Senate
4 July 1933

13th Parliament · 1st Session

  1. Senate
  2. 13th Parliament
  3. 1933

The President (Senator the Hon. P. J. Lynch) took the chair at 3 p.m., and read prayers.

page 2770

QUESTION

WHEAT INDUSTRY

Senator Sir GEORGE PEARCE:
Minister for Defence · West ern Australia · UAP

[3.1]. - by leave - On receipt of cables from theResident Minister without Portfolio in London (Mr. Bruce) relative to the consideration of the wheat problem by the four large wheat-exporting countries of the world, the State Governments were consulted by the Commonwealth Government, and a conference of Commonwealth Ministers and State Premiers took place in Sydney on the 1st July under the presidency of the Prime Minister. The following resolutions were adopted by the conference, with some reservations on the part of Queensland and Western Australia : -

  1. That this conference is emphatically of opinion that the major financial and economic problems before the World Economic Conference should be dealt with before specific subjects, such as wheat, are approached. Furthermore, this conference does not approve in principle of restriction of production as a remedy for. the world depression. The conference, however, recognizes that in the case’ of wheat the orderly marketing of the- existing surplus would considerably relieve the situation. Moreover, in view of the position which wheathas assumed at the World Economic Conference, this conference recognizes that it is advisable for Australia to agree in principle to a temporary scheme of limitation of wheat export from Australia, provided that the scheme is fair to Australian interests, and that not only the four principal wheatexporting countries, but also that the European pro- ducing and importing countries effectively cooperate in the scheme. .

The second resolution authorised Mr. Bruce to agree to a certain specific limitation which, as the matter is still under negotiation, it is not practicable at present to announce.

  1. That this conference is of opinion that questions relating to any prevention of expansion of the areaused for growing wheat need not be determined at the present stage.
  2. That this conference approves the principle that, on account of the existence of a world surplus of wheat, there should be no accumulation in Australia during the next two seasons of any . stocks of wheat over normal requirements.
  3. That this conference approves the principle that a proportion of any benefit in increased’ prices for wheat of theseason 1934-35 over present prices should be made available for the purpose of purchasing and dealing with any surplus during that season, not required for domestic use or available for export, but that no diminution of that benefit should be made except on. transactions in which the price is at least 3s. per bushel at sidings; any balance of the fund createdby contributions from such increased prices after providing for necessary expenditure to bo returned to the wheat-growers concerned. -

With regard to the reservation of Queensland, the Premier of Queensland has made the following statement : -

The Government of Queensland cannot agree to this proposal, because it believes it to be wrong in principle. Queensland is not a wheat-exporting State; in fact, it produces less thin its own requirements. I realize the position of the industry, and take the view that the problem is one which must finally be settled by the large wheat-producing States. While not approving of the principle involved in these propositions, I say that, if the States which are large wheat producers agree upon a common policy, Queensland will not place any difficulties in the way of their carrying it out. It would be absurd for a State like Queensland, which is’ not yet able to supply its own local requirements, to agree to a limitation of acreage.

Mr. J. J. Kenneally, Minister for Employment and Industrial ‘Development, who represented Western Australia at the conference, has stated that he does not find it possible to agree to the whole of the resolutions.

The Government of’ the Commonwealth, in conjunction with the Governments ofall the States, has been giving consideration to” the problem presented by the wheat industry, as raised in connexion with the World Economic Conference. The price of wheat has been disastrously low for several years, and a large and abnormal world surplus of wheat exists. The continued existence of this surplus exercises a . constantly depressing effect on prices, and if the North American countries were to release their ‘ excess stocks upon the market, prices would undoubtedly drop disastrously.

Accordingly, much thought has been Riven to the problem in order to see whether a scheme for the orderly marketing of the surplus, combined with the prevention of the production of another surplus, would bring about an increase of prices and a consequent rehabilitation of the industry. The subject of wheat has assumed great prominence at the World Economic Conference. It has become almost a pivotal point of the deliberations, and strong representations have been made to those concerned that every effort should be made to achieve successat least in relation to this particular question. The Commonwealth Government - and the Governments of the States take the same view - is very strongly of opinion that any scheme for dealing with wheat should form part of the whole scheme for rehabilitation which it is hoped the conference will produce. The Government considers that wheat should not be considered independently of the grave financial, monetary, and economic problems which have led to. the summoning of the conference.

Various proposals dealing with this matter have been made from time to time. There has been a general idea that the acceptance of any of these proposals would involve . a restriction of wheat acreage in Australia, and they have been criticized from this point of view. It may be stated at the outset that no such action is contemplated in the proposals which are now under consideration. The Australian wheat crop for the present year has been sown, and no action, if indeed any such action were possible, is contemplated for the purpose of restricting production in connection with the coming crop. The scheme is suggested also for the following year, but it is not proposed that Australia should undertake any acreage restriction then. Certain other countries are prepared to introduce a scheme of acreage restriction, but if the plan operates with respect to Australia, it will be upon a basis of export limitation, with appropriate provision for dealing with any surplus not required for domestic use and not exportable under the provisions of the scheme.

The views of the wheat-growers upon the subject differ to a considerable extent. Some important bodies are strongly in favour of a plan of restriction - even a restriction of acreage - while others have expressed opposition to the idea.’ However, some at least of this opposition has been ‘founded upon the erroneous idea that the scheme would involve a reduction of acreage in Australia. As a matter of fact, seasonal and other conditions have already brought about a very real reduction of acreage during the current season.

It should be clearly understood that what has been done is to authorize Mr. Bruce to confer with the other three principal wheat-exporting countries - the United States of America, Canada, and the Argentine - in the preparation of a scheme which is designed to deal with the existing normal surplus and to prevent the recurrence of a similar surplus in the near future. The object of the scheme is to increase the price of wheat by providing measures for dealing with the present abnormal situation. If the four countries agree upon such a plan, it is to be submitted to the European countries which import or produce wheat, because it is recognized that it would be futile for the four countries to take any special steps to the end suggested, if the European countries were to be at liberty to increase their production of wheat to an indefinite extent. It is the view of the governments of Australia that the effective co-operation of European countries is essential to the success of any scheme. >

The resolutions of the conference have been forwarded to Mr. Bruce, and the Commonwealth Government now awaits the result of the submission of an agreed plan to the European countries concerned. The Commonwealth Government has been prepared to give favorable consideration to the scheme suggested because -

  1. It affords the only opportunity of removing the menace to world! prices constituted by the North American surpluses.
  2. It affords a means of increasing prices, with consequent great gain to Australian wheat-growers.
  3. If it succeeds, it will assist in a general recovery of prices.
  4. If it fails, it will leave us no worse off that we are at present.
  5. It makes the first definite advance towards the co-ordination, on a world basis, of the interests of great primaryproducing countries like Australia and the countries of Europe, which constitute a substantial portion of the market foi our products.
Senator O’HALLORAN:
SOUTH AUSTRALIA · ALP

– Can the Leader of the Government in the Senate give an assurance that, before any agreement is entered into by the Government along the lines that, judging by the report he has read, are apparently contemplated, the Senate will have an opportunity to consider the details of it?

Senator Sir GEORGE PEARCE:

– Obviously, it is impossible to answer the honorable senator’s question at this juncture, as the form that the agreement will take is not known. The agreement might be a composite one, covering more than one subject. If a definite agreement is proposed, the Government will determine whether Parliament should be called together to implement it. If the pact requires legislative sanction, Parliament will necessarily be asked to consider it.

Senator O’HALLORAN:
SOUTH AUSTRALIA · ALP

– I understood the right honorable gentleman to say that, subject to certain contingencies arising in the negotiations with other countries, the Australian Government might .be prepared to enter into an agreement to limit for two years the export of wheat from Australia, and to prevent the accumulation of stocks as the result of such limitation. Has the Government in view any scheme for the disposal of the. stocks that will not be required to make up our export quota or to supply the local needs of Australia? If so, what is its nature?

Senator Sir GEORGE PEARCE.The statement that I have read to the Senate to-day is the considered statement of the Government, and I cannot either add to or take from it.

page 2772

QUESTION

HUME WEIR

Senator Sir GEORGE PEARCE:
Minister for Defence · Western Australia · UAP

[3.10]. - by leave - Some time ago, I promised that I would bring the representations of Senator Dunn with respect to the cessation of work on the Hume Weir, under the notice of the Minister for the Interior (Mr. Perkins).

Similar representations were made by Mr. Hutchinson, supported by Mr.

Collins, and the right honorable the Leader of the Opposition (Mr. Scullin), in the House of Representatives on the 27th April last, and were replied to by the honorable the Minister for the Interior (Mr. Perkins), vide Hansard, pages 1051 to 1056. The position is that in 1931 the parties to the river Murray agreement, namely, the Governments of the Commonwealth and of the States of New South Wales, Victoria, and South Australia, decided that only such works at the Hume Dam as were essential for a capacity of 1,250,000 acre feet should be carried forward continuously to completion, and that construction should then be suspended, the question of extension beyond the 1,250,000 acre feet storage for. either irrigation or hydro-electric purposes to be further considered “in about five years’ time.” The earthern embankment in the Victorian section was constructed to the height necessary for a capacity of 1,250,000 acre feet about the end of November or the beginning of December last. A conference of Ministers, representing the four contracting governments, was held at the Hume Reservoir on the 19th November, 1932, when the. questions of the construction of a roadway over the Hume Dam and the Victorian earthern embankment at the 2,000,000 acre feet level, involving the raising of the embankment, at an estimated cost of £51,000; barrage at the Murray Mouth, estimated to cost £549,000; a diversion weir at Yarrawonga, estimated to cost £380,000 ; and two weirs in the Mumimbidgee River. estimated to cost £220,000; making a total of £1,200,000, were discussed. Unanimity was not reached with regard to any of these matters. South Australia would not agree to share the cost of the construction of the roadway or the Murrumbidgee weirs, unless all the parties to the river Murray agreement shared the cost of the barrages at the Murray Mouth. New South Wales agreed to share the cost of these barrages on the understanding that the roadway and the Murrumbidgee weirs were authorized. Victoria would not agree to share the cost of the barrages, and introduced the question of the four parties sharing the cost of the Yarrawonga diversion weir. To this South Australia would not agree, and, finally, the matter was referred to the River Murray Commission for a report as to how the cost of the four works in question should be allocated. The estimate of £51,000 for the roadway over the Hume Dam included £25,000 for earthworks, £17,000 of this being on the Victorian side, and in order to avoid the dismissal of a large number of men so close to Christmas, the New South Wales and Victorian Ministers agreed between themselves that, pending consideration of the ‘report to be submitted by the River Murray Commission, their two Governments would share the cost of constructing the earthern embankment beyond the height for a capacity of 1,250,000 acre feet, up to an amount of £8,000. The River- Murray Commission recommended that all of the four works referred to should be constructed in accordance with the provisions of the river Murray agreement, and the cost shared equally by the four parties thereto, namely, £300,000 each, the proposal involving the Commonwealth in a liability of £97,500 in excess of that already agreed to. This recommendation has not been accepted by all of the Governments concerned. Meanwhile, some £8,000 to £9,000 had been spent on raising the Victorian embankment, and the New South Wales Minister notified that he was not prepared to recommend any additional expenditure by his Government unless the four Governments accepted the proposal of the River Murray Commission. It is understood that the Victorian Minister was unable to obtain funds to enable Victoria to complete the embankment, and as a result the constructing authority for Victoria, the State Rivers and Water Supply Commission of Victoria, had to cease- operations on this portion of the work. The Hume Dam is a work authorized by the existing river Murray agreement, but the River Murray Commission can construct it only to the height approved by the four contracting Governments. The Victorian embankment has been constructed to the height approved, namely, that necessary for a capacity of 1,250,000 acre feet of water, and there does not appear to be any possibility of the four Governments agreeing to the completion of this embankment to the height necessary for- a capacity of 2,000,000 acre feet of water unless unanimity is also reached regarding the other three works mentioned.

page 2773

QUESTION

AUSTRALIA-SINGAPORE AIR MAIL SERVICE

Formal Motion for Adjournment

The PRESIDENT (Senator the Hon. P. J. Lynch). - I have received from Senator Dunn an intimation that he desires to move the adjournment of the Senate for the purpose of discussing a definite matter of urgent public importance, namely, “the reported intention of the Government with respect to the calling of ‘tenders for a subsidized air mail service between Singapore and the Commonwealth of Australia “.

The PRESIDENT:

– There is no standing order compelling an honorable senator to give notice in these circumstances to the Leader of the Government, or to any other Minister; but as an act of courtesy, and to give reasonable opportunity to the responsible Minister whose department is affected, it has been the usage to give notice of intention to move the adjournment of the Senate. I must propose the motion to the Senate, if it is supported as required by the Standing Orders; but I trust that in future honorable senators will show the usual courtesy of giving sufficient notice to enable the responsible Minister to obtain the information necessary to reply to whatever allegations may be made against his administration. Is the motion supported ?

Four honorable senators having risen in support of the motion,

Senator DUNN:
New . South Wales

– I move-

That the Senate at its rising adjourn till 10 a.m. to-morrow.

I thank you, sir, for the friendly warning which you have given in reply to the point of order of the Leader of the Government in the Senate (Senator Pearce). Perhaps I may be permitted to explain that I have only just arrived by train from Sydney, and that although the train was running late,- 1 had not the opportunity to assist the engine-driver by adding a few shovelfuls of coal to ‘ enable the train to be speeded up. To put everything in order, I obtained advice from the friend of all honorable senators in distress, Mr. Monahan, the Clerk of the Senate. I offer to the Leader of the Government in the Senate (Senator Pearce) through you,.Air. President, my profound apology and promise that this will not occur again until, in collaboration with my colleagues on this side of the chamber, I move for the double dissolution of this Government and its activities. I should not have brought this matter forward until the Government had completed its plans, if the outrageous patronage extended to the visiting air liner, Astraea, did not indicate that the Government has decided on a course of action without waiting to give Australian airmen or Australian companies a chance to put in tenders. As the Government is always telling us that defence is a matter of great urgency, and as it is preparing to re-introduce compulsory military training for Australian youths, the prospect of the contract for this most important aeroplane service going outside the Commonwealth is most alarming.

If defence is as necessary as the Government says, it is necessary in the air, and every opportunity should be taken to encourage Australian airmen, and to build up a local industry for the manufacture of aircraft, including engines, so that, in the event of war, Australia will not be dependent on outside sources from which she ‘might be cut off. Even the Minister must admit that Australian airmen have proved themselves among the world’s best. I have no brief for any of them. I do not know any of them personally, but I do say that Kingsford Smith and Ulm, and half a dozen more, to say nothing of men like Hinkler and .Holden, who killed themselves trying to attract the attention that they could not get in their own country, have proved that they can compete with the best that Britain or any other country in the world can produce.

Apparently, these men are to be left on the beach while this profitable contract goes to Imperial Airways, to be run on British capital, manned by British airmen, and paid for with good Australian cash. “What chance has Smith, or Ulm, or any other Australian without money to compete with this wealthy monopoly in open tenders? They will be frozen out, and the Government, by its encouragement of the propaganda stunt of the Astraea, is already preparing the public mind to see them frozen out. Well, I want to know why they are to be frozen out, and the Australian people want to know too; they want to know why the Government, which has such a surplus that it does not know what to do with it, cannot place money at their disposal to enable them to get this contract, if a contract is to be given. There is a nigger in the woodpile somewhere, and I intend to show honorable senators where it is.

In the first place, we must try to find out why the Government is going on with this matter at all. Its improper extension of patronage to the propaganda visit of the British monoplane becomes all the more serious, and all the more puzzling, when it is recalled that the Auditor-General for three years in succession has condemned the proposal for an Australian-British air mail service, and has declared that there is no possible justification, for it. This Government, and the newspapers which support it, are very fond of slinging the name of the Auditor-General about when they want to condemn anything that a Labour government does, and they always lay stress on the fact that the AuditorGeneral is strictly impartial, and independent of whatever government may be in power. Very well, I shall give honorable senators opposite some of their own medicine.

Senator Sampson:

– Is the honorable senator in order in reading his speech?

The PRESIDENT:

– I remind Senator Dunn that the Standing Orders forbid the reading of speeches except on very important occasions; and I should not say that this is one of them.

Senator DUNN:

– I respectfully submit that this is a very important occasion, and, in any case, I am merely following my notes closely.

The PRESIDENT:

– The honorable senator may make reference to his notes, but if his references constitute continuous reading, he will be out of order.

Senator DUNN:

– Back in 1930 the Auditor-General first raised the matter, and emphatically condemned it as a costly proposal that could not be justified in any circumstances. In 1931, he returned to the subject, and backed up his opinion with some figures concerning the British subsidies paid to the service at. the other end. These figures are staggering. Dealing with the section from London to India, he stated that the cost in subsidies to the Imperial Government, without the cost of preparing landing grounds, was £1,800 a ton for cargo, and £180 for every passenger carried on the section between Cairo and Karachi alone. The Auditor-General then continued -

In my last report I criticized the proposal to establish this duplicate service, and expressed the opinion that, whether from the point of public demand, practicability, security, necessity or cost, present conditions did not warrant such a service. Although it is perfectly clear that the Australian financial position is such that it cannot afford the huge subsidy which would be necessary to maintain such a service, endeavours are being made by certain commercial interests to influence the Commonwealth Government with a view to establishing this service.

Those are not my words ; they are the words of the Commonwealth AuditorGeneral, and they require some explanation. Who are these commercial interest’s that want the money that was taken from the pensioners and the workers to be paid to them in subsidies? We shall see presently. But, first, let us return to the report of the Auditor-General for 1931 wherein ho quotes some Australian figures to give an indication of the extent to which subsidies are required to bolster the earnings of aerial services. He takes the West Australian’ Airways as an example, and the 1931 balance-sheet shows the following: -

I am not suggesting that, in the case of Western Australia, expenditure of this nature is not justified, because I realize the need for the expansion of air services in that State and also in Queensland, but the proposed England-Australia air mail service is in an entirely different category. It will not aid in the development of Australia. Already we have subsidized beam wireless and cable services between Australia and Great Britain, and now, because of the desire of the wealthy interests to link Australia and Britain with an air-mail service, we have had their “ drummers “ in this country agitating the public mind in favour of such a proposal.

It is evident that the warning issued by the Auditor.-General has had little effect on this Government. Apparently, it is determined to go ahead with the project. “ Vested interests,” said the AuditorGeneral, “ are still urging the establishment of this service. No real justification for an English-Australian air-mail service has been established “. These are serious words coming, as they do, from such an authority as the Auditor-General. The public are entitled to know who represent these vested ‘ interests which have induced this Government to disregard the Auditor-General’s warning. The visit of the Astraea has, I think, disclosed the “ nigger in the woodpile “. The British Stock Exchange record shows that the Imperial Airways Limited has an authorized capital of £1,000,000. The number of paid-up shares issued is £624,080, and, in addition, 25,000 deferred snares are issued to the British Government in consideration of certain subsidies overpaid. The British Government has agreed to pay to the company an annual subsidy of £310,000 for the years 1931-32 to “ 1934-35, £220,000 for 1935-36, £170,000 for 1936-37, and a gradually reducing amount in subsequent years. Apparently, it is not considered improper for the company to “ milk “ the British Government in this way,- but I say definitely that Labour members in this chamber will not tolerate any attempt to do likewise in respect of the people of Australia. The figures show that, in two years, Imperial Airways Limited has received in subsidies an amount equal to its paid-up capital. But that is not the whole of the sordid story. Australia is not the first to feel the imperial tentacles of this octopus. In addition to the European and Indian services, it now controls the African service, having acquired, through a “ dummy “ company, the whole of Sir Alan Cobham’s interests.

I think I have said enough to make it plain who represent the vested interests against which the Auditor-General has warned the Australian people. The Government knows these facts as well as I do, and, in the circumstances, I submit that its attitude towards the stunt trip of the Astraea comes very close to a public scandal. It will be a public scandal if this company secures the service which the Auditor-General states cannot be justified on any grounds. “Within the last fortnight we have read of many demonstrations of welcome to this monoplane in the various capital cities of the Commonwealth and elsewhere. At Canberra, expenditure was incurred by the Commonwealth Government, and also by Mr. Crutchley, the British Trade Commissioner, on behalf of these vested interests, but we have heard nothing of any proposal to fete the unemployed of Canberra.

The following are the directors of Imperial Airways Limited: - Sir Eric Geddes, chairman; Sir J. George Beharell. Mr. G. E. “Woods-Humphrey, Sir Samuel Instone, Lieutenant-Colonel J. Barrett-Leonard, and Mr. H. ScottPaine. The British Government’s deferred shares are represented on the board by Sir “W. Nicholson and Air ViceMarshal Sir Vyell Vyvyan. The names of some of these gentlemen will be familiar to honorable senators because of their association with Australian directorates that are interlocked with British concerns. I am concerned chiefly with two - Sir Eric Geddes and Sir George Beharell. both of whom are directors in the mammoth Dunlop interest. A former Premier of Victoria and a member of another place, Mr. “W. A. Watt, is associated with the Dunlop interests. I am wondering if Mr. Watt retired from politics because he felt that his position, as a member of the Commonwealth Parliament, might interfere with his commercial activities; but it is evident that, although he severed his connexion with politics, he has left plenty of contacts behind him-

The PRESIDENT:

– Order! Discussion of the private commercial activities of Mr. Watt is quite irrelevant.

Senator DUNN:

– Very well. All I need say is that Mr. Watt is on the inside of the powerful British- Australian financial Baillieu group, and is chairman of the Australian Dunlop-Perdriau company, which has a paid-up capital of £4,695,655, and has issued 500,000 shares to the parent Dunlop company, with an option over a further 500,000 shares.

Everybody knows something of the ramifications of the Baillieu interests. I have been informed that very shortly my dear friend, Senator Greene, intends to retire from federal political life to take charge of the Baillieu textile interests. The honorable senator may smile, but if he does retire for this reason he will become part and parcel of this big group. The directorate of the Australian DunlopPerdriau Rubber Company includes Sir Eric Geddes and Sir George Beharell two of the directors of the British Dunlop concern. It also includes Mr. C. L. Baillieu, who is a director of the English, Scottish and Australian Bank, and a good many other concerns. These gentlemen, who are part and parcel of the vested interests referred to by the Auditor-General, have been trying, through an ex-Premier of New South Wales, and an honorable member of another place, to obtain concessions for British Imperial Airways Limited, and now they are endeavouring, through Senator Greene, to tie the Australian people up and oblige them to pay heavy subsidies to British rubber interests and the Baillieu affiliations in Australia. I was not surprised that the Melbourne Herald was very enthusiastic about the visit to Australia of the British plane, Astraea, because British financiers, through the Baillieu group, control that newspaper, and, through it, nearly one-half of the newspapers of the Commonwealth. Any Australian, therefore, who dares to challenge the entrenched Imperial Airways Limited in respect of this air mail contract may expect “ a rough spin “ from the press. As a matter of fact, they are getting it already, for Granny Herald - the Sydney Morning Herald - and the Melbourne Argus have already joined in the chase on behalf of this British company. Every use is being made of Empire sentiment and the glorious traditions of the British Empire in seeking support for this contract. Mary Pickford has nothing on the Baillieu interests when it comes to publicity ! The Leader of the Government in the Senate may whistle and say “ Whoop-ee “, but the fact remains that while 500,000 men, women and children are practically starving in this country, this imperialistic combine can obtain consideration. Any one who thinks that the Australian fuel industry, or any other Australian industry for that matter, might get some benefit if this contract is made, would do well to look at the affiliations behind Imperial Airways Limited. They will then realize how the Australian public is to be “ milked “ to prop up a host of concerns which have not an atom of interest in Australia, but are seeking to make a “rake-off” from this country. The British Dunlop Rubber Company, which is so strongly interlocked with the Imperial Airways Limited, is shown in the Exchange Record as having the following affiliations:–

Group 1. - All the shares in W. Goodyear and Sons Limited, W. A. Bates Limited, Broad.hurst and Company, Campbell, Achnach and Company; Dela Rubber Company, Dunlop Rim and Wheel Company, Dunlop Sports Company, James Hoyle Limited, Improved Steel Company Limited, New Eccles Rubber Company Limited.

Group 2. - All the ordinary shares in Dunlop Cotton Hills Limited, Dunlop Plantations Limited, Dunlop Rubber Company International Limited.

Group 3. - 99 per. cent, of the shares in the Clipper Tyre Company, and 98 per cent, of the shares in Dunlop Tyre and Rubber Goods Company Limited.

Group 4. - Substantial unspecified interests in the “ Dunlop “ Trading and Manufacturing Companies in Argentine, Belgium, Brazil, China, France, Germany, Dutch East Indies, and 26 other countries.

The companies mentioned in Group 1 are not a bad little bunch of dummy organizations associated with this monopoly that Senator Greene, Senator Pearce, and the Baillieus, want to give a strangle hold on Australian aviation. Altogether, it is a wonderful organization which the Government desires to bind the Australian people to. It is surely not necessary for me to trace any other affiliation of this combine, which has such a grip on the

Australian press and Australian industries generally. But it is interesting to mention, in passing, that another Imperial Airways director, Sir Samuel Instone, is a director of the British Benzol and Coal Distillation Company Limited. This may explain the reason why our Newnes, Baerami, and other shale oil deposits have been . sabotaged. Senator Pearce might tell us whether he intends to hand the Newnes deposit over to this “ outfit “ after he has handed our air services over to it. The 6,000 idle miners, and the 14,000 women and children depending upon them, would be very interested to hear a statement on this subject.

The PRESIDENT:

– Will the honorable senator explain what these remarks have to do with the subject before the Chair?

Senator DUNN:

– I point out that before the Astraea or any other air-mail liner can flutter over Canberra for the amusement of honorable senators, it must have oil for its engines.

The PRESIDENT:

– I ask the honorable senator to confine his remarks to the subject indicated in his motion for adjournment.

Senator DUNN:

– Another of the Imperial Airways directors, LieutenantColonel J. Barret-Lennard, is chairman of Reversionary and General ‘Securities Limited, and another of them, Mr. Scott-Payne, is manager of the British Power and Boat Company. I wonder what else this group will want out of Australia when it has grabbed our air services and left Sir Charles Kingsford-Smith, Ulm, and other Australian aviators, well beached. I challenge Senator Pearce to reveal any fresh evidence that the Government has received to justify it going any further with this proposed contract.

The PRESIDENT:

– The honorable senator has exhausted his time.

Senator Sir GEORGE PEARCE:
Minister for Defence · Western Australia · UAP

3.50]. - I listened with such patience as could command to the long and discursive statement of the honorable senator, and the first thought now in my mind is : What necessity was there for the adjournment of the Senate this afternoon, and what urgency attaches to the- discussion of the subject on which he has spoken.

The matter raised has been under the notice of the people of the Commonwealth for some time. The report of the interdepartmental committee on aviation was circulated to honorable senators months ago, and the- Government’s intention to have conditions of service prepared with a view to calling for tenders was announced. There was nothing new in what the honorable senator said. It has all appeared in that deluge of letters, telegrams, and picture postcards with which honorable senators have been inundated by certain interests in Australia. As I listened to the honorable senator’s speech, it occurred to me that he might take a lesson from the art of aviation, as I understand it. A sound and air-worthy machine is needed. If we’ regard the honorable senator’s lungs as his machine, nobody can doubt its soundness. An aeroplane requires a plentiful supply of petrol - in America called “ gas “ - of good quality. The honorable senator was not deficient in that necessary commodity. But before setting out, an aviator needs to make up his mind where he intends to go; and to get there, he must have some knowledge of navigation. So far as I could gather from the honorable senator’s remarks, he directed an attack upon Imperial Airways Limited, and took exception to the British Government’s association with that company. What has that to do with the Commonwealth Government, which has no relations with Imperial Airways Limited, and is not responsible in any degree for the British Government’s association with it?

Then the honorable senator called to his aid - and this is done also in the literature with which honorable senators have been deluged - a statement made by the’ Commonwealth Auditor-General. I have great respect for that officer as the guardian of the finances of the Commonwealth. His official duties require him to analyse and criticize the accounts of the Commonwealth Government; but ns an authority on aviation, or air mail services, I pay him only so much respect fis I would give to anybody else. He has expressed in his annual report fori three successive years the view that the Commonwealth is not justified in spending money on air mail services. As an individual he is entitled to that opinion, but his statement of it does not carry special weight because the opinion happens to he that of the Auditor-General. Every honorable senator, and every member of the public, is entitled to his opinion on this matter; and that of the AuditorGeneral is no more weighty.

If this motion is intended to afford to the Senate an opportunity to declare that it is opposed to air mail services, I venture the opinion that it will receive very little support, because the overwhelming majority in this Parliament is in favour of the use of this latest, quickest and most effective method of distributing mails and giving communication to settlers in outback districts who are separated from centres of population by great distances. If the motion is intended to be hostile to the development of aviation in Australia by paying subsidies for the carriage of mails by air - a policy which has been, and still is being, followed - I suggest that it will receive scanty support in this chamber and elsewhere. But, so far as I was able to understand the honorable senator’s remarks, he seemed to be directing them rather to what may be proposed in the future. I think that he said that the Government has made up its mind that no Australian company shall be considered in connexion with either internal or overseas air mail, contracts. If that is his opinion, it is entirely without foundation. The Government is determined that Australians shall be considered in connexion with such contracts. May I draw attention to a certain action of the Government, which, I hope, will bring home to Senator Dunn and others the truth of my statement. It was the desire of the British Government to control the EnglandAustralia .service as far as Darwin, and it strongly pressed that proposal upon the Commonwealth Government; yet we insisted that Australia should control the service as far as Singapore, and the British Government has met us to that extent. ‘ We took that stand for a very good reason : we think that we have a special interest in the control of the air services between Australia and Singapore, because of the importance of that route in relation to defence. It will be highly advantageous to Australia if the service as far as Singapore is manned by Australians, who will thus get to know all about the islands, and the waters over which the service will be conducted. Thai is why we have been insistent on securing control of that section of the route.

I deprecate this discussion, if the honorable senator’s object is to suggest that the Government is proposing to give preferential treatment to one set of contractors as compared with another. We shall endeavour to do justice between the various tenderers, and they must be Australian companies. The Government has already announced as its policy that only Australian companies will be allowed to submit tenders. We shall do our best to see that the country gets value for the money expended in connexion with the section of the overseas air mail service that is operated by the Commonwealth authorities, and we shall act in cooperation with the British service that will extend as far as Singapore. No honorable senator, except, possibly, Senator Dunn, is unaware that that has’ already been announced as the policy of the Government.

I am sorry that the time of the Senate has been occupied with a discussion of this nature, because it can lead nowhere. No secrecy has been observed by the Government in this regard. It is generally known that the Government’s policv is founded on the departmental report to which I have referred. Nobody who has read that report, and the announcement of the Government’s policy in- connexion with it, could sympathize with the view put forward by Senator Dunn to-day. There is no ground for the suspicion that has been expressed this afternoon.

Senator RAE:
New South Wales

– I was pleased to hear the Leader of the Senate (Senator Pearce) say that every consideration would be given to Australian airmen in connexion with the proposed air mail service to Singapore and Great Britain. I do not know whether other honorable senators have more knowledge of this subject than I. possess; but there appears to be a general suspicion that the air mail service to Britain is likely to be provided at the expense of more necessary developmental services within the Commonwealth. The general taxpayer is not convinced that the payment of a subsidy for the carriage of mails to England is warranted when there already exist rapid means of communication with the other side of the world. Urgent messages can be sent by cable, or by radio-telephone; and, therefore, it does not appear necessary to speed up the conveyance of mails, especially if by so doing developmental work in Australia is delayed. It is not sufficient justification for the expenditure of public money to say that this service will enable people who wish to do so to travel more quickly between Australia and the other side of the world.

Senator E B Johnston:

– The subsidy will be paid for mails, not for passengers.

Senator RAE:

– That may be; but the payment of the subsidy will enable wealthy people to travel by aeroplane to Europe when otherwise they could, not do so. Whatever funds are available would he better spent in developing commercial aviation within Australia than in establishing this link with European countries. Almost every citizen favours the development of air services throughout this country, in order that the- most remote settlement may he brought into closer touch with the rest of Australia, but there is a fairly general opinion that we are not justified in providing luxury services for wealthy people who wish to reach Europe more quickly than is ‘now possible. Senator Dunn has done well in giving this subject prominence.

Senator DUNN:
New South Wales

– It ill became the Leader of the Senate (Senator Pearce) to try to be funny by referring to me as one “ full of gas”. If I am full of gas, it is the result of my five years’ war service. In addition to having been wounded, I was gassed at the front, and came back a gasometer. If the right honorable, gentleman wishes to be personal, I tell him that my political and private life will bear comparison with his. I say, emphatically, although without heat, that I. resent the right honorable gentleman’s remarks, and I remind him that when he attended the Labour Conference of 1905 he, too, was “ full of gas “. I have here a record of that conference containing a photograph o’f the delegates, with the right honorable gentleman marked with an “x”. It ill becomes one who has been honoured by the King, and holds a high office in the Parliament of the Commonwealth, to speak sneeringly of another honorable senator, especially one who, from time to time, has come to the support of the Government to save it from defeat by its own supporters. Apparently, some honorable senators supporting the Government fail to realize that the members of His Majesty’s Opposition in this chamber have as much right in the Senate as they have. Members on this side did not walk into this chamber until they had been elected by the people, and they have a perfect right to criticize the Government’s administration. In the political arena, I am prepared to take knocks on the chin with a smile; but I claim the right to return knock for knock without apologizing for so doing. I have to-day put forward a plea on behalf of Australian aviators and industrialists. Air-Commodore Sir Charles Kingsford Smith, in a series of articles contributed to a leading Sydney newspaper, stated that, if given the opportunity, he could find the men’ and the money to provide an air mail service to Singapore. In a message broadcast through 3LO transmitting station, Major Brackley, the commander of the air liner Astraea said that when the Australia to England air service began, passengers would make the journey in fourteen days. He added that although even faster trips could be made, it was not the policy of Imperial Airways to discourage flying by indulging in long, tedious flights. The Labour party is at all times prepared to advance with the times, and to keep abreast of modern inventions and scientific development ; but it wants the Australian people to control their own air mail services. The Controller of Civil Aviation, Captain E. C. Johnston, who is a returned soldier, “ has flown in the Astraea as a guest of Imperial Airways Limited. That may be all right; I impute no ulterior motive to Captain Johnston. But as he is a civil servant, paid out of the Commonwealth Consolidated Revenue, it would have been more seemly had he refrained from placing himself under an obligation to the proprietors of the Astraea. As has been pointed out by the Labor Daily, the visit of this air liner to

Australia is nothing more than a glorified propaganda stunt. This is what that journal has to say on the subject -

10,000 MILES GRAB AT SINGAPOREAUSTRALIAN ROUTE.

Grew Wined and Dined bt Government.

It would seem on the surface that the Commonwealth Government has fallen for the propaganda stunt of Imperial Airways Limited, in sending the Astraea to Australia as a forerunner to securing the air mail contract over the Singapore-Australian route. …

From a papulation point of view Australia leads the world in the number of really great airmen produced, and we have in Australia to-day dozens of pilots equal, if not superior, to the world’s best. It is time that Australia and Australians boosted themselves; boosted their airmen, their sportsmen, their country, and their products generally. Why this stupid inferior complex that something overseas , is superior to our own, just because it is not Australian? Our airmen have shown the world what they can do, and they can at least run an air mail service between Australia and Singapore. In addition, such a service run by an Australian company will create employment in several directions, and possibly start a new industry.

There is no doubt that we have airmen equal, and even superior, to the world’s best ; but, apparently, they are in demand only in time of war, and when they -can be useful to vested interests by endangering their lives in pioneering flights. When there is an opportunity to develop an air mail service between Australia and Singapore, which promises to be a commercial success, they are relegated to the background.

As is usual when I move for the adjournment of the Senate to discuss a matter of public importance, designed to benefit the people of Australia generally - in this instance, our airmen in particular - the Government has resorted to obstructionist tactics, designed to thwart my object. As I have intimated, I can take a gruelling without crying about it, and exchange hard knocks with the best. But I am a lover of fair play. I recall that, whenever ex-Senator Colebatch moved the adjournment of the Senate on a matter which he considered of the necessary importance, he was given a patient hearing. Also, when you, Mr. President - at present the custodian of order in this chamber, and the interpreter of the Standing Orders - sat on my left, you argued stoutly in favour of the suspension of the Standing Orders when so prompted by the merits of the cause that was being advocated. Apparently, circumstances alter cases. Why is the procedure different when a member of the Labour party seeks to. ventilate a matter which is of major importance to the people of Australia? I do not wish to make any threats, but I say to all concerned that the Labour party is determined to persist in its endeavours to obtain justice for the people of Australia, and, when the political pendulum swings in its favour, honorable senators opposite must not feel surprised or aggrieved if it acts in accordance with the Mosaic law, and demands an eye for an eye, and a tooth for a tooth.

Motion - by leave - withdrawn.

page 2781

QUESTION

EXPORT OF CITRUS FRUITS

Senator RAE:

– In view of the embargo imposed by New Zealand upon the importation by that dominion of citrus fruits from Australia, has the Government considered the advisability of subsidizing export to other countries, especially to Great Britain ?

Senator McLACHLAN:
Minister in charge of Development and Scientific and Industrial Research · SOUTH AUSTRALIA · UAP

– As the honorable senator well knows, it is not customary to make statements of policy in reply to questions. For his information I may say, however, that -the matter to which he has referred is being given the closest consideration, and that this evening I shall confer with an officer of the department concerning it.

page 2781

QUESTION

EXTRACTION OF OIL FROM COAL

Senator DUNN:

– Has the attention of the Minister in Charge of Development been drawn to the report in the Sydney Morning Herald, of the 1st instant, that Lyon Brothers, chemical research engineers, of Newcastle, have obtained something like an 89 per cent, result from their investigations into the extraction of heavy oils from Australian coal? Is the honorable gentleman prepared to call for a report on the matter?

Senator McLACHLAN:
UAP

– I have seen the report to which the honorable gentleman refers. I understand that it was made by Lyon Brothers themselves. It will he investigated by the appropriate officer of the department.

page 2781

QUESTION

OSMIRIDIUM

Senator J B HAYES:
TASMANIA

asked the Minister representing the Minister for Commerce, upon notice -

Will the Minister obtain from London the price that Tasmanian osmiridium is bringing in that market?

Senator McLACHLAN:
UAP

– The desired information is’ being obtained, and will be furnished to the honorable senator as soon as possible.

page 2781

QUESTION

INTEREST RATES

Senator DUNN:

asked the Minister representing the Treasurer, upon notice -

If it is a fact that there will he a loss in customs revenue from the importation of overseas films, is the Government prepared to insist on the payment of a general interest rate of 3 per cent;, to American holders of Australian bonds; if not, why nott

Senator Sir WALTER MASSY GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– It is not customary to make statements of policy in reply to questions.

page 2781

QUESTION

NEW SOUTH WALES TOBACCOGROWERS

Senator DUNN:

asked the Minister representing the Prime Minister, upon notice -

Is the Government, in view of New South Wales tobacco-growers being federal taxpayers, prepared to give them the same advantage of a federal tobacco inquiry as promised to the Queensland tobacco-growers at Mareeba; if not, why not?

Senator Sir GEORGE PEARCE.The inquiry into the tobacco industry in the Mareeba district of Queensland is being undertaken as the result of representations which were made by growers there in relation to special circumstances which are stated to be connected with that area. In response to representations that were made on the subject of the quality of leaf in the Tamworth district of New South Wales, an exhaustive investigation was recently carried out there by Mr. G. E. Marks, senior agronomist of the Australian Tobacco Investigation. I desire to add that the tobacco investigation maintains continuous contact with the industry throughout Australia.

page 2782

QUESTION

CENSUS

Senator DUNN:

asked the Minister representing the Minister for the Interior, upon notice -

  1. Is it the intention of the Government to ensure that the information contained in the census papers he treated confidentially, and not made available to other Commonwealth departments, as, for instance, the Pensions Department, for the purpose of assisting that department in its inquiries regarding applicants for pensions? .
  2. Is it not a fact that many of the residents of Canberra are known to each other; if so, will the Government issue special instructions regarding the observance by census collectors in the Federal Capital of the instructions regarding the confidential nature of the information obtained by them?

Senator Sir GEORGE PEARCE.The Minister for the Interior has supplied the following answers: -

  1. The information collected under the Commonwealth Census Act is strictly confidential, and is not available for inquiries regarding applicants for pensions.
  2. CensuB collectors in Canberra, as in all other districts, have been carefully selected, and have signed an undertaking of secrecy in every instance, and, further, are liable to a penalty of £50 if any particulars concerning any individual are divulged.

page 2782

PAPERS

The following papers were presented : - that of Government Acceptance Act and

Seat of Government (Administration) Act - Ordinance No. 11 of 1933 - Dogs Registration.

Audit Act - Regulations amended - Statutory Rules 1933, No. 78.

page 2782

QUESTION

CUSTOMS TARIFF 1933

In Committee : Consideration resumed from the 30th June (vide page 2769).

Schedule

Group 5. - Amendments made by the present Government which are supported by Tariff Board reports.

Division 5. - Textiles, Felts and Furs, and Manufactures thereof, and Attire.

Item 114, sub-items (b) (c) (e1, 2) (F1), (g)-

Hats, caps, and bonnets -

Wool felt hats in any stage of manufacture for men and boys, including wool felt hoods therefor, per dozen, British, 22s.6d., general, 42s. 6d. ; or ad valorem, British, 45 per cent., general, 65 per cent., whichever rate returns the higher duty.

Senator PAYNE:
Tasmania

.- Sub-item b relates to wool felt hats in any stage of manufacture for men and boys, including wool felt hoods therefor, the rates being 22s. 6d. and 42s. 6d. per dozen. Sub-item c relates to fur felt hats in any stage of manufacture for men and boys, including fur felt hoods therefor, the rates being 36s. and 60s. per dozen. There is a close relation between those two sub-items, and one cannot very well be discussed without the other. According to the Tariff Board, this is one of the most difficult items in the whole of the textile apparel group, because of the fact that valuable detailed information has been’ withheld from it. On the board’s own admission it has been impossible for it to ascertain the proportion, of imports of the different classes of hats which come under this item. According to the reports of the Tariff Board, there has, during the last few years, been a considerable increase in the importation of felt hats, and one would, naturally, conclude that the increased duties on men’s hats were necessary because of increased importations; but from the facts as I know them. I cannot come . to that conclusion. During the last five or six years, felt hats have been the vogue among women. There has been an enormous increase in the use of women’s felt hats. Because of the frequent change of fashion a woman requires three or four hats where a man requires only one. -The fashion in men’s hats is the same as it was twenty years ago. Naturally, the members of the fair sex, by taking advantage of the change of fashion, make themselves as attractive as possible. I mention that because it has a bearing on the question whether we are justified in increasing the duty on men’s hats. Personally, I do not think that this increased duty is warranted, because it is not supported by any evidence given before the Tariff Board. The local manufacturers have captured a very large proportion of the Australian trade in men’s hats. It has been stated by some witnesses before the board that lately there has been a falling off in this trade. But that has taken place, not because of increased importations, but because men and, especially youths, are adopting the fashion of appearing in the streets bareheaded.

Recently, when sitting in a park in Melbourne, I counted within twenty minutes 100 men who passed me bareheaded. The evidence given before the board is very interesting. Although its reports of 1925, 1929, and 1932, contain much valuable information, I have failed to find in them one paragraph justifying the. recommendation of the Tariff Board that men’s felt hats be subject to a higher rate of duty. In 1929 the board strongly reported against any increased duty, on the ground that it was not warranted. Even in its report of 1932, I cannot’ find any justification for the increased duty. In the reports of 1925 and 1929, reference is made to the handsome profits enjoyed by the Australian manufacturers of men’s hats, and the enormous dividend paid to shareholders. Years ago many of the factories engaged in manufacturing hats disappeared because of a merger under the United Felt Hat Proprietary Limited. That company has carried on for some years, but has not obtained entire control of the trade because many other factories were subsequently established and, according to the evidence given before the board, did remarkably well, notwithstanding the fact that their operatives were, in many instances, paid high wages. I have no objection to the payment of high wages provided that they are earned, but I strongly object to this increased duty on men’s hats, particularly as the board’s own report does not justify it. The following statement appears under the Tariff Board’s summary and comments in its report of 1932 :-

The felt hat manufacturing industry may be regarded as being firmly established in Australia, even though one of the largest manufacturers lias experienced losses. It is understood, however. that tlie company concerned has now completed arrangements whereby the whole of its manufacturing operations are performed under one roof. Reconstruction of the finances of the company and the writing down of capital, which the directors have in view, should greatly assist in placing the company on a sound footing, and should prove of benefit to the whole industry. A review of the accounts of certain other manufacturers shows that their operations have been particularly profitable, but on account of the manufacturing activites of these companies covering both hoods and hats, it has not been possible for the board to gain an accurate impression of the amount of profits attributable separately to hats and hoods.

That emphasizes my contention that the board has not had an opportunity to dissect the activities in the industry that would justify a conclusion regarding the different rates of duty that might be fairly applied to hats for men, women, and children respectively. The board said further -

In recommending against any increase in the rates of duty then operating, the board, in its report of 31st January, 1928, following an inquiry in 1927, drew attention to the following circumstances : -

The very satisfactory position attained by some of the local mills, which were fully occupied, and whose operations were so profitable that it was a matter for surprise that they coupled themselves with a request for further protection.

The last sentence is very definite.

  1. The large earnings of some employees - £15 per week in one instance, and £13, £12, £1.1 and £10 per week in others.

    1. The failure of the applicants to substantiate their allegation that severe competition was experienced from imported hats.
    2. The fact that the first class hat demand was not catered for by the local manufacturers.

The next paragraph refers to men’s hats -

Since the 1927 inquiry, the industry has progressed in many ways. Official statistics, which are quoted in full in the preamble to this report, show that the imports for 1931-32 have fallen to practically nil in the case of wool felt hats, and to 1,194 dozen in the case of fur felt hats. For the year 1928-29, the imports of fur felt hats were 53,927 dozen, made up of 39,092 dozen for men, and 14,835 dozen for women and children. Segregated details .for the 1,194 dozen imported in 1931-32 are not available.

In view of the fact that the board found that the industry was in a highly prosperous condition, and that it was unable to segregate the particulars relating to the various kinds of hats, is it reasonable to increase the rates of duty that operated up to 1930? Yet, in respect of wool felt hats for men and boys, we are asked to sanction increases from 15s. and 253. to 22s. 6d. and 42s. 6d. a dozen, and in respect of fur felt hats, from 24s. and 36s. to 36s. and 60s. a dozen. I move -

That the House of Representatives be requested to make the fixed duties, sub -item

  1. per dozen, British, 15s., general, 30s.
Senator McLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

– The Government cannot accept this request. The rates provided in the schedule are based on a recommendation of the Tariff Board dated the 4th November, 1932. The board recommended rates in respect of this subitem lower than those imposed by the Scullin Government by 7s. 6d. per dozen in both the British and general tariffs. There is an increase over the 1921-30 tariff rates by the following margins: - British, 7s. 6d. per dozen, or ad valorem 10 per cent; and general, 17s. 6d. per dozen, or 20 per cent, ad valorem. The Tariff Board inquired into the duties on these goods in August and September, 1932, and the ad valorem rates it recommended have been increased by 5 per cent, in the general tariff in order to give effect to the preference formula under the Ottawa agreement. The specific rates recommended by the board under the general tariff have been adjusted in order to maintain the margin existing when that agreement was signed. Following a previous inquiry in 1927, the board found that the 1921-30 tariff rates had enabled’ this section of the felt hat industry to prosper. Since 1927, the progress of the industry has been steady. A review of the accounts of many of the large hat manufacturers showed that, with the exception of one firm, their operations had been particularly profitable!. It would appear that the losses experienced by the firm concerned were attributable not to inadequate protection, but to the fact that manufacturing operations were not carried out upon as sound a basis as was the case with the other hat makers. The reconstruction of the finances of this company has since been undertaken, and this action, together with the writing down of capital, should place the concern on a sound footing. The local industry is not at a disadvantage in respect of raw materials when compared with oversea manufacturers, for supplies of wool and rabbit fur are available almost at their doors, and at’ prices which are no higher than the margin of exchange. The Australian manufacturers of men’s felt hats can supply all requirements, with the exception of very high-grade hata. The board pointed out, however, that the rates imposed by the Scullin Government pro vided unduly high protection, amounting to 100 per cent., and 60 per cent, under British and general tariffs on cheap fur felt hats, and 100 per cent, and 150 per cent., respectively, in the case of cheap wool felt hats. The proposed rates will provide adequate protection for this section of the hat industry. In making its inquiry, the board had in mind the facts which Senator. Payne has stated. In its reports of 1927 and 1929, it stated what protection was necessary, and mentioned that the demand for the Australian products was- increasing. Senator Payne has complained of the non-segregation ‘ of different classes of imports. The explanation is that the imports were so small that the dissection was not warranted. In 1929-30, the imports were valued at £11,000, of which £6,620 represented hats from the United Kingdom. In 1930-31, the imports from all sources totalled only £526, and in 1931-32, the value declined to £37. In respect of fur felt hats, however, detailed statistics have been kept. The importations of these articles in 1929-30 exceeded £222,000. In the following year; the value was £30,000, and for the year ended June, 1932, only £8,381. The figures for the current year show a slight increase. It cannot be said that the board approached the inquiry with its mind prejudiced in favour of the manufacturers. It pointed out that they were well situated in regard to supplies of raw materials, and reported -

There is evidence that at the present date the f.o.b. price of 3-oz. wool felt hoods in the United Kingdom has been reduced to 10s., or less, per dozen. This price applies to both the home and the export market, ‘and the board is convinced that it is a genuine market price, at which supplies may be purchased. Furthermore, it was stated in evidence that still lower prices prevail on the continent. It is clear that manufacturers in the United Kingdom (enabled largely by the fall in wool prices) have made drastic reductions in their selling prices. According to information in the possession of the board, slightly more than half of the production costs of one English manufacturer is represented by. raw material (wool), the price of which for 70s. on a clean basis fell from 40d. per lb. in April, 1929, to 19½d. in June, 1932. In contrast with price movements in England, which show reductions from figures between 18s. 6d. and 16s. per dozen in 1929 to 10s. per dozen or less in 1932, there has been no material reduction in the price of locally-made hoods during the same period, despite the big drop in the cost of wool and reductions in wages. Evidence tendered by millinery manufacturers shows that the price charged by Australian manufacturers for 3-02. hoods has remained practically the same as in 1929, namely, 33s. . per dozen. In some instances the price to millinery warehousemen has been as low as 27s. 3d. per dozen, but this price is by no means representative of the general run of sales. During the inquiry evidence was produced of sales of locally-produced hoods at 24s. and 25s. per dozen, but it has been explained by the manufacturers concerned that in one case the goods were of a low or mixed quality, and in the other of a small size and the transaction was not profitable at that price. The lower price of hoods in England may be partly accounted for by the use of a proportion of noils in manufacture. Local manufacturers contend that the result obtained from the use of noils is unsatisfactory; however, the hoods manufactured in the United Kingdom are regarded as satisfactory; therefore, it would appear that United Kingdom manufacturers have developed a technique not yet attained by Australian manufacturers.

The board analysed the balance-sheets of various manufacturers, and made a comparison of the cost of production in Australia and overseas -

The board admits the difficulty of determining whether the figures are fairly comparable. However, the overseas details were compiled in a convincing manner, and leave strong suspicion in the mind of the board that the methods of manufacture in Australia are not efficient. This view is supported by the exceedingly wide discrepancy in the selling prices overseas and local.

The board then dealt with wages, and the effect of exchange upon customs duties. It stated that the high duty on hoods is a burden upon the millinery industry. I am directing attention to these facts to show that all the points mentioned by Senator Payne have been considered by the Tariff Board. On page 10 of the report, the hoard stated -

The board is convinced that the price of the locally-made wool felt hood could andshould be considerably reduced, and proposes to recommend a duty which will ensure such a reduction. This will be of material advantage to the millinery industry, enabling a corresponding reduction in the price of hats, which will tend to increase consumption.

Senator Payne:

– That has no bearing upon this sub-item.

Senator McLACHLAN:

– I have quoted it to show that the board examined the facts submitted by all parties concerned, and eventually decided that the duties under the Scullin tariff were too high and that those imposed by the Bruce-Page Government were too low. On page 11 of the report, the board stated -

In the opinion of the board, all branches of the trade are catered for by local manufacturers with the possible exception of very high grade hats.

Fur felt hats of local manufacture range in price from approximately 12s.6d. to 32s. 6d. each retail. The retail prices of locally-made: wool felt hats range from approximately 5s.11d. to 10s. each. The general impression gained from the evidence of the various witnesses was that the quality of the Australianmade hat was satisfactory. In many instances prices have been reduced during the past few years, while in others the price has been maintained but the quality improved.

Having dealt with all these points, the board recommended certain duties which Senator Payne now wishe’s to reduce.

The CHAIRMAN:

– The honorable senator’s time has expired.

Senator DUNN:
New South Wales

– I trust that the committee will not agree to the reduction of duties proposed by Senator Payne. This is another instance in ‘which it would be dangerous, from the point of view of honorable senators on this side of the chamber, to reduce duties, because by doing so the textile and felt hat making industries would be seriously interfered with, and additional advantage would be given to Japanese manufacturers.

Senator Payne:

– Felt hats are not manufactured in Japan.

Senator DUNN:

– Japanese manufacturers are now making material from which hoods can be made. Prior to the imposition of high protective duties, Borsalino hats, made in Italy, and Stetson hats, made in the United States of America, were imported in large quantities. To show how Japanese manufacturers are extending their activities, I produce a miniature Australian flag manufactured in Japan. In New South Wales and in Victoria thousands of men and women are employed in making felt hats, which are equal to those of Italian or American manufacture. In Japan, girls are working twelve hours a day at a wage equivalent to 7½d. a day in our currency. The reduction of duties as proposed would retard the development of industries in which a large amount, of capital has been invested, and would, result in further unemployment, which we wish to avoid. The manufacturers of the wellknown Akubra hat, who have invested a large sum of money in buildings and plant, are producing men’s hats equal to those made in any other part of the world. A paragraph appeared in the Sydney Daily Telegraph to-day to the effect that large amounts of Japanese and other foreign capital are invested in textile and felt mills in India, where labour is available at a ridiculously low rate. A select committee of the House of Commons recently reported that, in some of the mills in India, children from five years of age upwards sleep alongside the machines which they operate, and that generally the industrial conditions in that country are deplorable. If Senator Payne is willing to attend an official function in a hat of Japanese manufacture, I shall present him an Australian flag made in Japan to take with him. Under the duties imposed by the Scullin tariff, felt hat manufacturers in New South “Wales and in Victoria have extended their operations, but a reduction would retard their operations, and lead to further unemployment. Felt hats are also extensively worn by women, who, owing to the frequency with which fashions change, are constantly purchasing this class of headwear

Senator PAYNE:
Tasmania

.- I am indebted to the Minister (Senator McLachlan) for giving such detailed information on this sub-item; but, notwithstanding what he has said, I am still convinced of the difficulty experienced by the Tariff Board in segregating the different types of ‘hats manufactured, because the evidence to enable it to arrive at a reasonable conclusion was not available. The Minister has said that the duties proposed should be adhered to, because the Tariff Board has recommended them ; but I refer the Minister to the fact that certain duties have been included in the schedule although not recommended by the board. It does not follow that we must accept all the recommendations of the Tariff Board. We consider the recommendations, and they are very useful to honorable senators, who, by examining the reports, become acquainted with the arguments, pro and con. I am in favour of a protective duty on this item, but the evidence shows that the former duty was sufficiently protective. In some instances, it has been more- than sufficient. I should be unwilling to do anything to injure the Australian hat manufacturing industry. It is a very fine industry, but Senator’s Dunn’s reference to thousands of persons being employed in it is not borne out by the facts. Michael Joseph Devereaux, general secretary to the Felt Manufacturers Union of Australasia, said that the number of journeymen on the roll in 1927 was 396.

Senator Crawford:

– But how many women were employed?

Senator PAYNE:

– Women are not employed in the manufacturing part of the industry, but mainly in the trimming and lining of the hats.

Senator Collings:

– They do a great deal more than that, and, in any case, should we not do something for the 396 journeymen rather than give the work to Japanese?

Senator PAYNE:

– Senator Collings and Senator Dunn have introduced into this debate an issue which is not justified. . I have never advocated trading with Japan. I challenge any honorable senator to find in the speeches I delivered last week one word to show that I am in favour of the importation of goods from Japan.

Senator Hoare:

– If duties are reduced, as the honorable senator suggests, encouragement will be given to the importation of goods from Japan.

Senator PAYNE:

– I know the tactics of honorable senators opposite. If they can get into the press anything which will injure honorable senators on this side, they do not hesitate to do it. Senator Dunn did something of that sort last week. I protest against the hypocrisy of pretending to give preference to British goods when no preference is given at all. These duties are not preferential, but absolutely prohibitive.

Senator Crawford:

– Hear, hear!

Senator PAYNE:

– Yes, I know the opinions of the honorable senator who interjected. He would, if he could, impose an anti-British tariff.

Senator Crawford:

– The honorable senator should not misrepresent me.

Senator PAYNE:

– We claim to give Empire preference in trade, but many honorable senators desire, not to trade within the Empire, but to keep all trade within the Commonwealth. The people in Britain could starve for all they care. Surely we do not want a spineless, jellyfish kind of people in Australia. We should try to develop a race which can hold its own against reasonable competition; a race of men and women who can stand up to fair competition from their kinsmen in Britain. Our policy to-day, however, is to erect a wall so high that neither British goods, nor those from foreign countries, can get in.

Senator McLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

– I should like to draw the attention of honorable senators to the concluding paragraph of the Tariff Board’s report. It is as follows: -

In the local manufacture of hats of the types covered by Item 114 (f), of the Customs Tariff Proposals of 3rd May, 1932, it is estimated by the board that approximately 5,000 employees are engaged.

The board, in its report of 23 rd December, 1929, in respect of women’s and girls’ headwear, expressed itself generally in favour of the rates now operating. The board recognizes that the protection afforded by these duties represents a much higher ad valorem equivalent than when the previous report was prepared. At the same time, the evidence showed that the local product is satisfactory, and that good value is given to the purchaser. Further, the competition in the industry is so keen that there is very little likelihood of unduly high profits being made by manufacturers.

I do not think that we need fear competition from the East, because practically all the imports in this line for many years have come from the United Kingdom, France, Italy and the United States of America. Importations from elsewhere are negligible.

Senator CRAWFORD:
Queensland

– I have never disguised the fact that I am an advocate of high protection, because I have always felt that high protective duties are necessary to enable us to carry on many essential industries in this country. High duties were never more necessary than under the present conditions of world trade and commerce. It is really pitiful to me to read in the papers day after day about the scores of thousands of unemployed men and women, boys and girls, who are facing a hopeless future. This is particularly so in the case of boys and girls leaving school.’ How are we to brighten their lives, and help them to find employment except by means of our customs tariff?

Senator Elliott:

– There are 113,000 fewer persons employed in the secondary industries to-day under our prohibitive . tariff than two years ago.

Senator CRAWFORD:

– That is not due to the tariff. Does the honorable senator suggest that if we were importing as much now as two or three years ago there would be fewer unemployed? The position would be infinitely worse if the tariff wall were not so high. We must seek, first of all, the good of our own citizens, and that is the chief duty for which we have been chosen by the electors to represent them in the Senate. Senator Payne made an appeal to us to allow competition between Australian products and those manufactured in the Mother Country. Those of us who think that Australian trade, limited as it is at the present time, should be reserved as far as possible for Australians, are not prompted by hostility to the Mother Country; we are only doing to the Mother Country what, under the Ottawa agreement, she is doing to Australia. Under that agreement we get no preference whatever for products which would compete with those of Great Britain. What are we going to do about our unemployed, if we do not establish and maintain industries which will provide them with work? We cannot turn them out ‘to grass like a horse that is being spelled. We cannot raise a nation of Nebuchadnezzars.

Senator Badman:

– Who is going to purchase the output of our factories?

SenatorCRAWFORD.- The people of Australia, so far- as they are able. At one time there used to be a cry, “ Go on the land, young man “ !- I ask Senator Badman how many young men could be employed in South Australia in the growing of wheat. There are more men engaged in growing wheat in Australia than can find a market for their produce. At the present moment there is under discussion a proposal to restrict the production of wheat, just as there is a proposal afoot for restricting the. export of butter to Great Britain.

Senator Elliott:

– The Government failed to dragoon the butter industry into accepting that proposal.

Senator CRAWFORD:

– If Senator Payne’s amendment is carried, a certain proportion of the hats worn in this country will be imported, and, to the extent of that importation, there must be a decrease in the manufacture and sale of Australian hats, and a corresponding decrease in the number of persons employed in their production. If that is not the object Senator Payne has in view, what is his object? Is he attempting simply to show what an expert he is in apparel, or is he trying to lead a Tasmanian vendetta against mainland industries? Senator Payne has made so many futile endeavours to reduce duties that I should have thought that, by this time, if he had no hidden purpose, he would have given up the attempt. I desire to emphasize the bad effect which the reduction of duties would inevitably have on Australian industry. If I had my way I would increase quite a number of duties in the schedule, because I do not think that they are as high as they ought to be, and experience will prove that to be the case. Recently, importations into Australia have increased considerably, and money has been going out of this country to provide employment for people elsewhere.

Senator COLLINGS:
Queensland

– If there is one thing which could keep me silent on this subject, it is that I hate to displease Senator Payne. I do not know why it is, but the most innocent interjection from me seems to rouse the honorable senator from Tasmania to almost uncontrollable fury. Another reason why I feel that I should not project myself into this discussion is that I know the Government is anxious to get the schedule completed, and to adjourn the Senate. I feel, however, that I must enter my protest against the persistence with which Senator Payne moves amendments, the effect of which, if carried, must inevitably be to deprive Australians of employment. Of course, I do not suggest that the honorable senator has any such intentions; I believe that he would regret, as much as any one else, to see Australian workmen and women discharged from employment.

Nevertheless, that would be the inevitable result of his suggested amendment, if it were agreed to. Hundreds of persons employed in the hat industry throughout Australia would he thrown out of work. The honorable gentleman must know quite well that he does not disturb tha equanimity of honorable senators on this side when he suggests that we are unpatriotic, simply because we believe that it is just as cruel to throw Australian operatives out of work by exposing our industries to competition from Great Britain, as it is to open wider the door to competition from any other country. We oppose his requested amendment from purely patriotic motives. We support these higher duties because of our love for Australia as a component part of the Empire to which we belong. I and other honorable senators on this side believe that we can best show our loyalty to the Empire by leaning on it as lightly as possible. We would like to see many of these tariff items increased rather than lowered, so as to ensure adequate protection for our industries. No one can truthfully deny that Australian hats are equal in every respect to hats made in any other part of the world. I am wearing a hat manufactured in Australia, and I do not hesitate to say it is very nearly an even-money wager that it is better in quality than any imported hats which other honorable senators may be wearing.

Senator Payne:

– The honorable senator would like us to believe that he is the only member of this chamber who wears Australian-made articles.

Senator COLLINGS:

– I worked in an Australian factory for 22 years, and during the little leisure that I am able to get from my parliamentary duties, I make it my business to improve my knowledge of Australian industries. This week I had an opportunity to inspect a wellknown Sydney wholesale and retail emporium. Thousands of articles of Australian production are being sold in New South Wales without the slightest intimation that they are of Australian origin, simply because so many people consider it to be not quite so fashionable to buy or wear Australian-made goods. I repeat that Australian hat factories are producing an artiole, the equal in every respect of hats made in any other country. As we have an almost unlimited supply of the raw material, the skins and furs, there is no reason why we should not make it into the finished article in our own factories.

Senator Payne, quoting from the latest Tariff Board report, mentioned that the secretary of the operatives union had, admitted that there were only a certain number of journeymen, approximately 400, employed in the hat industry. Yesterday, in Sydney, I visited one of the best-equipped textile factories possibly in the world, the Vicars Woollen Mills, which employs about 800 operatives. If the secretary of the local union had told me that there were only 300 male employees in that factory, that would not have affected my view of its importance, because I would have remembered that there were also 500 female employees, and that other textile mills in the . same neighborhood give employment to approximately 2,100 persons. If we lower these duties in order to give effect to Senator Payne’s wishes, namely, to make competition easier for British manufacturers, we shall certainly expose a large number of Australian workmen and women to the danger of unemployment.

I do not know whether honorable senators on this side are expected to rise during the discussion on every item to combat the arguments of tariff slashers on the other side, or whether we are expected to remain silent and allow the items to pass without defence, but I fear that, if we did not speak, it would appear that we were not interested in the welfare of Australian industries, or that we had no arguments with which to combat statements advanced in support of requested amendments for lower duties. The only admirable thing about Senator Payne’s attitude in this tariff discussion is his annoying persistency in moving requests for amendments. Fortunately, we are able to prevent him from doing injury to Australian employees and Australian factories, and the honorable gentleman should not get annoyed when we remind him of the inevitable result of his continual attempts to alter the tariff in a downward direction. Our desire is to see that a full measure of justice is meted out to Australia as a component part of the British Empire. I hope that the request will be negatived.

Senator DOOLEY:
New South Wales

– Senator Payne’s persistence in submitting requests for amendments to this schedule has caused me to wonder whether he realizes what would be their effect if they were agreed to. He contends that our high tariff is responsible for much of the existing unemployment. The honorable senator must know that the decline of the national income by approximately £200,000,000 a year is mainly responsible. Quite a number of men and boys are going about without hats simply because they have not the money with which to buy them. Even if hats were selling at 6d. a dozen these people would not be able to get hats unless they were in employment. I challenge any honorable senator to tell the difference between the American Stetson hat and the Australian Akubra hat, notwithstanding that the latter is very much cheaper.

Senator Foll:

– If it is so much cheaper, what need is there for high protective duty?

Senator DOOLEY:

– The Australian hat is cheaper because the local manufacturer enjoys practically the whole of the Australian market. Senator Payne also referred to Australian-made clothing. As a matter of fact he is wearing a Japanese tie that cost about 7½.

The CHAIRMAN:

– Order ! The honorable senator must not make personal remarks.

Senator DOOLEY:

– I hope that the honorable senator will change his heart in regard to this and other tariff items intended for the protection of Australian industries, the development of which will lead to more employment for our people.

Senator BROWN:
Queensland

– I pay a tribute to Senator Payne for having exposed the hypocrisy of the present Government’s tariff policy, and I hope that the Minister in charge of the bill, Senator McLachlan, will take notice of this attack. According to Senator Payne the Government’s tariff policy is hypocritical, and the country should know it. In so far as the honorable senator has exposed the hypocrisy of the Government, he has placed us under an obligation to him. The honorable gentleman mentioned that many young men were now going about without hats. The explanation is that it has become somewhat the fashion for our young men to discard hats, in some cases, it is suggested, because they hare had their hair marcelled, and do not wish it to be disturbed, as would be the case if they wore hats! In Brisbane, quite a number of persons employed in one of the distributing houses who were going without hats were notified by the firm that, unless they wore hats, they would be discharged. The day after that notice was given every man in the firm’s employ was wearing a hat. The Labour party believes in building up the standard of living in this” country. Our people should be able to earn enough to afford to buy hats to protect their heads from the sun and from the possibility of contracting some type of skin disease or skin cancer. Senator Payne is anxious to provide cheap hats for the people. The Labour party is not opposed to the provision of cheap hats; but it certainly is opposed to the provision of them at the expense of the hatmakers. We believe that the trade of Australia should be kept within Australia. As Senator McLachlan has pointed out, if our trade can be given to our own people it may be possible to decrease the price of Australian products. We believe in a policy which will give the people sufficient earning power to enable them to buy hats. Senator Payne believes in a policy that will provide cheap hats, but leave the people without the money to buy them.

Senator PAYNE:
Tasmania

.- The lengthy extract which the Minister read from the report of the Tariff Board had no bearing whatever on this item, so the honorable gentleman’s deductions from what’ he read had no real bearing upon my argument. I treat with the utmost contempt the innuendo of certain honorable senators opposite, first, that I have advocated the importation of Japanese goods, and, secondly, that I do not wear Australianmade goods. Senator Collings poses as * the only Australian in this chamber. If Australia had to rely upon men of his type, she would be in a sorry plight. The honorable gentleman spoke about my British hat. I challenge him to prove that he is wearing as much Australian clothing as I am. Senator Dooley, probably drawing a bow at a venture, said that I was wearing a Japanese tie. That is false. Such remarks show the calibre of honorable gentlemen opposite. Surely they should treat their colleagues with a certain amount of respect, even if they are political opponents. No arguments have been used to justify the rejection of my request, and I, therefore, hope that it will be carried.

Senator BRENNAN:
Victoria

– I wish to deal with one or two contentions made by Senator Crawford, some of whose suggestions were supported by honorable senators opposite. One argument that has been industriously advanced is that any reduction of the existing rates of duty must have the effect- of throwing persons out of work. The Commonwealth Bureau of Census and Statistics provides us with abundant information about our industries, and one might have expected that honorable senators who allege that the reduction of duties invariably throws people out of work would have quoted figures to support their wild statements. We have before us, in the memorandum relating to this schedule, four sets of figures showing the duties under the 1921-30 tariff, those under the- Scullin validated tariff, those existing immediately prior to the introduction of this schedule, and those proposed in this schedule. The duties on this item under the 1921-30 tariff were, British 15s., general 25s.; those under the Scullin validated tariff were 30s. and 50s. respectively; and those in this schedule are 22s. ‘6d. and 42s. 6d, respectively. If the slightest reduction of duties invariably meant a reduction of employment we might have expected a reduction to follow the substitution of the duties of 22s. 6d. and 42s. 6d. in this schedule for the 30s. and 50s. in the Scullin schedule; but no information of that nature has been furnished. If the slightest reduction of duties means inevitably a reduction of employment, it would seem that an increase of duties would mean an increase of employment.

Senator Collings:

– Other factors operate, of course.

Senator BRENNAN:

– That is so. The increase of duties under the Scullin tariff did not effect an increase of employment. I” shall probably be told that if the Scullin Government had not increased the duties the position would have been worse than it was, but the fact remains that although the duties were increased, employment became less. Honorable senators opposite seem to think that if they can show that after an increase of duties on a particular item there was an increase from, say, 1,900 employees to 2,000 employees in that industry, they have established their point, but it does not follow that they have done so. What may have happened in such a case is that employment was displaced.

Senator Duncan-Hughes:

– That is so, for an increase of duties may have the effect of drawing people from the country to the city.

Senator BRENNAN:

- Senator Collings observed in a previous debate that whenever I had anything particularly nasty to say I prefaced my remarks with the words “ with all respect.” I now say “ with all respect “ to my honorable friends opposite that they are constantly falling into the error of thinking that an increase of i employment in any particular industry following upon an increase of duty is necessarily a general increase of employment, and not merely a transference of employment from one industry ‘to another. An examination of our statistical information will show that employment was greater while the 1921-30 duties were in force than when the higher Scullin duties were in force. I do not desire to be dishonest in argument, so I do not attribute the falling off in employment while the Scullin tariff was in operation entirely to that tariff. I realize that since 1929-30 we have been passing through an unexampled crisis. I simply mention the fact to show that an increase of duties does not necessarily mean an increase in employment. A decrease of duties, on the other hand, does not necessarily mean a decrease of employment. My attitude to this tariff is not determined solely by the employment argument. We have been told over and over again that one of the things that this country, in common with every other country in the world, is suffering from is the restrictions imposed upon trade between the nations. Every economist of authority who has spoken on the subject has said that the lifting of these restrictions will, to some extent at least, open the way to recovery. We lay claim to. be considered as one of the nations of the world. We are “ the heir of all the ages in the foremost files of time.” We are proud of our position. But are we to be satisfied to follow fossilized ideas in the name of progress and democracy? Are we to learn nothing from what goes on round about us? Are we to benefit nothing” from the experience of the world ? Are we to be restrained from taking our part in world affairs simply because some honorable senators cry “ ruin “ when we propose to reduce by the least little bit the restrictions on world trade? I do not believe in those ideas. I shall, therefore, support the request.

Senator O’HALLORAN:
South Australia

– I should not have participated in this discussion but for the attempt of Senator Brennan to show that a result of the increased duties provided by the Scullin Government on this item was to reduce employment in this industry. If the honorable senator would, with his brilliant mind, consider this problem without bias, he would know that any fluctuations in employment in this industry at the moment are an unreliable guide as to. whether the protection being provided is sufficient or not. It has been pointed out that Australia is capable of absorbing many more workers in her various industries than she is doing at the moment, provided that the industries concerned are given adequate protection. Several honorable senators have referred to the change of fashions in men’s headdress in the last two or three years. Many men and boys have gone hatless in that period, perhaps because it has become somewhat fashionable, but principally, I believe, because it has become difficult for them to find the money to buy hats. The larger the hatless brigade becomes, the smaller will the number of persons employed in the hat industry be. In consequence of reduced purchasing power, many men are to-day taking their hats to be cleaned, and later taking them to be cleaned and blocked; and still later again, taking them to be cleaned, re-blocked and retrimmed. The consequence is that a hat which formerly lasted six months now lasts about two years.

An effective reply to the argument that the Scullin duties increased unemployment in the hat industry is found in the official bulletin relating to imports and exports. Senator Payne desires that we should return to the 1921-30 rates. According to the Overseas Trade Bulletin, No. 27, during the year 1928-29, the last year in which the 1921-30 tariff operated, 9,369 dozen men’s fur felt hats were imported, and their value was £73,405. Last year the imports of these hats were reduced to 1,074 dozen, of the total value of £7,417 ; therefore, as the result of the Scullin duties, the imports were reduced by about 8,000 dozen, and the value showed a fall of approximately £65,000. In South Australia there are three hat factories. One of the most important sections of theRoyal Institution for the Blind, which is situated at North Adelaide, is that devoted to hat-making. Blind persons who are trained there for this work are permitted to supplement their pensions by making hats, and the output of that factory, together with that of the other two factories in South Australia, has been increased materially as a direct result of the protection afforded by the Scullin . Government. This industry has been undergoing development for many years. In the early stages, experienced hatters were brought out from France and Great Britain for the purpose of’ training Australian workmen. The factories now have efficient machinery and experienced operators, and they are producing an article equal, if not superior, to imported hats, so they are entitled to the fullest possible measure of protection. It is unreasonable to suggest that we should revert to the 1921-30 rates. If Senator Payne’s requested amendment were agreed to, there would be a big increase in the importation of hats, because the present fashion among men of going without hats may not be in vogue next year. The one hundred persons whom Senator Payne recently saw hatless may be wearing hats next year. The reduction of duties already effected by the present Government has caused some of the operatives in South Australia to be thrown out of employment, and I would cheerfully support a request to increase the present duties, so that an efficient and well-organized industry might be amply protected against dumping.

Question - That the request (Senator Payne’s) be agreed to - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)

AYES: 14

NOES: 15

Majority . . 1

AYES

NOES

Question so resolved in the negative.

Request negatived.

Senator PAYNE:
Tasmania

.- Sub-item 114 f1 refers to felt capelines for girls and women’s hats. The duties under the 1921-30 tariff were British, 15s., and general, 25s. a dozen ; it is now proposed to make them 24s. and 39s. a dozen respectively. Under the schedule tabled by the . Scullin Government, the rates were British, 45s., and general, 60s. a dozen. Can the Minister say why the duties are higher than in the 1921-30 tariff?

Senator McLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

.- The Tariff Board reported on this sub-item on the 4th of November, 1932. The subdivision of this item did not find favour with the department, and it has therefore been referred back to the Tariff Board for further examination. This is one of the items which will come up for consideration -later.

Senator PAYNE:
Tasmania

.- The proposed rate of duty on sub-item g - Hoods, other than of felt - are ad valorem, British, 45 per cent., and general, 65 per cent., whereas under the 1921-30 tariff they were respectively 35 per cent, and 45 per cent. The articles covered by this sub-item are not manufactured in Australia; they are the raw material used by milliners for making hats for women’s summer wear. In the circumstances, there seems no justification for such exceptionally high duties.

Senator McLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

– In its report of November, 1932, the Tariff Board stated that the only justification for the high specific rates imposed by the late administration on hoods other than panamas and pandans, was that they might have encouraged local production. Those rates, which, in some cases, represented 600 per cent, ad valorem, failed to bring about any appreciable development in the manufacture of such hoods locally, with the result that hat manufacturers are still forced to import their requirements of hoods at a very high cost. The subsequent effect on the price of the finished article tends to restrict the demand, and, in turn, to lessen employment in the millinery industry. In view of the circumstances just related, the board recommended that the specific rates then obtaining be removed, and that all hoods, not being of felt, be subject to ad valorem rates of British, 45 per cent., and general, 60 per cent. Since the board’s recommendation was given effect, representations have been made by the sewn-hood manufacturers, who are chiefly located in Victoria, that their interests are being adversely affected by the inclusion of machine-sewn hoods in this item at ad valorem rates, whereas they were previously protected by alternative rates of British, 18s. a dozen, or 45 per cent, ad valorem, and general, 24s. a dozen, or 65 per cent, ad valorem.

Local manufacturers will be afforded an opportunity to state their case when theboard is reviewing the duties on the millinery section of sub-item f.

Sub-items agreed to.

Item 115, sub-items (a) (b1, 2) -

  1. Socks, per dozen pairs, British, 12s.; general, 25s., or ad valorem British, 45 per cent.; general, 65 per cent., whichever rate returns the higher duty.
Senator PAYNE:
Tasmania

.- I move -

That the House of Representatives be requested to leave out the fixed duties, subitem (a), and make the duties, ad valorem, British, 40 per cent.; general, 60 per cent.

Sitting suspended from 6.13 to 8 p.m.

Senator PAYNE:

– No one in the Senate understands the development of the Australian hosiery trade better, than I do. It has gone ahead by , leaps and bounds; in fact, it pro- . gressed so, rapidly two years ago that it overstepped the limits of sound business, and many crashes resulted. Under the 1921-30 tariff, a flat rate was imposed on socks and stockings, and that gave a considerable impetus to the Australian hosiery trade. The manufacturers improved their plant and methods, and extended their operations to such an extent that they were able to produce an infinitely greater variety of hosiery than was possible in previous years, which indicated that the tariff had met their needs. Incidentally, it also had the effect of forcing up the prices of the hosiery worn by the poorer section of the people, so that they found difficulty in purchasing their requirements. The class of half hose which’ is usually purchased by working men doubled in price, and British cotton hosiery manufacturers were justified in claiming that the duty was almost prohibitory, for the imports of their lines dropped by 85 per cent, compared with the previous year. Then came the resolution of the Scullin Government which increased the duties on socks from 6s. to 24s. a dozen, and on cotton stockings to 30s. a dozen. The people immediately began to invest their savings in the new hosiery companies which sprang into existence, with the result that in a comparatively few months there was such an over-production in

Australia that factory after factory had to close down or reduce the number of its employees. The Scullin Government had practically defeated the purpose for which the tariff was imposed, and added considerably to our unemployment, both in Melbourne and Sydney.

The word “ socks “ is defined in the schedule as “ any hose for human wear which, when worn, does not cover the knee “, while “ stockings “ is defined as “ any hose for human wear which, when worn, -covers the knee “. To me that is very amusing, “for it is well-known that many people who wear stockings roll them below the knee, so that under this definition, they would become socks, and be admissible at a lower rate of duty, showing the absurd lengths to which our tariff making goes. It should be sufficient merely to specify “ socks “ and “ stockings “.

Senator DUNCAN-HUGHES:
SOUTH AUSTRALIA · UAP

-hughes. - How would golfing stockings, which do not come above the knee, be classified?

Senator PAYNE:

– Under this definition, they could justifiably be termed socks.

Senator Duncan-Hughes:

– And what of a Scotsman’s stockings?

Senator PAYNE:

– They, too, would come within the category “ socks “.

After a careful analysis of the various items under the heading “ hosiery “, and an investigation of all classes of this wear, of which I have samples in my possession ranging from socks worn by infants to those used by grown-ups, I have come to the conclusion that a reasonable ad valorem duty would be sufficient adequately to protect the Australian industry. There is no doubt that our manufacturers have captured the local trade for hosiery with the exception of a few special lines that certain people insist on purchasing because of their great superiority in finish. Our manufacturers turn out a great deal of what is known as “ circular “ hosiery, which is not fashioned as is the fine quality British product; it has no seam at the back, and is not fashioned at the ankle, and therefore, does not meet with the approval of the fastidious.

Senator Brennan:

– Can the honorable senator state what would be the ad valorem equivalent of the present fixed rates?

Senator PAYNE:

– On cotton socks such as are worn by a working class man during the summer months, and invoiced in England at 6s. per dozen, the ad valorem equivalent of the present rate of duty is 200 per cent. The same comparison applies to women’s cotton hose invoiced at 6s. a dozen in England. On stockings costing 6s. a dozen, the ad valorem equivalent of the flat rate is 250 per cent., without taking into consideration exchange, primage, cost of transportation, wharfage charges, and so on. On a more expensive line costing 12s. a dozen in England, the ad valorem equivalent of the flat rate is 100 per cent, on socks and 125 per cent, on stockings. On a first-class line invoiced in Great Britain at 36s. a dozen, an ad valorem rate of 40 per cent, would be about 15s. a dozen, while the rate that we are asked to agree to is British 12s. a dozen pairs, or ad valorem 45 per cent.

The report of the Tariff Board on socks and stockings, dated the 9th- Decem ber, 1932, states -

There can be no doubt that the imposition of the prohibitive duties had a very unsettling effect on the trade generally. The sudden severance of business relations, built up over a number of years, caused much resentment. At the same time, the application of the duties encouraged the installation of plant in Australia far in excess of the requirements of the Commonwealth.

That bears out what I have said. The report continues -

This resulted in much disruption of the industry, including business failures, and caused serious economic waste. The board did not have the opportunity to inquire into this industry until nearly three years after the duties caine into force. By this time the industry had largely adjusted itself to the conditions operating, and the employment provided had become relatively stable.

That also bears out what I have said, that the industry and its employees were injuriously affected, but that now Matters have become stable. The report proceeds -

In the opinion of the board, however, a very big proportion of the Australian market could have been won with much less disruption to business under duties considerably lower than those operating - a course which would have been better for the industry itself and the Commonwealth generally. The board can see no reason for the maintenance of the duties now operating. It has already been shown that the rates are prohibitive, and are altogether out of proportion to the cost of production of the articles in question. There now exists sufficient local competition adequately to safe’guard the interests of the consumer, but the continuance of prohibitive rates would increase the likelihood of improper price-fixing arrangements, particularly amongst the relatively few manufacturers producing high-grade hosiery.

In the item under review, the rates of duty on hosiery vary according to the nature of the fibre used in manufacture, namely, cotton, wool, or silk. The board considers that there is no necessity for the continuance of this division, for the reason that the range of qualities in each fibre, and in mixtures is so extensive that the prices overlap.

The practice introduced- in the customs tariff proposals of imposing higher specific rates of duty on stockings than on socks is, in the board’s opinion, justified. As regards a suggestion made during the inquiry that some differentiation should he made between the duties on men’s socks and those on children’s socks, the board, after carefully examining the Australian manufacturers’ prices and information available as to f.o.b. prices of imported products concludes that there is so great a range of quality in both sections with considerable overlapping of price range, that a tariff differentiation is not justified. Following a study of the evidence suhmitted a.t the inquiry, and of the confidential information that has been tendered, the board recommends that the duties on stockings be15s. per dozen pairs, or 45 per cent. (British preferential tariff) and 30s. perdozen pairs, or 60 per cent, (general tariff) and on socks 12s. per dozen pairs, or 45 per cent. (British preferential tariff) and 25s. per doxen pairs, or 60 per cent, (general tariff).

The board fully recognizes that the specific rates of duty which it is recommending, although approximately half of those now operating, are high, particularly in regard to the cheaper lines of hosiery. For instance, the duties recommended would on typical lines of circular knitted artificial silk stockings represent from 150 per cent, to 200 per cent, on the f.o.b. value of the article.

These equivalents apply, however, to lowpriced goods; the ad valorem equivalents of the fixed rates on medium and high-class goods obviously recede as the prices increase, while the minimum ad valorem duties payable would bo 45 per cent. (British preferential tariff), and 60 per cent, (general tariff), the rates which the board has recommended as alternative to the specific duties.

Inordinately high duties have been operating for approximately three years, and the board, as already stated, is convinced that their continuance is not in the best interests of either the hosiery industry or the public.

After giving that information, the board made a recommendation, which was a reduction of the rates which operated under the Scullin Government resolutions, but still was higher than the rate that operated in 1929, which, particu larly where it applied to the socks and stockings that are usually purchased by the poorer classes, was prohibitive. The rate now embodied in the schedule is just double that which obtained in 1929 !

There is another class of hosiery to which I shall refer, that worn by children of from twelve to eighteen months upwards, and of which Australian manufacturers have not endeavoured to give our purchasers a good substantial article at a reasonable price. Consequently, because of the high duty, parents have had to pay exceptionally high prices when obtaining their requirements of these articles. These prohibitive duties apply more particularly to the class of hosiery worn by poor persons.

Senator Crawford:

– Those persons have their trade unions; why did they not make complaint?

Senator PAYNE:

– If the honorable senator moved among the poorer people as I do, he would have heard the complaints that have been registered day. after day. They were made to me when the high duties first became operative and the price of a pair of ordinary strong cotton half hose jumped from ls. to ls. 11d., while for the heather mixture socks that are worn by a working man in winter the price soared from ls. 3d. to 2s. 3d., and even 2s.11d.

Senator Crawford:

– Those complaints were not from the people on the mainland.

Senator PAYNE:

– They came even from districts where there are manufacturers. I do not know the class of persons among whom Senator Crawford moves, but I spend a good deal of my time among the working people, by which I mean the poorer classes, and I know they have experienced considerable difficulty in finding the wherewithal to buy these necessary articles of apparel. I have nothing to say against the Australian sock and stocking industry. I admit that it has developed marvellously, and now gives much better value that it previously did. Because of what was done, enormous losses occurred. I know of people who were induced to invest the savings of years in new hosiery factories, and lost the lot when those factories crashed. The Tariff Board says that unemployment was caused through the over supply of hosiery, which was encouraged by the ridiculous tariff of the Scullin Government.

The CHAIRMAN:

– The honorable senator has exhausted his time.

Senator McLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

– The rates proposed are based on the Tariff Board’s recommendation, except that there is an increase on the board’s rates of 5 per cent’, ad valorem, general, on all socks and stockings, and an increase of 5s. a dozen pairs in the general rate on stockings other than those of wool, the object being to provide the margin of preference on British goods required by the Ottawa agreement.

Briefly, the following are the main points made by the board in support of its recommendation: -

  1. The high rates imposed by the previous Government were responsible for the installation of plant far in excess of requirements, resulting in much disruption in the industry.
  2. The rates then existing exceeded in most cases the Austraiian wholesale selling price, and on medium and lower grades were equivalent to ad valorem rates ranging from 200 per cent, to 400 per cent.
  3. Labour involved is small in relation to the total cost. In several cases, the duty represented from three to ten times the direct labour charge in Australia.
  4. Local competition is adequate to safeguard the interests of the consumer but the retention of prohibitive rates will permit of improper price fixing particularly in respect to high-grade hosiery which few firms are manufacturing.
  5. The specific rates recommended are high in regard to the cheaper lines. On certain lines of circular knitted artificial silk stockings, they represent from 150 per cent, to 200 per cent, on the f.o.b. value. As the f.o.b. prices increase, the ad valorem equivalent of the specific duties diminishes, while the minimum ad valorem duties payable under the rates recommended are 45 per cent., British preferential tariff, and 60 per cent, general. It is inadvisable, however, to lower the duties to the other extreme as this would occasion further disruption in the industry.

No complaints have been received with regard to the proposed rates, and it would therefore appear that the industry is eminently satisfied with the lower protection now accorded. The board suggests in its report that even the reduced rates which it has recommended are high in some instances, and, subsequent to furnishing its report, requested that the question be again referred to it in order that it might consider the rates of duty necessary on British socks and stockings in accordance with article 10 of the Ottawa agreement. This is one of those cases in which the board itself stated that it had not given effect to the provisions of article 10 of the agreement. The matter is- again to be referred <to the board, which will decide to what extent article 10 applies, and will make such recommendations as it deems advisable. As the importations of socks and stockings from the United States of America were valued at £340,000 in 1929-30, honorable senators must realize how essential it is that we should have a scientific investigation of the matter by a tribunal so eminently suited as is the Tariff Board. In these circumstances, while, appreciating to the full the point made by Senator Payne, I must oppose his request.

Senator GRANT:
Tasmania

.- I have consistently voted for lower duties, but in this case the explanation of the Minister affords some justification for those that we are asked to agree to. Last year, there were practically no importations. We have more than sufficient machinery and skilled labour to meet all our requirements. The competition is intense, and I do not think that any person can complain of the prices now charged for either socks or stockings. In these circumstances, I propose to support the Government.

Senator BRENNAN:
Victoria

– Unlike my colleague and team mate (Senator Grant), I do not feel that the explanation of the Minister has met the point raised by Senator Payne, who proposes that the fixed rate of 12s. British, and 25s. general shall be struck out. The alternative is an ad valorem rate of 45 per cent, and 65 per cent., respectively, whichever rate returns the higher duty. It appears to me that that line whichever rate returns the higher duty “ is hypocritical, because the flat rate is far and away ahead of the ad valorem rate.

Senator McLachlan:

– Upon certain lines only. That provision is made in order to prevent the local market from being flooded with cheap lines of hosiery.

Senator BRENNAN:

– On the cheap lines, according to Senator Payne, the ad valorem rate amounts to 200 per cent.

Senator McLachlan:

– Some lines could be imported at 2d. a piece.

Senator Payne:

– The price of the lines that I quoted is 6s. a dozen.

Senator BRENNAN:

– On the better class lines, the fixed rate amounts to 100 per cent, ad valorem. There can be no comparison of the flat to the ad valorem rates, except on the very good lines. Senator Crawford has asked why the people’ have not complained. One of the evils of any tariff is, that it confers benefits and advantages upon one section of the community, which it unifies and makes politically powerful, so that whenever it is proposed to interfere with the privileges that Parliament has conferred upon those who compose that section, they present a united front, and raise a strident cry. On the other hand the suffering public have no one to lead them, and nothing to unify them, with the result that they bear the burden without knowing exactly what is pressing upon them.

Senator Crawford:

– They have the Housewives Association to watch their interests for them.

Senator BRENNAN:

– Of course, Senator Crawford does not receive complaints. ‘Can one imagine it being suggested that a protest should be made to the honorable senator on such a matter ! He may be urbane in ordinary walks of life, but we know that on the tariff all his urbanity vanishes.

Senator Crawford:

– That is unkind.

Senator BRENNAN:

– I am only stating what every honorable senator has had recent opportunity to observe. It may be, as Senator Grant says, that imports of hosiery are now negligible, but that does not seem to me a reason for imposing very high duties. On the contrary, it is a reason for relaxing duties somewhat. Senator Payne, who may be regarded as a severe, though a just, critic of the industry, has paid it the tribute that it is a great industry. It will not maintain that reputation if it persists in requiring from Parliament, as a condition of its continuance, duties ranging up to 45 per cent. It will endanger its reputation if it says that it cannot carry on without a duty of 45 per cent. It appears to be a fact that it has practically captured the whole of the Australian market. It is safe to assume that, as soon as it has completely captured the market, if it is carrying on at rates that are not regarded as remunerative, the weaker manufacturers will go to the wall, and . the stronger will unite and have the Australian people completely at their mercy.

Senator Duncan-Hughes:

– We are always told that that process means an immediate reduction of prices.

Senator BRENNAN:

– I admit that, up to a certain stage, prices fall; but there comes the time when the weaker go to the wall and the stronger combine. It is all very well for Senator Crawford to say that the Tariff Board would interfere. Those who were left in the industry would occupy a very strongly entrenched position, such as is held by those who are engaged in the sugar industry, who produce a great deal more sugar than Australia needs. Every ton of sugar not consumed locally is produced at a loss, and is sold outside Australia at a much lower price than the people of this country are charged. What is to prevent a similar occurrence in the industry that we are now considering? I cannot understand why it should be necessary to make provision for alternative rates. The public, not being experts like my friend, Senator Payne, have no opportunity to ascertain what the flat rate amounts to, and it gets through by a subterfuge without being thoroughly criticized. I hope that the Government will realize that it is a thoroughly bad principle to have alternative rates. We know that a duty of 45 per cent, is equal to 45 per cent, of the value of the article, but we do not know what 12s. a dozen may be. Those in the trade may know, but the public do not. I suggest that it should be so made that “ he who runs may read,” and those who have to bear the impost may know exactly to what extent it presses upon them. Therefore, I cordially support Senator Payne’s request, and I even go so far as to hope that I shall have the pleasure of the company of my colleague, Senator Grant, when the division is taken.

Senator CRAWFORD:
Queensland

– It is true, as we often hear, that “ the proof of the pudding is in the eating thereof.” The proof of the justification for a duty is in its effect. It is easy to theorize about the possible effects of duties, high or low. To my mind, the outstanding fact in connexion with the particular duties under discussion is that hosiery was never better in quality nor cheaper in price in Australia than it is to-day. The danger, of course, to this, as to all Australian industries, is that there is surplus production in other countries, and that the manufacturers abroad are seeking an opportunity to dump their goods into any market which they can find at almost any price. I interjected some little time ago that if these duties were bearing oppressively upon any section of the community, it would complain. Nearly every section of the community is organized. The workers have their unions. There is an active organization, with branches in all capital cities, known as the Housewives Association, and so far it has made no complaint regarding the price of locally-manufactured goods. All its complaints haA’e been directed against the prices of primary products.

Senator Sir WALTER GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– Such as sugar.

Senator CRAWFORD:

– It has also complained because of the increased price of butter brought about by the operation of the Paterson stabilization scheme. A few months ago when the Victorian Government proposed to help the wheat producer by increasing the price of wheat locally consumed, the Housewives Association vigorously protested, although it has never objected to the price of, say, sewing machines.

Senator Sampson:

– It did object a year ago. .

Senator CRAWFORD:

– For years I have worn a particular brand of socks. Originally I paid 4s, 3d. a pair for them, but when in Melbourne a few weeks ago, I paid only 2s.11d. for a brand of Australian socks which will outlast three pairs of the imported socks for which I used to pay 4s. 3d. a pair. The price of Aus tralian hosiery is to-day lower than I have ever known that of imported socks to be, and in addition, the local article lasts a great deal longer. In view of the fact that this industry is giving general satisfaction to the consumers and to the employees engaged in it, we ‘should hesitate before we attempt to find fault ‘with it, or to place it in a worse position than it is occupying at the present time.

Senator PAYNE:
Tasmania

.- I have no desire to imperil the hosiery industry of Australia. I quite agree with Senator Crawford that the Australian manufacturers, or at least, some of them, are turning out an excellent article at a reasonable price. But my point is that the proposed duty is unnecessarily high, and that a reduction of the ad valorem rates would not imperil the industry in any way. I know that the price of hosiery has been reduced, and that, of course, shows that there is no need for the proposed heavy fixed British preferential duty, which, under present conditions, is equivalent to a protection to the local manufacturers of about 80 per cent, or more. If my request were accepted the whole of the hosiery industry- would be placed upon a business footing, inasmuch as the tariff would apply equally to all classes of hosiery. The poor would not be impoverished to the advantage of the rich as is the position at present, because the higher duty - the flat rate - is on the class of hosiery, purchased by the poorer section of the community. That flat rate should be wiped out altogether. There is nothing fairer than the ad valorem principle of imposing a duty according to the value of the imported article.

Senator McLachlan:

– There should be no objection to this item because it has been referred back to the board for inquiry at its own request.

Senator PAYNE:

– That fact does not influence me in moving my request. I believe the principle of a flat rate to be wrong, and I should be lacking in my duty as a senator if I did not vote according to my convictions. I know many of the manufacturers, and, if my proposal is accepted, I am certain that they will be able to carry on successfully.

Senator LYNCH:
Western Australia

– I wish briefly to refer to the experience of the people of Canada who correspond in nearly all respects to our own people, because it has occurred to me that it will not be entirely without profit to us if we ask ourselves what is happening in the sister dominion of Canada. I find from the Canadian Y ear-Book that Canada, unlike Australia, does not produce sufficient wool for its own domestic use, and has therefore to buy its requirements on the world’s markets. Last year Canada purchased £4,000,000 worth of wool and wool products. Australia, on the other hand, purchased no. wool. As Senator Guthrie has repeatedly pointed out, we not only supply our own requirements, but also have a large exportable surplus. Canada purchased V001 at ruling prices, and turned it into manufactured goods. The value of its exports of socks and stockings last year was about £170,000, despite the fact that its tariff on woollen fabrics is as low as 22£ per cent., whereas the Australian tariff in respect of socks and stockings is 45 per cent. So we have this comparison, so unfavorable to Australia, exposed in all its naked ugliness to our view. I suggest to the normally balanced intellect that there is something wrong with our tariff policy compared with that of Canada. Why should we have a tariff higher than that of Canada ?

Senator Crawford:

– Canada has neither wages boards nor arbitration courts.

Senator LYNCH:

– Are not the con*ditions of Canada ‘equal to those of Australia ?

Senator Collings:

– No.

Senator LYNCH:

– That question has been thrashed threadbare on the floor of this chamber. The success of the MasseyHarris Company in Canada is another instance of the way in which an industry can be established without the aid of an excessively high tariff, and at rates of wages more favorable than those that obtain in Australia. That organization was started and brought to perfection under a tariff as low as about 20 per cent. Wool is produced in this country on land, the price of which is, in most instances, equal to that ruling in other countries. Although our wool producers have to com pete in the markets of the world, they are holding their own with the producers of other countries. I admit that the value of our wool clip, which at one time was £60,000,000 has now been reduced to about £40,000,000 but the wool is produced on land the value of which is lower than the- price of land in older countries. The land is the raw material of the wool producer. I have compared the value of land in this country with that in Denmark and other countries, and I find that it is practically the same in the two countries, and, in some instances, the value in Australia is less. The point which I wish to make is that if our wool producer is holding his own in the markets of the world, why is not our wool manufacturer doing likewise? He is not doing so because the urban population of this country is not doing its job; because the city people enjoy many artificial safeguards and privileges that are denied the country people. In Canada the value of the manufactured articles exported annually represents 43 per cent, of the total value, of production of £30,000,000. Compared with that stupendous sum, the value of our exported manufactures is microscopic. Why are not our secondary industries standing up to their job in the same way as our primary industries? It has been said that comparisons are odious, but throughout this tariff we have comparisons between different classes of society, times, prices, and conditions, and the exports of one country and another. We should follow the example of Canada. If we are to hold our own with other countries, we must reduce our tariff by at least one-half.

Senator CRAWFORD:
Queensland

– A comparison of the exports of other countries with those of Australia is valueless unless the nature of the exports is explained. The chief export from Canada is newsprint, and the second, wood pulp. A third important one is whisky, of which the dominion, having a market extending the full length of its southern border, exported during 1931, 18,000,000 dollars’ worth. Canada exports fish to the value of several million dollars annually. Australia exports none of those commodities. Senator Lynch referred to the export of hosiery from Canada. That trade is not very great, and in any case, it may represent only a surplus dumped abroad, because a profitable market for it could not be found locally. Senator Lynch did not state whether Canadian hosiery is exported at a profit or a loss.

Senator McLachlan:

– Canada, having a population of 12,000,000, has an internal market twice as large as that of Australia.

Senator CRAWFORD:

– That is to the advantage of Canada. The Australian standard of living is superior.

Senator Sampson:

– I doubt that. The Canadian standard seemed high when I was there in 1928.

Senator CRAWFORD:

– We have laws assuring to our workers reasonable wages and working conditions.

Senator Brennan:

– Surely the honorable senator does not suggest that similar laws do not operate in Canada?

Senator CRAWFORD:

– If they do, why do we so frequently hear complaints that because of our industrial legislation the cost of living and production in this country is unreasonably high?

Senator BROWN:
Queensland

– I spent a number of years in Canada, and I intended to return to that beautiful country after a visit to Australia, but I found the conditions of living here much more attractive. The conditions in the dominion when I was there were entirely different from those of Australia. Another factor to be remembered is that Canada is closely associated economically with the United States of America, and many American manufacturers have established branch factories in the dominion. Thirty-five years ago, 75 per cent, of the capital invested in the dominion was British, and only 25 per cent. American. To-day those figures are reversed. American firms, using the most modern machinery, and having a vast market close at hand, are able to produce economically and competitively under the low Canadian tariff.

Senator Badman:

– Americans are not satisfied with a low tariff in their own country.

Senator BROWN:

– No ; the attempts of European countries to pay their war debts with manufactured goods necessitated the raising of the tariff wall to safeguard American industries against this competition. When I was in Canada the workers were not so well paid as they were in Australia.

Senator Sampson:

– How long ago was that?

Senator BROWN:

– I left Canada twenty years ago, but I have maintained a correspondence, with friends there, and I know that Labour is not so strongly organized in the dominion as in Australia. Here the Labour organization is the most advanced and active in the world, and that is why the workers have been able to wrench from the employing class higher standards of living than have been reached in countries where Labour organization is not so thorough and active. Senator Lynch’s comparison between Australia and Canada was absurd. Because of the need to safeguard Australian manufacturers, I shall oppose the request.

Question - That the request (Senator Payne’s) be agreed to - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)

AYES: 13

NOES: 16

Majority . . . . 3

AYES

NOES

Question so resolved in the negative.

Request negatived.

Sub-items agreed to.

Item 120, sub-items (a) (bI, 2) (c1, a b) (e) -

  1. Articles, textile, as under, not being piece goods, viz.: - Articles of furnishing drapery and napery, including quilts n.e.i., table covers, doyleys, tray cloths, sheets, pillow cases and covers, bolster cases, counterpanes, bed spreads, table mats, splashers, tablecloths, runners, mantel borders, toilet sets, bags for linen, brush and comb bags, nightdress cases, handkerchief sachets, and the like, cosies and cushions in part or wholly made up -

    1. 1 ) When not containing wool, ad valorem - British, 25 per cent.; general, 45 per cent.
    2. When . containing wool, ad valorem - British, 35 per cent.; general, 55 per cent.

  2. (1) (b) Towels, n.e.i., cut or uncut; towelling n.e.i., in the piece whether defined or not for cutting up; Terry Cloth and Terry Robing in the piece,, ad valorem, British, 40 per cent.; general, 60 per cent.

Senator PAYNE:
Tasmania

.- I move -

That the House of Representatives be requested to amend sub-item (a) by omitting paragraphs (1) and (2) and making the duties, ad valorem, British, 25 per cent.; general, 45 per cent.

Only three of the articles mentioned in the sub-item, namely, tablecloths - which are principally of cotton, linen, or Victoria cloth with a little wool - mohair cloth, and mantle borders, are likely to contain wool. None of these is made in Australia, and if the imported goods contained a small proportion of wool that would be to our advantage. We should extend the market for our wool as widely as possible. In such circumstances, it seems absurd to have a second line reading “when containing wool “ and to impose an additional 10 per cent, under the British and general tariffs.

Senator Collings:

– That is for revenue purposes.

Senator PAYNE:

– In the 1921-30 tariff the duties were British 20 per cent, and general 35 per cent. The present proposals, therefore, show an increase in the general rate from 35 per cent, to 45 per cent. With the elimination of the words I suggest, more revenue would be received than hitherto, because an increase of 5 per cent, in the British and 10 per cent, in the general tariff would apply to all of these articles whether containing wool or not. As none of these articles, with the two exceptions mentioned, contains wool, I feel justified in submitting this request.

Senator McLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

.- The Tariff Board has furnished a recent report on this matter. Honorable senators will see that there was a differentiation in the rates of duty on goods classified under this item when made ofwool, even when the Bruce-Page Government was in office, when the British duties were 20 per cent, on goods not containing wool, and 35 per cent, on goods containing wool. The respective rates in the general column were 35 per cent, and 50 per cent. That differentiation has been retained in this schedule. The honorable senator has looked at this matter apparently from one view-point, but the board, after examining the whole position, has retained the differentiation. The board further stated that no evidence was tendered to justify the imposition of duties higher than those under the 1921-30 tariff, which it thought afforded sufficient protection. I understand that this matter is not of great consequence, and that there has always been this differentiation, although the rates may not have been as high as they are to-day. I understand that in France a certain quantity of wool is used in making some of these furnishings and tablecloths, and that there is a possibility of the industry being established in Australia. In these circumstances, does the honorable senator propose to press his request?

Senator Payne:

– Yes.

Question - That the request (Senator Payne’s) be agreed to - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)

AYES: 11

NOES: 18

Majority . . 7

AYES

NOES

Question so resolved in the negative.

Request negatived.

Senator PAYNE:
Tasmania

.- This item provides for duties of British, 40 per cent., and general, 60 per cent., as against duties of British. 20 per cent., and general, 35 per cent, under the 1921-30 tariff. The increase is too great. I do not think that the industry needs an increase of 100 per cent, in the duties. The towel-making industry in Australia has made excellent progress under the previous tariff. The duties recommended by the board are embodied in this subitem. On pages 6 and 7 of the Tariff Board’s report it states -

The price of locally produced yam used in the towel industry is more than twice the price of the United Kingdom f.o.b. price, and it is this position which so materially increases the cost of production of towels in Australia. White towels, the raw material of which is 100 per cent preparation yarn manufactured in Australia, represent at present only 15 per cent, of the local output. This is again mainly due to the high cost of the local yarn, on the basis of the figures submitted at the inquiry, it is evident that to adequately protect white towels, duties of over 200 per cent, would be necessary, and these, in the opinion of the board, are not justified. The Australian manufacturers are making profits sufficiently high to permit of a reduction in the selling price of towels. Furthermore, the selling price of Australian yarn is considered unreasonable, as such price is almost the same as the present landed duty paid cost of yarn imported from the United Kingdom, which includes a duty approximately 88 per cent, together with primage duty and high exchange rate.

The industry in Australia is producing excellent towels, and even if the duties are reduced, it will still continue to expand, but it is essential that the price of Australian yarn should be reduced. The Tariff Board says that the price of yarn is too high. In submitting a request for a reduction in the duties proposed, I am supported by the Tariff Board.

Senator Collings:

– The rates recommended by the Tariff Board are, British, 40 per cent., and general, 60 per cent.

Senator PAYNE:

– Yes; but they should be, British, 30 per cent., and general, 30 per cent. In view of the statements made by the board I cannot understand why higher duties should be proposed. I know how the industry expanded up to 1930 and since then. The duties I suggest are 50 per cent, higher than those imposed under the 1921-30 tariff, and would enable the industry to be fully protected. I move -

That the House of Representatives be requested to make the duties, sub-item (c1,b) ad val., British, 30 per cent.

Senator McLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

.- The Tariff Board gave this matter careful consideration, and, among other things, said that the cost of the yarn used by the Australian manufacturers represents on an average 48 per cent, of the selling price, whereas the cost of the yarn used by British manufacturers represents 60 per cent, of the selling price. It would, therefore, appear that the price of the raw material is not the only reason for the higher cost of the Australian towels. On the basis of the figures submitted at the inquiry, the board concluded that the wages, overhead expenses, and profits of the Australian manufacturers were, on the average, three and a half times greater than those of the English towel manufacturers. It was satisfied that the proposed duties will amply protect the manufacture of coloured towels in Australia. The board then dealt with huckaback towelling which is not now manufactured in Australia, and reported that there are only small prospects of its manufacture being successfully undertaken in the near future. Several towel manufacturers stated that they would not object to its importations under departmental by-law. The board, however, favours specific provision being made in the tariff. The duties now proposed on huckaback towels and towelling are the same as those imposed for revenue purposes on cotton piece goods n.e.i., and it is proposed to retain those rates. The board then went on to deal with the subject of

Japanese competition which is the subject of a preliminary investigation by the Trade and Customs Department, and has been referred to the Tariff Board for report. The duties imposed by the BrucePage Government were, British, 20 per cent., and general, 35 per cent. The honorable senator is now proposing that the duties should be 30 per cent, and 50 per cent. They went as high as 50 per cent, and 65 per cent., and the present Government has reduced them to 40 per cent, and 60 per cent, on the Tariff Board’s report. A considerable quantity of this material comes from Japan and Czechoslovakia, but the bulk of it is imported from the United Kingdom. For some years past this trade has been in an unsettled condition in Australia. The cotton yarn duties have been varied considerably. Beginning with a duty of 5 per cent., the protection was increased in November, 1929, to 35 per cent, and 55 per cent. On the 27th March, 1931, the duties were, per lb., 6d., and (-id. with an alternative ad valorem duty of 35 per cent, and 55 per cent., and in February, 1932, the duties were 35 per cent, and 55 per cent. Under the tariff proposals of the 3rd May last the rates were made to vary according to the count, and ranged from 4d. to 9d. per lb., plus an ad valorem duty. The Tariff Board has had an opportunity to study the needs of this most involved industry. Senator Payne has admitted that production is satisfactory, and I suggest that we leave the duties as recommended by the Tariff Board.

Senator DUNN:
New South Wales

– I feel sure that the Senate will not accept Senator Payne’s request. There is in Sydney an up-to-date factory engaged in the manufacture of towelling, where the employees work under trade union conditions. Victoria also has a similar factory. On the railway hoardings in and around Melbourne there is an advertisement which appeals to Australian people to buy Australian-made towels. The industry in Australia, however, is seriously menaced by foreign competition. Japan has practically collared the market in this country. For some time past, British and Australian manufacturers have been hopelessly beaten in price at the lower end of the towel trade, and that is not surprising for the following reasons : Japanese hours of labour and rates of pay are not comparable with those of Australia and Great Britain; Japan is able to obtain raw material, that is, cotton yarn, at the same price as can Great Britain; and the depreciation of the yen in terms of the pound sterling, and of the Australian pound, has given J apan an enormous trade advantage. The nation which, in this time of world-wide depression, is prepared to depreciate its currency as Denmark and Japan have done, is guilty of nothing but sharp practice. Australian manufacturers are operating on a strictly competitive basis compared with English manufacturers, but both are at a serious disadvantage compared with Japan. The great bulk of the sales of coloured towels are made at prices ranging from 12s. to 15s. a dozen, and when we compare the cost of the raw material to Japan and to Australia, it will be seen how inadequate the present tariff is to protect the Australian, or even the British manufacturers, against unfair Japanese competition. The relative percentage cost of these lines is as follows: -

The raw materials are subject to a protective tariff in favour of the cottongrowing and cotton-spinning industries.We have in Queensland a very fine primary industry engaged in the production of cotton. How would honorable senators who represent Tasmania feel if we were to put forward a proposal for removing the tariff protection from the carbide industry, or from Pascall’s, or from hops or raspberry jam. I do not mean the kind of raspberry which the Leader of the Government in the .Senate (Senator Pearce) got when he went to Western Australia. I mean the raspberries which grow on bushes. Can Senator Payne be serious in putting forward this proposal when he knows of the depreciation of the Japanese yen, deliberately engineered to give Japan an advantage over her competitors? He must have read in the ‘ press - not the

Labor Daily, but the other newspapers which support his political faith - that manufacturers in India, with its teeming millions, where the coolies sleep on the job, and work twelve hours a day for 9d., are unable to compete against Japanese goods, and that the Indian Government is raising the tariff wall against Japanese imports, the product of female labour which works twelve hours a day for 7½d.

Senator McLachlan:

– The Government is at present considering whether the anti-dumping provisions of the Industries Preservation A,ct should apply iu this case.

Senator DUNN:

– I am pleased to receive that assurance. According to the Tariff Board’s report, the cost of this yarn averages 30d. per lb., as compared with 13d. per lb. in Great Britain. The fair average weight of these towels may be taken at 6 lb. a dozen. It is surely a reasonable contention that Australian manufacturers should be placed on a parity with both British and foreign manufacturers for raw materials before a tariff to adjust the various standards of living is considered. It is claimed that a fixed duty, of ls. per lb. be applied to the general tariff, so as to place British and Australian manufacturers on a fair competitive basis with foreign manufacturers. It is now July, and on the first Monday in October the official opening of the swimming and surfing season will take place. Is my learned friend with the Japanese outlook-

The CHAIRMAN:

– The honorable senator must not make remarks of that kind.

Senator DUNN:

– Does he suggest that hundreds of thousands of white people in this furthest outpost of the British Empire should be compelled to dry themselves with Japanese towels? He may have told some duchess when he was in England with the Scottish delegation that he was a good Australian, prepared to do his best to protect Australian industries; but it seems strange that the Japanese capitalists and mill-owners are able to induce honorable senators in this chamber to support any proposal for the introduction of goods made by cheap, sweated labour in competition with Australian goods manufactured under trade union conditions. I realize that Senator Payne is entitled to his opinion, but it is time that we had from him something of that third generation Australianism of which we hear so much. If my dear friend from Tasmania-

The CHAIRMAN:

– Senator Payne.

Senator DUNN:

– I did not mention any one’s name. You should not anticipate what I am going to say, Mr. Chairman. I said “My dear friend from Tasmania.” I was referring to my dear friend who is so enamoured of Japanese goods, and who may take a trip to Japan shortly; my dear friend who may attend a tea party with the Japanese royal family at Tokyo ; my dear old friend who may blaze a trail for the modern Japanese drummer who is pushing his goods all over the world - this dear friend, I really do not know who he is; he may be Senator Payne.

The CHAIRMAN:

– Then the honorable senator is out of order.

Senator PAYNE:
Tasmania

– I am afraid that the Minister (Senator McLachlan) was innocently responsible for the outburst from Senator Dunn to which we have been obliged to listen, because he informed the committee that heavy importations werecoming into this country, not only from Great Britain, but also from Czechoslovakia, Japan, and other foreign countries. It may interest honorable senators to know that, last year, we imported from Great Britain towels to the value of £205,614, as against £21,170 worth from Japan, and only £940 worth from Czechoslovakia. Judging by Senator Dunn’s outburst, one would think that this country was being inundated with towels from Japan to the exclusion of those of British manufacture, when, as a matter of fact, our importations from foreign countrieswere infinitesimal, compared with those from the United Kingdom.

Senator Crawford:

– They could all be manufactured in this country.

Senator PAYNE:

– No doubt they could, but that has no Bearing upon the extraordinary speech just made by Senator Dunn, who charged me with having advocated Japanese commercial interests against the interests of British manufacturers. I throw that statement back in his teeth. It is a lie. I have not come here to help Japanese commercial interests at all, but to do what I can to see that this tariff is framed on reasonable lines, to ensure to Australian industries an adequate measure of protection, and, above all, to see that the so-called preference to Great Britain, provided for in the Ottawa agreement, is a real preference, and not a sham.

Senator RAE:
New South Wales

– I accept unreservedly Senator Payne’s statement that he is not “ barracking “ in the interest of Japanese manufacturers, but I remind him that his attempts to lower the tariff would, if accepted, leave the way open for more intense competition by foreign manufacturers. That is what honorable senators on this side will do all in their power to check. The fact that Japanese competition in this branch of the textile industry is not, at the moment, formidable, does not affect the issue. This is probably one of the lines in which Japanese manufacturers have just commenced the invasion of the Australian market. We know, from what has happened in other directions, that Japanese manufacturers, having made a start in this particular line of goods, will go on increasing their exports to Australia year after year.

Senator McLachlan:

– Importations of Japanese towels increased in value from £15,000 in one year to £35,000.

SenatorRAE. - That is what I anticipated, judging by the progress which Japanese manufacturers have made in other directions. It will not be long before the figures dealing with importations of towels fronthe United Kingdom and Japan will be reversed.

Senator Sir Walter Kingsmill:

– That is only an opinion.

SenatorRAE.- Competition from Czechoslovakia may appear to be of minor importance, but the intense rivalry between manufacturers in the various European countries is steadily dragging workers in secondary industries in those countries down to the coolie level, and it will not be long before the competition from Czechoslovakia is as dangerous to the Australian textile industry as is the Japanese menace to-day.

Senator DUNCAN-HUGHES:
South Australia

– I feel that the speech which we have just heard from Senator

Dunn should not be allowed to pass entirely without reply from this side of the chamber. The Senate, as one branch of the Commonwealth Parliament, is, equally with another place, responsible for Australia’s foreign policy. The remarks which have just been made by Senator Dunn reflect on a friendly power, and may be misconstrued overseas unless some honorable senators disavow them. I feel sure that the majority in this chamber do not agree with what Senator Dunn has said with regard to Japan, and I shall not be in the least concerned if that honorable gentleman asserts that, in taking him to task, I am speaking in favour of Japan. I remind him that Japan has, for many years, been friendly, not only to the British Empire, but also to Australia. Our troops could not have gone to the war if our transports had not been convoyed by Japanese warships.

The honorable senator, referring to the importation of Japanese goods, suggested that the interests of J apan were hostile to the interests of Australia. As regards our imports from, and exports to, J apan the trade balance is very much in our favour. Therefore, if , we do increase a little our importations from that country, it is only fair. Japan, as I have indicated, has been friendly to Australia for many years. It has a population of between 80,000,000 and 85,000,000, whereas we have a population of only 6,500,000; and if he have no gratitude for the friendliness of Japan in the past it would be well, I suggest, to consider future possibilities.

What is the position? In 1930-31 we bought from Japan goods to the value of £2,400,000, and sold to that country goods valued at £9,500,000, the balance in our favour being approximately £7,000,000. Trade as between two countries rarely balances quite evenly yearly, but if honorable senators will take the trouble to study the trade figures of Great Britain and Australia over a period of ten years, they will he surprised to find how closely the aggregate figures balance. In view of the fact that our trade with Japan is so heavily in our favour, the only logical result of any attempt to restrict further the small amount of goods which Japan sends to us will be that eventually we shallbuy nothing from Japan, and also, I suggest J apan will take nothing from Australia. What then will be our position? If we wish to sell our wool to Japan or any other country, surely we should be prepared to take something in return. Any one who has knowledge of the wool market during the last year or two - all honorable senators will agree that the wool industry has been a source of tremendous strength to Australia in that period, as in others - must acknowledge that purchases by Japan have helped to keep up prices at a time when values were almost uniquely low; that is for the last twenty years. I am quite certain that Senator Dunn had no more intention than I have of saying anything really objectionable to a friendly power. I feel sure that his remarks were couched in a spirit of humour rather than of seriousness. But observations made in lighter vein, when they appear in cold print and when read in Hansard as they will be read in Japan, let honorable senators make no mistake about that - the number of Japanese people who can read English is greatly in excess of the number of Australians who can read the Japanese language - will convey an unfortunate impression unless something is said in rebuttal. I hope that Senator Dunn will take an early opportunity to explain that he did not quite mean all that he said about Japan.

Senator COLLINGS:
Queensland

– I should not have risen to speak to this item but for the remarks of Senator Duncan-Hughes, who has so kindly come to the rescue of Australia with a view to saving us from international complications arising, out of Senator Dunn’s observations. I do not believe one word of what Senator Duncan-Hughes has said on this score, and what is more, I have not the slightest interest in the matter. I think that one of the meanest things that can possibly be done in a debate of this kind is to suggest that any honorable senator should refrain from giving expression to his honest thoughts because of the fear that some friendly power might take umbrage. If that rule is to be observed in this chamber, every honorable senator, upon his election, should be instructed as to what he should or should not say, because of the risk that remarks, critical of a friendly power, might lead to complications. Such a position as that is unthinkable and I, for one, would not submit’ to it without protest. Ever since I was a child I have been accustomed to hear warnings of international complications and bogeys. One bogey was the fear that, in a certain event, Russia would strike at the British Empire through India.

Senator Duncan-Hughes:

– And there was the German bogey, which proved rather substantial.

Senator COLLINGS:

– It is if anything more menacing to-day than ever it was. I refuse to be scared by any ©f these bogeys. The only bogey that I am afraid of is the prospect of having to face the people who belong to my own class if success attends this attempt, by tariff reduction, to injure Australian industries, and so make the last condition of ‘ our workers worse than the first ; and God knows their first condition has never been something of which Australia could be proud. Always I have in mind the position of the working class who are looking to us to protect their interests. We have just been told that we can sell to Japan goods of a certain value only if we agree to take from that country a certain quantity of its goods. That is supposed to be an argument in favour of lower duties. But Japan has never bought one farthing’s worth more from Australia than was justified by the value that was obtainable from Australia, and Australia has never bought’ one farthing’s worth more from Japan than was justified by the value that Japan offered. Both countries are looking for the best value they can get for their money. In these circumstances, it is futile t’o talk about encouraging commerce between the two countries for the purpose of balancing trade. That argument is used only by people who want to see the same industrial hell in Australia as is to be seen in other countries. I do not suggest that honorable senators individually have this objective in mind.

Senator Sampson:

– That is very good of the honorable senator.

Senator COLLINGS:

– I do not think that we should be expected continually to explain that we are not actuated by personal motives in resisting the tariff arguments of honorable gentlemen opposite. It appears as though honorable senators on this side of the chamber are not expected to have any feelings. But wo are prepared to stand by our convictions. I do not think that honorable senators opposite are fighting these tariff items because they desire to see Australia’s standards of living reduced. They are, no doubt, actuated by good intentions; but as I said earlier in the debate on this schedule, the road to hell is paved with good intentions. If honorable senators, with the best intention in the- world, destroy our industrial standards, we shall have to - suffer for it. These remarks are germane to towels, just as, on a previous item, they were germane to socks. Towels of such excellent quality are being made in Australia to-day that we should not think of buying towels from, other countries. We should be developing an Australian outlook. We shall not develop this nation satisfactorily unless we do everything possible to make it self-contained. How often do honorable senators opposite remember that Australia and New Zealand are the most distant outposts of the British Empire? A3 such, they should be doing their best to make themselves self-reliant, so that if war occurred, and they were thrown on their own resources, they would be able to maintain all their activities. I appeal to honorable senators to display a true Australian outlook. If there is one new -industry that is urgently needed in Australia it is an industry which will place big-hearted Australians in the Commonwealth Parliament. Prospective members of Parliament should be required to attend a school of economics, and to pass a test in Australian psychology. Everything that can usefully be said on this item has surely been said. I trust that this effort of Senator Payne to reduce our protective duties will, like all his previous efforts, be defeated, arid that another Australian industry will be saved from his clutches.

Senator BRENNAN:
Victoria

– I do not consider that everything has been said on this subject, although it is typical of the honorable senator who has just resumed his seat to conclude that after he has spoken on a subject all that need be said on it has been said. There are still one or two aspects of this subject which deserve attention. One sentence in the honorable gentleman’s speech with which I agree is that remarks on the economic effect of these duties, even though they may relate only remotely to towels, are germane to ‘the item. I agree with what Senator Duncan-Hughes has said upon the larger issues of the subject. The suggestion has been made that heavy duties are necessary on towels to prevent the country being flooded with imports from Japan. I do not think that any one who- listened to the speech of Senator Duncan-Hughes could suggest that he was out of order in talking of the economic aspects of these duties. It should not be necessary- for honorable senators opposite in discussing the subject to be offensive to any power, and, as Senator DuncanHughes reminded us, Japan is a friendly power. I have personal means of knowing, as Senator Duncan-Hughes said, that considerable weight is attached in Japan to remarks that are made in this chamber on these subjects. The Hansard reports of our debates on tariff and other matters are widely read by the Japanese people. It is proper that due weight should attach to the utterances of honorable senators on these subjects. One could not reasonably expect less. It would He remarkable indeed if the statements made in one branch of the Commonwealth Parliament were not regarded as weighty. I do not suppose that any one would suggest” that Japan would decline to discuss trade relations with us. We are, after all, dealing with a very small item of our import trade, and we should remember that Japan buys our staple products to a value of £9,000,000 or £10,000,000 per annum. It is nonsensical to declare that Japan is driven of necessity to trade with us.

Senator Collings:

– I did not say that. I said that she got value for her money.

Senator BRENNAN:

– To paraphrase Senator Collings’ remarks, the honorable gentleman said, in effect, that we need not be afraid to insult Japan because she is hound to take from us what she already takes from us.

Senator Collings:

– I rise to a point of order. I ask whether the honorable senator is entitled to say that I made a remark which I did not make, and which is entirely foreign to any idea that I expressed.

The CHAIRMAN:

– If Senator Brennan has made a remark that is offensive to Senator Collings, I. am sure that he will withdraw it.

Senator BRENNAN:

– I am sorry if my free interpretation of the honorable senator’s views is not satisfactory to him.. I was emboldened to speak freely because the honorable senator, before resuming his seat, said that he and his colleagues were prepared bravely .to stand up against whatever knocks were given them. Yet the first time that even a slight rebuff is given to the honorable gentleman he seeks the protection of the Chair. But to return to the item. Towels suggest drying up. I shall therefore “ dry up “ by saying that I agree with the request ‘ that has been made.

Senator HOARE:
South Australia

– Senator Duncan-Hughes argued that as Japan and Australia were friendly powers, an endeavour should be made to balance the trade more evenly between them. He pointed out that our imports from Japan were valued at about £2,000,000 a year, while Japan’s imports from Australia were valued at about £9,000,000 a year. But how did Japan regard such a proposition in relation to South Africa ? I take it for granted that South Africa and J apan are also friendly powers. When the Government of South Africa some time ago complained to the Government of Japan that she was buying many millions of pounds’ worth of goods in excess of the value of the goods Japan bought from her, the Japanese Government replied that Japan had nothing against South Africa and would buy South African goods if they were suitable and the price were right. Surely we should be allowed the same privilege in respect of Japan. If we need Japanese goods, and the price is right, we will take them.

Senator DUNCAN-HUGHES:
SOUTH AUSTRALIA · UAP

-hughes. - The nations have ways of trading which are suitable to them.

Senator HOARE:

– That is quite true. Japan does not trade with us because our relations are friendly, but because our wool suits her and the price of it is right. Japan was more patriotic to the Australian people in a recent series of wool sales than were the British woolbuyers, for they pushed the price of our wool up by a farthing or so per lb. against the British bidders.

Senator Elliott:

– Are not Japanese industrial conditions more likely to send the price of wool down than up?

Senator HOARE:

– No. During the regime of the Scullin Government, the duties were higher than they had been before, yet the Japanese purchased an enormously greater quantity of Australian wool than ever previously. If the Japanese require our wool, and the price suits them, they will buy it. The Australian people have every right to develop their own industries, irrespective of outside nations. As an Australian, I contend that charity begins at home. I put Australia first, and the other British dominions next. Although Japan was one of our war allies not many years ago, Britain and Australia were friendly with Japan, so the argument that we should consider Japan on account of its friendliness to us during the war cuts both ways. There is no good reason why we should study the interests of other nations merely for sentimental reasons. If those nations can outbid Australian manufacturers, they will, no doubt, do so, for sentiment and commercialism are as far apart as the poles. Senator Payne claims that he is in favour of developing Australian industries, and that he. is not endeavouring to help Japan by reducing duties; but, indirectly, he is doing so, because the more we reduce our tariff, the better opportunity Japan will hav( to gain markets in this country. Unintentionally, perhaps, the honorable senator is helping Japan to obtain business in this country .which should go to local manufacturers. Senator McLachlan has pointed out that a year or so ago we were importing from Japan £15,000 worth of towelling, and, to-day, we import towelling to the value of £30,000. It is easy to see that the thin end of the wedge has been driven into local manufacture. It is hardly necessary for me to say that the more we import from Japan, the smaller will be the quantity of goods manufactured in our own country. We should avail ourselves of every opportunity to provide employment for Australians.

Senator O’HALLORAN:
South Australia

– I hope that the committee will not agree to the request submitted by Senator Payne, and I shall endeavour to present an aspect of this matter to which reference has not yet been made. Under - the 1921-30 tariff, the duties were 20 per cent. British, 25 per cent, intermediate, and 35 per cent, general, which are lower rates than those now proposed by Senator Payne. Owing to the circumstances then prevailing, the effective protection of the industry under the 1921-30 rates was considerably greater than the effective protection that would be afforded if the request were agreed to. Prior to 1931, the Parliament had established the principle of assisting the cotton-growing and cotton-spinning industries by way of a bounty, the amount of which was to diminish gradually over a period of years; but, in 1931, this chamber acquiesced in a deliberate reversion of that policy, and the effect of Parliament’s action was to . increase the cost of the raw materials used by Australian towel manufacturers. Although Senator Payne glibly quoted certain portions of the report of the Tariff Board, if he had read from page 6 of the report, he could have shown that the board dealt extensively with the phase of this matter to which I am now directing attention. It was pointed out in the report that the rates of duty on cotton yarn were progressively increased as the bounty was reduced, and that, ultimately, flat rates were established, varying from 4d. to 9d. per lb., in addition to the ad valorem rate of 35 per cent, under the British preferential tariff, and 7d.’ . to ls. per lb., plus the ad valorem rate of 55 per cent., under the general tariff. The . board added -

The increased cost of preparation yarns, which arc produced in Australia and are used by local manufacturers in the production of coloured towels, has lessened the effectiveness of the protection.

The board showed that a considerable increase of the duties was required under the new policy for assisting the cottongrowing and cotton-spinning industries as compared with the old policy of helping them by way of a bounty. In 1929 Australia imported towels to the value of £491,000. The increased protection afforded the Australian industry by the Scullin Government, coupled with the effect of the depression, caused our importations of towels to fall to £229,000 in 1931-32. Should the committee agree to the request, the Australian towel-making industry would not exist for more than a year or two, and our imports would soon get back to approximately £500,000 per annum. The Tariff Board’s report shows that the Australian manufacturers of towels are not exploiting the public, and that they are producing good articles in efficiently conducted factories. Bealizing the impossibility of increasing the duties to the rates to which I think they should be raised, I shall support the duties set on; in the schedule. Honorable senators who support the’ request are dealing a blow not only at the Australian towel-making industry, but also at the cotton-growing industry, which supplies the raw material for the towels. I trust the committee will not agree to the request.

Senator MILLEN:
Tasmania

– Senator Duncan-Hughes has uttered a timely warning. It would seem that a great number of our people are of the opinion that we can sell our goods to the world and buy nothing in return. Were every nation to adopt a policy of extreme economic nationalism, and refuse to buy anything from other nations, the people of Australia, including those in the towelmaking industry, would soon be in a most serious plight.

Senator Hardy:

– Such a policy would lead to chaos.

Senator MILLEN:

– In dealing with this tariff schedule we must realize the need for buying as well as selling. The committee is indebted to Senator DuncanHughes for having put the position so plainly. As the custodians of the rights of the Australian people, whose social conditions we wish to maintain, we must not do anything to bring about chaos in our international relations. I shall support the request.

SenatorRAE (New South Wales) [10.14]. - I offer no excuse for rising again; so many fallacies have been uttered that it is well that the true position should be set before the committee. I did not attempt to insult Japan. I mentioned, incidentally, that Czechoslovakia and other European countries were getting down to coolie labour conditions, and that we should take care to see that they did not capture our market. If we run the risk of offending Japan by saying things detrimental to that - country in what we who are here know is a joking manner, the position is much more serious if those remarks appear in print. But how much more likely are we to offend this friendly power by out deeds ! Even Senator Duncan-Hughes does not suggest that we should refrain from levying duties against foreign goods; he only wants the duties on such goods to be reduced. Reference has been made to our balance of trade with Japan and other countries. I suppose that no country balances its trade evenly with every other nation.

Senator Crawford:

– It is the general balance that counts.

Senator RAE:

– Yes; the balance of trade may be against us in some instances, and in our favour in others; and, therefore, we need not worry unduly about our balance of trade with Japan. That is a matter for the Japanese people if they so desire, for our balance of trade with that country is on the right side. Until we adopt a saner social system, we must make the best of the existing system. I would welcome trade treaties with Japan and other countries so long as they provided for commercial intercourse on a reasonable basis. Were every nation to attempt to make itself a watertight compartment, the result would be serious injury to all. There is, however, no fear that any duties which we may impose will kill our trade with every other country, and make Australia entirely selfdependent. However desirable that aim may be, we cannot hope to achieve it for a long time; but every step to that end is a step in the right direction. For many years it has been the custom, both in Australia and in New Zealand, to decry local manufactures. We have had an inferiority complex; we have said, “We cannot make this or that. The oldestablished countries have the machinery, the skill, and the means of doing things which we cannot hope to do.” That fallacy has been repeated so often that the people have come to believe it. Indeed, it is only during recent years that the people of Australia have begun to free them selves from the grip of that inferiority complex which, in the past, has rendered them incapable of helping themselves.

Senator Sampson:

– The trouble is that some Australians have an unwarranted superiority complex.

Senator RAE:

– I shall not attempt to justify conceit ; but a complex which makes for self-help i3 an admirable one. There has not been enough of it in the past in Australia.

Senator Millen said that Australia could not shut itself off from the rest of the world. Did he suggest that, if we tried to do so, we would sit down and starve, when we have in Australia an abundance, not only of the necessaries of life, but also of those things which are regarded as luxuries. Does any honorable senator think that the people of Australia would starve because they found it impossible to sell their wool, wheat, fruit or meat? If Australia had no export market would our producers fail to avail themselves of the home market? If, by any act of God or of man, Australia were cut off from overseas supplies, the people of this country would at once set about providing their own requirements.

Senator Hardy:

– Does not the honorable senator believe in international brotherhood ?

Senator RAE:

– Yes ; but that does not mean loafing on the other fellow for things that we can produce ourselves. No government in its senses would allow the industries of a country to languish simply because the markets of the world were closed to its exportable surplus. There is no reason why, if we cannot export our surplus production at a profit, we should not use those commodities for our own consumption. We are not now speaking in terms of enmity against Japan or any. other country, but are merely trying to safeguard Australian industries, leaving Japan to look after its own affairs.

Senator BROWN:
Queensland

– This discussion shows the chaotic state of mind of some honorable senators. We have had exemplified the clashing of ideas which exists between economic nationalists and economic internationalists. I remind Senator DuncanHughes that the Government of Japan is assisting the industries of that country to the fullest extent, and nothing that is said in this Parliament will prevent that from being done. Only recently it was pointed out in the press that the Japanese Government . is giving practical assistance to certain industries, and doing everything in its power to shut out goods from other countries. The Japanese know what they are after - the safeguarding of their own industries. My colleagues and I contend that this Parliament should emulate Japan and concentrate upon looking after our own people and our own industries. Honorable senators must realize that if Japan can successfully produce wool - and that in Manchuria is within the realm of possibility - it will not continue to buy that product from. Australia.

The idea put forward by Senator Duncan-Hughes that we should extend our trade with Japan simply because Australia has a favorable balance of trade with that country is entirely contrary to the opinions that have been voiced by the honorable senator’s political friends. Because of the force of economic development, every nation is endeavouring to sell more than it buys, and the mentors of the people, the capitalists, writers, preachers and teachers, have been telling us day in and day out that the well-being of England, Australia, Canada, South Africa, and every other part of the British Commonwealth of Nations, is dependent upon each unit being able to sell more than it buys, which, of course, is absurd.

The CHAIRMAN:

– The honorable senator must confine his remarks to the item.

Senator BROWN:

– The item deals with towels, to which I am endeavouring to address my remarks. Senator DuncanHughes claims that because of the disparity in the trade figures between this country and Japan, and in order to rectify that credit balance of £7,000,000 per annum, we should extend our trade with that country to the detriment of our own towel, or any other industry. Then, he claims, Australia will be in the happy position of having the friendship of Japan, and military antagonism would not be engendered between the two countries. What an absurd statement!

Senator DUNCAN-HUGHES:
SOUTH AUSTRALIA · UAP

-Hughes. - The honorable senator is expounding his own argument. Mine is simply that in international affairs one must be civil.

Senator BROWN:

– I am not denying the need for civility, but I recall that it is usual for supporters of the capitalistic system always to keep a club behind the back when shaking hands with an antagonist, in order . to clout him should opportunity offer. The British Empire is building up its armaments, and, simultaneously, suavely making friendly advances towards other nations. The system of economics which we advocate is based on common sense and sound reasoning-

The CHAIRMAN:

– The honorable senator is out of order, and must confine his remarks . to the item.

Senator BROWN:

– It is economically unsound for us to sacrifice our towel or any other industry in the name of friendship. We should endeavour to produce everything possible that we need, and refuse to destroy any of our industries merely for the purpose of assisting a foreign nation.

Question - That the request (Senator Payne’s) be agreed to - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)

AYES: 13

NOES: 16

Majority . . . . 3

AYES

NOES

Question so resolved in the negative.

Request negatived.

Senator DUNN:
New South. Wales

– I move-

That the House of Representatives be requested to make the duties, sub-item (c 1b) per lb., British, free; general,1s., and ad valorem, British 40 . per cent.; general60 per cent.

The object of the request is to provide for a fixed, as well as an ad valorem, rate in the general tariff, with a view to preventing the dumping in Australia of towelling made in Japan, Germany, or other countries outside the British Empire, so that British- and Australian manufacturers may be placed on a fair competitive basis with foreign manufacturers. The immediate effect of the fixed duty that I have proposed would be to give Great Britain the benefits sought to be conferred upon her by the Ottawa agreement, which, to a large extent, have been nullified by unreasonable and unfair competition from Japan. I also urge that support be given to the request on the ground that it will afford greater protection to the Australian towel industry.

Senator McLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

.- The object of the honorable senator doubtless is to deal with the position, the existence of which has been disclosed during the debate on this item, namely, the competition that has arisen as the result of importations of Japanese goods owing to the depreciation of the yen as a deliberate act of policy. I point out, however, that the appropriate machinery for the attainment of that object is provided for by law, and that it has already been invoked to determine whether action should be taken by the Minister to prevent dumping. The application of the -Ottawa agreement can have no bearing on the matter. I assure honorable senators that the situation is being closely watched by the department, and that the Tariff Board is at present inquiring into the aspect of the matter that the honorable senator has in mind. I must oppose therequest.

Question - That the request (Senator Dunn’s) be agreed to - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)

AYES: 8

NOES: 20

Majority . . 12

AYES

NOES

Question so resolved in the negative.

Request negatived.

Sub-items agreed to.

Item 122 (a) (b) agreed to.

Division 6. - Metals and Machinery

Item 145-

Iron and steel plate and sheet, viz.: -

Corrugated galvanized, galvanized not corrugated, and corrugated not galvanized, per ton, British, 90s., general, 130s.

Senator E B JOHNSTON:
Western Australia

– I move -

That the House of Representatives be requested ‘to make the duty, per ton, British 20s.

Progress reported.

page 2812

ADJOURNMENT

New Zealand Embargo on Citrus Fruits - Temporary Chairman of Committees.

Motion (by Senator Pearce) proposed -

That the Senate do now adjourn.

Senator DUNCAN-HUGHES:
South Australia

– I have to-day received from Adelaide the following telegram relating to the New Zealand embargo on citrus fruits : -

Following resolution supported by federal representatives Stacey McBride Gabb Price Makin and State member Stott unanimously carried. That this meeting representing seven hundred citrus growers South Australia strongly protests against the suggestion made to the Prime Minister on 29th June by the Fruitgrowers Federation of New South Wales that no partial lifting of embargoes in favour of one or more States be negotiated in view of the damage which would result to New South Wales citrus interests this meeting respectfully points out to the Prime Minister that even a partial lifting of the embargo would have the effect of assisting all the principal citrus producing States by reason of the relief which would be afforded to both the Melbourne and other markets it is further pointed out that should the Commonwealth Govermnent decline a partial lifting of the embargo at this stage such action would seriously jeopardize the possibility of a complete lifting of the embargo at a later date.

Kimber and Underwood Adelaide Plains and Murray Citrus Association.

I ask the Minister representing the Minister for Trade and Customs whether there is any ‘suggestion for a partial lifting of the New Zealand embargo, as indicated in the telegram, or, more generally, whether he is in a position to make a statement on the whole matter?

Senator DUNN:
New SouthWales

– The other day you, sir, as President of the Senate, brought down a minute notifying honorable senators of the fact that Senator J. E. Hayes had been appointed a temporary chairman of committees. Senator Herbert Hays is the Chairman of Committees, and Senators Payne, Sampson and J. B. Hayes are now temporary chairmen of committees. Senators Grant and Millen have been put in the position of the members of the Mexican army, who have no status or stripes at all. I wish to know why preferential treatment has been meted out to Tasmanian senators. According to the Standing Orders it requires twelve honorable senators to constitute a quorum of the Senate,- andI think that, in appointing the temporary chairmen of committees, - consideration should have been given to the qualifications of ten members of the Labour Opposition in this chamber.I am speaking only for the Labour party. I have nothing to say against the integrity of Senator J. B. Hayes. I bear him’ no personal bias. We all know that, in respect of- the passage of this schedule, which is one of the most interesting and complex that we have been asked to discuss, Senator Herbert Hays, in his capacity as Chairman of Committees, is doing good work, and is dealing impartially with all honorable senators, no matter to’ which party they belong. I suggest to you, ‘ Mr. President, that, in appointing a temporary chairman of committees, some consideration might have been given to the claims of honorable senators who sit in opposition.

Senator McLACHLAN:
Vice-President of the Executive Council · South Australia · UAP

– At the present time, the Government of New Zealand is not prepared to negotiate for the removal, either wholly or partially, of the embargo on Australian -citrus fruits. Later, when the negotiations with -the United States of America have been completed’, the dominion, if it is free to do so, may be willing to negotiate for a partial lifting of the embargo. Mr. Mcintosh, a member of the South Australian Government, telephoned to me last night, and I conveyed hia views to- the Minister for Commerce (Mr. Stewart) who, I understand, has also received a communication similar to that sent to Senator DuncanHughes. I anticipate that Mr. Stewart will be in Canberra to-morrow, and. should any further developments arise, I shall advise the honorable senator. In the meantime, nothing further can be done.

SenatorRAE . (New South Wales) [10.51]. - I have asked several questions about citrus fruits, and when I enquired if there was any foundation for the statement that the Government contemplated paying an export bounty to help growers who are injured by the closing of the New Zealand market, I received the stereotyped reply that matters of policy are not usually disclosed in answer to questions. We are entitled to know, however, whether, if the . embargo should remain, the Government will do anything to open up markets for citrus fruits in other countries.

Senator Sir GEORGE PEARCE:
WESTERN AUSTRALIA · ALP; NAT from 1917; UAP from 1931

– That is being considered at the present time.

SenatorRAE.- I’ am glad to hear that. Recently I read a newspaper statement that a ship had left Sydney conveying 20,000 cases of oranges to the London market. Our citrus fruits are marketed at a season when those from other countries exporting to Great Britain are not available, and the Government should give full consideration to . the prospect of opening up a profitable trade with the United Kingdom. The suggestion has been made that a bounty of 2s. a case would not be unreasonable. Unless some action is taken to recover the lost market or to open up others, a large number of persons engaged in growing citrus fruits in the various States will be faced with disaster.

The PRESIDENT:
Senator the Hon. P. J.Lynch

– Senator Dunn has asked for information regarding the nomination of Senator J.B. Hayes as a temporary chairman of committees. Whilst I am under no obligation to justify my choice, I may, as an act of courtesy, explain that in these matters an endeavour is. made to preserve a balance between parties and States. Senator Payne had voluntarily resigned from the position of temporary chairman, and I considered that the balance formerly existing would be best maintained by the nomination of another honorable senator from the same State and party. For that reason, I asked Senator J. B. Hayes to fill the vacant office.

Question resolved in the affirmative.

Senate adjourned at 10.55 p.m.

Cite as: Australia, Senate, Debates, 4 July 1933, viewed 22 October 2017, <http://historichansard.net/senate/1933/19330704_senate_13_140/>.

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