12th Parliament · 1st Session
The President (Senator the Hon. W. Kingsmill) took the chair at 11 a.m., and read prayers.
– by leave - I omitted to mention last. night that the papers relating to the application for a hotel licence at Jervis Bay, being the property of the licensing court, cannot be laid on the table of the Senate, but I have brought them for the perusal of honorable senators, after which they will be returned to the court.
– I understand that the explanation of the premature publication of my colleague’s speech is that an advance copy was sent to The World newspaper on the understanding that it should not be published until after delivery. That is in accordance with the usual practice; but evidently some mistake has occurred.
Appointment of Organizer
– Yesterday the Assistant Minister (Senator Dooley) stated that since the resignation of Mr. Foley, no new organizer has been appointed by the Federal Labour party, Rawson Chambers, Sydney. Has the attention of the Assistant Minister been drawn to the following statement by Mr. A. J. McPherson, published in the Worker, Sydney, of the 4th November : “ Since taking up the duties of organizer of the Federal Labour party, I have visited many of our metropolitan leagues”? Will Senator Dooley still persist in stating that no paid organizer has been appointed by the Federal Labour party in New South Wales to succeed Mr. Foley?
– I said that I had no knowledge of such an appointment. J have not read the Worker, and thatan appointment has been made is news to me.
– I ask the Leader of the Government in the Senate which of the political trinity - the Treasurer, the Attorney-General, or the Minister for Markets - is to succeed Sir Granville Ryrie as High Commissioner in London? Senator DOOLEY.- So far as I am aware, such an appointment has not yet been considered.
In view of the recent reported manifestations, by acts of violence, intimidation, and by propaganda, of the activities of the communist organization in Australia, will the Government take immediate action under the Crimes Act 1926, to protect the Commonwealth against this organization; or, if necessary, seek further grant of power by legislation to enable such action to be taken?
– Decision as to when and to what extent the force of Commonwealth law should be used to suppress the manifestations to which the right honorable senator refers is one which, as he knows from his ministerial experience, calls for the exercise of discretion. The Government is aware of its powers, and is prepared to use them when it is deemed necessary.
asked the Minister representing the Attorney-General, upon notice -
Guard “ have duly appointed agents actively making a personal canvass of ex-members of the Australian Imperial Force, and other citizens, far the purpose of inducing them to join the “ New Guard “ ?
– The answers to the honorable senator’s questions are - 1, 2 and 3. I refer the honorable senator to the statement made by the Attorney-General in the House of Representatives on the 30th October last, and reported in theParlia- mentary Debates, page 1410.
asked the Minister representing the Prime Minister, upon notice -
– The answers to the honorable senator’s questions are -
asked the Minister representing the Prime Minister, upon notice -
– I have no information regarding any intention to introduce legislation in the Western Australian Parliament for the purpose mentioned. I do not consider, therefore, that any useful purpose would be served by discussing hypothetical questions based on the assumption that legislation of the nature referred to is in contemplation.
asked the Minister representing the Prime Minister, upon notice -
– The answers to the honorable senator’s questions are at follow : -
asked the Minister representing the Prime Minister, upon notice -
Has the parliamentary staff recently been reclassified?
– The answers to the honorable senator’s questions are as follow : -
Debate resumed from the 12th November (vide page 1630), on motion by Senator Daly -
That the bill be now read a second time.
– When I was interrupted last night I was indicating the attitude which I intend to adopt towards the tariff schedule. The Government is proposing alterations of the law, and the onus rests upon it, as in the case of every projected change of the law, to show cause. The conditions that obtain to-day are known to all of us, but no one can forecast, reliably, what will be the state of affairs when the law is changed. I hope, therefore, that the Minister in charge of the bill will regard it as his duty to inform the Senate why, in the opinion of the Government, each proposed alteration is necessary.
– I plead non possumus.
– That defence will not satisfy me, although it may be of great importance in the opinion of the Minister.
– It is important. The Commonwealth could not afford to make the refunds that would be necessary if this schedule were rejected.
– I . wish to stress the point which I fear, may be’ lost sight of, that in any action which we may take in connexion with this schedule, we shall not be changing the law, because the only Taw in existence is the law of the 1928 tariff. The mere fact that, by what has been termed the straining of its executive powers, the Governmenthas been collecting duties under the new tariff schedule, does not prove that the present tariff schedule has legal existence. Those who assume that it is legally in operation merely because it was brought down by resolution in another place, ignore the constitutional authority of this chamber. It is well, therefore, to remember that until a tariff schedule has been agreed to by the Senate, it has not, and cannot have, the force of law. This should be remembered, particularly by those who assume that, if we took the drastic step which we could take, and rejected the schedule altogether, we should be establishing freetrade; in effect, we should merely have left standing the highest tariff of which the world has any record. The only controversy between us, therefore, is whether we shall allow the world’s highest tariff to stand or whether we shall raise it a little higher. This is why I contend that the onus is on the Minister to give reasons why we should change the tariff.
The aim of this Parliament should be to reduce costs of production as much as possible, so that we may establish and maintain an important export trade in our secondary products. On this point the Tariff Board, in its annual report for the year ended the 30th June,1931, stated -
Naturally, any action that might be taken to reduce the more oppressive duties-
I call special attention to its reference to “oppressive duties,” because it indicates that, in the opinion of the board, some duties, at all events, are oppressive- would assist, not only the primary industries, but also those secondary industries which are seeking an export market.
The present Government appears to take the view that we require high duties against high wages paid in industries in America, against low-wage industries in European countries, and against medium wages paid in Great Britain. This appears to exhaust the categories, and from the facts I deduce that those who advocate these extremely high duties, assume that Australians are not competent to hold their own against the people of other countries. This is doing less than justice to the
Australian people. A few years ago our young men were called to arms on the other side of the world. They were required to adopt a profession to which they had not been trained. They asked for no concessions-; they expected no privileges; they claimed no handicaps, although they were aware that they were about to meet, face to face, in the dread arbitrament of war, men who had been trained in that school from their earliest youth. But what happened? Almost from the day they landed on foreign shores until the day when they left, their boast might have been the boast of Achilles, “You will know the difference now that I am here “. I remember, in the last days of the war, reading how, when the enemy were being driven out of towns and positions which they had held so recently, the cry, “ The Australians are here !” brought women and children from their hiding places, secure in the knowledge that they were protected by protectors who were a match for any foe. Is not that the Anzac spirit? And must we now confess that what we could do in the field of war we cannot do in the field of peace? Must we admit that, in industry, we are unable to hold our own in competition with the people of other countries? I fear that, by a complicated system of legislation, we are building up an inferiority complex in our own people to the disadvantage of tha Australian nation.
I am aware of the argument that the ^present high tariff is necessary if we are to become a self-contained nation. That, -as I have already said, is an ignoble ideal, and is not capable of realization. If it were capable of realization, it is too late in the day now for us to attempt it, because every year we have overseas obligations . amounting to between £30,000,000 and £35,000,000, which we have to meet in gold. And the amount is increasing because of the redemption of maturing loans at higher rates of interest.
The one gleam of sunshine that we get out of the fact that we are passing through an unexampled depression, is the knowledge that the people of this country now realize how much we depend for our prosperity as a nation upon the profitable sale overseas of our primary products. Towards- the end of last year a petition bearing the signatures of a number of representatives of our primary industries was presented to the House of Representatives - I am not certain if it was presented also to this chamber - pointing out that, of the total Australian exports for the ten years ending 1927-28, amounting to £1,316,719,000, primary products represented £1,260,254,000, or 95.71 per cent., while manufactured goods amounted to £56,465,000, and represented only 4.29 per cent. It showed further, that of the total of primary production, 46.5 per cent, was exported, whereas only 4.6 per cent, of manufactured products was sent overseas. When I said yesterday thai I feared this tariff would mean disaster to Australia, I had in my mind those figures, because, as I have shown, we have to maintain that position, and should seek to improve it, but we cannot do this if we impose further handicaps upon our primary producers. Paragraph 15 of the petition stated -
If the primary industries of this country fail, as fail they must unless they are afforded substantial relief, then Australia fails with them, for they ave Australia, aud represent mure than 95 per cent, of the exports of the country.
Since there may be some doubt as to my attitude to the tariff, I wish to make it clear that I take my stand upon the report of the Tariff Board. This is what the board has to say concerning the general effect of tariffs -
The board holds that the community in general is best served by the imposition of a duty sufficient to enable an efficient manufacturer, to develop his business and to secure the trade. This method tends to promote efficiency and economic production, and is much less disruptive in its operations than are prohibitive duties.
When I say that I take my stand upon that statement of the board’s view, I mean that our whole fiscal and economicpolicy should be directed to an improvement of the means to be adopted to meet our tremendous interest bill on overseas obligations. Leading world economists are becoming perturbed at the marked tendency in all countries to pass restrictive legislation, which, as we have discovered to our cost, is unduly hampering international commerce. I cannot now, in the limited time left to me, quote the opinions of those authorities, but I may have an opportunity to do so before this debate is closed. For the moment, I shall content myself by asserting that the trend of opinion among .he greatest economists in the world is that there must be some loosening of the restrictions which have been applied in all countries.
It is said that Great Britain has given a mandate for the change over to protection. Great Britain has done no such thing. What the people of the Mother Country did was to give an open mandate to the present Government. It is true that, as the result of the recent appeal to the electors, we may see the introduction of a mild form of protection in Great Britain, but’ I feel confident that it will be found to be expressed in the view put by the London Times, on the morning of the election, that Mr. Baldwin had made it abundantly clear that -
He will subordinate both the imposition and the use of the tariff to the main task - giving stability to the currency. This means that no tariff will bo imposed which will raise prices, harm exports, shelter inefficiency, or allow profiteering.
When we have a tariff embodying all these negative virtues, I will most readily subscribe to it. In the meantime I ask my honorable friends who hold the contrary view on tariff questions, to remember that greatness is not always material greatness, and that Australia cannot afford to ignore or, as Senator Barnes put it last night, slight the opinions of other countries. As the right honorable the Leader of the Opposition (Senator Pearce) said on one occasion, Australia attained to nationhood at Gallipoli. Braving attained to nationhood, we must take our place in the family of nations. Even the Minister for Trade and Customs (Mr. Forde) appears now to recognize that it is not such a. bad thing to deal with other countries. Yet if one may judge by his more recent utterances, he believes it to be a good thing to deal with them by government treaties, but not by private treaties.
I conclude by congratulating the Government and my learned friend, the Minister in charge of the tariff (Senator Daly) and a certain newspaper, which may be said to be an intelligent anticipator of events, upon the intelligence which it displayed in anticipating an event which has not yet taken place in this Senate, but which, no doubt, will (take place in due time.
.- I congratulate Senator Brennan upon the excellent speech he has just delivered. Having been a member of this chamber for many years, I recall all the advantages which it was claimed would flow from the original tariff schedule, and from the many subsequent revisions of it. As a consistent supporter of a protective policy, I now have to confess to a great deal of disillusionment. I have no hesitation in saying that the tariff has not solved our industrial, commercial, or unemployment problems. Unfortunately, unemployment is rife in all countries, and I am afraid that, if relief is not soon given, there will be trouble, leading possibly to revolution. Tariffs have been tried in practically every European country, and have been more or less failures. They have not assisted in any way to solve the problem of unemployment, which to-day is greater than it lias ever been before, and appears to be unsolvable It ia said that throughout Europe to-day, notwithstanding tariff restrictions, the unemployed number from 25,000,000 to 30,000,000 people. No matter how ardent protectionists we may be, we must face these facts.
In every tariff debate the country which is held up as an example of what can be accomplished by means of a tariff is the United States of America. Next to Australia, that country has the highest tariff wall iii the world. Throughout its existence, it has had the advantage of a large population to consume what it has produced, a plentiful supply of, labour, and efficient machinery and organization to enable it to export. Yet at the present time from 10,000,000 to 12,000,000 of its people are unemployed. On the other hand, Great Britain has always adhered to a freetrade policy, and until recently has been able to hold her own with every protectionist country. To-day, every country is shutting out the goods of all others, and striving to become self-contained. Great Britain’s present plight is due not to inefficiency, or failure to supply the world with its requirements, but to the fact that she has been shut out from the markets of other countries by the tariff walls that have been erected by them, and it seems likely that she will have to adopt some form of protection in order to prevent the dumping within her borders of goods that are produced in cheap labour- countries. In Australia there is a strong feeling in favour of giving to Great Britain whatever preferences we can grant without injuring our own industries.
This morning the Minister for Trade and Customs (Mr. Forde) published in the press a statement, the tone of which, in one respect, does not greatly astonish me. lt is unfortunate, however, that he appears to be more anxious to make trade treaties with foreign countries than with Great Britain. I have no objection to offer to such treaties, realizing as I do that they will have to be made if our industries are to expand. But Great Britain is our best customer, and should receive our first consideration. Our very safety is dependent upon her. That is a fact which is frequently overlooked by many of our people. She has also supplied us with the money that has been used in our development. The Minister is probably anxious to visit Ottawa, and is disquieted at the prospect that his desire is likely to be thwarted. It would evidently afford him considerable pleasure to air at the proposed conference the wonderful knowledge that he possesses of the commercial activities of Australia. I believe that he will miss the ‘bus, because, before the conference is held there is likely to be in power in this country a government that will more truly represent the opinions of the people of Australia. It must also be borne in mind that it is the intention of Mr. Thomas. the Secretary of State for the Dominions, to pay a visit to each of the dominions with a view to developing Empire trade. The question of Empire trade is a very complicated one, and if it is to be properly handled by the British Government, it is essential that Mr. Thomas should come into personal contact with the people, and learn the feelings and the conditions in the dominions. Our commercial and industrial safety may drive us into adopting a view different from that which we now hold about Empire trade. The present is an appropriate time for us to have a visit from Mr.
Thomas; and, if the trade conference is held subsequently, useful results will probably accrue from it. Mr. Forde can be better employed in. Australia than iu expressing before an Imperial Conference the narrow view that he holds on tariff matters. He does not appear to realize the injury that is being caused to Australia by the attitude that he is adopting.
In the past, Great Britain has depended on the East to provide her with a market for many of her products, which she has been able to supply at a price that has suited those with whom she has traded. That market is now being lost by her. Instead of the East looking to the West to supply its requirements, it is producing them itself. Japan, whose industrial life has extended over a period of only about 50 years, to-day is seeking a place in every market in the world. Once the East becomes properly organized, and realizes the possibilities arising out of the extensive use of machinery, it will become a danger to western nations. That, is a fact which we must bear in mind in building up our own industries. We may sneer at the low rates of pay and the long hours of labour in Janan, but we cannot deny her efficiency. She is now able to supply India with cotton goods at 8 cheaper rate than that at which India can produce them herself. Every one who has kept himself in touch with international affairs knows that Japan is overcrowded, and that she must find an outlet for those whom she cannot absorb in her own industries. The present trouble in Manchuria has arisen out of the fact that she has been looking for territory for the absorption of her surplus population and production
If the tariff walls that have been built around each nation continue to be raised, what will be the outcome? Eventually no country will be able to find a market beyond its own boundaries, and this will create an international menace. The developments within recent years have been regarded so seriously that a committee of experts was appointed by the League of Nations to make a thorough investigation .into the subject. That committee, so far as I have been able to gather, reported adversely about, the high tariff walls that have been erected, because of their danger to inter- national peace. Much of the international trouble in the past has been caused by the bad feeling and jealousy aroused by trade competition. A study of the last war, and of others that preceded it, will show that they had their genesis in trade rivalry. For many years the United States of America has been insistent upon having naval parity with Great . Britain. Why? No one imagines that the United States of America is in danger of invasion by Great Britain. The reason is that the United States of America seeks to predominate as- a commercial nation ; it wants a great navy so that it may police the high seas and protect its shipping in times of war. Obviously, the tariff walls that are being raised by different countries, the dumping that goes on periodically, and the endeavour by each country to become self-contained, must bring trouble. The weakest, will go to the wall. Because of Australia’s remoteness from the centres of civilization, we believe that in making this country self-contained we are following a laudable course. But are we going the right way about things? Judging from my own experience, over a good number of years, we are not. We are ruining Australia, instead of building it up into the nation that it ought to be. Our population is too scanty to be able to pay the price necessary to make us self-contained.
The Government has told us that this extremely high tariff is proposed in an endeavour to balance our trade, and to reduce the high rate of exchange. There is something to be said for that. On the other hand, we cannot forget that it is two years since the schedule was formulated. It has only just reached the Senate! The delay is unprecedented, and could have been brought about only by a government composed of extreme tariffists, and possessing such a great majority in another place. During those two years, industries have been built up in Australia in anticipation of the tariff bei ng accepted by the Senate. If rates are reduced by the Senate, hardship will be suffered by industries into which considerable capital and energy have been placed. Unfortunately, the efforts of the Government have been misdirected. Already these new industries are over-producing, and many are working only half time. Those ills are the result of the tardiness of the Government in presenting this schedule to the Senate.
Members, of the Government, and particularly the Minister for Trade and Customs (Mr. Forde), have gone around the country claiming that this tariff has created a tremendous amount of employment. They have repeated that statement so frequently that they now believe it. Unfortunately, their claim is not backed up by facts, as was proved by the figures that Senator Brennan quoted yesterday. I shall further disprove the claim of the Government by referring to statistics taken from the official quarterly bulletin of the Government. The following table shows the number of factories in Australia before and since the introduction of the schedule : -
Because of the existence of this tariff, there were 216 fewer factories in operation during the last twelve months than in 1928-29. It may be claimed that some of the employees who lost their work when these factories closed down were placed elsewhere. Here are the figures -
So the very pleasant legends that have been circulated by the Minister for Trade and Customs (Mr. Forde) and his friends are false! Actually, there were 31,288 fewer persons employed in 1929-30 than in the previous twelve months. The official statistics of the Australian Commonwealth show the following quarterly percentage of members of trade unions returned as unemployed : -
– As a matter of fact, our secondary industries are the only ones which maintain anything like the previous rate of employment.
SenatorREID. - This tariff was specifically introduced to assist our secondary industries, which, have not been built up as was expected, with the result that the burden of the tariff has fallen on the rest of the community, and particularly upon the workers. With the opinion that our secondary industries are very necessary, I supported every previous tariff, but the result has been disappointing.
It’ has been mentioned by several of our strong protectionists that .this tariff will find work for our young people. 1 am particularly anxious for that. Australia spends millions of pounds annually in providing for its youth an education that is unsurpassed anywhere else in the world. Given the inclination and the ability, any of ‘Our children may obtain a free education, from the state school to the university. What is the result of all that expenditure? There are thousands of young people out of employment. While it is heart-breaking for our mature citizens to be thrown out of work, it is tragic for the youth who has equipped himself with a splendid education, and goes forth into the world of business full of ambition and enthusiasm, to find that there is no place for him. Our secondary industries do not provide employment for these young persons, whose position has been made worse by the hampering restrictions placed on apprenticeship by trade unions. Those are facts which we have to face. This tariff has certainly hot been so beneficial as the Government claimed it would be when it was first introduced. We have to remember that however necessary secondary industries may be to assist our primary producers, we cannot build up Australia merely by the establishment of secondary industries. The interior of this vast continent is sparsely inhabited and is used mostly for the raising of sheep, cattle and other stock and, therefore, our primary industries are of paramount importance. At present Australia is not manufacturing any article that can be exported at a profit. We have given an enormous protection to the iron and steel industry. Our steel works are efficient, and, in fact, they have become over efficient, and now that the boom has gone machinery is standing idle. Most, people prefer the imported article, and will not purchase the Australian article unless compelled to do so. We cannot grow as a nation without an export trade. We must have export markets. The competition for markets under the tariff walls erected by various countries has become extraordinarily keen, and it is useless for us to attempt to establish secondary industries unless we can sell the manufactured article abroad, and tit a profit. We have assisted the secondary industries by imposing prohibitions and embargoes. We cannot continue to do that, particularly as our primary industries are suffering hardship thereby. The only primary industries that are not receiving assistance by way of bounty are the sheep and cattle-growing industries. The last report of the Tariff Board gives a glaring example of the effect of the bolstering up of secondary industries, without proper inquiry having been made. One paragraph reads -
In- several wises dealt with by the board iti the period covered by this report, there was evidence that the manufacturers who mad* requests for increased duties, or supported proposals for such duties could, by reducing the selling prices of their products, have secured u consider ably greater output in competition with imported goods. There was also evidence that thu manufacturers concerned, although earning profits which justified such action, had made no attempt to reduce their prices. Instances earnt under notice where requests had been made for increased duty, o; support had been given to increases embodied in tariff proposals, by manufacturers earning abnormal profits. One manufacturer in an industry supplying goods to the value of fi 00.000 per annum was’ making 100 per cent, per annum on the capital employed in hit business. Another company with an output of £50,000 per annum had paid dividends ranging from 22 i per cent, to 121 per cent, over the four years preceding the inquiry. In another industry a company having an annual turnover of over £1,000,000 made, over a. period of seven years, profits ranging from 37 per cent, to 134 per cent, per annum on tha capital employed.
The board docs not suggest that these profits are being made at the present time, but the fact that they were made under a protective tariff when trade conditions were normal indicated a grave probability of the misuse of any additional protection. Neither does the board suggest that, as a general rule, manufacturers seeking additional protection were such as to influence the board in recommending against any general increases in the duties applied for.
That is clear evidence that abuses have crept in under the tariff. In imposing many of the prohibitions and embargoes the Government has entirely ignored the recommendations of the Tariff Board, and with other honorable senators, I wish to enter my protest against that action. It is difficult to discuss many items of the tariff, because of the lack of information. Wild statements have been made by some honorable senators, and even by some of the members of the Government themselves. In respect of numerous items the Government ignored the recommendations of the board, and, without any inquiry at all, doubled the duties. Under the tariff of 1928, most of our workmen were employed and our industries working at a profit. The duties thou operating have been increased; in many instances, doubled. Despite that additional protection, thousands of men have become unemployed, aud the price of the locallymanufactured article has been increased. That is not the way to satisfy the public. The tariff has to some* extent shut out goods which cannot be manufactured in Australia, and that has seriously interfered with our primary industries. Within the last month the prices of wool and wheat have increased. Every one rejoices at that. The producers generally have been given new heart and a fresh outlook. But although prices have increased, they have not reached the point at which it pays to produce. It does not pay to produce wool at ls. per lb. The following statement of the President of the Chamber of Commerce, Mr. Hawkes, as reported in the Sydney Morning Herald, shows the effect that the tariff protection given to our secondary industries is having upon primary production : - “ It is upon the primary industries that this country depends to meet its obligations overseas,” said Mr. Hawkes. “ The primary producers, owing to the cost of living, have costs of production so exorbitantly raised that few can produce at a profit, especially since the disastrous fall in the prices of wool and wheat. “A statement of increased costs since 1010, taken from the books of one of the oldest wheat-growers in the Riverina, discloses that this farmer operates 1,000 acres as a wheat, farm, with sheep as an auxiliary. Freight on wheat shows an increase per ton of from lis. 2d. to 18s. Id., and agent’s commission and handling charges per ton ls. to ls. 6d This totals 2Jd. per bushel. On such a farm, averaging 18 bushels per acre (approximately 320 acres would be crop each year and 320 acres fallow), the quantity available for sale would be 4,650 bushels, and at 2ld. per bushel the increased cost would be £53 5s. 7d. Oil this property one man would be permanently employed all the time. In 1910 his wages were 35s. per week and keep. In 1930, 55s. per week and keep. This is an additional cost of £52 per annum. Add to this additional cost of harvesting labour, £10, and increased cost of keep, £26, and it makes a total of £83. Thelanded cost of manure in 1910. was £4 18s. 3d. per ton; in 1930 it is £5 10s. (id. per ton. Theincrease in cost on this farm is £22. Chaffcutting is done by contract, and the increase in costs amounts to £18. Insurance (fire and hail) rates have increased from £3 10s. to’ £6 10s. per f i 00, a total increase of £21 for the farm. New items in cost are: Workmen’s compensation, £4 103.; child endowment, £4 10s. - a total of £9. “Freight on a sheep van in 1910 was £7 ls. 8d.; in 1930 it is £13 4s. 2d., an increase of £0 2s. 6d This represents an extra cost of ls. 3d. per head of 300 sheep to be sold, a total increase of £18 15s. Shearing cost has doubled, and the extra cost for 300 sheep to-day is £12 10s. The increased freight on wool is £3 6s. 6d. Shire and P.P. Board rates have increased £22. There has been an increase of 2 per cent, in interest charges on mortgage of £3,000, which is equal to £00. Added costs due to freight increases on all requirements, and increased costs of duplicates, &.C., have also to be taken into consideration. “ In all, total operating costs have been increased by approximately £500, or 10s. per acre. In addition, there is the upkeep of the farmer and his family. Further, a comparison oi accounts for all farming implements, machinery, &c, shows fully 100 per cent, increase in cost, after allowing for all increased work the implements may do. “ These definite figures are worthy of serious consideration by all who have at heart the maintenance of our first line of financial defence “.
I cannot guarantee the accuracy of the figures I have just quoted, but they were placed before the Sydney Chamber of Commerce, and were evidently taken from carefully-kept books of account.
– That man must have been a jackeroo farmer!
-I have heard Senator Daly criticize similar figures before. When he was sitting in Opposition he questioned the accuracy of certain figures which I quoted in regard to the pastoral industry, but later he had to admit that they were correct.
To illustrate still further the difficulties which face those engaged in industrial undertakings, I direct attention to a sentence in. the report of the Commonwealth Oil Refineries Limited dated the 29th October, 1931, which was made available to honorable senators a few days ago. This reference is of particular interest, because it relates to a partly socialized industry which was established with the object of keeping the price of petrol down to a reasonable figure. The Government, as honorable senators know, holds the majority of the shares in the company. The sentence to which I refer states that, with the exception of paying primage on crude oil, the company pays the same customs and excise duties as other companies, and that during the year ended the 30th June, 1931, these amounted to £346,605 4s. 6d. ! Seeing that this company is taxed so heavily, I cannot see how it can be expected to keep the price of petrol down. But all industrial enterprises are being heavily taxed to-day, and this makes it extremely hard for them to maintain their operations on a profitable basis.
Britain. We all know very well that the doors of most of the dominions have been shut for the time being against British migrants, because of the existing financial difficulties; but it seems to me that we must adopt a policy which will make it practicable not only for the people of Great Britain to buy our goods, but for us to buy the goods manufactured there. The British Isles are today overcrowded with population in a way that the people of Australia who have not been there can hardly understand. The conditions are such that in the purchasing of foods a farthing means as much to some of those people as 6d. means to our people. With a half -penny or a farthing, a considerable amount of food may be purchased in Great Britain While I strongly favour the granting of preferences to Great Britain, I have always recognized that there arc difficulties in the way of making a mutually satisfactory arrangement. I know from relations of mine in Great Britain that it is beyond the means of the average middle class citizen of the Old Country to buy many Australian products.
The high cost of production in Australia is very largely due to our industrial conditions, and our industrial conditions are affected by our custom? duties. Honorable senators know very well that most’ of the time we spend in this chamber is occupied in the discussion of industrial problems or problems related thereto, of which the tariff is one. A good deal of the strength of the communist movement in Australia to-day has arisen from industrial causes. Unemployment has caused many otherwise estimable citizens to turn their attention to communism as a possible means of remedying the evils of our present social system. It is only to be expected that a man who sees the savings of year? disappearing, and his wife and family almost starving, will become desperate. Nothing is more humiliating to a man than to be left with the ability but without the means of providing his dependants with food and shelter. At the bottom, it was industrial troubles that precipitated the recent British election. The people there had been fooled, and when the opportunity came they simply swept away those who had fooled them.
They are now living in the hope of getting something better from the new Government. Similar problems have arisen in Australia.
When the tariff was first introduced, the members of the Labour party were not tariffists, but new protectionists. Their idea was that the workers should share in the benefit derived through the protection -given to local industries, and that sweating and other industrial evils should be abolished. The people of Australia endorsed the policy of the new protection ; but no sooner had the tariff been applied than the employees approached the Arbitration Court for an increase in their wages. Then the employers went before the Tariff Board, and claimed that, unless protection were” increased, they would be unable to carry on their industries, and Australia would be flooded with foreign goods. They showed that the costs of production had risen, and, therefore, the Tariff Board increased the duties. Within six months, the men again approached the Arbitration Court, and obtained a further increase in their wages. The result, eventually, was unemployment. The two parties to industry agreed to pass on the increased co3t of production to the public, who, naturally, were then unable to purchase so many goods as before. The real purchasing power of wages was falling all the time, owing to factors that were operating in a vicious circle. Australia’s ‘industrial progress was retarded and the outcome of the tariff waa the stifling of the very industries that it was designed to help. The great majority of employers have no desire to reduce wages; but it is futile to pay high wages if the community suffers in consequence of the policy that has been pursued.
– Does not that argument apply to the sugar industry?
– We must face hard facts, whether we are dealing with the sugar, dried fruits, or any other industry. The workers have been led astray by their so-called leaders, and have imagined that the higher their wages are, the more they can purchase. They are beginning to realize that the purchasing power of wages is an important factor, and that the cheaper a product is, the more demand there will be for it. Instead of the
Labour party accomplishing what it set out to achieve, widespread unemployment has been caused.
– Our fiscal policy has prevented us from selling our manufactured goods outside Australia.
The effect of protection on various industries, both primary and secondary, should be investigated by an independent tribunal. Duties have been imposed haphazardly without inquiry, and the opinions of the Tariff Board have been ignored in many instances. Manufacturers. particularly iu Sydney, have been invited practically to state their tariff requirements, and these have been granted by the Government without question. The Government coolly invites the Senate to agree to a tariff schedule that embraces duties which, in the main, are twice ashigh as those previously in operation. For the sake of the workers of Australia, and in the interests of all industries, a special body should be appointed to consider the whole tariff position. The high wages earned by coal-miners, and the effect of the high price of coal on industrial activities, should receive due consideration. [ Extension of time granted.] The price of coal has affected disadvantageously the iron and steel and many other industries.
– Is not the hewing rate too high in this country?
– Yes. Petroleum, oil and electricity are being utilized to such an extent in industry that the coal-miners are acting most foolishly in demanding the highest possible wages.
Members of this chamber have, no doubt, often wondered how to vote on individual tariff items. No member of the Ministry is able to give reliable information on the effect of these duties on various industries. Even the present Minister for Trade and Customs (Mr. Forde) has had ‘no business experience. Yet Australia’s industrial welfare is in our hands in dealing with this tariff. We may make general deductions, but definite information regarding the probable effect of increased duties is absent. I am not at all sure that Parliament is the most suitable body to determine tariff matters, and I feel that we shall be voting on these duties more or less in the dark. Senator Thompson, I think, is responsible for the suggestion that it wOuld be advisable to hand this matter over to a special commission. “We should lay down the policy to be pursued, and authorizing such a body to administer the tariff, so that the duties might be adjusted in such a way that the nation would receive the maximum benefits from them. This body should be free from all interference. The’ members of the Senate represent separate States, and, naturally, are inclined to support the requests for particular duties that come from their own States. Votes are often given in favour of proposals in which the members from the States concerned do not ardently believe. This disability would be removed if the duties were fixed by an outside independent body, whose function it would be to carry out the policy laid down, irrespective of the interests of particular States. In dealing with the schedule, I shall use my own judgment, and vote against items to which I am totally opposed. I trust that the tariff will soon be revised in such a way that it will be of benefit to Australia as a whole, in regard to both its primary and secondary industries.
Sitting suspended from 1245 to 2.15 p.m.
– This is a most important measure, and affects the economic and industrial life of Australia more than any other bill that has been before the Senate for a considerable time. I regret^ therefore, that the Leader of the Government in this chamber (Senator Barnes) suggested yesterday that the debate on, the customs tariff is occupying too much time. Every detail of the schedule should receive the earnest consideration and close analysis of honorable senators. That some measure of protection for our industries is necessary is generally recognized. Like all new countries, Australia first gave its attention to primary and extractive industries. But as the products of these industries are subject to fluctuations of price, demand and output - the former on account of drought or other local conditions - the. development of secondary industries is necessary to give a broader base to the economic structure, and alleviate the effects of low prices1, re duced demand, or decreased primary production. That is one of the reasons why secondary industries are entitled to a certain amount of tariff encouragement. Protective duties are justified also to enable industries to meet the competition of other countries which on account of less onerous industrial conditions are able to produce more cheaply. Again, protection is justifiable when it assures to an established industry a bigger share of the home market, thus enabling the adoption of improved methods and mass production, and selling at a, price equal to or less than that of the imported article. A customs tariff is a sound means of taxing imported luxuries, increasing the demand for local products without placing an undue impost on the every-day necessaries of life and industry. It also has its uses as a means of raising revenue. For these various reasons, the protective policy, wisely applied, can be of great benefit to any country. “We should, however, always bear in mind one consideration, which is succinctly expressed in the last annual report of the Tariff Board -
One of the most pressing problems of the day is- that caused by the very serious extent to which unemployment exists in Australia. Iiic board has kept this matter consistently to. the fore during the whole year and has recommended increased duties wherever it hae considered a net increase of employment will result. Obviously, many of the requests for increased duties which the board has recommended against would, if granted, stimulate employment in the industry directly concerned, but by reason of the detrimental effect on other industries, in the opinion of the board, would actually diminish employment.
During this debate, supporters of this schedule have stated that but for the imposition of almost prohibitive duties and embargoes, Australia would have become insolvent. Senator Dooley stated on Wednesday that these abnormally high duties were necessary to prevent the country from defaulting. That is a serious position for any country to be in. Let us analyse the facts, and ascertain the reason for the present state of affairs. During- the last few years the prices of all our export products, chiefly wheat and. wool, have fallen to a record low figure, causing an insufficiency of’ fund’s in London to meet- interest commitments and to pay for our imports; In addition to this, there is the large unfunded London debt of £38,000,000, for which no provision has been made. The London exchange rate of 30 per cent, would have been sufficient to rectify our adverse trade balance without the imposition of prohibitive duties and embargoes. But there is a greater force retarding the rehabilitation of the Commonwealth, for which the present Government is responsible, which has threatened the solvency of the nation. That is the lack of confidence in Australia’s effort to meet her obligations and the altered conditions under which we live. On this subject the Sydney Morning Herald, of yesterday’s date, made the following comments: -
While the floating debt of £38,000,000 remains unredeemed or unfunded, the demand for Australian funds in London must continue, and thus tend to maintain the exchange rate. Satisfaction of doubts about Australia’s capacity to meet thu demand depends upon a healthy export trade, and the stimulus today to our exporters is the yield from the high ratu of exchange, lt is possible to perceive more clearly now than formerly how the recovery of Australia’s credit overseas was definitely retarded by the past reluctance Of tin; Scullin Government to face up to its responsibilities, first recognized at the Melbourne conference of fourteen months aso, n,nd
Hut definitely faced and accepted until nearly twelve months had passed. The Prime Minister might have funded that floating debt in London a year ago but for the surrender, first by his Cabinet and then by himself, to the ignorant clamour of his party. The necessary economies had to bc made, but the delay in making them vastly deepened the depression.
That, I think, aptly sums up the cause of our present unhealthy economic condition. A higher tariff and the prohibition of the importation of certain commodities have not by any means been responsible for the strengthening of confidence overseas in Australia’s ability to meet its obligations. Senator Dooley referred to the improved position of Commonwealth stocks on the London market, and, I think without adequate reason, claimed credit for this to the present Government. I remind him that the restoration of confidence followed on the heels of the recent appeal to the electors in Great Britain, and I venture also to suggest that the attitude of the Senate towards this Government’s financial and industrial proposals has been, to a large extent, responsible for the improvement in our position in the London market.
At the outset, I mentioned that a limited measure of protection was necessary for new industries. The tobacco industry may be cited as a case in point. Under the stimulus of moderate protection, tobacco-growing has made substantial progress during the last twelve months, particularly at Mareeba, in North Queensland. Our annual importation of tobacco totals about 26,000,000 lb., a quantity of which could be produced in Australia, and if the industry be given reasonable protection I feel sure that, in the course of a few years, Australian production will meet the local demand.
– And yet certain economists would say that the Australian tobacco industry should not be supported because of the loss of excise revenue.
– Locally-grown tobacco pays the same duty as the imported leaf. In my opinion, the excise has not been administered in the best interests of the industry, but I shall deal with that aspect of the matter when we are discussing the tariff items in committee. ,
Advocates of high protection argue that it benefits primary producers by providing for them a wider and better home market. Work is the basic factor in the, successful development of every industry and form of production. Operatives, in secondary industries producing commodities that are required in every-day life exchange their output for that of the primary producer who supplies the raw materials for so many of our secondary industries. The essential factor in the building up of a well-balanced social order is the provision of an equitable medium of exchange. Our export industries provide the means for the payment of overseas services, the importation of necessary goods, interest, &c, and under existing conditions the primary producers in those industries are obliged to work from one and a half to two hours a day longer in order that workers in protected industries may enjoy higher rates of wages and shorter hours of labour. Thus workers in our secondary industries benefit in two ways. In the first place, capital borrowed abroad is generally used on city improvements Or public works such as water con- servation schemes and similar undertakings. It may be argued that water conservation projects benefit our primary producers. That will be admitted, but we should not forget that the high rates of wages duo to the inequality in the exchange of goods as between the primary and secondary forms of production have unduly increased the cost of such works. The interest on the capital that the country has borrowed, and its redemption, have to be met by the exports of the primary producer, and, in addition, he is burdened with the higher cost in which all undertakings are involved by reason of the higher costs of materials and labour made necessary byan unbalanced protection policy. That a country should produce the greater part of what it requires is very sou nd doctrine, provided that there is no departure from the fundamental principles laid down in the paragraph that I have read from the report of the Tariff Board; that is, noninterference with the costs of other industries, and the ensuring of a reasonable amount of competition. It is commonly supposed that a home market is created by high protection. Actually, however, that market exists whether there is high or low protection, because neither the population nor the amount which it consumes is altered by a tariff. The effect of a high tariff is merely to divert capital from one industry to another. It may be that that capital is diverted from a very sound proposition to an industry that is dependent for its existence purely on the protection that it receives. What happens in such a case is that the industry which was able to keep going without protection ceases to exist, and the employees supported by it are attracted to the highly-protected industries which, because of protection, can pay better rates of wages. This is borne out by the remarks of Professor Copland, published in the West Australian of the 27th August, 1931. The professor there says -
The capacity to export is perhaps the final test of the efficiency and economic value of an industry. Owing to thehigh costs in Australia there are few industries to-day that have a substantial export trade without some form of assistance.
– It is not difficult to imagine industries that are of consider able economic value, and yet may have no export trade; for example, the coal-mining industry.
– That is one industry which supports my contention that the high protection afforded to some industries lessens the value of others, and lessens their ability to provide employment. Had the coal-mining industry been left alone, the number of men that it formerly employed would have remained unaltered or have increased, and we should have been on a far better basis than we -are to-day. The honorable senator knows that the coal export trade of New South Wales, which at one time was flourishing, has now, even with government assist- ance, dwindled practically to nothing. There are many industries which, admittedly, are entirely dependent upon the high protection that they receive; they are not economically’ sound, and could not stand if the basis of their existence were an export trade. Professor Copland spoke truly when he said that the efficiency of an industry depends finally on its capacity to export to the markets of the world.
– Would the honorable senator apply that dictum to the sugar industry?
– We are not discussing the sugar industry at the moment; and, in any case, honorable senators know that it is in an entirely different, category.
– What about the cotton industry? ,
– As Senator Hoare stated on Wednesday - and I agree with him - there arc industries which need protection in their infancy. The cotton industry is one of those.
– If Professor Copland is right, the sugar and cotton industries should cease to exist.
– The cotton industry is in its infancy, and should be given protection until it becomes established, so long as that process does not extend over an unreasonable period. Any industry excepting, perhaps, a key industry that is competing on equal terms of labour with similar industries in other parts of the world, and cannot establish itself within a reasonable period, should not be fostered. If that principle were applied, our secondary industries would now be in a much more vigorous condition than they are at the present time.
It is frequently stated that the farmer derives an advantage from the tariff by reason of the fact that an additional market is created by it, in Australia. 1 differ from that view. The primary producer has to export his product to the Other side of the world. The dairying industry, for example, exports something like 55 per cent,, of its output; consequently, there is no need for the dairyman to look exclusively to the home market. It is argued that he receives locally a considerable addition to world’s market price. If he were allowed to purchase on the overseas markets at a price equivalent to that which he receives for his product, he would be in pocket; but, as he has to buy in a highly protected market in Australia he should be allowed something as a setoff against the extra cost of the commodities that he requires. Senator Brennan and SenatorReid- stressed the fact that this tariff had decreased employment. With those statements I entirely agree. I admit that there has been an increase of employment, in certain highly protected industries. The Minister for Customs has repeatedly declared that there has been an increase in employment in certain secondary industries in both New South Wales and Victoria. However, that is the exception rather than the rule. In the waterside industry particularly, the tariff policy of this Government has resulted in much additional unemployment. Comparing the ratio of unemployment of to-day with that of pre-war years, Professor Copland stated -
Even before the present crisis unemployment was rising compared with the level before the war. For 1922 to 1929, the average was 10 per cent., with a vising tendency, compared with6 per cent, before the war. It would seem to indicate, therefore, that the tariff was a means of enlarging the volume of em ployment at ruling rate of costs had reached and, indeed, exceeded the limitations of its usefulness.
That concisely sums up the position. Up to a certain limit a protective tariff if an asset, but beyond that limit it become? a liability. The safety limit has now been passed. In an interjection to Senator Reid, Senator O’Halloran declared that the percentage of unemployment was not so great in our secondary as in our primary industries. That bears out what I am saying. Purely because of the protection afforded them, the super protected industries have been able to employ additional men. That that has been at the expense of the other industries is conclusively proved by statistics.
– What would have been the result had those protected industries not existed?
– I have already answered that question. Then it would not have been necessary for the poorly protected industries to discharge men ; they would simply have carried on at a lower cost.
– Surely the honorable senator does not contend that wool could be produced at a profit at 6d. per lb.?
– That was done when costs were lower than they now are. Obviously, it could not be done at prevailing costs.It. has been stated that Australia could be self-contained. Personally. I cannot see how that could be brought about. To be consistent, supporters of the idea should advocate that the States, too, should be self-contained. The very basis of federation was unrestricted trade between States. It is only by an adherence to that policy that our States have progressed. Had they been self-contained units, their advancement would have been negligible. If we admit that, we must, take the broader view and acknowledge that Australia could not exist as a self-contained nation.
This tariff schedule was tabled in another place on the 21st November, 1929. Since then the Government has brought down eight additional sections and four amending acts. When introducing this measure in another place in June of last year, the Minister for Trade and Customs (Mr. . Forde) said -
Honorable members will be afforded on opportunity within the next fortnight to give the fullest consideration to these schedules in detail.
The honorable gentleman was very optimistic. It was almost, eighteen months before that other place was given an opportunity to debate the schedules, and only now, in the closing months of the life of this Parliament, has it been passed on to us. Many of the items have been in operation since the first schedule was tabled on the 21st November, . 1929.
In speaking during this debate, Senator O’Halloran declared that the newlyelected British Government would have to take steps similar to that adopted by this Government, and introduce a highly protective tariff. I do not agree with the honorable senator. I believe that the new MacDonald Government has no intention of rushing into high protective duties and embargoes such as were sponsored by this Government during the past two years. If it does, it will find itself in even greater difficulties than those which now confront us. Although Great Britain has a great number of free items on, its tariff list, it is by no means a freetrade country. I believe that its” customs revenue last year amounted to £150,000,000. This tariff has been imposed without any thought being given by the Government to its dire effect upon primary production. A properly-regulated tariff would be of decided advantage to this country at the present time. I trust that the British Government will not only adopt an adequate tariff policy, but will also take steps to bring about tariff reciprocity throughout the Empire. We on this side are not opposed to protection. We would welcome a properly-regulated tariff, due regard being paid to its effect upon Australian industries generally. The following remarks by Professor Copland aptly put the position : -
If the tariff spreads rapidly it imposes heavy burdens upon existing industries, and its costs will be greater than its benefits. Thus the committee that reviewed the tariff in 1029 was forced to the conclusion that any increase in the tariff would depress both the exportindustries and the standard of living. The committee’s view was quite definite: “Our surplus resources available to subsidize industry are limited and will not stand any greater strain than imposed by the present tariff.”
That statement, which was made in 1929, has been borne out by what has happened since. The arbitrary and unscientific manner in which this tariff has been framed must give rise to serious concern on the part of all right-thinking men. Yesterday Senator Brennan, in giving a resume of tariffs introduced since 1908, said that in that year only eight items pro vided for ad valorem duties of 40 per cent, and over. To-day, there are 582 such items, and80 other items on which a total prohibition has been placed. Senator Dooley said yesterday that this tariff was a purely temporary measure.
– I did not say that.
– The honorable senator, if he looks up Hansard, will find that he said that the tariff had been imposed to bring about national solvency, and that it is a temporary measure. However, it is difficult to view this tariff as a temporary measure when duties have been increasing ever since 1908, and no one can say when the limit is likely to be reached. This tariff is vastly different from the protection of industries tariff which the British Parliament is now proposing.
– This is an antidumping tariff.
– I quite agree that we should have an anti-dumping lawto prevent from entering this country goods selling at a price lower than cost of production, which, of course, is not fair competition.
SenatorO’Halloran. - This tariff if designed to prevent that practice.
– This tariff prevents healthy competition. There is no competition in Australia, and the local manufacturers have almost a free hand. We have reached the extreme edge of our tariff policy; in fact, this is protection run riot.
I wish now to refer to two aspects of the incidence of the tariff on primary industries. The first is the greatly increased cost of living. . The figures quoted by Senator Brennan yesterday show that there has been a general rise year by year since 1908 in the cost of living, corresponding with a general increase in tariff rates, and ‘that that has been reflected in the higher wages, the increased cost of services, and the shorter working hours operating in this country. Let me give one example of the additional burden thrown upon the primary producers because of the incidence of this tariff. In 1915 the rail freight on a ton of wool from Longreach, in western Queensland, to Brisbane was £611s. 8d. In 1928 it was £12 7s. 7d., or an increase of about 95 per cent. In 1931 the cost was reduced to £10 17s.11d., and since the first of this month it has been reduced to £101s.11d. The credit for that reduction must be given to Mr. Moore, the Premier of Queensland. Freights to-day are considerably higher than . they were in 1915. This extra cost is due largely to the greatly increased cost of material and services connected with the operation of railways. The whole incidence of the tariff has been to increase the burden of the primary producer, although the price of wool to-day is practically the same as it was in 1915. The other aspect of the incidence of the tariff is the greatly increased cost of the manufacturing requirements of the producers, which is a great deal more than they can afford, considering the low prices ruling for their products.
All shearing machinery, with the exception of one item, the hand piece, is dutiable at 55 per cent., 65 per cent., and 75 per cent.
SenatorO’Halloran. - Is not shearing machinery less costly now than it was a few years ago?
– No ; it is dearer. Even the combs and cutters which the shearers have to supply for -themselves arc more expensive. In fact, spare parts are tremendously dearer. This has had a considerable effect upon the shearing industry.
The price of primary products is now back to where it was years ago, when all production costs were much lower than they are now. Senator Glasgow, a few days ago, in giving some instances of the differences between cost now and in 1913, mentioned that it now cost £2 per bale to shear and market a bale of wool. The honorable senator made a very moderate estimate. Many wool-growers would be happy if they could get their wool to market at that cost. Such a pastoralist as that to whom the honorable senator referred must work a property near the railway. I have received some authentic figures supplied by an accountant which show the cost of marketing wool produced in theWin ton district. The average weight per bale of wool in this instance was 350 lb., and the average number of fleeces per bale was 50. Shearing and woolpacks cost £2 7s. 8d. per bale; road freight for 130 miles by horse teams cost 16s. 3d. per bale; and rail freight and selling charges accounted for £2 0s. 6d. per bale, making £5 4s. 5d. in all. The gross proceeds from the sale of that clip in August last averaged £10 10s. per bale! This price was well above the average. It will be seen therefore that practically 50 per cent,of the proceeds were absorbed in shearing, packing, and freight charges. This meant that the pastoralist had to carry on his operations for practically the whole year, pay rent and wages, meet interest charges, and allow for depreciation out of only 50 per cent, of the gross proceeds of his product. Compare this with the following costs for 1913, when wool was a little dearer than it is to-day : -
– What about a bounty for wool?
– If the wool industry were to be granted a bounty the effect would be the same as if the foundation were removed from under a building, the whole structure would collapse. By reverting to horse transport, costs have been cut down to 9d. per ton per mile, as against1s. 6d, per ton per mile for the first 50 miles, and1s. 3d. per ton per mile for every subsequent 50 miles by motor lorry. The use of horse transport is dependent upon the seasons. If seasons are bad, the carriers cannot afford to hand feed their horses. Our high duties are making it most difficult for the motor lorries to show a profit on the capital involved.
The tariff embargo policy has also had a most serious effect upon shipping costs as a result of thecarriage of goods one way only. Some honorable senators may say that there has not been any great increase in shipping freights recently, but I point out that there has been a decrease in such costs in other parts of the world, and if it had not been for our tariff prohibition policy there would have been a decrease here. I understand that negotiations are now taking place between the
Commonwealth Government and the shipowners in regard to freight charges.
Senator Dunn last week referred to Dr. Earle Page as the high priest of freetrade.
– I read a quotation from the Evening News.
– I definitely dispute the statement, whoever made it. 1 do not think the Leader of the Country party has ever been an advocate of absolute freetrade He considers that the machinery required for production and constructional work should be admitted into Australia free. If this were done, the capitalization and overhead costs of many of our factories would be lower than at present.
– Dr. Earle Page did not show any freetrade tendencies while he was a member of the Bruce-Page Ministry.
– I do not think that it can be said that he has ever been an out-and-out free trader. If I remember rightly, ho definitely stated in a speech in Sydney at the Country party conference last year that he advocated the free admission into Australia of all machinery required for primary and secondary production. I understand that this i3 the policy of the sister Dominion of Canada. In this connexion, the following extract from the petition of the primary producers of Australia to the members of another place is interesting -
By the consequent lower cost of production Canada’s trade grew between 1000 and 1929 by 800 per cent, as compared with only 300 per cent, in Australia. In Canada the maximum duty is 373 per cent., constructional material is admitted free, as also all capital requirements for plant, whilst all reproductive imports as requisites for industry are ad- mitted free or at the lower tariff rates. In Australia the management of any industry has to seriously consider the tariff penalty to be paid to the Government for trying to increase the national wealth.
The view enunciated in that paragraph is sound. Canada has prospered under her policy. It must be remembered that if the conditions are such that our primary producers cannot market their products overseas at a profit there will beno national income to support the manufacturers. At present we have to buy in one of the world’s dearest markets and sell in_ competition with the world’s products in the overseas markets. I hope that when >the individual item? in the schedule are under consideration, the Minister will state definitely why the duties have been imposed, and furnish information, if he can, to justify them.
Debate ,(on motion by Senator E. B. Johnston) adjourned.
– I move -
That the Senate, at its rising, adjourn till Tuesday next at 3 p.m.
I have consulted with the Leader of tinOpposition (Senator Pearce) on thi, matter. Honorable senators seem to agree that it is necessary to speed up the work of the Senate. The Government may possibly ask the Senate to meet next Thursday morning, and it may be necessary to prolong the evening sittings to a later hour than usual.
Question resolved in the affirmative.
– hy leave - The right honorable the Leader of the Opposition (Senator Pearce) asked 8 question this morning having referenceto a newspaper report of an announcement made by the Minister for Trade and Customs (Mr. Forde) with regard to the desirability of holding the adjourned meeting of the Economic Conference al as early a date as possible. One of th,questions asked by the right honorable the Leader of the Opposition was as follows : -
Does the Government consider that Unmaking of threats such as are contained in the statement referred to likely to assist th, movement for inter-Empire trade agreement?
I desire to say most emphatically that no such threat as alleged was made, and Senator Pearce appears to have based hi, question upon a newspaper heading which was at complete variance with the subject-matter which followed it. The Minister made it clear that trade treaties would not be negotiated by the Commonwealth with foreign countries until the adjourned Economic Conference had been held. He also stated that the representations which had been made by foreign countries could not be ignored indefinitely, and he gave it as his opinion that the adjourned Economic Conference, which was to have been held in August of this year, should be called together at the earliest possible date. Surely the right honorable the Leader of the Opposition cannot take umbrage at this suggestion, and if he is at all fair in the matter, he will admit that there was no justification for the manner in which he presented his question. During the course of the tariff debate he has advocated that wo should negotiate with foreign countries with which we have favorable trade balances, and the sooner the adjourned Economic Conference is held the sooner we shall be able to come to a decision on the representations which have been submitted to us by certain foreign countries.
In conclusion, I desire to inform honorable senators that this Government is most friendly in its attitude to interEmpire trade, and is most anxious to furnish further tangible proof of its sincerity in the matter. In this connexion, the Empire Marketing Board has already applied the principle that preference should be given, in the first place, te the products of Great Britain, and, after that, to dominion products. No objection can be taken if we apply the same principle, giving preference to our own products first, and thereafter to British and dominion products.
Motion, by Senator Dooley, proposed -
That the Senate do now adjourn.
– Senator Rae and I are not satisfied with the reply given last night by Ministers to my allegation of political graft on the part of the Treasurer (Mr. Theodore). The statement that we have made about the distribution of the unemployment grant, so far as the Cockatoo
Island Dockyard is concerned, demands the closest investigation, and we challenge the Government to appoint either a parliamentary committee representing all sections in both branches of the legislature, or a royal commission, to sift this matter to the bottom. Senator Daly remarked last evening that he regretted the political spleen that had been vented on the Treasurer by me; but 1 claim that our action is not prompted by spleen. We are merely fighting the Treasurer in regard to the distribution of the unemployment grant. Senator Daly went on to say that the Cabinet, and not the Treasurer, had determined how the grant should be allocated, and that Cabinet had to take full responsibility for the allocation of the various sums. We realize that, and we attach no blame to the Cabinet in regard to the setting aside of the total sum of £250,000. What we dispute is the right of the Treasurer to distribute from the Consolidated Revenue £5,000 of the amount earmarked for renovation work at the Cockatoo Island Dockyard. We object to paid organizers and canvassers in the same political camp as the Treasurer supplying lists to the authorities at Cockatoo Island for the purpose of obtaining preferential treatment for certain workers. If an employee is a supporter of the Nationalist party, “the Country party, or even the Lang party, but not a member of the Theodore group, is he not to receive any of this relief? I say, definitely, and with all sincerity, that I shall not consent to the introduction by the Commonwealth Treasurer of any Queensland “stunt” in this Parliament. We challenge the Government to make the investigation that we have suggested. We know that the other branch of the legislature is not now in session, and that the Prime Minister is now in Sydney. We know that the Treasurer is to speak at a convention of the Scullin-Theodore faction to bc held in the Y.M.C.A) building in Sydney, and that the Prime Minister will give an address there next Sunday afternoon. I repeat that Senator Rae and I challenge the Government to appoint either a royal commission or a parliamentary committee to inquire into the charge of political graft that we have made against the Treasurer.
– If Senator Dunn will supply me with the particulars upon which he bases his allegation, 1 shall certainly, in Cabinet, draw attention to the charges made by him against
Lue Treasurer. But as I pointed out last night, the making of mere general statements against a Minister of the Crown a mounts to little more than political spleen.
– Set up a committee; we challenge the Government to do it.
– Senator Dunn, in common with me and other members of the Labour movement, took part in an election some time ago. We stumped this country from Port Darwin to Melbourne with the cry that the Bruce-Page party was at fault in providing for government and inquiries by commissions and committees, and when Senator Dunn was ‘in the caucus room with me nobody set his face more strongly against the establishment of committees than he did. I, personally, am not prepared to advocate or agree to the appointment of a royal commission until I know something of the facts upon which the commission is to inquire. It is not my desire that there should be discrimination in the distribution, of this grant.
– Why is the honorable senator afraid to appoint a committee?
– Order ! I ask Senator Dunn not to interrupt.
– Why should I be afraid ? I am not the Treasurer’s keeper. Senator Dunn must have some information upon which he based his allegation.
– Appoint a committee and I will disclose it.
– Why not allow me to inquire into the honorable senator’s evidence first?
– The honorable senator is a lawyer.
– Order ! I have previously warned Senator Duun not to maintain a constant fire of interjections.
– Even a lawyer can sift a complaint. I do not believe in unfair discrimination of the character alleged, and, if 1 can find any evidence in support of Senator Dunn’s statements; I shall advocate, in Cabinet -an alteration of the practice. I do not believe that the Treasurer has any connexion with the distribution of relief work at Cockatoo Island. To the best of my knowledge, the distribution is controlled entirely by Senator Dooley.
– We are not blaming Senator Dooley. Instructions have been issued by the Treasurer.
– The Treasurer has no right to issue instructions to the head of any department other than his own, and I do not think that he has done so.
– He has not.
– The only Minister who can issue instructions to the officer in charge of these works is Senator Dooley, and he has given the Senate an assurance that no such instruction as has been suggested was given, and thai no list of the nature stated by Senator Dunn was supplied to the manager at Cockatoo Dockyard. I accept my colleague’s statement.
Senator Sir GEORGE PEARCE (Western Australia) [3.27]. - With all respect to Senator Dooley, I suggest that the statement which he made on the economic conference should have been made on the motion for adjournment, rather than by leave. A statement by leave may prevent honorable senators who are concerned from speaking in reply, and if .the making of controversial statements by leave became a practice, the Senate might eventually decide to refuse leave.
– It was only by an oversight that I made the statement by leave instead on the motion for the adjournment.
Senator Sir GEORGE PEARCE.No harm is done on this occasion, because I now have an opportunity to reply to Senator Dooley’s statement. Any impartial person reading the interview with Mr Forde, published in the Canberra Times to-day, cannot but regard it as containing a definite threat. The Canberra Timesstates -
Mr. Forde said that he thought the time was ripe for an early dominion economic conference and in his opinion it should be held at the earliest possible date. The dominion* had already made up their minds and evidently the electors of Great Britain had given a mandate that such a course of action should be taken. All the data is now available iIi the Trade and Customs Department. The confer- ence, which was to have been held at Ottawa in August last, and which was postponed, should be heldnot later than January.
Representations have already been made to the Commonwealth Government by other countries, who buy largely of Australian products, for trade treaties, with Australia, with promises of advantage to Australia with reciprocal benefits to those countries. . . . “It is hoped,” said Mr. Forde, “that the economic conference will be held at. the earliest possible date; otherwise those pressing representations from other countries that buy largely from Australia, cannot be postponed indefinitely.”
He went on to say that South Africa had already negotiated treaties with Germany and other countries, and Canada had a treaty with France. Then he added -
A few more of such treaties will vender more difficult the consummation of trade agreements within the Empire. Procrastination as to the date of the next economic conference will only lead to difficulties that will militate against the finalization of a favorable trade agreement with Great Britain.
The whole tenor of the statement is threatening. Mr. Forde says, in effect, to the British Government, “ Unless you conferwith us in January, we shall conclude agreements with other countries “.
– If Mr. Forde does not go to London in January, he will not go at all.
– I am afraid that that consideration is at the back of his statement. The making of reciprocal trade agreements with the dominions will necessitate the imposition by the Mother Country of duties on goods which to-day are admitted free. Obviously, the British Government cannot enter into such agreements without full consideration and examination. The object of the tour of Mr. Thomas, the Secretary of State for the Dominions, is to put the Mother Country’s point of view to them ; to let the present Australian Government, for instance, understand some of the difficulties in the path of trade reciprocity, and invite it to say what it is prepared to do in return for an improved position in the British market. The conference to be held, subsequently will merely record the decisions reached by imperial and dominion Ministers in consultation. Mr. Forde stated that the Trade and Customs Department has all the information in it’s possession. Has it information as to how far the British Government is prepared to go? Does it know on what goods Australia will ask for preference, and what the attitude of the British Government towards such requests will be?
– The British Government should have a fair idea of how far it is prepared to go.
– It has just assumed office after an election at which the tariff was a leading issue practically for the first time in the history of British politics.
– Consider” how quickly this Commonwealth Government made up” its mind.
– Australia’s experience of a tariff schedule which has- been hurriedly thrown together should be a warning to the United Kingdom to hasten slowly. Probably when Mr. Thomas learns of what has happened in this country, through undue haste in tariffmaking, he will return and say to his colleagues : “ Whatever we do, let us not be too precipitate.” I know that Mr. Forde is full of energy, and is a young man in a hurry; but I suggest that a minatory tone should not be adopted in negotiations of this character.
– I associate myself with the complaint made by Senator Dunn. Senator Daly said that my colleague’s statements are general ; they are specific. We have strong evidence that persons acting on behalf of Mr. Theodore are compiling, or have compiled, a list of men to beengaged on relief; work; these men are almost exclusively, if not wholly, electors of Dalley, and others from adjacent electorates are shut out. Furthermore, if it has not been already done, pressure of a very definite character will be brought to bear to compel the management of the dockyard to accept the services of the men who’ are being listed in this manner. Senator Dooley said last night that he was not aware that an organizer had been appointed to take the place of Mr. Foley, who had resigned. Our information is that an organizer has been appointed, and that he is canvassing the districts affected, and is doing the work referred to.
– Has he been, engaged by Mr. Theodore?
– Mr. Theodore is too old a “ bird “ to do, in a direct way, things that can be better done in some other way. Even my comparatively simple friend would not be so destitute of shrewdness as to do anything of that kind in a direct way. We have sufficient evidence to warrant us in bringing this matter forward, and I do not think that any one will dispute that, provided our assumptions are correct, it is a matter of very grave importance that the public revenue should not be in any way manipulated by a member of the Cabinet, to increase his own political prestige or power in a particular district. That is the substance of the allegations which we make. We have some evidence which cannot be very well disclosed at this stage, but 1 would ask those honorable senators who, perhaps, have had more experience than I have had, if it is not a fact that one may have evidence which can only be brought before a committee where those concerned would have immunity, and where there would bc no danger of injuring any person by a premature disclosure of information. I can say no more, but I think I have said sufficient to indicate the nature of the allegations.
– On more than one occasion, I have heard you, Mr. President, rule that questions must be asked for the purpose of eliciting, and not giving, information. I wish to complain now about certain information given by Senator Rae this morning in a series of questions relating to the State Savings Bank of Western Australia. The honorable senator started off by asking -
Is it- a fact that a measure is being introduced in the Western Australian State Parliament for a referendum on the proposed secession of that State’ from the Commonwealth?
The Minister, in his reply, did not give much information on this point; but for Senator Rae’s benefit, I may state that the Western Australian Government has definitely intimated that it intends to introduce legislation before Christmas to enable a referendum of the people of that State to be taken on the question of seces sion from the Commonwealth. Senator Rao also asked -
Is it a fact that the Western Australian State Savings Bank was recently in a dangerous financial position, and was only saved from disaster by the assistance rendered by the Commonwealth Bank 1
If so, is it a fact that as a consequence of these happenings, the Western- Australian Savings Bank was absorbed by or amalgamated with the Commonwealth Bank?
– I was asking for information.
– The amalgamation referred to was not made because the State Savings Bank was in a dangerous financial position, nor is it true to say that the run on the bank was attributable to that cause. The Western Australian Savings Bank was one of two financial institutions - the other was the West Australian Bank - founded by the people of Western Australia. Both have now passed from local control, the former by amalgamation with the Commonwealth Bank and the latter by absorption by the Bank of New South Wales. The amalgamation of the Western Australian Savings Bank was not due to any uneasiness on the part of depositors. They were entirely satisfied with its control. It is true that, for a time, there was an excess of withdrawals over deposits, due largely to the financial depression which was accentuated in Western Australia by the results of this Government’s policy.
– Will the honorable senator deny that there was a run on the bank?
– Order !
– I am coming to that. Naturally, the depositor? have had to draw heavily upon their savings in order to carry them over the bad times through which they are passing, but there was no definite run on the bank, and there was no sign of uneasiness until the publication of a telegram, in the press of that State, to the effect that the Premier (Sir James Mitchell), who was then in Melbourne, had made an agreement subject to the ratification of the State Parliament for the amalgamation of the Western Australian State Savings Bank by the Commonwealth Bank,
– Is it not a fact that the police were called out to control the queue in front of the bank premises.
– If the honorable senator interjects again, I shall have to take the necessary action.
– No doubt you will.
– The honorable senator must not treat the Chair with disrespect.
– Evidently you have got me in the gun, but if you sabotage mo I will submit a motion to discuss your rulings sooner or later.
– The honorable gentleman makes an accusation of unfair ness against the Chair. It is true that I have called him to order more than other honorable senators, but that is because he will persist in disregarding my admonition. While I am President of the Senate, I intend to have my calls to order obeyed, and I ask the honorable senator to bear that in mind. There has been some unpleasantness already, and I do not wish to have a repetition of it. The honorable senator must have regard to the ordinary rules of courtesy.
– If everything was entirely satisfactory, why did the Premier of Western Australia submit to the Commonwealth Bank his proposals for the absorption of the State institution?
– The reason is clearly stated. At the time, there was an excess of withdrawals over deposits. That fact, however, was never mentioned in any section of the press, and no one except the authorities was aware of it. The public of Western Australia was entirely satisfied to leave its savings under State control. The disparity was so great that Sir James Mitchell considered it necessary to enter into the agreement without even consulting his colleagues, who were on the other side of the continent, because he did not want a whisper of it to get abroad. His action, which I, as a Western Australian, very much regret, was forced upon him, his Government, and this suffering State, by the entirely unwarranted intrusion of the Commonwealth Bank into the domain of the State for the . purpose of competing for the savings of the people, thus putting the taxpayers to the huge expense involved in running the two in stitutions side by side. Such a step was never contemplated by the framers of the Federal Constitution.
But the point that I rose particularly to make, and that which I again impress upon honorable senators, is that there was no public anxiety in Western Australia regarding the position of the State institution until the news was published that the agreement had been made. A little of the snrne sort of panic that preceded the closing of the Government Savings Bank of New South Wales then manifested itself, but it was quickly allayed. Sir James Mitchell’s action compares very favorably with that taken by Mr. Lang in similar circumstances. When he saw that the withdrawals were exceeding the deposits he went to work quickly and quietly, and by entering into an agreement with the Commonwealth Bank, succeeded in saving the position. He did not, wait, as Mr. Lang so foolishly did, until months had elapsed, and then run to the Commonwealth Bank for assistance after he had repeatedly repudiated his obligations not only to that institution but to the Commonwealth Government. There had never been a run on the Savings Bank of Western Australia in its historyun til the announce ment was made that it was to be absorbed by the Commonwealth Bank. It . was only then that Ministers found it, necessary to deliver speeches in the precincts of the bank reassuring the depositors, as Sir Robert Gibson did a day or two later, that their deposits were just as well safeguarded under Commonwealth control as they had always believed them to be previously.
Senator Sir HAL COLEBATCH (Western Australia) [3.50] . -I have not’ the slightest doubt that both Senator Dunn and Senator Rae, iri common with thousands of people in New South Wales, have been utterly misled by the entirely false statement that’ has been made more than once by the commissioners of the Government Savings Bank of New South Wales, to the effect that the Commonwealth Bank acted towards tho State Savings Bank of Western Australia in a manner in which it refused to act towards the Government Savings Bank of New South Wales. When the right to issue notes passed out of the hands of lue States, and the State savings banks were called upon to compete with the Commonwealth Savings Bank, no foresight on the part of the authorities of the State savings banks could prevent the making of such demands upon their resources as they could not meet. The authorities of the State Savings Bank of Western Australia saw that the time was coming when it would be difficult for that institution to meet the demands made upon it. They approached the Commonwealth Bank, and effected an amalgamation before any trouble arose, or there was occasion for the slightest public uneasiness.
Question resolved in the affirmative.
Semite adjourned ill 3.52 p.m.
Cite as: Australia, Senate, Debates, 13 November 1931, viewed 22 October 2017, <http://historichansard.net/senate/1931/19311113_senate_12_132/>.