13th Parliament · 1st Session
The President (Senator the Hon. F. J. Lynch) took the chair at 3 p.m., and read prayers.
– Is the Leader ofthe
Senate prepared to make a statement of the Government’s policy for the assistance of the wheat farmers?
– The Government expects to be in a position to make a statement on the subject next week.
– Is the Minister representing the Minister for Commerce aware that the sum of £2,000,000 which, it has been suggested, the Government intends to provide in the form of a wheat bounty, will be equivalent to only 3d. a bushel for this season’s crop?
– I refer the honorable senator to the answer just given by the Leader of the Senate.
– Has the Leader of the Senate received a telegram as follows from Mr.C. G. Latham, M.L.A., leader of the Country party in the Western Australian Parliament: -
Absence announcement by Federal Government regarding assistance towheat industry causing farmers of this State grave concern. Very strong feeling National Government deserting them constituting poor reward for services rendered when at request of Prime Minister they increased output to maintain national solvency 1930-31. Expect effect be given their request for 3s. bushel. Early statement necessary to ensure harvesting.
Will the Government give consideration to the request for a minimum price of 3s. a bushel at sidings before coming to a decision in the matter?
– The Government has received a number of representations, including that referred to by the honorable senator, and all of them are receiving the closest consideration by the Cabinet.
SenatorBRENNAN. - I ask the Leader of the Senate if the Government will consider the desirability or advisability of inviting the Government of the United States of America, or of any other friendly power, to send a warship to Australia to take part in the centenary celebrations in Melbourne next year?
– Can the Minister in
Charge of Development inform me when the report of the committee which recently inquired into the condition of the tobacco-growers in the Mareeba district will be made available?
– I understand that the Prime Minister has given an undertaking that it will be made available to-morrow.
– By the indulgence of the Senate I desire to make a personal explanation in connexion with the debate which took place in this chamber last week with regard to statements made by a journalist concerning members of this chamber and another place. During the discussion, my colleague, Senator Dunn, partly on information which I had supplied to him, stated that Mr. Brian Penton, a representative of the Sydney Daily Telegraph, had been expelled from membership of the Australian Journalists’ Association. To the report of the discussion, the editor of the Daily Telegraph appended a footnote stating that Mr. Penton had not ‘been expelled from the association. In consequence of that statement, I deemed it desirable that the matter should be cleared up, as I was one of those who had been criticized by this journalist. I, therefore, as a member of the committee of the Australian Journalists’ Association, wrote the following letter to the secretary of that organization: - Dear Sir, tu the discussion in the Senate concerning press attacks on members of the Federal Parliament concerning the recent part restoration of salary reductions, Mr. B. Penton’s conduct as a journalist was referred to. Senator Dunn stated that Penton had been expelled from the Australian Journalists’ Association for nonpayment of dues. In a foot-note to a report in the Daily Telegraph, the editor stated that Mr. Penton had not been expelled, thus making out that Senator Dunn had lied. Will you, in order to have the matter cleared up, inform rue as follows: -
To that letter I received the following reply :-
I beg to reply to your favour of the 10th instant, as follows: -
I dc not think that being struck oft- the roll is tantamount to expulsion from membership, for there is nothing to debar Penton being re-admitted to membership should he make application.
All that I desire to add is that about half an hour after the letter was received by me, a cheque for £5 arrived from Mr. Penton, in payment of the amount owing by him, and 15s. in part payment of the fee charged for rejoining the association. The fact that Mr. Penton was struck off the membership roll, and also compulsorily removed from the graded list of members of the staff of the newspaper by which he i3 employed, so nearly amounted to his expulsion from the association that, to say that he was not expelled, is merely to split straws.
– Has the attention of the Minister representing the Minister for Trade and Customs been drawn to the following statement published in the Sydney Labor Daily : -
ANOTHER SCHEDULE EXPECTED.
Trade and Customs Re-organizing the Department atearly Date. (From Our Special Representative.)
Anticipating a new low duty tariff schedule earlynext year, the Minister for Trade and Customs (Mr. White) has reorganized the central office of the Trade and Customs Department, and a special branch has been created to deal with tariff revision, trade treaties, and trade agreements.
Preparatory work is in hand to facilitate the consideration of intricate negotiations with representatives of foreign countries at an early date?
Is the Minister prepared to make a statement to the Senate on the general question of further tariff reductions?
– I am not prepared to make any such statement. It is not usual to announce the intention of the Government in regard to tariff matters until the schedule is laid on the table of the House of Representatives.
asked the Minister representing the Prime Minister, upon notice -
In regard to the reply of the Minister on 9th November to a question by Senator Dunn as to the alleged fine of £1,000 inflicted upon Associated Newspapers of Sydney for evasion of income tax payments, wherein it was stated that the Income Tax Act precluded giving information to any but officers of the department, will the Minister state -
Are fines for offences against the Income Tax Act paid secretly by agreement between the offender and the Taxation Commissioner, or are such fines imposed in Open court? (b)If the latter, then does not the penalty imposed become a matter of public knowledge and interest, and why is such information refused ?
– The answers to the honorable senator’s questions are as follow: -
fines which must be recovered In a court;
Thefines automatically imposed by the act forlate payment of tax or late lodging of returns are not published. Those automatically imposed by the act for understatement of income arc only published when the Commissioner is of opinion that there has been avoidance of tax by fraud or evasion. The publication is made through the Commissioner’s Annual Report to Parliament.
asked the Minister representing the Minister for Commerce, upon notice - 1.Is it a fact that wheat importations into the United Kingdom for the eight months ending 3 1st August last, were 2,746,303 cwt. greater than in the same period last year, of this increase the Argentine accounting for nearly 2,000,000 cwt., having during the month of August shipped 3,099,935 cwt., compared with 1,108,548 cwt. in August last year?
– The answers to the honorable senator’s questions are as follow : -
The preference to Empire flour affords to Australian flour exporters definite competitive advantages in the British market.
The International Wheat Agreement provides for distribution of the anticipated demand for wheat by importing countries among the exporting countries. Thus, it is anticipated, that there will be a market for all Australian exports of wheat in the United Kingdom and other countries.
asked the Minister representing the Minister for Commerce, upon notice -
– The answers to the honorable senator’s questions are as follow: -
The value of primary production and of factory production during 1932-33 is estimated at £314,600,000, or £47 9s. per head; Federal and State taxation amounted to about £14 4s.. or about 30 per cent, of the £314,000,000 quoted.
asked the Minister representing the Minister for Commerce, upon notice -
When will the Government’s proposals in regard to the allocation of £125,000 to apple and pear growers, mentioned in the budget speech, be made known to the Senate?
– An announcement on this matter will be made at a very early date.
Leader of the Government in the Senate, upon notice -
Senator Sir GEORGE PEARCE.The answers to the honorable senator’s questions are as follow: - 1 and 2. The Government is aware of the extent of the dependence of the Australian beef industry on the Belgian market.
asked the Minister representing the Minister for External Affairs, upon notice -
If it is a fact that the League of Nations is so far disregarded by members that 46 nations out of a total of 57 in the league are in arrears with their contributions to a total sum of £891,127. is Australia, justified in continuing membership at a cost which for the last year, including representation, is stated to have amounted to £69,000?
– The answers to the honorable senator’s questions are as follow:-
The total amount of contributions to the League of Nations in arrears at 31st December, 1932, was £949,952 gold out df total budgets amounting to £12,774,881. The percentage was 7.44. The States which had not completed the payment of contributions numbered 28, most of which are assessed on the basis of a very smallnumber of units; ten being assessed at only one unit each out of a total of 1,013 units.
It will probably be found that many of the 28 States were in arrears only by reason of delay in payment.
It is not considered that the position as regards arrears of contributions of some States’ is such as would justify discontinuance by Australia of membership of the league.
asked the Minister representing the Minister for the Interior, upon notice -
– The answers to the honorable senator’s questions are as follow: -
asked the Minister representing the Prime Minister, upon notice -
– The answers to the honorahle senator’s questions are as follow : -
Plans and specifications arc being obtained from Canada with a view to the invitation of tenders in Australia and elsewhere for the construction of a fisheries research vessel. 2 and 3. See answer to 1.
asked the Minister representing the Prime Minister, upon notice -
Senator Sir GEORGE PEARCE.The answers to the honorahle senator’s questions are as follow: -
The Commonwealth is already a party to the Treaty for the Renunciation of War,as well as the General Act for the Pacific Settlement of International Disputes, and various other multilateral conventions and agreements for the maintenance of international peace which have been drawn up under the League of Nations.
asked the Minister representing the Minister for the Interior, upon notice -
Senator Sir GEORGE PEARCE.The answers to the honorable senator’s questions are as follow : -
Senator - DUNN asked the Minister representing the Prime Minister, upon notice -
Is it a fact that when members of the Cabinet make State and interstate and Pacific Island tours of their respective administrations, the press representatives accompanying such ministerial parties arc franked over the railways systems of Australia at the expense of the Commonwealth Government?
What other facilities are granted to the press gratis when accompanying such Ministerial parties?
Senator Sir GEORGE PEARCE.The answers to the hono’rable senator’s questions are as follow : -
No facilities for the press are provided at Commonwealth Government expense in such circumstances.
What is the total tonnage, per annum, of Australia’s quota of meat for export to Great Britain under the Ottawa agreement?
Of Australia’s quota, what quantity has been allotted to each of the various States?
Has any one or more of the States filled its quota of meat export for the current season; if so, which State or States?
When does the Government expect that Australia will fill its quota for the current year?
The honorable the Minister for Commerce has now supplied the following answers : -
The only State which has filled its quota to date as regards mutton and lamb is South Australia, which has been given an additional amount of 1,747,070 lb. This additional amount has been withdrawn from -
It is anticipated that by the middle of December the mutton and lamb quota for Australia will have been filled. As regards beef, the probability is that the quota will barely be reached before the end of the year.
Assent to the following bills re ported : -
Northern Territory (Administration) Bill 1933.
Officers’ Rights Declaration. Bill 1933.
Bill received from the House of Representatives, and (on motion by Senator Sir Harry Lawson) read a first time.
In committee (Consideration resumed) :
Clauses 3 and 4 agreed to.
Clause 5 -
The duties of customs (other than primage duty and duty imposed by the Customs Tariff (Industries Preservation)Act 1921-1922 any act amending or in substitution for that act) which would, but for the provisions of this act, be payable on goods to which protective duties apply and which are admissible under the British preferential tariff and which are entered for home consumption on or afterthe fifth day of October, One thousand nine hundred and thirty-three, shall be varied in accordance with the following provisions: -
– I move -
That after the words preferential tariff the words “ or from any country the currency of which on the date of shipment of the goods is (a) British sterling, (b) appreciated relative to sterling, or (c) nominally on a sterling basis.” be inserted.
The effect of the amendment is to carry out in full the recommendation of the Tariff Board, which conducted a careful investigation into the incidence of primage and exchange. The board recommended that the adjustment be made, not only on goods from Great Britain, but also on those from sister dominions, and from foreign countries whose currencies were appreciated in relation to sterling. The bill we are now discussing gives effect to the Tariff Board’s recommendation so far. as Great Britain is concerned, and to that extent I commend it, but no reason has been given why the board’s recommendation is not being followed in full, although the declared policy of the Government is to accept the guidance of the Tariff Board in matters of this kind.
– The honorable senator surely would not have the Government give effect to the board’s recommendation regardless of the effect on Empire preference?
– Certainly not, but the cause of Empire preference is not forwarded by placing a barrier in the way of trade with other countries. My request is a very simple one, namely, that the Tariff Board’s recommendation in regard to this matter shall be given full effect. I entirely fail to understand why the Government has accepted ‘ only portion of it. 1 remind Senator Elliott that it applies to sister dominions, as well as to the Mother Country, and I always understood the honorable senator to be a strong advocate of Empire preference.
– I do not advocate preference to foreign countries, such as the United States of America.
– At all events, I accept the recommendation of this valued tribunal in this instance. In his policy speech, the Prime Minister (Mr. Lyons) declared that, when framing its tariff policy, the Government intended to be guided by the recommendations of the board. But in this instance it is not doing so, although the recommendations could be given effect without prejudicing Australian secondary industries. The Government’s inconsistency is the more amazing because of the views expressed by the Minister in charge of the bill (Senator McLachlan), when he was in Opposition. At that time he was one of the greatest protagonists of the principle that, in tariff matters, the Government .should accept the recommendations made by the Tariff Board. I well remember a speech delivered by the honorable gentleman on the 5th November, 1931, when the Senate was discussing the tariff proposals of the Scullin Government. In the brief time at my disposal I shall not he able to read the whole of his speech, so I shall have to content myself with a number of extracts, which, I believe, correctly interpreted the views then held bv the Vice-President of the Executive Council on this subject. The honorable gentleman said -
It was the duty of the Government to let us have the recommendations of the board.
They should have been tabled in another place, but were not, and the schedule was bludgeoned through, without any proper examination of it. There can be no proper examination of it until it has first been investigated by the Tariff Board. Again and again we find in the reports of this board most valuable information. A case that is absolutely convincing can be made out for higher or lower duties to myself, or 6 dme one else equally as ignorant as I am, but when we get to understand the ramifications of the whole thing, and all its repercussions - all that is likely to take place in regard to it - we must come to the conclu-sion that, without the enlightenment thrown upon it by an examination by the Tariff Board, we know absolutely nothing about the subject.
In this instance we have a number cf recommendations made by the Tariff Board after a thorough investigation of the exchange problem, and presented for our enlightenment, yet the Minister is rejecting portion of them. The honorable gentlemen went, on to say -
The annual report of the Tariff Board brings out, in very strong relief, the laxity of the Government in this regard, and its failure to do its duty, as laid down by statute, to submit requests for increased duties for examination bv the board.
This Government’s refusal to give full effect to the board’s recommendations i* just as grave as was the refusal of the previous Administration to instruct the board to inquire into industries to which it gave excessive protection. Later in his speech the Minister said -
I do not speak as a little Australian: I have always stood for the realization of nationhood by the application of a tariff ; but 1 feel that the justice which should have been meted out to the primary-producing States has not been meted out to them. It can be done only by a tribunal of men, skilled and trained, and capable of understanding things, as the Tariff Board is to-day.
– The honorable senator approves of that. It is a pity that he does not always express the same opinion.
– I approve of it to the extent that it supports my advocacy of lower duties. I regard duties recommended by the Tariff Board as the maximum duties that should,, in any circumstances, be imposed. I should like to see the Tariff Board Act amended so that the tribunal could give a larger measure of relief from tariff’ burdens than it can under existing con- ditions, with its hands tied. Later in his informative speech, the Minister said -
I understand that, when it was pointed out in another place that the Tariff Board had come to a recognition - in common with the whole world, except those who are so blinded by prejudice that they will not see - that something must be done to reduce tariffs in Australia as well as in other countries, supporters of the Government retorted, “ Oh, the Tariff Board has gone anti-protection.”
In this case the Tariff Board has submitted a recommendation which, if adopted in its entirety, would give to our primary industries considerable relief from fiscal burdens, which are crushing them. The Minister censured the previous Government for imposing duties that were not based on recommendations by the board. This Government is offending similarly, because it is refusing to accept^ recommendations made by the board.” The Minister said further -
It reminds me of a man who, having a judgment against him, accuses the judge of prejudice. What interest has the Tariff Board, when advising the Government, other than to serve the welfare of the country?
The board’s recommendation would, if accepted by the Government, promote the welfare of the country, as well as help the sister dominions, and it is in conformity with the Government’s declared policy. The Minister went on to say -
In the past, it supported a pretty high protective policy, which, in the main, I was able to follow, because that policy was based originally upon a principle. Now that policy has been departed from by the Government, which has sponsored in its stead a policy that is based upon no principle at all.
I regret that the Government is overriding the recommendations of the board, and I hope that my requested amendment will be carried.
– It is rather unfortunate that the honorable senator should have dipped into the past instead of studying the explanation which I gave in my second-reading speech last week, and supplemented during my speech in reply on Friday last, of the reasons why the Government did not accept in full the recommendations of the Tariff Board on this important issue. For reasons which I shall give seriatim, the Government considered it was inadvisable, if not dangerous, to accept of the Tariff
Board’s recommendation that portion relating to exchange adjustments with foreign countries. This is what I said in my second-reading speech -
It will be asked why the Government has confined the adjustments to goods dutiable under the British preferential tariff, and failed to extend them to foreign goods dutiable under the general tariff. Those honorable senators who may be disposed to press for the extension of the adjustments, should bear in mind that, in this proposed legislation, we are breaking new ground, and that we are entering into fields that, so far, have not been freely surveyed. I believe that Australia is the only country which has made a reduction of duties to counteract the protection afforded to industries by an adverse exchange. This action is all the more noteworthy because it is being taken at a time when other countries are engaged in raising the barriers against imports.
Honorable senators will more readily appreciate the significance of the Government’s decision not to apply the exchange adjustments to goods imported from foreign countries if I explain that the principal function of an exchange Tate is to equalize costs between any two countries. Comparative costs between such countries are, therefore, brought into proximity by the rate of exchange. In respect of a. large number of foreign countries, however, there exist no data relating to costs, wages and other charges, which would enable us to ascertain whether the exchange rate between Australia and a foreign country is a natural one or a managed one. If the former, an adjustment might safely be made; hut, if it is a managed rate, the costs of production in the foreign country might be much lower than they would be if the rate were a natural one. If, then, on account of exchange on that foreign country, a substantial ‘ allowance is made from duty, and if the costs of production in that country have not been increased by reason of the fact that the exchange rate is not a natural one, it will lie readily appreciated that Australian industry will be exposed to undue competition, assuming, of course, that the general tariff rate is reasonably protective.
– What is the difference between a natural and a managed rate of exchange?
– I am sorry that they are largely becoming intermingled. Most of the exchange rates of the world are to-day being managed. The war of tariffs is being superseded by a war of exchange rates. As I stated in my speech, when we consider the pioneering nature of this legislation, the danger of wide and general application of the adjustments to many countries, about which we have very little definite information, will be appreciated. We have access to all the information that we require regarding the position in Great Britain, but we have little or no information about foreign goods.
– Would not the Tariff Board have taken all these matters into account?
– It is probably not aware of the fact that the Customs Department, the Treasury and the Statistician’s branch have no means of checking up the position in foreign countries, although information from Great Britain comes to us with that freedom that is to be expected between a dominion and the Motherland.
– Is the exchange rate between England and Australia now approximately natural?
– I should not be called upon to express my individual opinion in that regard, but the Tariff Board, in its report, accepted the present rate as natural.
Let us now pass from that real difficulty, so far as the Government and the department are concerned, to the position with which we are -now faced. The representatives of several foreign countries have approached the Government and expressed a desire to conclude trade treaties with the Commonwealth. By means of these negotiations we shall obtain a complete and accurate understanding of the internal situation in those countries. The Government believes that this matter can be safely dealt with by bargaining with individual countries. We must be very careful not to take action which would conflict with the terms of the Ottawa agreement. I pointed out, in reply to the criticism following upon my secondreading speech, that if the present amendment were carried, it would cut across the Commonwealth’s obligations under the Ottawa agreement.
– The Tariff Board is responsible for that. It made this recommendation.
– If that is so, a manifest error on the part of the hoard has occurred. A few days ago I gave honorable senators a specific example of the rates on a protected line of goods. The British duty was 40 per cent, and the general rate 60 per cent., leaving a preference of 20 per cent., which conforms with the margin agreed to at Ottawa in respect of commodities in that particular range. If the amendment were accepted the result would be that one-fourth of the duty or one-eighth of the value for duty, whichever is the less, would he deducted. This would mean that protected goods imported from the United Kingdom would bie dutiable at 40 per cent., less exchange adjustment 10 per cent., making the net duty 30 per cent. Protected goods imported from the United States of America would be dutiable at 60 per cent., but after deducting 12£ per cent, for exchange adjustment, the net duty would be 47 £ per cent., and the margin would he reduced to 17£ per cent. The honorable senator cannot have it both ways.
– In the reference to the Tariff Board, the instruction was given that the Ottawa agreement should be taken into consideration.
– I venture to say that in this matter the Tariff Board has taken into consideration the margins of preference under the Ottawa agreement ; but the honorable senator’s amendment is not in accord with the board’s recommendation, as it would apply the exchange deductions to the full foreign rate. A similar line of argument was followed in the other branch of the legislature by the Deputy Leader of the Country party (Mr. Paterson). Is it not better that we should have an opportunity to bargain with those countries concerning whose economic conditions we can obtain full information, giving them tariff benefits in return for concessions which they accord to us? If the position is left as the Government desires, this legislation will be a powerful weapon to he employed in defence of the interests of primary production and other export industries. Even if we accepted the recommendations of the Tariff Board in toto, ‘ we should be dealing with the exchange rate by a formula which would give rise, no doubt, to criticism by Senator J Johnston. We should immediately bring about an increase of duties against Japan, which takes a large quantity of our wheat and wool.
– The Government will have to do that later.
– We are now adopting a procedure that is least objectionable to Japan and other countries. Whom does the honorable senator wish to benefit by his amendment? He suggests that either the United States of America-
– No, the currency of that country is down.
– How is it down? It has a managed currency, forsooth, if ever there was one. Are we to accept the statement that the currency of the United States of America is down, when we really know nothing about the position? When the Tariff Board made its recommendation, the United States of America and Germany were two outstanding examples of countries that would be benefited by the proposed amendment. By this bill the Government is striking a more powerfulblow for Empire economic unity than anything else that has been done since preferencewas first granted to the Motherland many years ago.
– And it has applied the broad axe to Australian industries !
– If any Australian industry is menaced the Minister for Trade and Customs will be the first to hear of it.
Only two cases of any consequence have been cited, and they relate to matters that are at present being investigated under the direction of the Minister. Who is it that Senator Johnston desires to benefit, and who will benefit?
– The United States of America.
– Yes ! Driven from pillar to post for arguments in support of his amendment, the honorable senator reminds me of an Egyptologist excavating amongst ruins in search of articles of antiquity; but the honorable senator is not prepared to face the position as we find it to-day. He remarked, “ The exchange rate has fallen in America”. The fact that we know practically nothing about the internal position in that country to-day is one of the fundamental reasons why the department recommended that the Government should accept the board’s report only so far as it referred to goods to which the British preferential rates apply. When the time comes for bargaining with other countries, we shall be able, under this measure, to obtain all the facts that we require. I appeal to the honorable senator to withdraw his amendment, particularly in the interests of the primary producers whom he claims to represent. Already the Government has received overtures, which I do not intend to disclose in this chamber, from foreign countries who desire closer trade relations with Australia.
– In reply to the Minister’s statement that my amendment would cut across the Ottawa agreement, I point out that any such result would have to be attributed to the Tariff Board itself. I cannot believe that this board, which has been much eulogized by members of the Government on other occasions, would have made such a mistake. In the reference made to it on the 14th December, 1932, the board was asked to inquire into the practicability of evolving some method of varying duties imposed under protective items of the customs tariff by reason of the operation of exchange and primage, having regard, inter alia, to the necessity for maintaining the protection given to Australian industries, primary and secondary, and the margins of preference agreed to under the United Kingdom-Australia Trade Agreement Act 1932, and the Customs Tariff (Canadian Preference) 1931. The matter was placed before the Tariff Board, which after due consideration, made certain recommendations, to which my amendment is designed to give effect. The Minister’s speech of a couple of years ago was consistent with the policy upon which the present Government was elected. I disclaim the Minister’s suggestion that I referred to an ancient document, or attributed to him views other than those which the people of South Australia believe he still holds. The Minister cannot’ evade the fact that the Tariff Board was instructed to keep the Ottawa agreement in mind in considering this matter and that, having done so, it made recommendations along the lines of my amendment. The Government professes to be guided by the Tariff Board, but it is not prepared to accept the Board’s recommendation in this important matter which affects practically every item in the tariff schedule. It has definitely disregarded the board’s report on this important matter. The Government’s refusal to accept the board’s recommendation in this instance will keep lip the cost of production in Australia, particularly in primary industries.
– The Minister did not make it clear whether, in his opinion, the present rate of exchange is natural ‘Or not. Mr. Davidson, the general manager of the Bank of New South Wales, says that it is the natural rate. In view of the Minister’s statement that the idea underlying exchange is the equalization of costs between country and country, Mr. Davidson’s statement means that the currency of Australia equals that of Great Britain. The great difference is that we are continuing to regard as fi both the Australian £1 and the British fi, whereas, if we called the Australian f i a “ Canberra “ and related it to the English £1 in the same way as we relate the English £1 to the American dollar, or the French franc, we should be on sound ground. If the exchange rate is natural there is no necessity for clause 5. That clause means that the protection afforded to Australian industries against Great Britain is to be reduced, but instead of clearly saying that it desires to give British manufacturers in Great Britain an opportunity to compete with Australian manufacturers, the Government brings forward this camouflage of exchange. I admit - as all students of economics will admit - that, for a time, one country gains an advantage when the exchange rate between it and another country is altered ; but, as time goes on, the advantage disappears. If there has been a depreciation of the currency of Australia because of inflation, and a natural exchange rate shows the true relation of the Australian currency to the British currency, it follows that Great Britain is advantaged if the tariff is reduced. The Government is under a misapprehension regarding exchange; at least the Minister in charge of the bill has not made himself clear. I should like him to say definitely whether the present rate of exchange is, or is not, natural. The Minister says that we cannot arrive at a proper conclusion in regard to exchange in relation to the United States of America because of the fluctuations of the currency of that country. We cannot get the facts in regard to foreign countries, and, therefore, Ave cannot arrive at a proper conclusion in regard to out1 currency and theirs, but, according to the Minister, we have all the facts relating to exchange as between Australia and Groat Britain. In spite of that statement, however, the Minister has not said whether the exchange rate is natural or is fixed arbitrarily. He should be able to give us that information.
– It is in the Tariff Board’s report.
– If the Minister understands the Tariff Board’s report, why does he not give a definite answer to the question ?
Senator Johnston professes to be a great Imperialist, yet lie desires to lower the duties on goods coming from foreign countries.
– And from British dominions. I would lower the duties on all imports.
– The honorable senator desires -to reduce the protection given to Australian manufacturers.
– Would Senator Johnston favour the abolition of the British preference altogether, and the substitution of a policy of freetrade?
– Certainly not.
– Senator Johnston is not willing to admit that he is a freetrader. Notwithstanding the Minister’s statement that Australian manufacturers have not objected to the Government’s proposals, I know that, a number of their representatives see a danger in them. If we allow British manufacturers full opportunities to compete with Australian manufacturers, injury to Australian industries will necessarily follow.
– And benefits will be conferred on Australian primary producers.
– I frankly admit that Australian primary producers gained a decided advantage from the increase of the exchange. Assuming that a natural rate of exchange now exists between Australia and England, they did not receive adequate payment for the goods they sold prior to the increase. The exchange was pegged at a certain rate, with the result that money was taken from one section of the community and given to another section.
– There will always be a difference of opinion as to whether the rate should not have been higher.
-I am endeavouring to ascertain what is a natural rate; I have admitted that the raising of the rate confers a benefit on Australian primary producers. I now am seeking the Minister’s opinion as to whether £125 is the natural rate between Australia and Great Britain. If it is, we, by passing this clause, shall be doing a disservice to those industries which previously had a certain measure of protection. If the rate was natural, when the currencies of Britain and Australia were at par, and wo protected an Australian industry by a50 per cent. duty, that protection remained so long as the rate of exchange was natural. In considering the question of exchange, people are frequently misled, because they continue to regard the Australian pound as£1, instead of falling it by some other name. In France and the United States of America, there is no suggestion that legislation of this nature should be introduced. Despite the juggling of currencies, there is always a certain natural relation between francs and dollars, and between dollars and pounds; there is no camouflaging of the position by means of tariff or exchange manipulation. The Minister should state the true position of exchange as between Australia and Great Britain. If the rate is a natural one, both this clause and Senator Johnston’s amendment should be opposed. Senator Johnston is a freetrader who would reduce import duties to a rninimum excepting where Western Australian industries are concerned. That State has started to grow bananas; were the rate of exchange to affect that industry adversely, the honorable senator would probably view the position differently. Before we can vote intelligently on the amendment, or on the clause itself, we should know whether the rate of exchange is natural or has been pegged away from the natural level. If the exchange is not a natural one, we are forced to the conclusion that the banks control the tariff policy of Australia. In reply to Senator Collings, the Leader of the Senate (Senator Pearce), said that the Government did not interfere with the Commonwealth Bank’s control of exchange, because it did not desire to exercise any political control over that institution. If the Commonwealth Bank has pegged the exchange above the natural rate, and this Parliament accepts what the bank has done, and thereby gives a greater preference to Great Britain, it follows that the Commonwealth Bank and the trading banks, with which it is closely associated, control the fiscal policy of this country. I challenge any one to point out a flaw in my argument. I am thinking particularly of the Bank of New South Wales, the general manager of which, Mr. Davidson, not only succeeded in having the exchange rate between Australia and Great Britain raised, but was also able to convert the Government of New Zealand to the policy of maintaining a highrate of exchange.
– It was the policy of the Bank of New South Wales in that respect, and not anything done by governments, that saved the primary producers.
– A high rate of exchange undoubtedly assisted the primary producer, but the time has now arrived when we must ask ourselves whether the present exchange rate is natural. If the Minister can inform us on that point, we may he able to judge the probable effect of the clause we are now discussing. Without that information we must vote blindly.
– While Senator Brown was speaking Senator Johnston said by way of interjection that the primary producers of New Zealand and Australia had been saved from ruin by the action of the Bank of New South Wales in raising the rate of exchange between Australia and Great Britain. During the last 50 years, the Bank of New South Wales has regularly invested approximately 90 per cent. of its funds in primary industries, leaving the task of financing Australia’s secondaryindustries to other banks. Therefore, it is only natural that Senator Johnston, who represents Western Australia, a primary producing State, should, when he is in Sydney, take his orders from Mr. Davidson.
– I recognize the value of his work.
– We all know that the higher the rate of exchange, the greater will be the profits for Mr. Davidson, his directors and shareholders, under the system of “ robbery under laws, “ which is what our present economic system amounts to. The Bank of New South Wales has a lien on the farming and pastoral assets of New South Wales. A little over two years ago the Sydney Truth attacked Mr. Davidson for seeking to raise the exchange rates, allegedly in the interests of the primary producers, but really in the interests of his own bank. I am convinced that those in control of institutions such as the Bank of New South Wales are financial burglars. If we of the Labour party thought that the farmers themselves would benefit from the raising of the rate of exchange, we should be prepared to support that policy, but we know that the benefit will go to the banks, whose mouthpiece in this chamber is Senator Johnston. If Senator Hardy were in his place in the chamber now he, too, I am sure, would argue in defence of that financial swindle by which exchange is controlled through the banks. The Labour party believes that it is time the swindlers were exposed.
– I direct Senator Brown’s attention to the following comments which appear on page 4 of the Tariff Board’s report, because they supply the reasons which induced the Government to bring forward this measure : -
The effect of exchange costs in increasing protection has been recognized ever since the initial depreciation of Australian currency, but the board usually has recommended duties as though that added protection did not exist. This practice was considered to be necessary because either of the following could leave local manufacturers without reasonable protection if the duty were based on values in- cluding exchange costs: -
A big reduction of the rate of exchange.
Proportionately increased local costs as a secondary result of the adverse exchange.
It is of no use, at this stage, to suggest that the bill is aimed at the destruction of Australian industries. The Government weighed carefully the effect of the Tariff Board’s recommendation’ on Australian industries generally. Senator Brown was insistent that I should informhim whether the present rate between Australia and England was a natural or a managed rate. In short, the honorable senator asked me to assume the role of a prophet, which I am not prepared to do, because exchange between all countries has varied to an extraordinary degree during the last two years. This was one of the elements which I discussed when dealing with Senator Johnston’s requested amendment. The Tariff Board quoted Professor Giblin as saying that the present rate of exchange will continue for an indefinite period at a rate approximately equal to that now in operation, thus -
I think we must regard ourselves as on this 125 basis with comparatively slight variation one way or the other almost indefinitely - certainly indefinitely from the present point of view.
– Then there is no reason for this bill.
– On the contrary, the fact that we are on the 125 basis supplies the reason for the measure. I have heard many amateur economists discussing the exchange problem, and I am not surprised that the honorable senator should fall into a common error. If there were a reasonable prospect of exchange on London getting back to parity, there might not be need for this measure. The Tariff Board stated further-
For more than a year now the rate with sterling has been kept stable with 125, and the board can see no features in the present situation which are likely to influence those in control of the rate to depart in the near future from their policy of stability. The board’s recommendations in respect of protective duties would, therefore, be based on false premises if it continued to accept the view that the considerable depreciation of Australian currency is a factor which may be safely ignored.
Many factors have to be considered in relation to exchange. First, there is the tremendously heavy interest bill which we have to meet in London every year, and in respect of which we depend entirely on our export industries. Honorable senators will have noticed that our balance in London to-day is much higher than it was at the corresponding date of last year, although our commitments have not increased to a similar extent.
– That is due to the increase of the price of wool, which is offset by a lower price for wheat.
– I agree with the honorable senator that a higher price for wool has been partly responsible for the larger balance in London, and that if, unhappily, present prices for wheat do not improve, the financial situation in a few months’ time may not be so encouraging as it is at the moment, because, with si restricted harvest, we may not be able to export the quota provided under the international agreement. In this matter of exchange adjustment we should take the long view, and be guided by expert advisers such as the Commonwealth Bank, which fixes the rate of exchange, and the Tariff Board, which furnishes recommendations to the Government.
– Then the tariff will go up and down in sympathy with the exchange rate?
– Paragraph Z> of clause 5 provides for a certain amount of elasticity in the event of the exchange rate dropping by more than 5 per cent. We know something about the position in Empire countries, but do not know what is likely to happen in other countries from day to day.
– We do not know what is going to happen from day to day in Australia.
– I think we do, and we can agree with Professor Giblin that a rate of £125 on London is practically a normal condition now. The Government could not accept the whole of the board’s recommendation, and preferred that arrangements should be made by separate treaty agreements with foreign countries whose currencies are on a sterling basis..
– No honorable sena tor has, so far, expressed approval of the course taken by the Government in this matter. This appears to be a matter in which everybody is right. For instance, Senator Johnston is quite consistent in submitting his requested amendment. In view of the Government’s attitude generally to Tariff Board recommendations, the honorable senator is entitled to ask why, in this case, it is waiving an essential part of a recommendation by the board. I repeat that, from his point of view, his request is perfectly consistent. On the other hand, the Government is, in my opinion, right in accepting portion only of the board’s recommendation. When this subject was being discussed on the second reading of the tariff, I suggested the very course, which, as it happens, the Government has followed. Honorable senators may recall that E said that the Government was now in a position to strengthen the Ottawa agreement by giving additional, preference, to Great Britain, and I hoped that it would do so. J. further said that it might be possible also to make exceptions in the case of foreign countries with which we hai entered into special agreements. I nro glad to know that that also has been considered. Therefore, it would be illogical for me to refuse now to support a course which was first suggested by me in this chamber, although it may possibly have been- mentioned elsewhere.
– I think that the honorable senator is really responsible for the Government’s proposal.
– Not so far as I am aware. While I do not wish unduly to qualify my support, I cannot refrain from saying that in these matters the Government should make its own decision and not shield itself with reports of the Tariff Board. If it is proper for duties to be reduced, the Government, after considering the recommendations of the board, should scale the rates down. We are now dealing with a converse case; what are, in effect, tariff advantages to foreign nations that have been recommended by the Tariff Board have not been agreed to by the Government. I approve of the Government’s decision, and my only regret is that the Ministry did not adopt at an earlier date the commonsense attitude that it has adopted in regard to exchange and primage. I hope that this measure will result in giving further preference to Great Britain. I am sure that Senator Johnston desires that object to be achieved, and, in the circumstances, I crust that he will withdraw his amendment. I feel sure that the opinion of the majority of members of the committee is against him.
Question - That the amendment (Senator E. B. Johnston’s) be agreed to - put.
The committee divided. (temporarychairman- senator Sampson.)
Majority . . . . 22
Question so resolved in the negative.
Clause agreed to.
Clause 6 (Variation prior to date of assent to this act).
– Is the committee to understand that the effect of this clause will be that, despite the fact that the date on which the act will operate is fixed by an earlier clause, no reductions of duty can apply until the measure has received the Royal assent ?
– Under clause 4, the time for the varying of the duties is fixed. If they- are not brought below the present legal tariff they will operate from that date; but if they are brought below the present rates, the new duties cannot come into operation below the level of the 1921-30 tariffrates until they receive the Royal assent.
Clause agreed to.
Schedule and title agreed to.
Bill reported without amendment; report adopted.
Debate resumed from the 9th November (vide page 4290), on motion by Senator McLachlan -
That the bill be now read a second time.
– This bill provides for an amendment of the Customs Tariff (Industries Preservation) Act 1921-22, popularly known as the “anti-dumping act”. The provisions of the principal act have been abused for years by the exclusion from the Australian market of British wire-netting and other goods required by primary producers. This measure has proved almost vicious means of increasing the costs to primary producers throughout the Commonwealth. It has placed an unjustifiable burden on the backs of wheat-growers, sheep-farmers and others, and I am entirely opposed to restrictive legislation of this kind. My experience in. the past four and a half years convinces me that no Minister for Trade and Customs, and no government, should be given the tariff-making power to be conferred by this bill, and particularly that given under the principal act.
– To whom should the power be given ?
– To the people’s Parliament. It isbad enough when the Parliament imposes tariffs and taxes on the primary producers, and prevents their proper requirements from entering the Commonwealth. I desire that goods that have been excluded in the past shall now be admitted.
– Dumped goods?
– I am prepared to admit wire-netting as cheaply as possible from any part of the world.
– Shall we permit the dumping of wheat from the United States of America?
– Our sheep and wheat-farmers have to sell their products in the open markets of the world, and, so long as I am a member of this chamber, I shall endeavour to give them an opportunity to buy their commodities in those markets in which they have to sell their products. .1 would give the settlers the right to buy in the cheapest possible markets the articles required by them in combating the rabbit, the dingo, the fox and other pests, no matter from what part of the world those goods are obtained. I regret that the bill does not go a great deal further.
– But it conforms to the recommendations of the Tariff Board.
– Nevertheless, I should be glad if the Government repealed the principal act, and gave the primary producers who depend on. the world’s markets full opportunity to purchase their requisites in those markets. 1 emphasize this the more because the abuse of the parent act for so many years lias prevented Australian graziers and farmers from obtaining wire netting at world prices. Although the application of the anti-dumping provisions of that act to wire netting was recently repealed, the fact remains that for about a decade the primary producers have borne a grievous burden. This is the first opportunity I have had to enter my protest against the parent act.’ and I gladly avail myself of it. I object to this legislation, because I would not entrust to any government or Minister the power virtually to determine the fiscal policy of this country when Parliament is iti recess. If the Government wants to alter the duties on goods entering this country, it should call Parliament together for the purpose; otherwise it should allow the existing duties to remain until Parliament meets in the ordinary course. I object to any government or Minister having the power to alter and increase tariff items at will, or to impose grievous burdens on that section of the community which is least able to bear them. I refer to the primary producers. I do not believe in double-edged legislation of this nature, which is always used to injure the primary producer.
– Senator Johnston’s arguments are the most one-sided I have ever heard in this chamber. Listening to him, a stranger would be justified in believing that other honorable senators desire only to take from the primary producer, and to give to him nothing in return. What would Senator Johnston say if Parliament decided to bring to Australia a boatload of beer from Germany? The honorable senator cannot have it both ways. If there should be freetrade in those things which the primary producers buy, then why not have freetrade in wheat? We could get wheat from Russia for ls. a bushel. If we are to wipe out the protective barriers in some cases, let us be consistent and wipe them out. altogether. I hope that the committee will take a more broadminded view of these things than that put before it by Senator Johnston. If we carry the honorable senator’s arguments to their logical conclusion. we shall have to agree that the dairy farmer has no right to a protection valued at £4,000,000 a year, or the fruit-grower to a protection of £3,000,000 a year. Nor, in that case, would there be anY reason why we should agree to the people of Australia paying £7,000,000 or £8,000,000 a year in exchange. Each year about £15,000,000 is taken from the pockets of the general community and given to the primary producers.
– Perhaps the honorable senator would like to express his views in relation to the sugar industry.
– Sugar-growers, at. least, believe in a give-and-take policy, whereas Senator Johnston would take everything and give nothing in return. He would allow any nation to dump its goods into this country so long as the primary producer could get them cheaply. I remind the honorable senator that there is no duty on wire netting from Great Britain. This Parliament is doing what it can to assist the primary producers of Australia. I do not say that they are not worthy of assistance; but I do say that, if they are to be protected, other sections of the community also should be protected. Senator Johnston is most inconsistent. He overlooks the fact that the primary producers of Australia are generously protected. Of what use would it be to protect the farmers of Australia if other sections of the community were left without the wherewithal to purchase their products? I do not want to see goods from other countries dumped into Australia.
– I have no objection to Senator Johnston expressing his views in this chamber - indeed, he was sent here for that purpose - but I do object to his description of the Labour party as the enemy ©f the farmers of this country.
– I did not refer to the Labour party.
– The Labour party represents both primary producers and manufacturers; it has at heart the interests of the man who works in the mine, as well as his fellow who works in the mill or at the bench. Senator Johnston overlooks the fact that the best market for Australian primary produce is the home market. A few days ago, when searching the files of newspapers in the Library, I found in the columns of the Castlemaine M,ail, a paper which supports the policy of the Country party, and has its direct representative in this chamber in the person of Senator Elliott, the following leader: -
A circular which has been distributed on behalf of the Bureau of Publicity of the Australian Country Party declares that “ recent events have shown that our unjust discrimination against certain Japanese goods endangers the retention of our best wool ‘ customer “. It adds that “ for the sake of penalizing £2,000,000 of Japanese merchandise, our tariff jeopardizes the purchase by Japan of £0,400,000 worth of our wool, and £2,200,000 worth of our wheat, together with other goods, which brings the total purchase of Australian goods by Japan to £9,500,000”.
There are many features of the Australian tariff, particularly in respect to the retaliation which it evokes, that are open to the most serious objection, but such fiscal measures in respect of Japan that might come within the scope of such retaliation are in an entirely different category.
Japan has obviously set about a definite task of undermining the textile industries of the British Empire. In her campaign, she has the assistance of a negligible “ standard “ of living, low wages, &c.
She is buying Australian wool, and she will continue to buy it, for without it she cannot hope to compete with the established textile industries of the world. If, however, she succeeds in winning domination of the textile industry, and thus gains a position from which she can dictate the price of wool, the present high levels will not continue to rule. The Country party will not gain prestige by following this line of attack.
I should like o ask Senator Johnston whether he is British or Japanese in his outlook. He cannot have it both ways. When he goes back to Western Australia he may find it necessary to explain to the Empire League there just where he stands.
– I am glad to hear it, but I cannot see how he is going to square himself with his colleague of the Country party who controls the newspaper from which I have quoted. Had I quoted from the Labor Daily the honorable senator might have retorted that the paper was prejudiced in favour of the new protection, and that its opinions were, therefore, unreliable, but no such charge can be laid against the Castle- maine Mail.*
I read in a newspaper to-day of an interview which a newly arrived Japanese commercial representative gave to press reporters in Sydney. He said that he was sorry to hear of the attacks made by Australian politicians and business men on the commercial activities of Japan. Japanese industry, he said, was highly mechanized, as was that of the United States of America. If the policy of which he complained were continued, Japan would have to look elsewhere for the wool it was now buying in Australia, and he mentioned South Africa and the Argentine as possible sources of supplies. Of course, we know that modern commercialism knows no frontiers, and is prepared to buy in Germany, France, Austria, South Africa, the Argentine or anywhere else if it can get what it wants at a suitable price. Japan is buying Australian wool because it suits it to do so.
The Australasian Manufacturer, in its issue of 6th May, 1933, published a subleader from which I quote the following extracts : - “Once more unto the breach, dear friends,” - the breach of the Ottawa agreement, committed by the British Government, first, in taking wheat from Russia when there was ample wheat to be taken from the dominions; second, in taking meat from the Argentine, when all its requirements could have been taken from Australia; third, in giving an order for £7,000,000 worth of butter to Denmark, when this country could have supplied the lot. The Russian wheat was cheaper than Australian wheat - but what about “ the spirit of the Ottawa agreement”? British financiers have millions invested in the Argentine - but what about “a self-contained Empire?”. Denmark trades with England - but in proportion to Australia’s trade with England, Denmark’s total is paltry.
That reference to a self-contained Empire reminds me that, when Senator Johnston was twitted with being a rebel because of his secessionist activities in Western Australia, he said that he and his colleagues always opened their meetings with the singing of God Save the Kang, and closed them in the same way. Apparently his idea was that if. any present had forgotten to save the King at the beginning of the meeting, they might have an opportunity of doing so at the end. Yet Senator Johnston, who claims to be a good Australian and a good Britisher, and who is a member of a dozen or so patriotic organizations in Western Australia, has now declared that he is prepared to allow the goods of all nations to be dumped in Australia, no matter what the effect upon Australian industry.
– The honorable senator is misconstruing what I said. I stated that I would buy from those countriesto whom we were selling our own produce.
– Now the honorable senator is running for cover. A little while ago the association which guards the interests of Australian manufacturers issued the following circular : - “ Steady, continuous effort is essential to build up sufficient funds to fight the manufacturers’ battles. You will remember that the fighting fund was introduced to enable manufacturers to contribute on a pro rata basis of Hd. per employee per week, paid quarterly, as it was felt that few firms found it convenient to. pay a lump sum when the money was most needed. The Stevens Government’s election triumph and, later, thu referendum victory, were due in some measure to the efforts of our chamber and its members.”
It is a pity that some of those manufacturers were not present a little while ago when Senator Johnston made the statement to which I have referred. The quotation from the Australasian Manufacturer continues -
In the face of this wanton smashing of the agreement, in spirit if not in letter, England demands more and more concessions from the dominions - and especially from Australia. She demands that her manufactures under the “ Scrap of Paper “, shall enter this country without effective tariff restrictions on goods that can be made here.
If Senator Johnston has financial interests in any of the industrial suburbs of Sydney or Melbourne, where the workers, after a hard day’s toil like to have a glass of beer, would he look with favour on a government which, by tariff legislation, permitted the dumping of a million casks of cheap beer from Germany or any other country? The Australasian Manufacturer goes on to state -
It is this sort of behaviour that eventually caused England to lose America. The colonists there were a long suffering lot - as we are - but a point was reached at which further oppression was unbearable.
This, I remind the Senate, is the opinion of a journal that is subsidized by the manufacturers of Australia. If steps are not taken to prevent unfair treatment of our industries at the hands of British, German, French, Belgian, Czechoslovakian or Japanese manufacturers, what happened in North America may one day happen in Australia. Were I to express publicly and in similar terms the complaint raised by the Australasian Manufacturer, Comrades Wheeler and Denison and the other go-getters of the press world in Sydney would be clamouring for my expulsion from this Parliament. The article states further -
The fault lay, of course, not with the English people, but with English statesmanship, which is forever the slave of financial interests that never hesitate to use British Imperialism as acloak for activities that are antiImperial.
This ought to appeal to Senator Johnston, who is a member of various patriotic organizations in Western Australia. On the hustings he poses as a whole-hearted Imperialist, but in this chamber he is an anti-Imperialist.
The unfair treatment of Australia by England is reflected in the adverse comments that are now appearing even in newspapers noted for their jingoism, andnot for their sturdy defence of Australia, as a national entity. The Sydney Daily Telegraph, for instance, on 28th
April, published a scathing loading article on the Trade Treaty with Denmark. Here are a few sentences : - “ It would certainly seem to most observers on this side of the world that something is radically wrong with Empire statesmanship.” “… to give away £7,000,000 to Denmark, as the latest treaty does . . . strains the spirit of the agreement, however closely it mav conform to the letter.”
A few months ago when the Government of Great Britain introduced measures for the protection of British farmers, the Danish Government depreciated its currency to such an extent, that Danish cream was sent to London and, within two miles of Buckingham Palace, was manufactured into Danish butter for consumption by the people of Britain, to the detriment of the British dairying industry. The Australasian Manufacturer goes on to state -
In Canberra last week, during the tariff debate, the freetrade warhorse from Western Australia (Mr. Gregory) moved an amendment to one item that would have allowed an 80 per cent, impost on British cotton piece goods. According to Mr. Gregory, the Ottawa agreement provided that no duty higher than 75 pur cent, was to be im.posed upon British goods. The amendment was defeated. By voting against thu amendment, the Lyons Government itself has admitted that the Ottawa agreement is impracticable. Mr. Scullin took the opportunity to tell the House again that the agreement was unworkable, and that before long, “ it would only be a scrap of paper.”
So far as English statesmanship is concerned, the agreement is already a scrap of paper. So far as English industry is com cerned, every advantage has been taken to use the agreement as an instrument to injure Australian manufactures. The latest example of that is to be seen in the woollen goods that will now come from England in everincreasing quantities. As Mr. Fenton told the House during the tariff debate last week, many Australians arc under the impression that all the woollen goods imported from England are made from Australian wool. That was not so. Many of the woollen goods coming here were made from raw material from the Argentine mid other countries. He expressed the hope that if the Australian woollen industry fell into danger in the future, the Minister himself would act promptly, and not adopt the slow process of going to the Tariff Board. Mr. Fenton might have saved his breath. The Lyons Government, while it remains in power, will do nothing likely to annoy its overseas friends. Even if the reduction of the duties on knitted or lock-stitched piece goods eventually closes mills in such districts as Bendigo. Ballarat and Geelong, the conscience of the Lyons Government will be clear. It will have observed the spirit and letter of the -agreement, wherever the spirit and letter operate in favour of overseas interests.
The only hope for the complete destruction of the infamous agreement in the near future seems to exist in its own impracticability. When the pretence that it is workable can no longer be sustained, the Government may have the grace to agree with Mr. Scullin, that it is but “ a scrap of paper “. It will then he put in its proper place - with other scraps of paper.
The proposal contained in the bill has been condemned by Senator Elliott, who is one of Senator Johnston’s Country party colleagues.
– In what respect is the bill connected with the Ottawa agreement ?
– During the last election campaign, Australian manufacturers threw their weight behind the United Australian, party and the Government which had seen the error of its ways as regards anti-dumping legislation. Whatever Senator Johnston may say he stands behind the Government, knowing very well that, if he does not, give his support to that legislation, his colleague from Western Australia, the Leader of the Senate, will see that he does not get the support of the political organizations in that State at the next election.
– The honorable senator and his friends helped the Government to pass the tariff schedule.
– That is true. Nevertheless, we would like to celebrate the defeat of this Government. I make no apology to Senator Johnston or his political friends for our support of the Government’s tariff proposals, because “ new protection “ is one of the main planks of the Australian Labour Party’s platform.
Senator BROWN (Queensland) [5.55J. - I draw the attention of the Minister to a statement made by the Leader of the Opposition (Mr. Scullin) in the House of Representatives which indicated that in the operation of the formula for which this measure provides, Australian industries will suffer, in that the protectionafforded them will not be so great as that given prior to the depreciation of Japanese currency. Mr. Scullin, by way of illustration, took the value of certain goods at £2,100, and pointed out that a 60 per cent, duty upon them -would increase the cost to £3,360. If there were a currency depreciation of 40 per cent., the actual cost of the goods plus duty would be only £2,220, a difference of £1,140. According to the right honorable gentleman’s statement, however, .the formula to be applied would give an added value of only £4S0. I shall be grateful if the Minister will elucidate this point. It has been said that the Japanese Government has deliberately depreciated the currency of Japan; but that statement has been denied by certain Japanese Ministers, who declare that the yen has not been depreciated to any greater extent than has arisen from ordinary causes. Of course, our currency has been depreciated, because of the inflation following upon war finance; but gold is still accepted as the basis of currency values.
– Although a very unstable basis.
– Gold is the most stable commodity that I know of, and throughout the world it has played an important part under the capitalistic system, in providing a standard of real value. If I sell an ounce of gold in Great Britain, and on receiving payment in .English paper pounds, transfer the money to Australia, I get a larger sum in Australian currency, because £100 sterling is worth £125 in this country. Paper pounds are thus still related to gold values. According to some authorities, currencies have been deliberately depreciated in various parts of the world. The depreciation of the dollar and the yen has enabled the United Stated of America and Japan to compete more easily in the export markets of the world ; but the importers of goods have had to pay increased prices for them. In Australia the workers have been penalized, because the manipulation of the currency has increased their cost of living. By comparison with the employees, the manufacturers have gained, because wages have not risen in proportion to the depreciation of the Australian pound. The Government declares that whether or not the depreciation of currency has been deliberately brought about, Australia has been affected by it, mid it has taken action in accordance with the Tariff Board’s recommendations.
– No new principle is involved in this legislation, for since 1921, when Australia was troubled because of the depreciation of the German mark, the Italian lira and the currency of other continental countries, this principle has been embodied in Commonwealth legislation. Section 8 of the act which we now seek to repeal contains a special provision to deal with depreciated currencies. The schedule to the 1921 act had specific application; its tables do not apply to the present case. For instance, one table applied to the German mark, another to the French and Belgian franc, and others to other countries. Elaborate tables were provided to deal more or less accurately with the difficulties then presented by the currencies of specified countries; now the TarifF Board has evolved a formula for general application.
I wish to correct the erroneous view expressed by Senator Johnston that this bill touches on the application of the anti-dumping provisions to wire netting. It does nothing of the kind.
– -But the parent act does.
– Section 4 of the Industries Preservation Act of 1921 deals with goods which are invoiced for export to this country at prices below (heir domestic prices in the country of origin. If we are to allow war u> be made on our industries in that fashion, we may as well do so by means of a depreciated currency. Rather than send goods to Australia, at prices below the domestic prices in their own countries, some nations resort to the device of depreciating their own currencies, thereby enabling their merchants to get their goods into Australia at rates against which Australian industries cannot compete. Section 4 of the Industries Preservation Act applies only when the domestic price in the country of origin is higher than the invoice price of the goods sent to Australia. The Tariff Board supplied a formula, and. the Government has applied it so as to give as little offence as possible to nations which are good customers of Australia. Nothing offensive to any nation is intended in this legislation ; we merely say that Ave intend to protect Australian industries from competition of a certain character.
It is true that the legislation does not go as far as some people desire in the protection of Australian industries. If
Senator Brown will turn to the Tariff Board’s report, he will see that the circumstances which his leader had in view are mentioned in one of the examples given by the Tariff Board itself. Example 4 on page 10 of the hoard’s report is as follows : -
That additional £4S0 is a considerable sum, and although the formula may not raise the protection to heights which some people .consider necessary, it is elastic.
I remind Senator Johnston that the power of the Minister to do certain things of which he complained has always existed. That, of course, may not meet his objection ; but I cannot see that we can do anything else when matters affecting exchange are in a state of flux. Parliament is not so long out of session that irreparable damage is likely to he done. In any case, should the Minister act in a way of which Parliament does not approve. Parliament can soon put things right. It would he cumbersome, and, in some cases, disastrous, to have to wait for legislation to he passed by Parliament. Already certain industries in Great Britain have complained of the absence of legislation for their protection.
– Will the law be put into operation to protect them?
– This section of the act does not purport to assist British goods. Such provision exists in another section of the parent act. This section protects Australian industry against exchange depreciation. It throws the mantle of protection around this country to the disadvantage of those countries with depreciated currencies. In the interests of the manufacturing industries of Australia and, indeed, in the interests of correct methods of trading, this measure should be passed.
– Dumping is part of Australia’s trading policy. Australian sugar, dried fruits and butter, are dumped in other countries.
– Is Senator Brennan suggesting that the exchange rate has not been fixed honestly? If the present rate is the natural rate, there is no dumping of wool or other primary products, although there may be a degree of dumping in respect of the products of some industries which receive artificial support in other ways.
Sitting suspended from 6.15 to 8 p.m.
Question resolved in the affirmative.
Bill read a second time.
Clause 1 agreed to.
Clause 2 (Exchange special duty).
– Apparently, we must support this amendment, because if we reject it section 8 of the principal act will remain operative. It is the principal act that is defective, and this proposed amendment slightly improves it. I have said before, and I still maintain that, in spite of the opinion held by the High Court of Australia, the bill confers upon the Minister for Trade and Customs a power which the Constitution never intended that he should possess. The first section of the Constitution lays down what shall constitute the Parliament of the Commonwealth of Australia, and how it shall exercise its power. Section 90 provides that the Parliament shall have paramount and exclusive power to impose uniform duties of customs and excise. The Constitution does not provide that Parliament shall have the authority to delegate its power to any other authority. Although I recognize the futility of offering any opposition to this proposed amendment, I register my protest against what I consider the usurpation of the powers of this Parliament. We have heard numerous protests against Parliament handing over to the Tariff Board the power of making customs tariffs, but however extensive may be the powers of that body, it has the authority only to recommend that certain things shall be done. The Tariff Board does not attempt to exercise any power other than recommending to the Government a cer- tain course, in support of which it adduces reasons. Under section 8, and also under the proposed new section, however, the Minister for Trade and Customs can snap his fingers at this Parliament, and decide whether duties shall or shall not be imposed. That has happened more than once in the history of th6 Commonwealth by reason of the powers conferred upon the Minister by the principal act. In spite of the judgment delivered by the High Court, I protest against this provision. I think it wrong for the Parliament to be hamstrung in this way. It is giving to an individual the power to make the laws of this country.
– I associate myself in part with what has been said by Senator Carroll. I do not agree with him that the High Court has ever interpreted section S.
– I was told that such was the case.
– It is dangerous to assert and difficult to prove a negative; but, speaking impromptu, I do not think that the section which this provision is to replace has ever been dealt with by the High Court. In the original Customs Act there is a provision under which the Governor-General in Council is given power to prohibit imports by proclamation. Although it was argued that that was a usurpation by the Minister of power which was vested exclusively in Parliament, the High Court held that Parliament could delegate its powers to the Governor-General in Council. Any criticism of what has been done under section 8 applies with greater force to a provision such as is now proposed. The proposed new section merely means that if the Minister is satisfied after inquiry and report by the Tariff Board about certain exchange values and currency, he can alter the duties. That does appear to place very great power in the hands of the Minister, but, as pointed out by Senator Carroll, no advantage would be gained by negativing this clause as that would throw us back on the provision that has been in operation for many years, and which, if anything, is worse than this. This is an illustration of the growing tendency of Parliament to delegate its authority by extending the regulation-making power of different bodies, but even in the case of regulations, often as they are abused, the right of veto rests with either House of Parliament. The trouble in this instance is that there is no right of veto. The Minister has to be satisfied after inquiry and report by the Tariff Board, which means that he has to say that he is satisfied. The court has held times out of number that if the Minister says he is satisfied no one can cross-examine him as to why he is satisfied. There is no limitation or requirement laid down as to what form the preliminary inquiry shall take, or what shall be the nature of the Tariff Board’s report. In effect, the Minister can provide for new customs duties, and when he has given his decision neither House of Parliament can call it into question. Of course, the House of Representatives can always dismiss a Ministry, and, therefore, the Ministry cannot fly in the face of the majority in the other chamber. Although tho Senate has co-equal rights with the other chamber in the making of laws, it will have no power whatever to call in question anything done under this proposed new section. This is a further illustration of the powers given to the Governor-General in Council to legislate by proclamation - n. power, which I venture to say, was abused very noticeably recently when after this Parliament had imposed a duty on sheet glass, the GovernorGeneral in Council by proclamation prohibited the importation of that commodity. This is an instance of Parliament handing over its powers to departmental officers. When we speak of the Minister we really mean the departmental officers who have charge of this branch df the Trade and Customs Department. They are the persons who make recommendations to the Minister. Naturally, hq trusts his officers, but by this system we are getting further from the exclusive right of Parliament to make laws for the good government of the country.
– Why not amend it?
– -We could not amend it now, because the section proposed to be amended is only one of a long and complicated series. It would mean that the whole act would have to be reviewed. Senator Crawford said that there are acts of this kind in every country; although I cannot contradict that assertion, I do not think that *it> is correct. We cannot amend this provision, because it would mean amending the principal act. The only consolation we have is that this proposed new section will not make the position any worse than it is at present. Rejection of this would only leave in operation existing section 8.
– I cannot agree with the views expressed by previous speakers, particularly in view of what has taken place in connexion with recent legislation on similar subjects. It seems that honorable senators opposite have forgotten that Parliament has permitted the Tariff Board to decide the fiscal policy of this country, and that some of those honorable senators actually supported the view that the Tariff Board was above Parliament.
– It, has the power only to recommend.
– We were told during the debates on the tariff and on the Ottawa agreement that the Tariff Board consists of experts whose recommendations must be accepted as final, and members of Parliament are not expected to hold any opinions worth while.
– Parliament cannot impose duties higher than those recommended by the Tariff Board.
– Yes. We have been advised to accept the recommendations of that board, but I disagree with the views of some honorable senators that Parliament should be instructed by that board. Now Senator Carroll and Senator Brennan are 0)>posed to the Minister having the right to decide what certain duties shall be.
– The Minister can impose duties of his own volition.
– He is advised or directed by the board. The Minister represents the Government, which is answerable to Parliament. I did not speak on the previous measure because I knew that the present hill was to he brought down, and I regarded the one as being complementary to the other. Having accepted the first bill, we must, in order to be consistent, accept the second. Reference has ‘been made during the debate to gold and its effect on currency. The following extract, from a statement by Mr. Reginald McKenna, chairman of the Midland Bank, in January, 1932, indicates that gold is not nearly so important as some people think: -
The widespread impression that the gold standard operates automatically is a complete delusion, for in fact it must always be in some degree managed so soon as bank credit plays a_ leading part in the business life of a com’munity.
Senator McLACHLAN (South Australia - Vice-President of the Executive Council) I.SJ7]. - No new principle is involved in this measure, because it follows substantially the same lines as the original act of 1921-22, and anything which may be said against the present measure would be equally applicable to the original one. It is of no use theorizing about these thing3; we must deal with facts as we find them to-day. If Senator Carroll thinks the bill is unconstitutional, he has the right to challenge it before the proper tribunal, but this is not the place in which to do so. If the recommendations of the Tariff Board had been adopted in their entirety, the system provided for in the bill would have operated automatically in respect of those countries whose currencies are depreciated. We have merely adopted the principle embodied in the existing section 8, and made it applicable, with certain modifications, to the present situation. The act dealt, specifically with the depreciated lira, mark and franc, and the principle reappears in the present measure in a form which is not, so likely to give offence to friendly countries, but will, at the same time, protect Australia’s industries. The Tariff Board, on page 9 of its report, states -
Consideration has been given to the effect of exchange in increasing the landed cost of goods from countries whose currencies are depreciated relative to sterling, but less than Australia, The board considers that no adjustment of duties is necessary in regard to importations from such countries.
It has already been shown that the existing rate of duty applied to imports from countries with whom the Australian exchange is adverse has the effect of increasing the protection : conversely the application of the existing rates of duty to goods from a country with a depreciated exchange relative to Australia litis amuch lower protective incidence than was intended when the duties were fixed. This arises from the following circumstances : -
The invoice value of the goods in terms of Australian currency is lower; and
On account of the departmental practice of collecting ad valorem duty on the basis of sterling, the duty on goods so rated is even lower than it would be on the basis of Australian currency.
The board is not overlooking the fact that the Industries Preservation Act could be invoked in the case of importations from a country with a depreciated currency, but it considers it is only just and logical that a general corrective should be applied to goods from countries with currencies depreciated relative to Australian currency.
In considering what would constitute an equitable adjustment the board has recognized that the depreciation of the currency of a country exporting goods to Australia would to some extent affect the cost of imported and exportable raw materials in terms of the currency of the country much in the same manner as obtains in Australia.
Senator Brennan said that the bill represented a further invasion by the Executive of the legislative powers of Parliament. If that be so, the wrong has existed ever since 1922. The original act was passed for the specific purpose of meeting an exigency which first arose then, but which now exists in a more intensified form. The provision now proposed is more elastic than the existing section 8. The honorable senator said that no limitation has been placed on the power of the Minister, but I remind him that, before action can be taken, there must be an inquiry by the Tariff Board, and the board must report that the exchange value of the currency of the country of origin of the goods has depreciated in relation to Australian currency, and that, by reason of such depreciation, goods have been, or are being, sold to importers in Australia at a price which is detrimental to an Australian industry. The Executive is responsible to Parliament, which always has the right to override anything the Executive does. It has been objected that the rights of the Senate are being ignored, but I remind honorable senators that at times it is necessary to take prompt action to protect Australian industry. If other nations make war on. our trade by depreciating their currencies, ‘we must do what is necessary to defend ourselves.
In my opinion, the Government has acted wisely in prescribing that all cases coming under this legislation shall be examined by the Tariff Board, and that only on receipt of the Tariff Board’s report can. the Minister act. The object of the Government is to create as little friction as possible with friendly countries that trade with us.
.- When, this bill was first introduced, I saw no particular objection to it. I take it that there is general agreement among honorable senators that the purpose of the bill is good, and that the bill itself is a necessary complement to the one we have already passed. I agree, however, after hearing the argument of Senator Brennan, that the Senate would bc unwise willingly to deprive itself of the power to review decisions of the Minister for Trade and Customs. The House of Representatives has always had power to review the decisions of Ministers, but, as we were reminded not very long ago, the Senate does not possess such power. Most of us have had reason to complain that the tariff has not been submitted to the Senate for approval, sometimes for as long as two or three years after its introduction. Is it wise, therefore, for the Senate, by its own act, to surrender its right to review ministerial decisions? I do not think thatit is. I do not say that the Minister would ever exercise his power other than as he thought best, but the Senate should retain the right to say whether, in its opinion, the Minister has decided rightly. The Minister’s determinationshould be laid on the table of the Senate so that it may be discussed and, if necessary, overruled. There is at present on the notice-paper a bill dealing with the payment of a bounty in the iron and steel industry. In that measure, Parliament is asked to surrender the power to decide what shallbe done in the event of certain contingencies arising. I maintain that Parliament should not surrender that power. It may delegate its power, but it should always retain the right of review. I put forward the suggestion, placed before me by Senator Brennan, that the Minister, instead of merely promulgating his decision by notice in the Gazette, should issue regulations. These would have to be laid on the table of Parliament, and either House could disallow them. If the Minister will give an assurance that such regulations will be issued, I shall be content; otherwise, I propose to move an amendment that any action taken under the bill shall be subject to the approval of both Houses of Parliament, such approval to be expressed within six months of the publication of the Gazette notice. This will make it abundantly clear that the Senate, while prepared for the sake of convenience to grant certain powers to the Minister, retains control over him by requiring him to submit his decisions to Parliament.
– The provision to which Senator Duncan-Hughes now objects has been in the act since 1922. All that we are doing now is to remodel it by substituting a formula for the schedule to the old act. In practically every other respect the proposed new section is a reproduction of section 8. Parliament has considered this matter from time to time, and has re-affirmed its decision with regard to it. I assure Senator DuncanHughes that the constitutional rights of the respective Houses of Parliament are involved in his amendment, which the Government cannotaccept. Clearly his intention is to make the Senate superior to the House of Representatives. What would happen in the event of the Senate declaring its opposition to a certain rate of duty, and the Government insisting on its original proposal? This chamber cannot arrogate to itself the right to control the actions of Cabinet Ministers. This matter was debated at some length in the other chamber upon a similar amendment. Those in control of industrial concerns are entitled to know where they stand and what is the Government’s attitude. Obviously we could not allow action under the proposed new section to be altered at the whim of either House, and thus extend to the Senate control over the Government of the day in respect of tariff matters. In its present form the proposed section will not be offensive to the countries that are likely to be affected by it, because we are not picking out any particular country or industry, and we do not want to cause conflict between the two branches of the legislature.
– I move -
That the following sub-section be inserted: -
These provisions shall be subject to the approval of both Houses of Parliament, which must be expressed within six months of the publication of such notice.
The Minister has said that the present procedure has been followed for a number of years. That, I suggest, is the very reason why it is necessary to alter it. It is not becoming a Senate Minister to approve of any proposal to whittle away the powers of the Senate in deference to the powers of another place. The Senate’s powers are clearly defined in the Constitution, and the Minister should at all times uphold them. It is. within the knowledge of most honorable senators that whether intentionally or otherwise, the Senate has been largely debarred from exercising powers conferred on it by the Constitution with regard to tariff matters. That fact, I repeat, is the chief reason why we should endeavour to alter the procedure. The Minister also said that it would be improper for the Senate, by resolution, to override regulations approved by the House of Representatives. In the last Parliament the Senate repeatedly disallowed regulations, approved by the House of Representatives, dealing with the waterside workers.
– That was not a financial matter.
Senator DUNCAN HUGHES.Whether or not the regulations in question dealt with a financial matter is beside the point; The question at issue then was the constitutional powerof the two Houses. The very last act of the Senate in the last Parliament was to disallow a regulation, made by the Scullin Government, with the approval of the House of Representatives. I again suggest that’ it is not fitting that the Vice-President of the Executive Council who, as a private senator, supported the action of the Senate in disallowing a ministerial action under one act, should now take precisely the opposite view. Personally I do not care very much if my amendment is defeated; it is so obviously equitable that any reasonable-minded man outside Parliament, reading it, would ask what’ was the objection to it? What objection can there be to Parliament exercising a final decision in respect of a ministerial action based on a recommendation by an extra parliamentary body without authority? My intention in moving the amendment, is to ensure that this branch of the legislature shall exercise the powers given to it under the Constitution.
– Senator DuncanHughes betrays a lack of his usual logic with regard to this matter. The Government has not been unmindful of what happened in another place. It has armed itself with the opinion of the law officers of the Crown regarding the respective rights of the Senate and the House of Representatives. While I appreciate the honorable senator’s pleasantries as to what I should do as a Minister, I shall always be guided by what I conceive to be the underlying principles of the Constitution, whether I happen to be a member of this or the other branch of the legislature. This matter has been succinctly commented on by the SolicitorGeneral in the following terms : -
The effect of the notice by the Minister is to impose taxation, and, under the Constitution (section 53), the powers of the Senate ave limited as regards proposed laws imposing taxation. The Senate may not amend such laws, but may request the House of Representatives to omit or amend any item or provision in any such. law.
This Chamber, by the exercise of the power of disallowance, regardless of the wishes of the House of Representatives, would be able to alter a tax which the Minister, by virtue of a notice in the Gazette, had levied on goods from a country that had a depreciated currency. The Solicitor-General proceeded -
Although the Senate may not amend a proposed law imposing taxation, it has the right to reject the proposed law and thereby prevent the taxation being imposed. Such a course might result in a disagreement between the Houses which might result in section 57 of the Constitution being applied. The power which the Senate would have under the proposed amendment might ‘be very embarrassing to a government which did not command a majority in that chamber.
Section 53 of the Constitution, with which honorable senators are familiar, provides that proposed laws appropriating revenue or moneys, or imposing taxation, shall not originate in the Senate, and in respect of such proposed laws the Senate mar’ only make requests for amendments. Section 57 states that if the House of Representatives passes any proposed law, and the Senate rejects or fails to pass it, or passes it with amendments to which the House of Representatives will not agree, and if, after an interval of three months, the House of Representatives in the same or the next session again passes the proposed law, and the Senate rejects or fails to pass it, or passes it with amendments to which the House of Representatives will not agree, a double dissolution may take place. Does it appear proper to honorable senators that we should take away a power that was given to . the Minister eleven years ago, and which it is now proposed to grant again, with further safeguards in the interests of the people and of decent tariff policy? If the amendment were accepted, the Senate would be given a power in ‘ respect to taxation matters which, I venture to say, was never contemplated under the Constitution. The power previously conferred upon the Minister is of an exceptional kind, and was given- in exceptional circumstances. The Government asks that it be granted again in equally exceptional circumstances. I cannot support the amendment.
Senator COLLINGS (Queensland) ‘8.50] . - I am entirely in agreement with the Minister in this matter. I am as anxious as any other member of this committee to safeguard the powers of the Senate, and, if 1 had not looked for the motive, behind the amendment, I might have fallen into a trap and might have supported it because, allegedly, it will prevent the filching from the Senate of some of its Constitutional powers. But we have had a definite declaration by Senator Johnston that he is prepared to allow any country to dump goods into the Commonwealth. The clause now under discussion gives the Minister power to deal with dumping immediately it becomes apparent. If the measures he adopted were subjected to disallowance by either chamber, chaos, and even the ruin of industries, might result.
– The Parliament would, have to sit continuously in those circumstances.
– Of course. Behind this innocent looking amendment is the sinister desire to make it increasingly difficult for the Government to do anything effective in support of Australian manufactures.
– I naturally expected that, before Senator Collings had proceeded far, he would begin to impute motives to those who had put forward a proposal which he apparently has not taken the trouble to understand. “Whatever may be said about it, the amendment submitted by Senator Duncan-Hughes would not cause any delay which is not involved in the Government’s proposal.
– It involves the revision of decisions.
– It does not. It mainly involves the claim of this Senate that the Constitution, which provides that the legislative power of the Commonwealth shall bc vested in the Sovereign, the Senate, and the House of Representatives, shall be obeyed. In other words, before any measure becomes law in this country it shall, in accordance with the provisions appearing at the very outset of the Constitution, he approved by both Houses of Parliament. The reason for the criticism of the Government’s -proposal is that it does not relate to an Administrative act, but to an act of legislation, and, most important of all, an act of taxation legislation. This act could be performed by the Governor- General-in-Counc.il, and one branch of this legislature, at any rate, would have no power to veto it. The Minister said that this provision was introduced Originally eleven years ago, at a time of stress. The implication, apparently, is that in the meantime the state of emergency passed away, hut is now presenting itself again, and that it becomes necessary to make a similar provision. If the power Conferred by section S of the Industries Preservation Act has been lying dormant for some considerable time, that is all the more reason why we should call attention, to the fact that a proposal of this kind does whittle away the rights of this chamber. The .Minister has sug gested that something turns on the fact that this is a taxation bill, and he read from the Solicitor-General part of an opinion which that gentleman gave upon a totally different matter. I should imagine that it was upon the disagreement between the two chambers which . i3 already manifest in regard to one or two small items in a very long tariff schedule.
– The opinion referred to the amendment submitted iu the House of Representatives hy the honorable member for Swan (Mr. Gregory), which was similar to the present amendment. ‘
– I was entirely unconscious of the fact that Mr. Gregory had moved such an amendment, and I have the assurance of Senator DuncanHughes that he was equally unaware of it. Senator Johnston, having been, in closer touch with Mr. Gregory, may have heard something about it. The suggestion is made that because this clause deals with taxation the powers of the Senate are in some way limited, hut that is not so. This chamber has complete power to reject the whole customs tariff schedule by voting against the measure at one of its stages. We have no power to amend it, but we may request amendments. Yet in the long run we have power to reject the schedule mi toto by negativing the second or third reading of the measure. That is all that we claim in this case.
This clause as a matter of fact deals with taxation. It is proposed under the bill to impose taxation by proclamation. Does the Minister in charge of the measure say that the Government of the day has a right to legislate in such a way as to deny this chamber an opportunity to express its views on that legislation ? It is also said that there may be a conflict between the two Houses upon the allowance or disallowance of a regulation. I do not see any such possibilities about it.
– The honorable senator claims that the Senate should have the right to disallow such a regulation, and that, in the event of its disallowance, out it should go.
– Precisely, as the Senate can now disallow the customs tariff as a whole. The principle is the same; the greater surely includes the less. If we can reject the customs tariff as a whole, as undoubtedly we can, surely we can reject a particular provision which the Minister proposes shall become law.If the Minister does not wish to bring this provision into force by regulation,and thinks that it can be better done- by act of Parliament, he can introduce a bill in the other chamber, and surely before it becomes law it should have the assent of both branches of the legislature. In respect of legislation by the Governor-General-]’ n-Council, or anything that amounts to doing what the Constitution says Parliament shall do in exercising the legislative power, this chamber has the right to say whether it shall become the law of the land ; and a decision of the Minister, on the advice of the Tariff Board, becomes substantially the law of the land when it is notified in the Gazette.
– Then the honorable senator would place a person who secures a dumping duty under this provision in a worse position than one who has had the benefit of the anti-dumping provision in the original. act.
– I do not say that. Exactly the same result as will be obtained . under this proposed section would come about if the suggestion, that the Minister should proceed by regulation were adopted. If the Government were satisfied it could draw tip a regulation which would become law almost immediately, and would remain law until disallowed by either House of the Parliament.
– What would happen to the revenue collected under that regulation ?
– That could be provided for. There would be no change except that instead of the act being done by notice in the Gazette it would be done by regulation.
Under the proposed amendment of Senator Duncan-Hughes the position would he that the regulation would become law as soon as it appeared in the Gazette, and Parliament would have six months in which to say that it should not remain law.
– Not Parliament, but either House of the Parliament.
– The amendment of Senator Duncan-Hughes provides for the approval of both Houses of of the Parliament.
– If one House does not approve, it is equivalent to one House having the right to disapprove.
– This proposal is aimed at what is regarded as a serious tendency of our legislation. The wording of the amendment of Senator Duncan-Hughes may require further consideration, as may my proposal also. ‘
– I hope that the committee will not agree to the proposed amendment which, if passed, will hamper the administration of the Customs Department. This legislation is not new, except so far as it provides for the effect of exchange on the duties to be collected. The Industries Preservation Act has been in operation for a number of years and I have never heard any complaints regarding its administration. So far as I am aware, its provisions have never been applied harshly. It would be inconsistent to provide for parliamentary review of the operation of this proposed section when there exists no power to review action taken under other sections of the principal act. For the amendment to become 1 effective Parliament would have to meet at, frequent intervals, and we should practically dispense with what is termed “responsible government. “ In the peculiar circumstances of industry and trade throughout the world at the present time it i3 necessary, for the preservation of the interests of Australian industries, that the responsible Minister should retain all the powers he now possesses, in addition to those which this bill proposes to give to him. I do not share the opinion that the position in Australia is much better than it was a few months ago. It may be that some businesses are doing better this year than they did last year, but in many instances their success has been gained at the expense of other businesses. It is imperative that every step possible shall be taken to preserve the secondary industries of this country
Because the outlook for some of the primary industries is most discouraging, we shall in the future be more dependent on the secondary industries than we have been hitherto. Other countries are erecting tariff harriers which are higher than anything we have ever contemplated.
– And a nice mess they have caused in the world !
– In considering these things, we must he careful not to confuse cause and effect. The World Economic Conference, which met in London recently, had as its main objective a general reduction of tariffs and a removal of some of the existing barriers ito trade. That conference failed,- chiefly because so many countries had made strenuous efforts to become, self-contained, and had found the policy to be good. The last presidential election in the United States of America ,was fought largely on the fiscal policy of that country. Mr. Roosevelt promised that, if he were returned, he would set about reducing the protective duties; hut he has not attempted to reduce one of them. T have had some experience in connexion with the administration of the Trade and Customs Department, and am bound to say that the officers holding responsible positions there are men of ability and integrity. I have not come into such close contact with the junior officers of the department, and therefore cannot speak with first-hand knowledge of them, although I have no reason to doubt their honesty or their -fitness for the positions they hold. I anl convinced that the administration of this legislation may safely he left in. the hands of the officers of the department, under the direction of the Minister for the time being.
– No one has charged the Minister for Trade and Customs (Mr. White),. or any of his officers, with any desire to act improperly. The question before us concerns the constitutional right of thi3 Parliament to rob itself of its powers of legislation, and to hand them to an individual, to be exercised by him according to his own discretion, and not subject to review by this chamber. It is a case of “ shut your eyes and open your mouth and take what God may send you According to the Minister, the Solicitor-General says that, in such * case, Parliament has no powers at all.
– Parliament can delegate its powers to another body or individual.
– The Constitution is silent on the power o’f this Parliament to delegate to any individual the right to tax the people of Australia; yet that is what this hill empowers the Minister to do. Legislation of this kind, although in a slightly different form, has been on the statute-book for many years : but this is the first time that its constitutionality has “been questioned. There’ is no suggestion that the Minister may make a wrong use of his power, or that his officers may be dishonest.
– When this matter was debated in the House of Representatives, an amendment that -
Every notice published by the Minister in pursuance of this section shall be laid before both Houses of Parliament, and shall be subject to disallowance as if it were a regulation, was accepted without its import being fully realized. Later, it was contended that a’ new principle would, be embodied in our legislation if the amendment became law. The Minister might impose exchange and dumping duties on goods from countries with a currency more depreciated than our own, and then either House could by resolution disallow such duties. It was contended that Parliament was being asked to allow a customs duty to be dealt with as if it were a regulation. When a tariff schedule is tabled in the House of Representatives, the duties become operative immediately, and are not varied unless that chamber so decides. If either House had the right to disallow a dumping duty imposed by the Minister under the powers conferred upon him, importers would ‘be in doubt until the period within which’ the duty might he disallowed had expired. The power possessed by either branch of the legislature to disallow a regulation differs materially from that suggested in this instance. The dumping duties imposed under the Customs Tariff (Industries Preservation) Act are not subject to disallowance by either House of the Parliament, and if an amendment on the lines suggested were adopted, commercial chaos would prevail until a definite decision had been reached.
– The adoption of such an amendment would destroy the preference we extend to Great Britain.
– That ma.y be possible.
– Is it .the intention of the Government to make this legislation apply to America, where the value of currency is fluctuating?
– If the conditions required by the act obtain, then it will apply in such cases as the Minister thinks fit after inquiry by the Tariff Board as to the price of the goods concerned in the country of origin. As one House of Parliament has not the right to exercise the power now sought with respect to customs duties generally, it is unreasonable to suggest that either House should have the power to disallow a dumping duty. The Minister, who is always answerable to Parliament, will naturally exercise his powers in a proper way.
– “Would the Minister support this measure if he were in Opposition ?
– Under the conditions prevailing to-day, I would do so. Trade cannot be effectively conducted on any other basis. I am opposed to Parliament delegating its powers, but in cases of this kind, there is no alternative. It is true, as Senator Carroll stated, that in this instance a Minister has powers greater than that possessed by the Senate, but the Minister is responsible to the Government and the Government to Parliament.
– I quoted the opinion of the Solicitor-General.
– That may be so, but we have to recall the methods being adopted in some countries in order to break down our tariff barrier, and this i3 one way in which we are endeavouring to protect Australia’s interests. I have no desire to give away rights which this chamber, should possess, but as the Senate has not the power to impose taxation, it should not have the right to disallow customs duties. I trust that the committee will reject the amendment.
.- As we all know, the Minister (.Senator McLachlan) is an able debater, but only on one occasion have I known him to be less convincing than he has been to-night, and that was during the tariff debate on glass. I was unaware that the honorable member for Swan (Mr. Gregory) had moved a similar amendment in the House of Representatives. Senator Carroll, who raised this matter, is more closely associated with the honorable member for Swan, and possibly knew what was done in the other chamber. I am glad that the point has come up for our consideration. The Minister said that if the amendment is carried, either House will have the right to disallow a proclamation issued under the authority of the Minister for Trade and Customs. That, in a sense, is true, but, putting it in another way, the effect of the provision in the bill would be to give the Executive, and not the House of Representatives, the power of making a decision, and eventually of overriding the will of Parliament as a whole. The House of Representatives would naturally be inclined to follow the lead of the Government, and would npt offer any opposition; in those circumstances the Senate’s right of veto would lapse. If the Senate is to delegate certain power, it has the right to say on what terms and conditions that power shall be exercised. It is idle for the Minister to say that the Senate has no power to amend taxation measures. The Senate is at liberty to reject entirelya money bill, and, if it does so, of what avail is the limitation of its power of amendments? The Minister, in effect, says that we should not even express an opinion on the exercise of the antidumping provisions, because they ‘relate to taxation, but I decline to accept that view.
The Ministry, naturally, finds it more convenient to take in advance general power under which it may act, rather than come to Parliament in each specific instance for powers that will have to be granted by both Houses; but I am against the granting of such power of attorney when I am present to act myself.
– The honorable senator’s amendment would be all -right if Parliament were sitting continuously.
– I have provided that approval must be given within six months, so that it will not be necessary to call Parliament together to deal with a particular situation which may arise. The amendment is a precaution against the Executive acting in contravention of the wishes of Parliament. It is possible, for instance, that a future Labour government might choose to act under this provision in a way of which the Senate disapproved, but the ‘Senate would have no power of veto. It would have given a power of attorney, and would have no further say in the matter.
– So that is the nigger in the wood pile!
Senator DUNCAN-HUGHES Whether the act is being administered by a government I support, or by another government, I do not propose, if I can help it, to surrender my right to speak and decide upon any matter which properly comes within the survey of the Senate”.
– Senator Brennan began his speech by saying that he suspected it would not be long before I imputed motives. That may or may not have been a generous remark, and I am not particularly concerned over it, except to state that, in my opinion, there ought to “be a motive behind every speech that is delivered in this chamber. There is certainly a motive ‘behind what I am saying now. If it is not, true, that the suggester and mover of this amendment - I understand that the responsibility is divided - were prompted by a desire to defeat the effective operation of the Industries Preservation Act, I have done them an injustice. Now, however, Senator DuncanHughes, of his own accord, advanced another possible motive, namely, that there might be in power a Labour government which would seek to administer the act too conscientiously to suit his freetrade prejudice. Perhaps neither of those suggested motives is the real one, and the amendment may have been born of its sponsor’s complete ignorance of customs procedure. I cannot conceive of any one who has had personal acquaintance with the work of the Trade and Customs Department supporting an amendment of this kind. If the Industries Preservation Act is to he of any use whatever to the secondary industries of Australia, there must be power for some one to act on the instant that action becomes necessary.
– The amendment would permit of instant action being taken.
– Action must be taken at the moment the difficulty occurs, and it must be sufficient action. There never was a time in the history of the world when the need for action might so seriously and suddenly arise as now. Senator Brennan said that there would he power, even under the amendment, to take instant action, but is it likely that effective action would be taken by a Minister or a customs official if it were known that whatever was done would be subject to review by one or both Houses of Parliament, with every likelihood of these being a political squabble over the business ?
– It might lead to an international squabble.
– There is that possibility, too. No one is more jealous of the rights of this chamber than I am, but those who are posing as champions of the rights of the Senate on this occasion are, at other times, prepared to forgo those rights when it suits their, political purposes. The Industries Preservation Act is a valuable instrument for the protection of Australian, industry. If this amendment is agreed to, the effectiveness of that act will he largely destroyed. 1 cannot believe that the majority of honorable senators are prepared to support so iniquitous an amendment.
Question - That the amendment (Senator DUNCAN-HUGHES’S) he agreed to - put. The committee divided. (Temporary Chairman - Senator Sampson.)
Majority . . . . 9
Question so resolved in the negative.
Clause agreed to.
Clause 3 agreed to.
Title agreed to.
Bill reported without amendment; report adopted.
– I move-
That the bill be now read a second time.
The purpose of the measure is to ratify the reductions made in the ordinary customs duties in connexion with the budget. The goods covered comprise beer, spirits, tea and rubber. The importations of these commodities during the year 1 931-32 totalled £1,845,000, of which over £1,000,000 worth was purchased from British countries. The remission of taxes by way of customs and excise is estimated at £1,760,000, of which’ approximately £450,000 -would be represented by the proposals contained in this bill. Tea,which will involve £185,000, and rubber, upon which £225,000 will be remitted, are the two principal items. It is expected that the public will derive the full benefit from these reductions. Some prices have already been reduced and the price aspect will be carefully watched by the department with the object of obtaining the maximum possible reduction. This bill is part of the legislation necessary to give effect to the remission of taxes provided for in the budget.
Senator O’HALLORAN (South Aus bill were fully discussed and, in the main, approved in the budget debate, there is little that I need say with respect this measure. The Minister observedthat the benefit from the reduction of duties on the items mentioned would be passed on to the people, and that, if they were not, the Government would take the necessary action. One of the most important items is tea, the duty on which has been reduced by1d. per lb. In connexion with this item I have a distinct recollection of a statement made by tea merchants in South Australia, when the Government’s proposals were announced, that they would not be able to reduce prices. Has that statement been brought under the notice of the Government, and has the Minister for Trade and Customs investigated the position with a view to taking appropriate action should the benefit not be passed on to consumers of tea?
– The suggestion, I understand, was that as a result of a pool in tea-producing countries, prices have been raised against importers.
– It is extraordinary that the discovery of the existence of a tea. pool synchronized with the Government’s announcement of a reduction of the duty on tea. In the circumstances we should know definitely whether the Government has the power to force traders to pass on to the people the whole ofthe benefit following the reduction of the duty, and that, if this is not done, it will exercise its powersto the fullest extent.
– I am in agreement with Senator O’Halloran. The people of Australia were greatly relieved when they read of the Government’s proposals to remit taxation, which the Prime Minister (Mr. Lyons) assured us would be passed on to the people generally. Since then public announcements have been made that, in respect of several items, the public would benefit from the relief given. The duty on crude rubber has been reduced from4d. to 2d. per lb., with a view to giving relief to motorists and other purchasers of manufactures of rubber. Two or three days after, the delivery of the budget, Mr. W. A. Watt, the chairman of directors of the Dunlop-Perdriau Company, which, controls a very large proportion of the rubber goods manufactured in Australia, pointed out that, as the price of tyres had already been reduced considerably^ his company would not be aMe to give further relief to users. I am sure it is not the wish of the Government to make a gift of £225,000 to the rubber companies. The intention was to give relief to motorists and others who have to use rubber manufactures. The Government could effectively counter the statement made by the influential chairman of directors of the DunlopPerdriau Company by announcing that, if the benefit of the lower duties were not passed on to the people, it would reduce the duty on imported tyres by an amount equivalent to a duty of 2d. per lb. on rubber.
– Why not allow the present duty on rubber to stand and take an equivalent amount off the sales tax ?
– The honorable senator’s suggestion is a very practical one. I am prepared to support the reductions of duties in any part of the tariff schedules as they stand to-day, because of their harassing effect upon, not only the primary producers, but the people generally. I do not intend to allow the rubber companies to retain for themselves this handsome gift of £225,000 ‘if I can prevent it. If the Government adopts my suggestion,’ and reduces the rate of duty on tyres and manufactures of rubber, it will very quickly bring them to heel, and force them to pass on the relief given by the reduction of the duties. I protest against the arrogant attitude of the principal company, and will do all in my power to see that the people benefit from these remissions of taxes.
– -For once I find myself in agreement with Senator Johnston. I pointed out on a former occasion that the Government should take steps to see that relief from taxes accorded to wholesalers and retailers of ales and stouts should be passed on to the consumers; hut when the tariff schedule was presented, it was noticed that, despite the relief given to the liquor interests by the reduction of the excise duty on ale and stout by 3d. a gallon the price charged to the consumers had not been lowered. It was stated that the liquor interests had decided to put an extra ounce of beer in the mugs in. which it was supplied in hotel bars, but what means have the hundreds of thousands of consumers of measuring the mugs to be sure that the benefit of the tax remission to the brewers has been passed on to them?
Another racket is being “ put over “ the consumers of tea. ‘ Both the Lyons and Scullin Governments received revenue to the amount of £500,000 by means of the tax on tea, which was sponsored by the present Prime Minister (Mr. Lyons), yet the tea merchants have not passed on to the consumers any of the benefit of the recent remission of the tax. They contend that when the reduction was made they were contemplating an increase of the retail price of tea.. The Government should use its influence with the. merchants to induce them to lower the price to the public. Australians are among the greatest tea drinkers in the world, and the Government ought to tell the merchants plainly that the interests of the people must be considered.
Senator Johnston’s criticism regarding the rubber duties also was justified. The rubber racketeers are led by William Watt, ex-Premier of Victoria and ex-Federal Treasurer. He is chairman of directors of a combine operating from Melbourne, and finds it more profitable to be on the box seat of the rubber racketeers than on the box seat in this Parliament. -Speaking on behalf of the rubber combine, Mr. Watt recently stated that the time was not opportune to pass on to the people the recent remission of duty. I point out to the Government that the interests of the rubber combine should be made subservient to those of the 6,500,000 people in Australia. The Government should be strong enough to let Mr. Watt and the whole gang of racketeers - hoth the rubber trust and the beer combine - know that the people of this country who contribute to the Consolidated Revenue of the Commonwealth should benefit by the recent remissions of taxes.
– I know nothing about the merits of the reduction of the duty on tea and the alleged failure to pass on the benefit of the reduction to the public, and I know less about the reduction of the rubber duties. Regarding tea merchants, it was said that if some redress had not been given through the customs it would have been necessary soon for them to increase their prices. If that bo true, of course the public is getting the benefit of the remission just the same.
SenatorRae. - It is rather curious that the merchants did not mention the necessity to increase their prices until the remission of taxation was proposed.
– That is not so; I believe that the matter was previously discussed in commercial circles.
I point out thatthis bill seeks to amend the Customs Tariff 1933, an act which does not exist. A footnote to clause 1, reads-“ Act No. , 1933 “. The number of theact is not given, because, us yet, there is no Customs Tariff 1933. The position is that we donot know which of two acts will come into force first, because neither can have the force of law until assented to.
– It is intended to delay ; he third reading of this measure until after assent to the other has been given.
– That may overcome the difficulty. I merely point out that we are now considering the amendment of what is said to be a law hut which, in fact, is not a law.
Question resolved in the affirmative.
Bill read a second time.
Clause 1 agreed to.
Clause 2 (Amendment of tariff).
. -This clause reads -
The schedule to the Customs Tariff 1933 is amended as set out in the schedule to this act, and duties of customs are hereby imposed in accordance with thefirst-mentioned schedule asamended by the lust-mentioned schedule.
The last-mentioned schedule deals principally with reductions of duties on ales, spirits and beverages. A few days ago I voiced my decided objection to a reduction of the duties on alcoholic liquors as the effect would be to increase the consumption of such liquors.I go further, and say that I will do all within my power to bring about a diminution of their use. In order to test the committee, I move -
That the furtherconsideration of the clause be postponed.
Recently I have received numbers of letters and petitions from influential sections of the community, including the Women’s Christian Temperance Onion, al most important organization whose members are actuated by the highest motives; and organizations of men connected with temperance and other societies, urging the strongest opposition to any reduction of the duties on alcoholic liquors. With them, I look forward to the day when the representatives ofthe people will realize that the smaller the consumption of alcoholic liquors in any country, the better for that country. The moneyspent on drink could be put to much better use, in which case a great deal of distress and unnecessary expense on the part of governments would be avoided. Every year, governments throughout the world are put to heavy expense in maintaining institutions that care for victims of the liquor traffic. In the best interests of the community generally I trust that the committee will support my amendment.
Question - That the further consideration of the clause be postponed - put. The committee divided. (Temporary Chairman - Senator W. Carroll.)
Majority . . … 16
Question so resolved in the negative.
Clause agreed to.
Clauses 3 and 4 agreed to.
Senator E.B. JOHNSTON (Western Australia) [10.26J.- Item 331 deals with crude rubber, rubber waste, masticated rubber and powdered or reclaimed rubber. In ray second-reading speech, I referred to the attitude of certain rubber companies, and shall be glad if the Minister can give the committee any information in regard to them.
– I did not reply to all the points raised during the secondreading debate, because I thought that it would be better to do so when the individual items were reached in committee. Senator O’Halloran asked whether the Government had the power to deal with those recalcitrant people who failed to pass on to consumers the benefits derived from the remissions of duties. Some traders have passed on these benefits; others have not. It would be improper for me to say more than that the Government has not only the power to deal with such persons, hut also the will to do so. The persons whom the Government considers have not passed on the remissions have been communicated with. They will, of course, bc given an opportunity lo he heard in their own defence; butI assure the committee that the Government will not hesitate to take whatever action it deems desirable or necessary.
Schedule agreed to.
Title agreed to.
Bill reported without requests; report adopted.
The following papers were presented : -
Meat - Particulars re Australia’s quota of exports to Great Britain under the Ottawa Agreement.
Papua Act - Ordinances of 1933 -
No. 1 - Census.
No.6 - Supplementary Appropriation 1932-1933.
No. 7- Appropriation 1933-1934.
Senate adjournedat 10.32 p.m.
Cite as: Australia, Senate, Debates, 15 November 1933, viewed 22 October 2017, <http://historichansard.net/senate/1933/19331115_senate_13_142/>.