonuses for the encouragement of manufactures, or to the establishment of manufactures under the direct control of the Commonwealth or State Governments, but no proclamation is to issue except in pursuance of a joint address passed by both Houses of Parliament. We may find ourselves confronted with a proposal to grant assistance to individuals or companies who may seek to establish the iron industry in Australia. Some honorable senators would approve of a measure of that character, but the Bonus Bill may, when it conies before us, propose to grant assistance only to such States Governments as may undertake to establish ironworks. There are honorable senators in this Chamber who are not prepared to assent to a measure of that character.
– The honorable senator can deal with that matter when the Bonus Bill is under consideration.
– It may be too late then.
– Precisely; it may be too late then. Here we are confronted with a proposal involving three alternatives. The Government intend this division to come into operation as soon as ironworks are established under the Bonus Bill, either by the Commonwealth, the States, or by private enterprise. Senator O’Connor, in the course of his remarks, devoted a deal of attention to the proposal to establish ironworks at Lithgow and the Blyth River. He told us that £750,000 would be involved in carrying on the contemplated operations at Lithgow, of which £350,000 was to be spent upon additional machinery. The Blyth River Company will be established upon practically similar terms. But the moment we pass the Bonus Bill, which provides that bonuses shall be paid only to those States which embark in this industry, the Lithgow and the Blyth River Companies will disappear. Indeed, in a recent interview which was published in the press, both Mr. Sandford and Mr. Thomas claimed that it was only the inducement originally offered under the Bonus Bill which prompted their determination to extend operations at Lithgow. In view of recent developments, they declare that it is absolutely useless for private individuals to attempt to establish the iron industry. Why? Because if the States can obtain a bonus upon their production of iron, and private individuals cannot, it is not likely that the latter will enter into possible competition with the former. The moment that position is put before speculators, they button up their pockets. Then, what is the probability that any of the States will endeavour to establish national ironworks ? We are told that the undertaking will involve an outlay of from £500,000 to £1,000,000. Even at Lithgow, the company which was formed talked about expending £350,000 in additional machinery. Before any State can embark upon this enterprise, it must be in a position to put aside that sum of money for the purpose. Is there a probability of that being done? I do not propose to discuss that question, because it can be debated very much better in connexion withthe Bonus Bill; but when we are called upon to deal with a duty which is contingent in a threefold sense upon that Bill being passed, it seems to me that we are going the wrong way to work. The course which has been adopted is unfair to the Government and to the interests which they desire to conserve. What would have been more simple than for the Government to have postponed the consideration of this division, or to have eliminated it from the Tariff, with a view to incorporating it in the Bonus Bill? The whole matter would then have been before us, and we should have known exactly what we were doing.
– We could not do that under the Constitution, because a Taxation Bill must deal with taxation only. We cannot mix up taxation and the granting of a bonus in the same Bill.
-No ; but we can have two Bills before us, one for the bonus, and the other for the duties, as in the present instance we have two Bills before us at the same time, namely, the Customs Bill, and the Excise Bill, to both of which we are allowed to refer when necessary. I hold that the Government are making a mistake in dealing with the matter in this way. They are putting honorable senators, who, under certain conditions, may be in favour of the granting of a bonus to encourage the production of iron, in a false position. If the Bonus Bill takes the form which the Government desired, and for which they fought so hard, probably works will be established at Lithgow and the Blyth River, but if it assumes the form that, apparently, it will assume, the companies mentioned will be wiped out of existence.
– If the States are willing to engage in the industry, would the honorable and learned senator object ?
– That opens up the very wide question of how far it is desirable that the States should enter upon an industry of this kind, which possibly can be carried out more effectually. by private enterprise.
– Is not that a matter for the States to consider?
– It is a matter for the States to consider, as it is also for the individuals who comprise those States. Senator O’Connor has declared that the manufacture of iron in Great Britain had developed before the era of Cobdenism. He also affirmed that America would not now be producing such an enormous quantity of iron were it not for the fiscal encouragement given to the industry, and that the case of Canada was still stronger. Now we all know that many years ago England had a protective policy. .But more than half a century ago that policy was scattered to the winds. What has been the position of the industry in Great Britain during the past 50 or 60 years, since every vestige of protection disappeared ? It has improved by leaps and bounds. Moreover, in the same period, the population and production of Great Britain have enormously increased. and, therefore, it cannot be claimed that the prosperity of the old country is due to the position which she obtained under protection.
– I said that the industry was thoroughly established before the duties were taken off.
– Before the duties were remitted, the iron industry was but a small infant compared with what it is to-day.
– America is underselling Britain in her own market.
– That ma)’ be the case ; but it should be remembered that America has immense deposits of iron ore in excess of those possessed by Great Britain, and has also enormously greater opportunities for developing the iron industry. Moreover, the ironworks in America are chiefly conducted by foreigners, and not by native-born American citizens. What is the position of Canada, whose case, Senator O’Connor urged, was still stronger ? That country has been producing iron for a great many years. From the Statistical Tear Book of Canada for 1900 I find that in 1888 the ore produced amounted to 78,587 tons, whereas in 1899 it aggregated only 74,617 tons; so that during that period, production had absolutely declined. Canada’s best years were 1892,”l893, 1894, and 1895, when the production somewhat exceeded 100,000 tons. In 1900 her total output of pig-iron was 35,387 tons. Referring to the world’s production of pig-iron, I find that in 1899 Canada produced 78,047 tons; but this quantity included 46,186 tons made from foreign ore. The production of the United Kingdom is set down at 10,500,000 tons, and that of the United States at 15,250,000 tons. I find that in 1899 6 ton’s of pig-iron were exported from Canada, while in 1900, 337 tons were exported. I think that Senator O’Connor gave us the export returns up to a later date, and they showed that the export trade is very small. We must all recognise that at first a country produces pigiron only for its own consumption, and that its export trade is developed subsequently ; but Canada has imported a very much greater quantity than she has produced for her home consumption.
– What did she import in one year ?
– I believe that she imported something like 60,000 tons.
– According to the Canadian Iron and Steel Industry Magazine of May last Canada exported nearly 67,000 tons of pig-iron during the first eight months of the financial year just closed.
– I am not in a position to quote the statistics to which Senator Styles refers, but I am satisfied that he has quoted them in all good faith. It is remarkable that while the cost of the production of pig-iron in England is £2 1 2s. per ton, in Lithgow it is £2 7s. 7d., leaving a margin of 4s. 5d. in favour of the local production.
– The great disparity is due to the difference in the cost of the material. In England the cost of the material is 1 9s. 7d. per ton, in Lithgow it is 18s. 7d., while in Pittsburg it is £1 ls.
– In Pittsburg, the cost of production is given at £1 12s. 5½d If we assume, for the sake of argument, that we desire to give the difference between that amount and £2 7s. 7d. to our local manufacturers, it means that we shall have to tax the people to a much greater extent than a duty of 10 per cent, would involve. It 1 s al most impossible to bring down these figures to an exact position, and therefore I say that their quotation will not lead us to the conclusion that the Government proposal would place the productions of these two countries upon a plane. ‘Does not the difference between the cost of the raw material in Pittsburg and Lithgow indicate that there must be a great disparity between the rates of wages paid in the two countries? The’ honorable and learned senator referred to the value of certain articles imported into the Commonwealth, and gave us particulars of the value of fuel and labour, as well as the value of the pig-iron introduced here. Assuming that pig-iron can be imported here at low prices, we shall be in no better position for the manufacturers using pig-iron, if we produce it in the Commonwealth. Senator O’Connor tells us that something like £5,000,000 worth of goods, in which 330,000 tons of pig-iron are used, is imported annually; but, although imported pig-iron can be obtained at as low a rate as we shall ever be able to produce it, we do not find that the iron industries of the country have gone in very largely for the manufacture of these goods as the)’ would have done if the local production of pigiron had been the great inducement, as has been suggested. If we can produce pigiron at £2 7s. 7d. or £2 10s. per ton at Lithgow, or give the manufacturers imported pig-iron at cheaper prices, surely these great industries for turning pigiron into the manufactured article would have established themselves years ago ? The position in Canada shows that, even if we produce any quantity of pig-iron, we cannot expect to have nothing but our own local production used in the machinery and metals which are introduced into this country from time to time. Senator O’Connor said that the objection to the proposal that the question of the imposition of these duties should be dealt with when the article is manufactured here was, that there might be u change of policy. That consideration, however, might operate even under a Tariff in which it was proposed to place 10 per cent, or 1 5 per cent, duties on these articles. A Parliament might be established next year on different lines and repeal these provisions.
– Then we shall not bind succeeding Parliaments, as Senator Pulsford has suggested.
– We are attempting to do so. The honorable senator recognises that by passing these duties at the present time we shall express an opinion as to what should be done five years hence, and prejudice a subsequent Parliament to a certain extent. But Parliament may repeal or pass a Bill any day. If the Government had, in this and the Bonus Bill, some express provision that bonuses should be granted, and that these duties should be continued for a certain time, a contract would be directly established between the Government and individuals which it would be impossible to get over.
– The Bonus Bill must provide something of that kind.
– It must provide that a bonus shall be paid for a certain time, but will it go further, and say that duties, according to the Tariff Bill, shall continue to operate for a further period ? Of course that could not be done. If the Government provided in this Bill that a person who had established certain works in accordance with the provisions of the Bonus Bill should be entitled to these duties for a certain period, that person would be protected.
– That is practically what we do.
– I do not agree with the honorable and learned senator. Something much stronger is necessary. We have the objection that while some are- prepared to give bonuses they are not prepared to grant duties to protect the industry after the giving of those bonuses shall have ceased. They say that once a man has been assisted to establish his industry, and has a market at hand for his products, he should not ask the State for anything more. If an industry requires some assistance, that is about the only legitimate way in which it can be given. Are the Government going to say that they wish to establish an industry which will be eternally dependent upon the public purse for its existence? Such a course would not place an industry like this upon the firm footing on which it should be established. My idea is that as our population increases our markets will extend, .and that we shall have a natural demand for all these things, with the result that these industries will be established upon such a firm basis that they will be able to stand against any competition.
– Population will not increase under free-trade.
– The policy of every State in Australia, unlike that of Canada or America, has not been to encourage the immigration of the bone and sinew of the old world. If we had such a policy, the position would be different. First of all, I say that it is dangerous to put three alternatives before the committee under which we pledge ourselves to grant a duty. That is a mistake. This proposal has been introduced in a way which does not give us an opportunity to deal with it satisfactorily, because we have not the Tariff and the Bonus Bill before us. That also is a mistake. Many men would agree to a duty of 10 per cent, if they saw an industry established either by a State, or by a company, orunder individual responsibility. Taking all the circumstances into consideration, I hope that honorable senators will see that the best course to adopt will be to put these proposals aside until we know what kind of a Bonus Bill the Government intend to introduce. I find that the New South Wales Chamber of Mines recently passed the following resolution : -
That the action of the Federal House of Representatives in so altering the Bonus Bill, that no bonus shall be paid for the making of iron, unless the material was made in works operated by a State Government, is prejudical to the best interests of the Commonwealth.
That while a bonus may be necessary to induce private enterprise to embark in such an undertaking, there should be no need, and would be no justification for applying the revenues of the Commonwealth to subsidize the works of a State Government.
That while the alteration of the Bill will not insure the establishment of iron-making works by any State Government, it will effectually prevent the investment of private capital in such works, because capitalists well know that if, by then skill and enterprise, they brought such works to a successful issue, they might at any time be placed in the position of having to compete with works conducted at the expense of the State, and subsidized by the Commonwealth.
SenatorO’Connor. - That touches only the Bonus Bill.
– But the Bonus Bill is interwoven with the Tariff because the Government contemplate such a system. We know that according to the records of another place a Bonus Bill was introduced there, and that a certain amendment was carried, providing that the bonuses should be given to industries established by the States Governments alone. Therefore we are justified in considering this point. Of course, those who do not believe in protective duties will oppose the proposal, but no matter what our fiscal beliefs may be, the present is an inopportune time to deal with this question, and the method of legislation is a bad one. It is far better that we should postpone the matter until we know what shape the Bonus Bill will assume ; then, if possible, we should deal with the two proposals together. For these reasons I intend to vote for the motion.
– I have asked myself the question which has been put to the committee by Senator Gould, and I may say at once that I do not agree with protective duties. I do not agree with protectionist principles, because the imposition of protective duties allows a certain section of the community to divert money into their own pockets, at the cost of the general community. If I viewed this division solely as it stands in the Tariff I should certainly vote for its omission, but I think we have to bear in mind that the proposal is interwoven with another measure - the Bonus Bill - - which ‘ has reached a certain stage in another place. I know that under the Bonus Bill certain items in this Division VIa. will be dutiable only if the industry is established as a State-owned industry. In that case my argument about protective duties will not apply, because they will not divert money into the pockets of a section of the people, but into the pockets of the whole of the people.
– The honorable senator is assuming that the Bonus Bill will be carried in that form.
– I am assuming that it will be carried in that form, and I shall be prepared to give a vote to help to carry it in that form. Let me point out to honorable senators that if the Bonus Bill is not carried, this division will be so much waste paper, and will be perfectly harmless.
SenatorMATHESON. - The Bonus Bill may be carried in another form.
– If it is it will be with the consent of the Senate, and if honorable senators are sufficiently in favour of the principle of bonuses to carry the Bill in some other form, they will be sufficiently in favour of the principle of protection to carry these duties. The system of bonuses is only a more direct system of assistance to industries, and if there is a majority in the Senate in favour of bonuses, there will be a majority in favour of these 10 per cent, duties. I draw the attention of the committee to the fact that the Bonus Bill, in so far as it applies to State-owned iron works, will not apply to the whole of Division VIa. The proposed duties upon galvanized, tinned plate, and sheet, reapers and binders, other machinery, machines, or parts referred to in proclamation, wire netting, and spelter, will apply to the productions of a private company, and taking the view I do of protective duties, I shall be justified in voting against those duties, or in support of a reduction of them. Bar, rod, angle, tee, sheet and plate iron, and wire, iron and steel tubes and pipes, and hoop iron will receive the benefit of these duties, if the product of a State-owned works, andI am prepared to accept the assurance which has been given by the Government to another place that they will go on with the Bonus Bill notwithstanding the amendment which has been moved.
– It is going to be recommitted.
– That may be, because the amendment is not altogether in a workable state at present. I am not in the confidence of the Government, and I do not know why it is to be recommitted, but if the intention be to pass the Bill in its original shape it must not be forgotten that the Senate will have to agree to the passing of the Bill in that shape, and we can then say that notwithstanding we have left in the Tariff a provision for the application of certain duties, if we cannot carry the Bonus Bill in a certain shape we shall reject it altogether. Honorable senators must recognise the fact that if the iron industry is established in Australia it must be a monopoly. There are persons who cannot by any stretch of imagination be called state socialists, who still recognise that if an industry is to become a monopoly, it is wise that it should be under the control of the State. Mr. Robert Reid, chairmanof the Victorian Chamber of Commerce, in an address to the Chamber dealing with the shipping company combinations, said that was causing great anxiety, but he also said that -
The public ownership of our railways prevented the shipping trusts from securing control in that direction, and he hoped we would never lose them to capitalists. If these combinations grew nothing would save us from disaster but the ownership of steamers by the Government.
Honorable senators will remember that this is the statement not of a member of the Trades Hall or of the labour party, but of Mr. Reid, the chairman of the Victorian Chamber of Commerce, and at present Minister of Education in the State Parliament. Senator De Largie contended that the iron industry, if established in Australia at all, must be a monopoly, and that furnishes us with a powerful reason for seeing that the monopoly shall be in the interests of the people, and shall be the people’s monopoly. Senator Gould has said that there is no prospect of State -owned ironworks becoming an accomplished fact; but I would remind honorable senators that in the State Legislative Assembly of New South Wales, Mr. McGowan has already given notice of a motion to refer this question to a select committee, with the view of starting the manufacture of iron in New SouthWales as a State monopoly. It is idle, therefore, to say that nothing is done, and that there is no prospect of anything being done in this direction. I consider this division from the point of view of the possibility of the Bonus Bill being carried in its present shape, and resulting in the establishment of State-owned ironworks. I have no objection to these duties remaining on the Tariff if the industry to be assisted is a State-owned industry. I find that in this instance I am in good company, because I remember that Senator Symon, in reply to an interjection, said that he preferred State socialismto protection.
– That was in connexion with tobacco.
– I do not know to what the honorable and learned senator was referring, and I only wish he was present to add his powerful voice to others in this direction. If Senator Symon prefers State socialism to protection, I am certainly in good company. The course I intend to pursue is this : I shall support the Government in their proposals, excepting so far as these duties do not apply to the product of State-owned ironworks. I would remind honorable senators that there is a still further power left to the Senate. They will see that a joint address of both Houses of Parliament must be passed before these duties can come into force. That is surely a sufficient safeguard. We have power under this provision to refuse to pass the address, which will be necessary if we consider that the industry is not established upon satisfactory lines. For these reasons I shall take the course I have indicated, and I hope the Government will press the Bonus Bill through in its present form, and give the Senate an opportunity of debating it.
Question - That the House of Representatives ‘be requested to amend Division VIa. by omitting, on and after 1st August, 1902, the introductory note - put. The committee divided -
Ayes … … 11
Noes … … 12
Majority … … 1
Question so resolved in the negative.
– I wish to draw attention to the fact that this item deals with duties about which we have already passed resolutions. In Division VI. wire is specially exempted from duty. I submit that as we have already dealt with wire, we cannot deal with it again in connexion with Division VIa. Reapers and binders are also on the free list in another part of the Tariff, and I contend that they ought not to be mentioned again in this division. Wire netting is likewise on the free list. We had a division in regard to it last night. I submit that it is not in order that we should be asked to vote in regard to it again. I also draw attention to the duty upon scrap iron and steel. Upon page 17 of the schedule, scrap iron and steel are specially exempted from duty, but there is a note to the effect that the duty is not to take effect until the coming into operation of Division VIa. The same remark applies to galvanized iron, to which there is also a note. It is, therefore, competent for the committee to deal with galvanized iron and scrap iron and steel, but I submit that reapers and binders and wire netting, being made exempt already, the committee ought not to discuss them again in connexion with Division VIa.
– The matter raised by Senator Pulsford is clearly not a point of order. There is nothing in the standing orders with which Division VIa. conflicts. We have to take the Tariff as it is sent to us. What we have done has been to request amendments; not to amend the schedule. We have no power to amend. If we had made amendments the position would have been different. It will be competent for the honorable senator to move arequest for the omission of wire from the dutiable list. But it is not competent for me to rule that the lines to which he has taken exception cannot be put. The committee can make any request it likesin connexion with any of these duties, but I cannot rule that it is out of order to permit the committee to vote upon any part of the item.
– I accept your ruling, and intend at once to propose that the House of Representatives be requested to remove the word “ wire “ from the item.
-Col. Neild. - If Senator Pulsford moves to omit some portion of the item and the vote goes against his proposal, the words will have to stand as printed, and it will not be competent for any other honorable senator to move to excise the words.
– I wish to move that all the articles mentioned in this item, and which are dutiable at 10 per cent., shall be placed upon the free list. If the Chairman rules that in the case of Senator Pulsford not carrying the motion he suggests, I shall be debarred from moving a subsequent motion, I shall have to request Senator Pulsford to give way to me.
– It is quite competent for any honorable senator to move a request that the form of the item be altered or that any part of it be omitted. After the form of the, item has been dealt with it will be for the committee to determine what the duty shall be. Consequently if the part of the item relating to wire is permitted to stand as printed there will be nothing to prevent Senator demons afterwards moving a request to make the articles mentioned in the first part of the item free.
Senator PULSFORD (New South Wales). - I beg to move -
That the House of Representatives be requested to amend item 81 by omitting, on and after 1st August, 1902, the word “wire,” line 6.
I submit this proposal on the ground that the committee has already accepted the Tariff as it stands in regard to wire. When we agreed that wire should be specially exempted it was not intended that the subject should be brought up again in connexion with this division.
-The honorable senator has given no reason whatever in favour of the request whichhe has moved, and his argument rests upon a misunderstanding of the meaning of the item. It is true that wire, n.e.i., is upon the free list. Then comes the paragraph which the committee has already agreed to, providing that the duties in Division VIa. are to come into force under certain circumstances. The duties now being dealt with are to come into force after a proclamation has been issued, and not until then, and itis expressly provided that until that time wire, amongst other things, shall be exempt from duty. The intention is that the duty shall not operate until the manufacture of the article in question has been established in the Commonwealth. No reason has been given why the course suggested by Senator Pulsford should be followed. We have already carried the paragraph which abundantly explains the position in which wire stands.
Senator PULSFORD (New South Wales). - If Senator O’Connor’s argument be correct, we have before us the whole range of items dealing with metals and machinery, and I can immediately proceed to propose that all those items which happen to be in excess of 10 per cent, shall be included in this division, so that on the proclamation being issued the duty upon them shall be 10 per cent, and no more. Are we to understand that the whole matter is re-opened for discussion, and that any honorable senator can propose any request ? I have already drawn attention to the fact that there are two articles dealt with under this item that have already been discussed. I am clearly of opinion that if we can be asked to reconsider items which we have already dealt with we can re-open the whole subject of the duties under Division VI., and propose new duties which will only come into effect when the proclamation has been issued.
– I do not like Senator Pulsford’s proposal ; I do not like any of these small proposals. I want to take the item at a mouthful, and make all these things free.
– I move -
That the House of Representatives be requested to amend item 81 by adding to the duty, “ Iron and steel . . . ad valorem, 10 per cent.,” the words, “and on and after 1st August, 1902, free.”
It is generally admitted that the provisions of the Bonus Bill, which is now under the consideration of the House of Representatives, are closely intertwined with the proposals contained in the division of the Tariff which we are now discussing, and the vote which I intend to give in regard to the duties contained in item 81 will be upon the same lines as that which I shall give upon the Bonus Bill. I shall oppose State socialism in every shape and form, and whenever I can. If the duty now under discussion is agreed to, the result will be that the iron industry can be established within the Commonwealth upon one condition only, and that is that a State or States shall embark in it. In other words, if the Government proposals are carried, the result will be that the development of the iron industry within the Commonwealth will be crushed, because none of the States is likely to enter upon the manufacture of iron as a Government enterprise.
– What about New South Wales?
– The people of the Commonwealth have been given clearly to understand that the New South Wales Government will not undertake the enterprise, and, although we have been told that Tasmania contains some of the finest iron deposits in Australia, there is not the faintest chance of the Government of that State undertaking it. It might have been possible to establish the iron industry within the Commonwealth, and to obtain the results which many people are anxious to obtain - the employment of labour and the enrichment of the whole community - if it had not been for the manner in which the Bonus Bill has been altered. But, under present circumstances, the enterprise is absolutely crushed, and an honorable senator who misrepresents Tasmania has done a great’ deal by his vote to bring that about. Does he think that the Government of Tasmania will enter upon the iron industry?
– Certainly not. That is one of the reasons why I voted as I did.
– I believe that every senator who represents Tasmania will agree with me that the Government of that State will not embark upon this enterprise. That being so, the State will gain nothing from her deposits of iron ore, because it cannot be conceived that a private com- pony will ever attempt to work these deposits while it is debarred from obtaining a bonus which is at the same time offered to the States Governments. As a free-trader, I do not particularly like bonuses, but there are occasions when I would vote for them, and I should be inclined to do so in this instance if the opportunity of earning them were offered to all, and not limited to the Governments of the States.
– Cannot we alter the Bonus Bill when it comes up here ?
– Perhaps so ; but I do not want to give an opportunity .for the worst to happen if I can prevent it. If this division is. carried as it stands, we may not be able to prevent the offering of bonuses solely to the States. It is to.be argued in favour of bonuses that they are paid directly from the revenue of the State, and are therefore contributed to by the whole people, whereas protective duties fall wholly upon the consumers of the articles upon which they are imposed.
– In this case the duties would be paid by the owners of the industry.
– Does not the honorable senator see that every person in the community is not a consumer of iron 1
– The honorable and learned senator would like what is paid to go to the importers.
– I think that when a Community is taxed, all should pay upon fair and equal terms. Those who do not consume iron will not pay any part of the proposed duty of 10 per cent.; and we are not all consumers of iron any more than we are consumers of any other article in the Tariff. Senator Dobson will probably find that the protective duties will be retained upon those articles which are to be manufactured in the State ironworks, whilst the manufactures of those engaged in private enterprises will be admitted free of duty. Some of the States may benefit from the provisions of the Bonus Bill, but Tasmania cannot possibly do so. Private manufacturers should have an opportunity of reaping the benefit of any bonuses that may be offered, but Senator Dobson, by his action, has insured a monopoly for the State Governments.
– The discussion on this item will enable me to state not only how I intend to vote, but also to mention one or two of the reasons which induced me to support the Government. Senator Clemons has stated that I am misrepresenting Tasmania. That is an unwise and- ungenerous suggestion. Is my honorable friend the only man amongst the 36,000 electors of Tasmania who has the right to tell me that I am misrepresenting my State because I do not happen to see eye to eye with him ? He evidently supposes that he hould have a key to every man’s conscience, and keep it in his pocket. I think I shall be able to justify my vote to the people of Tasmania, and that is what I care most about. I am absolutely opposed to the nationalization of industries. I should now be a member of the Fabian Society, which is doing good work in England, were it not that I cannot subscribe to the great plank in their platform in favour of the nationalization of industry ; and it was because I saw that there was no possible chance of Tasmania or New South Wales ever starting State ironworks that I voted with the Government; on the last occasion. It is not necessary for Senator Clemons to tell me that there is no chance of Tasmania establishing State ironworks. Her financial responsibilities are too heavy to permit of her doing so, and I am sure that there is no possibility of the Legislative Council of that State indorsing any such proposal. I also believe, from what I have learned, that the Parliament of New South Wales will not interfere with the work which has already been clone in that State by Mr. Sandford. I believe that when the Bonus Bill comes before this Chamber the VicePresident of the Executive Council will endeavour to restore it to the form in which it was first submitted in another place, so that effect may be given to the policy of the Government. The Government do not believe that bonuses should be offered solely for the benefit of the States Governments. If there is any danger of the Bill leaving this Chamber in its present form, I shall join with my honorable friend, Senator Clemons, in altering the effect of the vote which I gave to-night, but I do not anticipate that it will be necessary to do anything of the kind. When the members of the labour party who make State socialism a plank in their platform find that there is no chance of either New SouthWales or Tasmania establishing State ironworks, what will they do? Three or four thousand men might find employment in Tasmania or New South Wales in the great iron industry under private enterprise, and when it becomes a question of losing the Bonus Bill altogether or accepting it in the form in which it was first introduced in another place, my honorable friends of the labour party will, I am sure, accept the inevitable, and make the best of the situation. Another reason why I thought it was fair to retain this item was, that if bonuses are to be given in order to secure the establishment of the iron industry we must provide for the fair treatmont of those engaged in it when the bonuses are exhausted. In Canada, they provided not only for bonuses, but for high protective duties. I do not approve of the Canadian system, because the duties in operation there appear to be altogether too high to impose upon products which form the raw material for so many industries. At the same time, we have been devoting weeks and weeks to the adjustment of duties which will, on the one hand, bring in some revenue, and, on the other, afford a moderate amount of protection to local industries, and, on the whole, do justice between the consumers and those engaged in the various factories. I ask whether we should not treat the iron industry in the same way ? If we succeed in establishing an iron industry by paying away a quarter of a million of the public money in the form of bonuses, it would be suicidal on our part to run the risk of rendering our expenditure useless by refusing to extend moderate protection after the bonuses cease. Moreover, it would be unfair to deny protection to those who have devoted their labour and their capital to a great enterprise, whilst other industries are deriving the advantage of duties ranging as high as 25 or 30 per cent. I have not lost sight of the fact that iron is a most important factor in various manufactures in which the primary producers are interested, and therefore I shall not vote in favour of anything beyond a moderate duty on machinery, or upon iron itself. In selecting 10 per cent. I think the Government have gone to the extreme limit ; but no one can say that that rate is highly protective. I look upon this as a moderate revenue duty ; but taking into account the natural protection afforded, the iron industry will be substantially assisted. I could not support 15 per cent, duties for the protection of other industries, and give nothing to those engaged in the iron industry. ‘ When I agreed as a member of the free-trade party to vote against these duties, I was opposed to the Bonus Bill. I have never been particularly in love with bonuses, and I was not favorably impressed with the way in which the system was appliedby the Victorian Government. The granting of bonuses in connexion with the production of butter, fruit, and other similar products seemed to me to carry the system to an extreme, and to inflict great injustice upon the great body of the citizens. I regard iron, however, as standing in a position entirely different from that occupied by butter and fruit. The information I have gleaned bears out the statement of the Vice-President of the Executive Council, that no country has ever established the iron industry within its borders without granting bonuses or a considerable amount of protection. In view of this fact, and considering the enormous amount of capital that will have to be embarked in the establishment of ironworks within the Commonwealth, I have been induced to regard the Government proposal with a large degree of favour. I opposed bonuses because I believed they operated unfairly to the general body of the taxpayers. I have, however, taken some little trouble since I agreed to vote with my party to ascertain the truth in this matter, and I believe I have seen a document which my honorable friends opposite have not had an opportunity of perusing. I refer to the report of the expert who came from England, and who was paid £3,000 to report upon the iron deposits of Tasmania and other States. Before I had seen this document I had intended to vote against the granting of bonuses, because I regarded it as impracticable for us to manufacture iron that would compare with that produced in the old established mills of Great Britain, Scotland, and America. But so hopeful was this report, and so appreciative of the enormous value of the iron ores of Tasmania and of the facilities for mining and shipping and for carrying’ on the manufacture of iron generally, that I was induced to change my mind.
– For whom was that report made ?
– For the Blyth River Company. I presume that the Government have made the fullest inquiries, and probably they know more than I do about the subject. Had I voted in favour of eliminating this division from the Tariff, and had the motion in that direction been carried, it would have been accepted by the other branch of the Legislature as evidence that the Senate was opposed to the Bonus Bill.
– Rubbish ! Does not the honorable and learned senator think that the other House understands the difference between protection and the granting of a bonus ?
– If Senator Clemons does not believe that the rejection of Division VIa. would have been regarded as an indication that the Senate was opposed to the Bonus Bill, I disagree with him. If the acceptance of that division depends upon one vote only, there is plenty of time during which that vote can be reversed. In conclusion, I desire to say that I am not in favour of unduly taxing the tools of trade and implements of the primary producers, and therefore I am not at all sure that I can vote to impose duties upon agricultural machinery. We shall have to consider that matter very carefully when the proper time comes. No man can say what will be the price of agricultural implements five years hence, or what the state of trade will be, and therefore I hope that at least some of these duties will be struck out.
Question - That the House of Representatives be requsted to amend item 81 by adding to the duty, “Iron and steel . . . ad valorem, 10 per cent.,” the words, “and on and after 1st August, 1902, free” - put. The committee divided -
Ayes … … … 10
Noes … … … 12
Majority … … 2
Question so resolved in the negative.
Motion (by Senator Clemons) proposed -
That the House of Representatives he requested to amend item 81 by adding to the duty, “ Galvanized and tinned plate and sheet, ad valorem, 10 per cent.,” the words, “ and on and after 1st August, 1902, free.”
– I do not intend to argue this matter, but merely desire to state that I shall oppose the motion.
Question put. The committee divided -
Ayes … … … 11
Noes … … … 10
Majority … … 1
Question so resolved in the affirmative.
Motion (by Senator Lt.-Col. Neild) proposed -
That the House of Representatives be requested to amend item 81 by adding to the duty, “ Reapers and binders, ad valorem, 15 per cent.,” the words, “ and on and after 1st August,1902, free.”
– The proposition of the honorable senator is rather an extraordinary one,in view of the items which have previously been carried. We have already agreed to the paragraph which provides that these duties shall come into operation only after it has been declared that the manufactures to which they refer aresufficientlyestablished within the Commonwealth. Now, however, it is proposed that reapers and binders shall not come within that category. The honorable senator proposes that after the bonus system, has come into existence these articles shall be free. Therefore, we have the extraordinary position, as proposed by my honorable friend, that whilst reapers and binders are now liable to a duty, all protection is suddenly to be withdrawn after a bonus has been given for a certain period for their manufacture. If honorable senators think that that is theintention of the first paragraph, or is expressed in other parts of the Tariff, it is most remarkable reasoning. The policy of the Government is that £4,000 shall be given by way of bonus for the manufacture of the first 500 reapers and binders in the Commonwealth. That bonus, at the rate of £8 each, is to be given to enable them to be manufactured here. We all know that although reapersand binders have hitherto been free in all the States, their price in Australia was at one time nearly double the cost of their manufacture, and that the only thing which has led to a reduction has been the threat that duties will be placed upon them. It is quite clear from the prices in America and the prices here that there is a margin of something like 40 per cent, to go and come upon. If this proposal is carried, immediately the protection has been taken away, and the bonuses have ceased, the market will be open to machines from America and Canada at any price at which it may be thought fit to take possession of the market. This proposal also depends upon the Bonus Bill, and unless that measure is carried, it will not take effect. The real fight over this matter was on the first paragraph, and as that has been carried against the Opposition, I would advise them if they wish to leave anything like consistency in this suggestion, as it will go down to another place, to allow the duty to remain as it is.
– If any mistake has arisen the item itself is responsible for it, because if Senator O’Connor will look at the first line of the first paragraph in the division, he will see that all these articles are announced as being exempt from duty. I cannot understand, therefore, why he should say that they are subject to a duty, and seriously contend that if this motion is. carried articles will be made free, after a bonus has been given, which otherwise would be dutiable. They are not dutiable at the present moment, and the object of Senator Neild’s motion is that they shall continue to be free after the bonus has been given. That is not an unreasonable suggestion.
– So far as I am aware, it is impossible to ascertain the number of reapers and binders that are imported into the Commonwealth. The statistical registers simply show the number of packages imported, and the importation value set down against reapers and binders introduced into Victoria during 1899 is £73,000. If that amount is divided by £25 it will be found, roughly speaking, that it represents 3,000 machines. I think I am well within the mark in saying that 3,000 reapers and binders were imported into the other States during the same year, making a total of 6,000 for the Commonwealth, so that the item is a much larger one than it would appear to be at first sight. At one time, although these machines were duty free, they cost the Australian farmer £70 each ; subsequently the price was reduced to £65 and £60, and last year it was further reduced to £55. As soon as the Commonwealth Parliament was sworn in, however, prices began to come down, and it is possible now to obtain a reaper and binder for £35, or half the price formerly charged by the importer. Prices have been reduced, not because the ring has burst, but in order to prevent if possible the imposition of a duty which would encourage the manufacture of these machines in the Commonwealth. I have the authority of the manager for Messrs. T. Robinson and Co., makers of harvesters, and one of the largest agricultural implement manufacturers in Australia, to state that if they are protected in such a way that they will be likely to receive a large order for reapers and binders they will supply machines, as good as any imported, at £25 each. Surely that is some reason why the committee should offer an inducement to our large agricultural implement makers to manufacture these machines and so benefit the farmers.
– I should like to point out to the committee that we have done something in the direction of providing for the imposition of a duty upon iron when it is manufactured by any of the States, and that as reapers and binders and other machinery of that description are made for the most part of iron and steel, it would be very foolish to allow them to come in duty free, when one of our States has a monopoly of the manufacture of material largely used in their construction. How can we prophesy at this time that, in conjunction with the State iron works which may be created in the near future, there may not spring into existence other national works for the manufacture of machinery? There may be some slight risk of the manufacture of these machines getting into the hands of private enterprise, because it is more convenient for our agricultural producers to have implement factories in close proximity to the scene of their operations ; but these factories will be the principal customers of our State-owned iron , works, and . I think we should give them some little encouragement. I could say a great deal about agricultural, machinery, and particularly about reapers and binders, because I have in my possession one of the circulars issued by the reaper and binder combination, giving the rules under which their agents and operators have to work, but I do not wish to occupy the time of the committee. I hope that there will be no possibility of such a combination being created in Australia again, either among importers or manufacturers.
Question - That the House of Representatives be requested to amend item 81 by adding to the duty, “ Reaper and binders,” advalorem, 15 per cent.,” the words, “ and on and after 1st August, 1902, free.” The committee divided -
Ayes … ….. … 11
Noes … … … … 9
Majority … … 2
Question so resolved in the affirmative.
Motion (by Senator Lt.-Col. Neild) put -
That the House of Representatives be requested to amend item 81 by adding to the duty, “Other machinery, machines or parts, referred to in proclamation, ad valorem., 15 per cent,” the words, “and on and after 1st August, 1902, free.”
The committee divided -
Ayes … … … 11
Noes … … … 9
Majority … … 2
Question so resolved in the affirmative.
Motion (by Senator C lemons) proposed -
That the House of Representatives be requested to amend item 81 by adding to the duty,”Wire netting, ad valorem, 10 per cent.,” the words, “ and on and after 1st August, 1902, free. “
– I do not believe in allowing everything to go without protest.. We get, in this proposal, some idea of the value of Senator Clemons’ deliverances in regard to this item as a whole. The honorable and learned senator tried to induce the committee to believe that he was very anxious to support this particular industry in Tasmania and in Western Australia by a system of bonuses, only he saw that the State socialists were at work, and would succeed in preventing private enterprise taking any part in it. His present proposal shows that his appeal to the committee was merely an appeal to the more conservative amongst us, who might be frightened by the use of the term “ State socialism” into forsaking the protectionist cause and voting ] with the free-traders. We have to deal only with what is before us, and what is before us now is not the Bonus Bill, but a proposal to encourage the iron industry, whether it is undertaken by a State or by private enterprise. I hope that the protectionists in the committee, and especially those who have been returned as protectionists by the State of ‘Victoria, will remember that there is a struggling wire-netting industry in this State, which is struggling only because it has to meet German competition. If the Germans desire to compete with the local manufacturers of wire netting, let them come here and do so in the Commonwealth, and not avail themselves of a bounty system which cuts against us in many ways. We cannot blame the German Government for having a system of bounties upon exports, but we can blame the Commonwealth Government, and politicians who occupy seats in the Federal Legislature, if they throw away their opportunities and expose the local wire-netting manufacturers to German competition outside the borders of the Commonwealth. I hope we shall be able to get a majority upon this motion. I do not take very much notice of the previous divisions, because I believe a majority of two in a committee of the Senate will not have very much weight with the House which deems it to be its special privilege to deal with Money Bills. I cannot understand the attitude of certain honorable senators who have been willing to support Division VIa. upon general grounds, who have passed the introductory paragraph, but who are now assisting to reduce the duties proposed, or to place the articles upon the free list. Messrs.
Lysaght and Company, who are engaged in the wire-netting industry, employ some 400 hands. If necessary, honorable senators can see an auditor’s certificate to show that this firm, who have establishments in New South Wales and in Victoria, are working the wire - netting industry at a loss, and are continuing in the industry only in the hope that the Commonwealth will come to their aid, and to the aid of their 400 employes, who probably have wives and families dependent upon them, and who will be cast adrift if honorable senators do not give them some protection. It is all very well to attempt to raise a bogy by the use of ‘the term “ State socialism “ in connexion with * this item, but I thought that that particular scarecrow had been long since blown to the winds. It appears that it is only in this Senate that it has any effect. The people of the Commonwealth know too much now to be led astray by any such bogy. They know that in the Postal department, the Education department, and the Railway department, we have State socialistic institutions. And who will argue for a moment that those particular State socialistic institutions are not better for the Commonwealth than the great beer-importing industry which Senator Pulsford seems to have taken specially under his charge? The committee seem to have been running riot in consenting to these reductions. The term “ abolitionists “ would be a better one to describe the free-trade and revenue party than the name by which they are known.” They wish to abolish all the industries of the Commonwealth except the pastoral and mining industries - and of course the great beer-importing industry, with its free corkscrews !
– I do not know whether the honorable and learned senator who has moved the motion before the committee realizes the position in which this item now stands. We have carried the first part of the division, to which all the rest is a schedule - that is, that when a bonus is given, and after a proclamation has been issued, certain duties are to be imposed. We have decided, amongst other things, that bar, rod, angle, tee, and sheetiron is to have a protection of 10 per cent. The next thing that was done was to provide that when a higher state of manufacture was attained - that is to say when the iron was galvanized or tinned - it was to have no further protection whatever.We have dealt with reapers and binders, and then we come to wire netting, which, of course, is another product of iron. Although it is part of the policy of the Government to. include wire netting in the bonuses, Senator Clemons proposes that the manufacture of it shall have no benefit in the way of protection, although other manufactures of iron are to have a protection of 10 per cent. Is there any consistency in that position ? How can the committee expect any body of reasonable men to whom this Bill is sent back to carry out the suggestions made by the Senate when they are contradictory? I would ask Senator Clemons whether he really wants to put the committee in the position of sending back the Bill, so far as concerns Division VIa., in such ah absurd and confused condition that there will be no possibility of our suggestions being accepted?
Question - That the House of Representatives be requested to amend item 81 by adding to the duty “ Wire netting, ad valorem, 10 per cent.” the words “and on and after 1st August, 1902, free”- put. The committee divided -
Ayes … … … 11
Noes … … … 9
Majority … … 2
Question so resolved in the affirmative.
Motion (by Senator Lt.-Col. Neild) proposed -
That the House of Representatives be requested to amend item 81 by adding to the duty “Iron and steel tubes not dutiable under Division VI., ad valorem, 10 percent.,” the words “and on and after 1st August, 1902, free.”
– The committee will remember that the particular kind of pipes referred to in this motion are placed upon the free list, because they cannot at present be made within the Commonwealth ; but it is anticipated that when we have iron manufactures established under the bonus policy of the Government, the pipes will be made here. In order to protect them, the duty of 10 per cent, will be imposed when the bonuses come to an end. I hope that those honorable senators who voted for the establishment and maintenance of iron manufactures will vote against the motion.
– If the committee agree to Senator Neild ‘s proposal, it will be in my opinion the crowning act of folly in regard to this item. I have been seriously asking myself - what are we going to manufacture iron for? It is folly after passing the introductory paragraph of the division to knock out every duty pertaining to articles that will be manufactured from iron. I do not know whether it is of any use to argue further in respect to the matter, because the Opposition seem to have a majority of one, and will carry their proposal. We might as well let them have their division, and fight the matter out at a later stage. But I am bitterly disappointed with the work that the committee has done to-night.
Senitor HIGGS (Queensland). - The pipes referred to in the motion involve work of the simplest character for any iron foundry that may be established. Who is there who believes in State socialism - in the State running the Post-office and the Railways - who would wilfully subject the State to unfair competition ? That is what honorable senators will do. If they establish State iron works they will subject them to the unfair competition of manufacturers in other parts of the world. I am satisfied that Senator Pearce and other free-traders who voted for this division did not intend that. We protect the Post-office against competition, and surely those who are anxious that the States should establish iron works must see that it would be unfair to compel them to compete with the manufactories of Germany and other countries.
Senator PEARCE (Western Australia).I have already explained my position. The duty how under discussion will, if the Bonus Bill be passed into law in its present state, go to support a State-owned industry, and for that reason I shall vote for the Government proposal.
– Notwithstanding the impatience of honorable senators, I feel that I must say a few words in regard to this attempt by the destroyers of our industries who sit on the other side of the chamber to moke yet another branch of the iron industry suffer. Senator Neild, in particular, seems to have made a dead set against all branches of the iron and steel industry, though, surely, if any industry should receive encouragement it is this. My first consideration is the interests of the people of my own country, while that of honorable senators opposite is the interests of the people of other countries. There are numerous iron working industries in the Commonwealth which maintain and support a large number of people, while those in the State which I represent give employment to nearly 4,000 men. Honor- i able senators opposite, however, seem to 1 think that there is no room for the further expansion of these industries, and are unwilling to give them any consideration. Although the members of that party are often referred to as “ calico jimmies,” they unfortunately do not confine their attentions to calico and similar articles. In Victoria “iron and steel industries have grown to considerable dimensions, and there is room for their further development. I have often had to praise the enterprise, industry, perseverance, and foresight of the people of Victoria. They naturally hoped that under federation they would receive still further encouragement, but in that they have been disappointed. To-day I obtained from the Chief Inspector of .Factories in Victoria the following letter in regard to the number of persons employed in iron working industries in this State : -
With reference to your visit to this office today, I have the honour to inform you that there are 279 registered factories in Victoria in which general engineering, machinery, or foundry work is carried on, and that 5,790 persons are employed therein.
The following list will give yon an approximate idea as to where the larger of these factories are situated : -
Does Senator Neild not see the wisdom of increasing these industries by giving them the necessary aid and encouragement t I extremely regret some of the votes which have been given this evening, and, while I am very anxious that the rights and privileges of the Senate shall be upheld, I am afraid that we are provoking a conflict with the other Chamber in which it will be impossible for us to maintain our position. I deplore the action of the committee in giving advantages to people in other parts of the world without considering the interests of the people of Australia.
– I deprecate these continual references to what the other Chamber may do. It is desirable that members of both Chambers should remember that the ultimate appeal is to the people, who are watching the votes which we give here. I do not care how soon we are able to go to the country, so that the public may express an opinion upon our work.
-Col. NEILD (New South Wales). - Senator Glassey appears to be oblivious of the fact that the proposal before us is that the articles upon which this duty is to be levied are not to be dutiable until a bonus has been granted for their production. But if those who manufacture them can do so at the present time without the assistance of either a duty or u bonus, why should they want both in the future ? It seems to me that, if they are to be free of duty for the present, they should not be subject to duty at all.
Senator GLASSEY (Queensland). - I was not oblivious of the fact to which Senator Neild refers. Senator Pulsford would no doubt spell “ the people “ with a great big “ P.” I, too, am very anxious to preserve their best interests, and I wish to consider the people of my own country before those of other parts of the globe. He deprecates any mention of the likelihood of a conflict with the other Chamber, but some members of the committee seem to be anxious to force such aconflict, and if a conflict does take place we shall not be able to maintain our position.
Question - That the House of Representatives be requested to amend item 81 by adding to the duty, “Iron and steel tubes and pipes . . . ad valorem, 10 per cent.,” the words, “and on and after 1st August, 1902, free” - put. The committee divided -
Ayes … … … 9
Noes … … … 12
Majority … … 3
Question so resolved in the negative.
Motion (by Senator Lt.-Col. Neild) proposed -
That the House of Representatives be requested to amend item 81 by adding to the duty, “ Spelter,advalorem, 10 per cent.,” the words, “and on and after 1st August, 1902, free.”
– I hope that honorable senators will vote in favour of retaining this duty, because it is of the utmost importance that the production of zinc should be encouraged as far as possible. We have tens of thousands of tons of zinc in Tasmania, and equally large quantities in New South Wales. No doubt some honorable senators from Tasmania may regard party considerations as of greater importance than the interests of their own State, but I hope their fiscal fanaticism will not carry them so far as to lead them to vote against this duty.
– I believe that the common name of spelter is zinc, and as this forms the raw material of a number of important industries, it should not be subjected to a protective duty. The protectionists begin by imposing high duties upon raw materials, and then propose still higher duties for the protection of those who work up the raw materials into manufactured articles. This is why we find some honorable senators ready to support the imposition of protective duties ranging as high as 300 per cent. The duty upon spelter cannot be supported upon any reasonable grounds.
– To those honorable senators who have been continually claiming that we should do something for the miner, I would point out that this duty presents an opportunity for encouraging the utilization of tens of thousands of tons of what is now mere refuse upon some of our largest mines.Vast quantities of material at Broken Hill, and other places where silver is produced, could be treated for the production of spelter with great success if proper machinery and appliances’ were employed. Surely it is reasonable that we should do everything we can to encourage the production of the zinc we require from our own mines? We propose to give a bonus of £2 per ton for the first 10,000 tons of spelter produced within the Commonwealth. The bonus period will expire on the 1st July, 1905, and under these circumstances itis reasonable that we should ask for the protection of the industry after that date.
– If there is anything I know something about it is spelter, and if there is an article regarding which the Vice-President of the Executive Council knows nothing it is also spelter. It is amusing to hear the honorable senator speak about a 10 per cent, duty upon spelter as if it would solve one of the greatest metallurgical problems of the present day. The imposition of a duty upon spelter can haveno possible connexion with the solution of the sulphide problem. The difficulty with which we are confronted in the case of spelter is not connected with the consumption of the article by our own people, but the extraction of it from the ore, and a duty of 100 per cent, would not afford the slightest assistance in this direction. As a matter of fact, there is no reason why a duty should be imposed upon spelter under any circumstances, or at any time. The only effect it can have will be to enable those who own spelter within the Commonwealth to obtain a little more for it.
Question - That the House of Representatives be requested to amend item 81 by adding to the duty “ Spelter, ad valorem, 10 per cent “ the words “and on and after 1st August, 1902, free” - put. The committee divided-
Ayes … … 10
Noes … … … 9
Majority … … 1
Question so resolved in the affirmative.
Division VII.- Oils, Paints, and Varnishes.
Item 82- Blacking, including dressings, soaps, oils, inks, pastes, polishes, stains, and varnishes for leather ; Berlin and Brunswick blacks, furniture oil, paste, and polish, and bronzing and metal liquids and powders, ad valorem, 20 per cent.
– I move-
That the House of Representatives be requested to amend item 82 by adding the words, “and on and after 1st August, 1902, 15 per cent.”
The committee have already decided that 15 per cent, is a proper duty to impose upon oilmen’s stores, and as a number of the articles included in this item practically come within that category, I think that 20 per cent, is altogether an excessive rate.
– This is a matter which very much concerns the revenue of the States, and therefore ought not to be passed over lightly. Not content with endeavouring to prevent the establishment of industries within the Commonwealth, Senator Neild now proposes to deprive the States of a portion of the revenue upon which they depend for the purpose of carrying on the government of the country.
– I find that the total revenue which the Government expect to receive from this item is £3,050, so that the amount involved is not a large one. I claim, however, that a duty of 15 per cent, will produce more revenue than will one of 20 per cent., and that 10 per cent, will produce more than either. The reduction proposed will, in my judgment, benefit the States. It goes without saying that these small articles will he made chiefly in Melbourne and Sydney. The Government hold that the imposition of high duties will prevent importation, quite oblivious of the fact that the moment importation stops we cease to obtain revenue. I hold that a 20 per cent, duty will tend to discourage importation, and thus lessen the amount of revenue derivable from this item.
Senator GLASSEY (Queensland).- I do not agree with Senator Pulsford that a lower duty will produce more revenue. I would further point out that, even if the amount involved is not large, we cannot afford to throw away any revenue. Assuming that these articles will be produced only in the large centres of population, the fact remains that if we do not derive revenue from their importation our own people will be engaged in their manufacture.
Senate adjourned at 10.8 p.m.
Cite as: Australia, Senate, Debates, 9 July 1902, viewed 22 October 2017, <http://historichansard.net/senate/1902/19020709_senate_1_11/>.