14th Parliament · 1st Session
The Senate met at 3 p.m.
The Clerk. -I have received from the President an intimation that, owing to illness, he will bo absent from the sitting of the Senate to-day. In accordance with the Standing Order, the Chairman of Committees will take the chair as Deputy President.
The Deputy President (Senator Sampson) took the chair and read prayers.
[3.1.] - I lay on the table copies of the following international agreements : -
The following papers were presented : -
Sent of Government Acceptance Act and Scat of Government ( Administration) Act - Industrial Board Ordinance - Regulations.
Excise Act - Regulations amended - Statutory Rules 1936, No. 56.
– I ask the Postmaster-
General if, in view of the very buoyant revenue of the post office, he will, when reviewing the departmental estimates, give serious consideration to a reduction of telephone charges?
– I shall certainly give very serious attention to the reduction of all postal charges; but I remind the honorable senator that other aspectsof the matter will, no doubt, be brought forward by my colleagues in Cabinet.
SenatoT PAYNE. - I. ask the Minister representing the Prime Minister if the Government will, at the earliest possible date, consult with State governments as to the possibility of establishing homes in the various States similar to the Fairbridge Farm School in Western Australia?
– In view of the controversy which is taking place on the subject of a 40-hour working week, will the Leader of the Senate instruct the department concerned to furnish the Senate with information as to the hours worked by employees in the various departments of the Common wealth ?
– I could not, offhand, promise to do that. I advise the honorable senator to submit a motion for the preparation of a return giving the informationwhich he seeks.
Export to Great Britain
asked the Minister representing the Acting Minister for Commerce, upon notice -
– The Acting Minister for Commerce supplies the following answer: -
In granting assistance for 1935 exports, the Government made it clear to the industry that no further assistance would bc rendered unless the industry itself established an organization to deal with its own problems. This organization has not yet been established, and accordingly the question of assistance for the forthcoming season has not been considered.
asked the Leader of the Government in the Senate, upon notice -
– The answers to the honorable senator’s questions are as follows: -
asked the Minister representing the Acting Minister for Commerce, upon notice -
If the report in the press be correct, that butter in Tasmania is to fall 4d. per lb. because the poll in that State for a marketing scheme failed, is there any provision for a second poll to he taken?
– The Acting Minister for Commerce has supplied the following answer : -
The poll in question was taken under the provisions of the Tasmanian Dairy Products Act 1935, and consequently it is not a matter upon which the Commonwealth can express an opinion.
In committee: Consideration resumed from the 5th May (vide page 1197).
Items 162 and 163 agreed to.
By omitting the whole item and inserting in its stead the following item: - “105. (a) Reaper threshers and harvesters n.e.i., ad valorem, British, 5 per cent.; intermediate, 35 per cent.; general, 35 per cent.
And on and after 27th March, 1936.
Stripper harvesters, each, intermediate, £13; general, £13.
Ad valorem, British, 5 per cent.; intermediate, 35 per cent.; general, 35 per cent.
And for each £1 by which the equivalent in Australian currency of £100 sterling is less than £125 at the date of exportation - an additional duty of, ad valorem, British, . 8 per cent.; intermediate, 1 per cent.; general, . 1 per cent, whichever rate returns the higher duty.”
– I move -
That the House of Representatives be requested to make the duties, sub-items (a) and (B), ad valorem, intermediate, 15 per cent. ; general, 15 per cent.
If the request is agreed to, the committee will be giving effect to the recommendations of the Tariff Board. In this instance I have selected reaper-thresher harvesters and stripper harvesters, which are among the most important and expensive agricultural implements used in primary production. Within the last few years I have visited numerous farms, where I have met wheat-growers who have said that they need new harvesters, but, owing to the depressed prices of wheat and the high prices charged for harvesters, they are unable to purchase them. They also told mc that they have been producing wheat at a loss, and that in some cases it would take the proceeds of up to one-half of oine season’s crop to purchase an up-to-date harvester. Many of these machines would be purchased by farmers if the prices were reasonable. The royal commission on the Avheat industry stated that £10,000,000 is required to provide for a complete renewal of machinery and plant used by the Australian wheat-growers, and probably one-fifth of that amount is needed in Western Australia. If the duties were reduced to 15 per cent., and the farmers of that State were in a position to purchase all the machinery and plant suggested by the royal commission, they would probably save about £300,000. The Australian wheatgrowers have to dispose of their product in the world’s markets, and, even if the estimated saving is not as great as I have indicated, they should be able to purchase their machinery at prices which compare favorably with those paid by their competitors who are selling in the same market. Yesterday the PostmasterGeneral (Senator A. J. Mclachlan) quoted at length the Tariff Board’s reports in opposition to my request, without mentioning that the board had recommended that a duty of 15 per cent, under the intermediate and general tariffs was fair and reasonable. Everything the Minister quoted from the board’s reports is consistent with what I have contended. The Senate should agree to these very important recommendations of the Tariff Board, particularly when it is noted that in another part of its report it stated that if these machines were admitted from overseas free of duty, the natural protection accruing from exchange, freight, insurance and other charges, would amount to not less than 65 per cent. I am of the opinion that such protection would be more than adequate for this or any other efficient Australian industry. However, I have not moved for the elimination of the duty, which I personally would like to see effected; I think it is far more probable that the Senate will accept a reduction to 15 per cent, as recommended by the Tariff Board. I point out also that the value of these imports is not very great ; certainly they have no important bearing on the figures which the Minister has quoted in regard to our adverse trade balances with the United States of America and Canada. The Overseas Bulletin, page 2S3, shows that our total importations of harvesters in 1933-34 were valued at £150, and in the following year at £36. Considering that these importations were portions of machines and not complete machines, we cannot go wrong if we accept the recommendation made by the Tariff Board, in order to assist the wheat-growers who are obliged to sell their products overseas. More than any other section of the community, they bore the brunt of the hard times of the last five years, and their machinery and plant are in such a shocking condition to-day that the royal commission which investigated’ the wheat industry estimated that no less than £10,000,000 would be required for their reconditioning or replacement. In these circumstances I hope the committee will accept the recommendations of the board.
– Last evening I indicated the reasons which actuated the Government in departing from the recommendations of the Tariff Board in respect of the general tariff on this item. I think the reasons advanced appealed to honorable senators. Regarding the’ intermediate tariff, I again assure’ the Senate that the Government’s action has been taken in the interests of Australia as a whole, and as a” preliminary to theconference on trade matters which will shortly take place between our representative’s and those of Canada. I do not ‘know whether I made it sufficientlyclear that the Canadian Trade Commissioner has just leftfor Canada, with a view to advising the Minister who’ will accompany him back to Australia in order’ to conduct negotiations with representativesof ‘the Commonwealth. This item; ‘ and’ anumber of other items, mustbe considered in relation to’ the impending conference, because in ‘ respect of all of them Canada will ‘ be interested ‘ during the forthcoming negotiations. The action of the Government ‘in respect of theseduties has been taken only with a view to making better trade arrangements between”Canada.’ and Australia. I repeat that they will be reviewed’ at the forthcoming conference; there is no doubt that oh these, and other items yet to be considered, and on the items inthis division consideredlast night, “Canada will make some requests.
In1927-28 . importations . of reaper threshers and harvesters from Canada were, valued at£78,,000, and those from the United States pf America at £56,000, or a total value of . approximately £135,000. In respect, of these items, the Tariff Board said -
Australian prices are about equal to. the prices at . which imported machines would be sold if they were free of al! duty. …
In thesecircumstances,the Australian farmer is not suffering any disadvantage as the result of therates now proposed. Honorable senators will find confirmation of the statements I have just made on page 18 of the Tariff Board’s report-
Whatever may be the special merits of individual machines, the broad fact remains that the.,Australian manufacturers are supplying farmers with harvesters that are eminently suitable for local conditions, at prices which are below the estimated selling, prices of dutyfree imported machines thatwould be competitive though not strictly comparable.
I put it to honorable senators that, on the grounds I indicated last night in respect of our . tradewith the United States of America, and for the reasons I have just endeavoured to clarify with regard to imports from Canada,’ they should” endorse the action taken. by the Government; .. I again assure them that these items will be among the matters which willbe discussed at the forthcom- ing conference between representatives of the governments of ‘ Canada’ and Australia:
– The Opposition is notinclined to encourage a’ procedure which will mean thaton all the requests tobe submitted by SenatorJohnston we shall” have to repeatthe’ di’scu’ssidri andvote of yesterday. Wediscussed very fully yesterday the principleinvolved in this request, and there is no justincatio’n-unless it be merely a method of wasting time-for the committeetogo through the same agonizing process over and overagain. I have no comment to offer on the proposal now beforethe committee..
. -Owing to circumstances beyond my control, I was absent from the chamber yesterday; but I have since studied the discussionand the Minister’s remarks oil itern 161, covering agricultural machinery and implements. A departure from the recommendation of the Tariff Boardin respect of the duties on agricultural machinery isa matter of prime importance to the membersof the Country party, who have consistently advocated the implementing” of the board’s recommendations. I do not say that every member of the Country party has, at all times, stood for the letter of the Board’s recommendations, for I reflect that, in connexion with the duties on tobacco, some members of the party, including myself, did not accept its recommendation. In that instance, new factors had arisen since the publication of the board’s report, and we supported the Government’s action in raising the duty on tobacco by 6d. per lb., contrary ro the board’s recommendation. In respect of the item before the committee, we are told that two factors have influenced the Government - the proposed trade treaty with Canada, and the desire to rectify the adverse trade balance with the United States of America. I should like to know whether I am correct in assuming that the Postmaster-General’s statement means that the Government desires that action in respect of these items shall be deferred until the position in relation to trade with Canada and the United States of America has been clarified. The matter is of vital importance to the farming community.
– The duties will operate, but they will be subject to review after the conference.
– I should like to know how any alteration of the duties now could possibly prejudice the discussions?
– If the honorable senator would apply to this subject ordinary commercial logic, he would realize that it is not wise to create a new factor on the eve of a complete survey of the whole field. Speaking for myself, I am prepared to accept the Government’s assurance that these duties will be reviewed after the termination of negotiations with Canada and the United States of America.
– Yesterday, the committee discussed fully the duties on agricultural implements, and a test vote was taken. The decision then arrived at was, I think, indicative of the views of honorable senators in relation to agricultural machinery generally. I should like to know how acceptance of Senator Johnston’s request could possibly prejudice Australia in the pending negotiations with Canada and the United States of America. It seems to me that, irrespective of the duties in force at the time of the conference, the whole position will be thrown open to discussion as if the duties did not exist.
– That is the position in theory, but not in practice.
– If the request be accepted, Australia will have nothing to give.
– Should it be found impossible to enter into trade arrangements with the countries mentioned, I take it that a further opportunity to alter the duties would not arise until another tariff schedule was under discussion.
– The Government undertakes that the duties will be reviewed after the conference.
– I cannot see that the acceptance of the request would make any difference to the negotiations, because the representatives of Canadian and American manufacturers know what is in the minds of honorable senators. We have now an opportunity to express our views on this subject, and to make a small contribution towards a reduction of the cost of primary production. It may be that by reducing railway and shipping freights some relief may be obtained, and that an aggregation of small benefits may result in a substantial reduction of costs; but generally, it is true that, except by way of a lowering of duties no substantial reduction of the cost of primary production is possible. Unhappily there is no immediate prospect of any substantial increase of the prices received for our export commodities. Previous reductions of duties on agricultural implements have been followed almost immediately by lower prices for locally produced machines. Notwithstanding lower manufacturing costs, resulting from reduced railway freights, lower wages and cheaper raw materials, the prices of agricultural implements have not fallen commensurately. Present prices are from 25 per cent, to 50 per cent, higher than they were 20 years ago.
– Prices have risen during the last two years.
– The increased prices charged for agricultural implements have not been offset by better returns from the primary products which we have exported. Any reduction of production costs must have a beneficial effect on Australian primary industries. By agreeing to the request we can make a contribution towards lower production costs, without in any away prejudicing the pending negotiations with Canada. In this instance, I refer particularly to Canada. The figures reveal clearly that over the last twelve months there have been few, if any, imports of farming machinery from the United States of America or Canada. If the committee carries this request, the Australian manufacturers will still be left with a substantial margin of profit, while, at the same time, some contribution will be made towards a reduction of the costs of primary production.
.- Item 161, upon which the- Senate voted last night, was of comparatively minor importance. As a matter of fact, the total value of the imports covered by it did not exceed £1,000, so that the item was not of much consequence. Senator Herbert Hays has pointed out correctly that imports of machinery from Canada and the United States of America have fallen away considerably. Of the machines covered by the item now before the committee, there are no importations, because the International Harvester Company has arranged for the manufacture of its reaper-threshers in Australia, and the Massey Harris Company has combined with H. V. McKay and Company for a similar purpose.
– “Would not the establishment of the International Harvester Company in Australia bc of advantage to the Commonwealth ?
– I am not suggesting otherwise. I desire to emphasize, however, that this enterprise is now, in conjunction with an Australian company, manufacturing agricultural implements in Australia. This matter, which at one time was of great importance, has now become one of relatively minor importance. In 1934, the total imports into Australia of farm machinery of all descriptions, including agricultural, pastoral and dairying implements, were valued at only £284,000, whereas the value of implements manufactured in Australia was £1,767,000. In contrast with those figures, the imports in 1927 were as high as £973,000, and the value of the Australian manufactures, £3,819,000. The position to-day is that our requirements are being manufactured in the Commonwealth; but, as Senator Herbert Hays has truthfully pointed our, the cost of these machines is too high. As I endeavoured to show last night, it cost £226 to sell £700 worth of agricultural machinery. In the face of those figures, obviously something is wrong in our methods of distribution. It is. a pity that competition is non-existent; it has been definitely eliminated.
– There would have to be a considerable volume of foreign competition to affect the present prices of Australian machinery.
– I have already pointed out that the International Harvester Company is having its machinery manufactured in Australia, while the Massey Harris Company has combined with H. V. McKay and Company. I do not use the term “ combined “ in any sense of disparagement, but these arrangements have tended to abolish competition.
– If there is no competition, why is it necessary for an enterprise to spend so much money in putting its implements on the market?
– That excessive expenditure, I believe, induced the Tariff Board to report as it did.
– Mitchell and Company Proprietary Limited is in competition with H. V. McKay and Company.
– Yes; in addition to Mitchell and Company Proprietary Limited, there are Shearer and Sons Limited, T. Robinson and Company Proprietary Limited, and quite a number of other manufacturers; but the competition of the International Harvester Company has ceased. I would like to see a reduction of the cost of agricultural machinery to the farmers, without affecting the profits made by the Australian manufacturers. In my opinion, this can be effected very largely-
– By dismissing the salesmen ?
– If an expenditure of £266 was required to sell £700 worth of machinery, I fail to see that any harm would be done by dismissing the salesmen.
– In fixing the rate of duty necessary to protect the industry under discussion, has the Tariff Board made any provision to protect the manufacturer, when the Arbitration Court increases wages or reduces working hours, after the board has made its report? I am aware that these matters entened into the discussion in connexion with the earlier reports of the Tariff Board; hut in view of the recent decisions made in the Arbitration Court, and the prospect of a further reduction of the hours of labour, I ask the Minister to explain the position.
– The Tariff Board does not take into consideration future increases of the wages paid by a particular industry; it bases its report on the conditions ruling at the time. On the 1st March, 1935, wages in the agricultural machinery industry advanced by 2s. a week
On a cost-of-living adjustment, and from the 1st March, 1936, the Arbitration Court reduced working hours in factories from 48 to 46 a week, with no reduction of wages. These two factors increased the costs of the industry by nearly 3 per cent., and the advances of prices, to which reference has been made, did not recoup the manufacturers for that increase. The cost of workmen’s compensation during the same year increased by 106 per cent., meaning an additional outlay to one firm alone of £2,000 per annum. Advice received from Toronto discloses that the Massey Harris Company has made a general increase of retail prices by 3.48 per cent. The increase of manufacturers’ prices in the United States of America is 5.28 per cent. Therefore, I contend that Australian manufacturers are treating their clients remarkably well.
Giving the 1911 prices for machinery of this class an index figure of 1,000, the comparative costs in recent years have been as follows: -
The increase of costs in 1936 was responsible for the index figure rising to 1212, which is smaller than the figure for 1933 and only slightly larger than that for 1934. Those are the latest statistics supplied by the department.
– This afternoon, in reply to Senator Johnston, the Minister gave the committee an assurance that the forthcoming trade conference with Canada would deal with this matter. The Minister emphasized that, in this connexion, Australia had a lever to obtain a more advantageous treaty with that dominion. But now he inconsistently defends the increased charges made by the machinery manufacturers. If, when negotiating the trade treaty with Canada, he endeavours to give effect to both of his assurances, he will be placed in a difficult position. I doubt whether he can use the lever, as he expressed it, to obtain those favorable concessions, and at the same time support the Australian manufacturing industry, upon ‘ some phases of whichthe Tariff Board has reported adversely. Last night the Minister said that the merchants had not taken advantage of the excessive protection which has been given to them. I shall cite a case in connexion with sales tax in 1932; Senator Poll referred to it yesterday. The sales tax had been removed from farming requisites, and that was of great advantage to the man on the land. I approve the remission of sales tax on all farm machinery and requisites in order that our primary producers may reduce their costs of production. In 1932 when the Government remitted the sales tax on these goods a farmer whom I know very well, had entered into negotiations for the purchase of a reaper-thresher for £168. Following the remission of the tax he was able to purchase the machine for £158, the difference representing sales tax of 6 per cent, remitted. In the following year the firm which sold that machine to him priced reaper-threshers at £164, and in its schedule stated that in the previous year the price was £168, no mention whatever being made of the reduction which had been made. Farmers were given to understand that owing to the remission of sales tax, the price had been reduced from £168 to £164. The farmer who had purchased a machine in the preceding year for £158 and was thinking about purchasing another, abruptly terminated, his negotiations and indignantly ordered the representative of the machinery firm off his property. That was a concrete instance of Australian manufacturers taking full advantage of the protection given to them. Last night, when I was in the chair, Senators Leckie and Collings, the arch priests of protection in this chamber, challenged a statement which I had made earlier in the debate that the cost to the community of protecting our secondary industries amounted to £5 a head of the population. I have since taken the trouble to investigate the matter further, and I find the following comment on page 180 of The Greater Illusion, a critical review of Australia’s fiscal policy: -
The subsidy to the protected industries in the various States by the excess costs borne by the people of theCommonwealth in the form of higher prices for their goods than the prices at which similar goods could be sold, if imported duty free, were estimated by the Tariff Committee as follows: -
These are official figures and cannot be refuted.
During the discussion yesterday it was stated that the cost of the financial assistance given to primary producers was also substantial and represented a definite burden on the community. This assistance, I would point out, was given first in 1929, and it was definitely justified by the higher prices which primary producers, who sell their surplus products in open competition in the world’s markets, were forced to pay for their requisites. I agree that it is an advantage to have in this, country established secondary industries to supply pur requirements in manufactured goods and provide a wider home market for primary, products; but the nation cannot expect to make headway if primary producers are unduly handi capped by excessive tariffs on their requirements. The Australian manufacturers have almost a monopoly of the local market for the sale of farm machinery, and the prices which they charge press heavily on primary producers.
– ‘What is the honorable senator’s estimate of the protection given to our secondary industries?
– The industry affected by this item enjoys protection of 35 per cent., plus 25 per cent, exchange, less 12½ per cent., or a total of 47½ per cent., to which must be added 40 per cent, primage and freight charges, making a total protection of nearly 100 per cent. I am not prejudiced against Australian manufacturers of farm implements. I admitted last night that they produce good machinery. My principal objection is that they take full advantage of the protection given to them and charge our farmers unnecessarily high prices for their requirements. If these sub-items were amended on the lines indicated by Senator Johnston, it would be a welcome gesture to the Canadian delegation which will visit Australia shortly to negotiate a revision of the trade treaty with the sister dominion, and we should be justified in expecting Canada to do something for us.
.- As the main item was fully discussed yesterday I should not have intervened in the discussion, this afternoon but for the statement made by Senator . Gibson, and repeated by Senator Badman, that the cost to the community of protection given to Australian . manufacturers totals £30,000,000 annually and represents a burden of £5 a head on every individual in the community. I. do not know ifthe Tariff Board made, such a ridiculous statement, but I presume that it did, since the honorable gentlemen mentioned used these figures on the authority of that body.
– The board did not say that.
– Inorder to refute the statement that the’ whole of the Customs collections definitely benefit Australian manufacturers, I direct the attention of honorable senators to the following list of imports, and invite them to point to anyitem . in it that benefits directly. , any manufacturers in Australia: -
These figures are taken from the Commonwealth Year Booh for 1934 in which year imports totalled £60,000,000. In the following year they rose to £70,000,000, and it is believed that this year they will reach £80,000,000.We have had the statement of the Minister for Trade and Customs (Mr. White) that of the additional £10,000,000 of imports last year, less than £2,000,000 represented goods competitive with’ Australian production. I admit that of last year’s imports of cotton and linen, amounting to £4,390,262, not more than £250,000 or £300,000 would represent textiles in which Australian manufacturers are interested and which therefore would be competitive. Out of total imports of £60,000,000 in 1934, at least another £5,000,000 worth of imports may be regarded as revenue-producing, so that dutiable imports, which would benefit Australian manufacturers, would total not more than £10,000,000. These figures show that, on the face of it, the statement by the Tariff Board was ridiculous, and I am. unable to understand why any honorable senator should repeat it.
– Senator. Johnston, who stated that an enormous saving . could be effected by Australian farmers, if the duties on imported agricultural implements were reduced to 15 per cent, should peruse the Tariff Board’s report of the 19th August, 1925, in which the following table appeared:-
– The average life given appears fair.
– I cannot speak from experience, but I think that it is. Senator Johnston also said that if the duties were reduced the farmers of Western Australia would be able to replace the whole of their machinery and save thousands of pounds ; but it is absurd to suggest that they would renew the whole of their plant at the same time.
- Senator Johnston said that in many instances whole plants should be renewed,
– The figures quoted by Senator Johnston are misleading.
– Unfortunately the users of agricultural implements have to pay exorbitant prices for duplicate parts.
– Australian manufacturers are able to supply duplicate parts at short notice and at a reasonable price. Some years ago my father-in-law, who is a farmer, purchased an imported implement. When a . duplicate part was required it had to be obtained from Chicago, and the freight from Brisbane to Melbourne was higher than the freight from Chicago to Brisbane:
– The Scullin Government prohibited the importation of many commodities.
– Last night- the Leader of the Senate (Senator Pearce), said that one of the several alternatives which’ might have to be adopted to correct the adverse trade balance with the United States of America, Was the prohibition ofimports. Thetable have quoted shows that the annual cost to each farmer over a period of 20 years is about £3.3 per annum. If farmers’ requirements were imported from the United States of America. primary producers might save a few pounds ; but assuming that the saving over a period of 20 years was £100 the annual saving would be only £5.
– Does the honorable senator say that the average life of an agricultural machine is twenty years?
– I have not had practical experience in the use of these machines; I am quoting the Tariff Board’s figures. A good deal depends upon the nature of the country on which it is used and the way in which it is protected from the weather. The members of the Country party say that they do not wish to do anything to increase unemployment; but if American implements are imported into Australia the demand for implements manufactured in Australia must decrease. The Tariff Board also stated: -
On an average the Australian-made implements are 12½ per cent, higher in price than the landed cost, excluding duty, of imported implements. The farmer may, therefore, be said to be carrying a burden of 12½ per cent, on agricultural implements. Measured in terms of bushels of wheat, this burden is equal to . 292 of a penny per bushel of wheat produced. It should be clearly understood, however, that the agricultural implement maker does not receive the full advantage of the 12½ per cent., for owing to the operation of the income tax law the Australian manufacturer pays a higher tax rate than the representatives of overseas firms, with the result that the value of the tariff protection is reduced by 0 per cent. After allowing for this C per cent., the Australian implement maker is seen to be receiving a benefit of only6½ per cent, through the tariff, and the amout thus involved is too small to be taken into account - it is about . 15 of a penny per bushel, and probably amounts to 70/6d. per year to the average wheat-farmer. Before charging even this small amount as a “ burden due to the tariff “. however, there should be taken into consideration the fact that Australian-made implements are sold cheaper in this country than imported implements in New Zealind or Argentine; so it is only reasonable to assume that if there were no implement industry here the farmer would also be paying a higher price for implements., It may safely be said, therefore, that the tariff on agricultural implements is imposing no burden on the primary producer.
The members of the Labour party are strongly opposed to the exploitation of the farmers by the imposition of unduly heavy charges. If the farmers are being penalized in that way the Tariff Board should be instructed under paragraph 1 h of section 15 of the Tariff Board Act to hold a full inquiry into the profits made and the prices charged by the manufacturers.
– Are not the selling prices too high?
– As I am not a farmer, I cannot say. The Tariff Board has stated that the prices of agricultural machinery manufactured in Australia arc lower than those charged in New Zealand and Argentina. Other honorable senators have stated, no doubt sincerely, that the prices are higher in Australia than in any other country.
– I suggested that the duty should be lowered if the forthcoming negotiations with Canada proved unsuccessful.
– Those negotiations are a matter for future consideration; this afternoon the honorable senator must consider this matter in the light of existing conditions.
– We intend to defer dealing with the matter.
– I have stated the views of the Opposition; we are opposed to exploitation, and the making of excessive profits ; but we believe that there is a better way to deal with such abuses than by adopting a course which would involve the displacing of many workers from employment, as would certainly result if importations of these machines from the United States of America were encouraged. For these reasons, it would be unwise to support Senator Johnston’s request.
Question - That the request (Senator E. B. Johnston’s) be agreed to - put. The committee divided. (Temporary Chairman - Senator J. B. Hayes.)
Question so resolved in the negative.
Item agreed to.
Item 166 agreed to.
By omitting the whole item and inserting in its stead the following item: - “ 167. Metal parts of reaper threshers, stripper harvesters, strippers, and harvesters, n.e.i. - ad val., British, 5 per cent.; per1b., intermediate, 2d.; general, 2d.
And for each£1 by which the equivalent in Australian currency of £100 sterling is less than£ 125 at the date of exportation - An additional duty of - ad. val., British, 8 per cent.
– I move -
That the Bouse of Representatives he requested to make the duties, ad valorem - intermediate, 15 par cent.; general, 15 per cent.; and omit the specific duties.
The Tariff Board has dealt very fully with the abnormal expense incurred by farmers in replacing worn or broken parts. The committee has indicated that it will not reduce the duty on agricultural machines. I emphasize that a great many farmers possess machines for which duplicate parts are constantly required. Senator Brown spoke of the long life of these machines, but I assure him that many farmers have to bear a very big expense for replacements year after year, because most of theseparts have to be replaced frequently.
– Cannot duplicate parts be made here?
– The farmer is advised to use duplicate parts obtained from the vendor of the machine. I suggest that a great deal more information in regard to the present condition of the agricultural industry is supplied in the Tariff Board’s report of 1934, page 22, than in the report read by Senator Brown which was dated 1925. In the later report, the board dealt with changes which have occurred since 1925. For this reason, I ask honorable senators to be guided in this matter by the 1934 report, in which the board recommended the reduction of duties, which I now ask the committee to approve. The board pointed out -
Many complaints were made at the inquiry regarding the high prices of parts.
Year after year replacement of parts constitutes one of the biggest items of cost to the farm, particularly in districts not yet thoroughly settled, and where, on the partly cleared land with stumps projecting, machines wear out or break more quickly. The board continued -
It seems to the board, however, that the inevitably high costs of distribution are of more consequence that any other factor in keeping the prices high.
Whatever the influence of this factor might be, the fact remains that these prices are altogether out of proportion to the cost of a new machine. The board said further -
A purchaser is inclined to look at a small repair part of an implement, assess its cost as a workshop product, and wonder why the price he has to pay for it is so high. ‘ If it is an imported part, he blames the duty, and if it is a locally made part,he is inclined also to blame the duty that permits the local manufacturer to charge such a high price. During the inquiry at Perth, one witness handed to the board a bolt - which, incidentally, was part of a tractor and not part of an agricultural implement - of wihich the retail price was 4s. 6d. As an engineering product, the value of the bolt in the country of origin would not have been more than6d., and the duty at the highest rate not more than 4d. It is quite evident that there were other causes for the high price of 4s. 6d.
– It is hard to make a comparison in this matter with the cost of tractor parts, the prices of which are notoriously high.
– That is so ; but the further the farmer is situated from the factory, the higher becomes the cost of the duplicate parts for all classes of machines. The board dealt very fully with this matter, and I am sorry that I shall not have time to quote its remarks fully. On page 23, the board, dealing with the tremendous cost of parts, as compared with the prices- of- the .complete; machines, £aid-r ‘
The range of ‘prices was from the equiva lent of 6d. ‘per lb., to 2s. lOd. per lb!,- and the average- prices per lb. for different implements were as in the. following table, which also shows the Victorian cash price per lb. to’ the complete implement - ‘ ‘
The Victorian cash price . is considerably lower than the cash prices ruling in the outer States.
– The reduction of these duties would affect only the price of imported parts, whilst the price of parts for Australian-made machines would remain unaffected.
– That is not correct. I contend that if the price of the imported parts were reduced, the price of the locally manufactured article would consequentially be reduced.
– But the parts are not interchangeable.
– Not always. . After a careful inquiry, the board drew attention to the excessive cost of parts, and recommended a considerable reduction of the duties on them as one means by which relief could be given to users of these machines. The duty on these parts is a deep-seated cause of dissatisfaction among agriculturists. I hope that the . committee will agree to the request.
– The duty of 2d. per lb. under the intermediate and general tariffs was in force in 1928. Later the Scullin Government continued the duty .at. that rate. The Tariff Board has definitely indicated that’ the duty on imported spare parts for agricultural implements is not likely to have any material effect on the price of similar parts ‘made in ‘Australia. I ‘point out that parts’ which the Minister is’ convinced cannot be -produced in this- country “ can ‘-be admitted- free. The duty’ must be retained1 as a corollary of what we have already ‘done. ‘ “ ‘
– I do not understand Senator Johnston’s out-look on tariff matters, generally, but I can understand even less his views ih’ regard to spare parts for agricultural implements. .1 had ‘26 years experience in one . of the most highly mechanized industries in the Commonwealth, at a time when all machinery used was imported from. America, there being then no ..local manufacture of. them. From time to time great, difficulty was experienced in obtaining spare .parts quickly when they were required, notwithstanding that in each of the capital cities spare par ts were obtainable. The .machines were sold on a royalty basis; no Australian manufacturer could buy one outright. For a time the cost of spare parts was reasonable, but, later, manufacturers in the United Kingdom made similar machines, and some factory owners in Queensland, and probably in the other States also, decided to purchase British machines in preference to those of American origin^ Immediately that happened, the makers of the American machines refused to supply spare parts to any one who had a British machine in his factory. British machines were not subject to royalty payments. Senator Badman has admitted the excellent quality of the agricultural implements made in Australia. Parts of such machines are much more easily obtainable than are parts for imported machines. It must be remembered that whereas in respect of Australian machines, the wages paid go- to our workmen, and the- profits to our manufacturers, in respect of imported machines the profits and -the wages benefit the people of another . country. Senator Johnston and those» who support his view are most illogical. Although they seek a reduction , of duties, which might tend to increase importations, they say; that they do not desire that more machines shall be imported. They declare that. their purpose is- to make- Australian manufacturers reduce -their prices; they profess to believe that lower duties will not increase importations. Obviously, those who argue in that way do riot believe what they sayIf the Australian’ manufacturers of either parts or machines reduce ‘prices, it .must be because they- arc afraid, that otherwise, machines or partswill be imported.I realize that it is idle for the Opposition to repeatwhat it has already said, but I desire to emphasize that the Opposition will not, in any circumstanceswhatever, agree to lower duties which place the Australian manufacturer in the position of a prisoner in the dock. Instead, of the person on trial being the localmanufacturer, as is now the case, the other fellow should be on trial. I hope that the committee will not agree to the request.
.- The subject before the committee is of even greater importancethan the importation of harvesters. The parts covered by this item are not for replacements of machines now being imported, but are for machines which came here before the manufacture of agricultural machinery was undertaken in this country. Senator Brown . has told us that the life of a harvester is twenty years. A man who is hard up and consequently not able, to buy new machines, may require parts for his old machines. . He should not be penalized. These parts are not made in. Australia. .
– That ismy point.
– Throughout Australia there are many agricultural machines which have notbeen, made in this country. If the higher duties are retained, the primary producers who bought those machines,’’ in some cases many years ago, will be perialized.Senator Johnston’s desire is to help the poor man who is seeking to carry on with old machines because he cannot afford to buy new ones.”
– The duty in the schedule was inforce in 1928.
– That may be ; but ever since that year efforts to alter it have been made.
SenatorCOLLINGS-Parts for those old machines can be made by almost any blacksmith.
– The reason why spare parts for agricultural implements are so costly is that spares aire not carried in. country centres, and must therefore be. obtained from the capital, cities. Whena machine breaks, down, a. new part. has to be ordered from, the city. As prompt delivery is of prime importance, theorder is usually sent by telephone, or, telegram and the parts are forwarded by either post or passenger ‘train. The cheaper the cost of replacements,; the better for the hard-up man in the Mallee, and the man: with the old machinery. A reduction, of the duty would not benefit the man who has. modern machines. The amount involved in Senator Johnston’s request is under £3,000 per annum, and I hope that the Minister will accept the request.
. - Surely those who oppose the request will not be so illogical as to. penalize the man. who purchased machines made in another country some years ago when similar machines were not made in Australia. Because of the high cost of the necessary dies it would not pay Australian manufacturers to make these parts and therefore the parts covered by. this item do not enter into competition with parts locally made. An importing firm recently supplied toe with . figures showing that it imported; from the United States of America , machine parts valued at, £1,000, butbefpre it could make any profit from their sale, it had to pay duty amounting to £1,240. It is time thatthe Government recognized the necessity for admitting free of duty machine . parts . which are not , ‘made’ in Australia and do not compete with goods of localmanufacture.
.-I would like, tohear the explanation of. the Minister in charge of the’ bill (Senator, A.J. McLachlan) , in regard to this matter, be6auseitappears to me to be a mostimportant point. which has not received the consideration it deserves. , The purchase of new capital goods from the United States and Canada is not involved; it is simply.a matterof buying, replacement parts to enable the capital goods whichhave already beenpurchased from the United States by Australian agriculturists to be given an extended economic operation .
– The Schedule does not make that plain.
SenatorHARDY-Somehonorable senatorshave stated’that the . parts in question are manfactured only in America andCanada,andhavenever been duplicated. in Australia.Is that correct?Anddoestheitemrelatesimply to replacements of parts on machines, many of which were purchased some years ago? If that is so, I shall not hesitate to support the request. But if the proposal is designed to facilitate the importation of complete machines, which will compete with Australian manufacturers, I shall, in view of the adverse trade balance with the United States and Canada, oppose it. Having regard to the statements made by certain honorable senators who should be well informed upon the subject, because they come from wheat areas, I should like to hear the Minister’s explanation.
– In order to clarify the position I shall cite figures showing the importations of these spare parts of agricultural machinery during the last few years. For portion of this period the importations were prohibited, unless the consent of the Minister for Trade and Customs was obtained.
– There was never a prohibition against the importation of spare parts.
– Importation of metal parts for reapers, strippers, threshers, and harvesters was prohibited from the 4th April, 1900, to the 31st August, 1932, entry being allowed only with the consent of the Minister for. Trade and Customs. In 1931-32 the value of the spare parts from the United States and Canada was £1,136; in 1932-33 a small quantitywas purchased from the United Kingdom; £843 worth from the United States and none from Canada. After the prohibition was lifted, Canada sent to us £221 worth of spare parts, New Zealand £5 worth, and the United States £791 worth in 1933-34. The value of importations from Canada in 1934-35 was £180, and from the United States £863. For the first six months of the current financial year, the total value of importations was £921. I assume that a considerable proportion of those parts has been purchased for replacements on machines which are being used. But both the Customs Department and the Tariff Board consider that the importation free of duty of spare parts would be used by the agents for imported machines to increase their competition with the Australian-made machines. If these spare parts entered Australia free of duty a tremendous inducement would be offered to the farmer to give the representatives of overseas businesses orders for new machinery. That, of course, would be disadvantageous to the local manufacturers.
– That is why the Government is penalizing the owner of an imported machine.
– The penalty inflicted upon him cannot be so enormous in view of the limited importations during the last few years. Even in prosperous times their value did not exceed £8,000; nearly all of them came from Canada and the United States of America. Some of those spare parts, I have to confess to Senator Hardy, are used on machines already being operated in Australia; but local manufacturers view with concern the possibility of the importation of spare parts increasing after a reduction of the duty. For that reason the Government, pursuant to its policy, has adopted the duty of 2d. per1b. which was in existence in 1928.
– The small importation of parts suggests that there cannot be many imported machines still in use by. agriculturists.
– No; in 1929 about £8,000 worth of metal parts was imported. It would be very dangerous to interfere with the duty if it is desired to preserve the market for Australian manufacturers.
– What course will the Government take if a new agreement is negotiated with Canada?
– It may have to grant some concession to the Canadian manufacturer ; but under existing conditions I am not prepared to do anything that will help the United States of America.
– Are some of those metal parts now being manufactured in Australia under licence?
– During the dinner hour I shall take the opportunity to inquire into that matter, but I emphasize to honorable senators, and to primary producers generally, that if this market be given to the United States cf
America and exploitation begins, the Government has the machinery to deal with the situation. The most economic course from the viewpoint of the agriculturist is to establish efficient manufacture in Australia; this can be achieved only by assuring to the Australian manufacturer the home market. A big economic unit must be established In order to compete successfully with the manufacturers of other countries. .
– In this instance, a monopoly has been established.
– It is the responsibility of the Australian manufacturer to reduce his prices. When the honorable senator reads what tho Tariff Board has said-
– The Tariff Board has recommended the alteration.
– If we open the gate to permit an influx of overseas articles an injury will be done to the Australian manufacturer. Probably his fears in this respect are exaggerated. I. suggest, however, that we are considering a trivial matter. In my opinion the proposal of the Government will not impose any burden upon the primary producer.
– I understand that honorable senators have been invited by the High Commissioner for the United Kingdom (Sir Geoffrey Whiskard) to attend a social function between 5 and 7 p.m. I have consulted with them in this connexion and I believe that it will meet the convenience of the committee if the sitting be suspended till 8 p.m.
Sitting suspended from 5.1 till 8 p.m.
.- Senator Johnston’s logic does not appeal to me.
– I rise to order. I direct attention to the fact that the press gallery is absolutely empty, whilst this item, which is of vital importance to our primary producers, is being considered.
– That is not a point of order.
– Apparently the purpose of the amendment is to reward the importing interests for the high prices which they have been charging farmers for spare parts on obsolete machines. It has been stated that 4s. 6d. was charged for a bolt that was worth 4d. or 6d. The duty upon it at 2d. per lb. would be less than Id.; so the effect of the amendment would be to relieve the importing interests of the duty in order that farmers might be able to buy that bolt for 4s. 5d., instead of 4s. 6d.
.- I am very much afraid that Senator Leckie’s logic is at fault. He says that the effect of the amendment is to reward the importing interests for their exploitation of primary producers. For a long time purchasers of imported farm machinery have been penalized, because spare parts have not been available in Australia. The PostmasterGeneral has told us that this is a small matter, and that spare parts are now being made locally. That is true of the Massey-Harris machine, which is now being manufactured by H. V.
McKay and Company, but that machine has been so altered, that Australian parts will not fit, and the purchaser is forced to buy imported parts, if he happens to own a machine that was imported prior to the combination of the two firms. Since the inquiry by the Tariff Board, the International Harvester Company has also entered into an agreement with a Melbourne company to manufacture its machines in Australia, so neither make of machines is now being imported. Consequently, farmers who cannot afford to buy up-to-date, machines have to rely entirely upon replacements to keep their plant in operation. I hope that the Minister will give this matter further consideration. Of my own knowledge the only reaper threshers that have been imported into this country are the Massey Harris and International Harvester Company’s machines, and both are now being manufactured in Australia. .
– Can the honorable senator say how many farmers need machinery parts from overseas. .
– I should say that thousands of farmers are in need of spare parts for imported machines.
– Then how does the honorable senator account for the low imports last year - only £700 ?
– In .good seasons imports were as high as £S,000.
– The Minister has made several references to the report of the Tariff Board dealing with agricultural machinery and parts, but he has not told us that the board recommended the duties which I am now asking the committee to insert in this item. The Tariff Board, which is highly esteemed as an independent tribunal, stated in its report -
The board has recommended the imposition of dirty on implements which it considers, will tend to guard against undue increases in prices of Australian implements. This will do somewhat ineffective if- a high duty is maintained on parts, for farmers purchasing a now implement invariably consider the probable price of duplicates when arriving at a decision.’ The’ board considers, therefore, that the duty on parts should be at the ad valorem rates it has recommended on complete implements. If the duty on complete’ implements is not unduly high, the local’ manufacturers, in order to retain the market, will not only have to maintain competitive prices for implements, but also sec that parts prices are not unduly high. It is through the duty on the complete implements more than through the duty on parts that local parts prices can be controlled.
As a practical farmer I know that expenditure on duplicate parts is an important item. The Minister has advanced several reasons for rejecting the amendment but I contend that unless we take advantage of this opportunity, and adopt the recommendations of the Tariff Board, our primary producers will be penalized. The Minister is invariably courteous. I cannot say the same for one of his colleagues. I listened attentively to what the PostmasterGeneral had to say this evening, but he did not convince me. I, therefore, hope that the committee will accept my amendment. The Minister is wrong in asking the committee to act other than in accordance with the recommendation of the Tariff Board. I should like to hear the views of some of the members of the Country party in this chamber on this item, because when they are appealing to the electors they always advocate a reduction of the duties on agricultural machinery and parts. On one item discussed to-day I and several other genuine supporters of the primary producers endeavoured to obtain a. reduction of duties, but Senator Badman and I were the only members of the Country party who supported the request. What is the use of the primary producers forming organizations and paying subscription fees if, when items such as this are under discussion, Senator Badman, Senator Gibson,, Senator Carroll, and I are the only members of the Country party to support reduced duties? Are only four of the seven members of the Country party in this chamber willing to protect the interests of the primary producers by assisting them to obtain their machinery and parts at a reasonable price ?
– The honorable senator’s time has expired..
The request moved by Senator Johnston appears to be- in conformity with, not only the recommendation of the board, but also its supporting comments.. On page 22 of the board’s report on agricultural implements, dated the5th December, 1934, the following paragraphs appear : -
The duty on parts has little direct protective incidence. Obviously, if the parts are for an Australian-made machine, they will be locally manufactured, whethera duty is imposed or not; on the other hand, if they arefor an imported machine, they will be imported, because it is unlikely that an. Australian manufacturer would undertake to make them without effective guarantee regarding the proportion of the market he would obtain.
The direct effect of the duty on parts is, therefore, to add to the cost of goods that are not made in Australia, and it would seem in the circumstances thatsome concession could bemade without. any damaging effect on the local industry, in the interests of those farmers who necessarily have to purchase imported parts.
Those two paragraphs are sufficient to justify the request moved by Senator Johnston, which I intend to support. The Tariff Board has shown clearly that if effect is not given to its recommendation and higher duties are imposed, the cost of parts of imported machines must necessarily be increased. I am not prepared to support a proposal involving an increase of the cost of machinery used in primary production. I object to Senator Johnston suggesting that he and three others are the only honorable senators in this chamber willing to protect the interests of primary producers. I supported a request moved previously by the honorable senator. Moreover, 1 always endeavour to conserve the interests of the large number of primary producers in the State which I represent. I cannot see that local manufacturers will suffer if the request be agreed to. The Tariff Board, which examined witnesses and inquired fully into the whole subject, stated that the rates of duty it recommended are sufficient.
Question - That the request. (Senator E. B. Johnston’s) be, agreed to - put. The committee divided. (Temporary Chairman - Senator Badman.)
Question so resolved in the negative.
Item agreed to.
By omitting the whole of sub-item (B) and inserting in its stead the following sub-item: - “ (b) Mining and metallurgical machinery and appliances, viz. : -
By omitting the whole of sub-item (D) and inserting in its stead the following sub-item: - “(d) Rock boring machines, n.e.i.,ad valorem, British, 7½ per cent.: intermediate. 22½ per cent. : general. 333/4 per cent.”
– I move -
That the House of Representatives ho requested to make the duties,sub-item (B) (1) (2) and (3) ad valorem, general, 25 per cent.
Before dealing specifically with this item, which covers mining and metallurgical machinery, I suggest that the primary producers of Australia will be surprised to learn that out of seven Country party senators, only four- Senators Badman, Carroll,and Gibson, and , myself- voted to preserve their interests in the division just taken in regard to duties on agricultural machinery. Apparently only four out of the farmers’ direct representatives in this chamber are prepared to fight for the true interests of the primary producers of this country.
This item vitally concerns the great mining industry. During the last few years many people have invested a good deal of money in the development of this industry, and most of the new development is taking place in Western Australia. The recommendations of the Tariff Board, which inquires independently into tariff matters, and which is being used by this Government to whip up its supporters in regard to duties on cement, were totally ignored by this Government when it dealt with the duties on agricultural machinery, despite the fact that such machinery is a far more important factor than cement in Australian industry. We find also that this Government is prepared to ignore the board’s recommendations in regard to duties on importations of gold-mining machinery. In respect of all these subitems, it approves of a general tariff rate considerably in excess of that recommended by the board. Contrast this attitude with the attitude it adopted in connexion with items covering agricultural machinery when the Minister quoted ad infinitum, the opinions of the Tariff Board; he went to unusual limits in that direction ; indeed, he failed only to tell us that the board, after making thorough investigations, recommended very much lower duties than those which the Government was prepared to accept. I remind honorable senators that in recent years there has been a marked increase of importations of mining machinery, more than half of which has been installed in the State of Western Australia. Along with -the Leader of the Senate, (Senator Pearce), I have the honour to represent that State in this chamber. However, there is a marked difference between our views on these matters ; whilst I advocate a reduction of duties, to at least the levels recommended by the Tariff Board, the Loader of the Senate, in regard to both agricultural and mining machinery,, supports very much higher duties than those recommended by the board. Indeed, if I had my way, I would reduce the duties on these importations very much below those advised by that tribunal. I am not satisfied with the recommendation of the Tariff Board, because I believe in very much lower duties than it has advocated. The Leader of the Senate (Senator Pearce) also is not satisfied with the board’s recommendations, but for an entirely different reason; he believes that the duties should be much higher. The right honorable gentleman has joined with the Leader of the Labour party (Senator Collings) - a gentleman for whom every honorable senator has a great measure of respect. It is strange to find the Leader of the Government and the Leader of the Opposition in agreement as to the placing of a very much higher burden “on the agricultural and mining industries than the Tariff Board has recommended. On page 4 of its report, dated the 15th October, 1935, the board gave the following extract from evidence on behalf of Australian mining interests by Mr. G. L. Chilvers, representing the Broken Hill mining companies and their associated treatment companies, and, through the Chamber of Mines of Western Australia, the mining companies associated with that body: -
Owing partly to the assistance of exchange,’ and partly to the development of the local engineering industry, the Australian manufacturer of mining machinery could compete in many instances even if the imported plant were admitted free of duty.
Metallurgical practice and machines are being constantly improved, and, if the local mining interests are to keep abreast of developments, they must have the freest possible choice of design, and must be able to purchase their plant and .equipment at prices as nearly as possible competitive with those paid overseas.
By-law admission is requested of several appliances of types not manufactured in Australia.
That is most important to the large number of new mining companies which have taken up leases in Western Australia with a view to their development and the production of gold. Mr. G. S. Murray, representing Frank Manford Limited, and the Chamber of Mines of Western Australia, said, in evidence before the Tariff Board -
There are many machines and appliances which should be classed under tariff items 170 (b) or 170 (e), but on which at present duty is demanded at higher duties under other tariff items. A re-easting of the item is desirable.
– The honorable senator has exhausted his time.
– In respect of all the items which have been under discussion, and this sub-item in particular, the Tariff Board’s recommendation regarding the British preferential rate has been given effect. Concerning the sub-item which Senator Johnston desires to amend, the board recommended that . the general tariff should be 40 per cent.; but the Government, with a view to facilitating negotiations for trade treaties, decided to introduce an intermediate rate of 37½ per cent., and to make the general tariff 483/4 per cent. A considerable quantity of the goods covered by item 170 comes from the United Kingdom. For instance the total importations under one heading for 1934-35 were valued at £18,566, of which £17,793 represented goods from that country. There were certain clearances at free rates in respect of goods which could not be obtained here. Last year goods from the United Kingdom to the value of £7,039 were cleared under that branch of the tariff, as against only £179 in respect of foreign countries. The intermediate rate is not so high as that recommended by the Tariff Board for the general rate. The proposed rates represent reductions of 10 per cent. British and 6¼ per cent, general. A comprehensive inquiry as to the rates of duty considered necessary on metallurgical machinery and appliances was recently undertaken by the Tariff Board, which reported that the mining industry generally is being well served by the local heavy engineering industry in regard to both price and quality of product. The board’s report stated that local manufacturers are equipped to supply the general needs of the mining industry, and that competition between manufacturers is sufficient to ensure reasonable prices in most lines. In the case of winding engines, however, the board reported that a higher protection than that required for most other mining machinery is justified. The inquiry showed a divergence of opinien as to whether the local manufacture of highpowered winding engines was economically sound. Although the board deemed it inadvisable to impose a limit on the size or capacity of the machine to which protection should be given, it pointed out that, in the event of a winding engine beyond the capacity of local factories being required, it could be dealt with under departmental by-law, and admitted at concessional rates of duty. Some winding engines have been admitted under by-law. The duties with which the committee is now concerned are in the main those under the British preferential rate, and I repeat that the duties in the schedule are those which the Tariff Board recommended. As already explained, an intermediate rate has been inserted in the schedule, whilst the general tariff has been increased by 83/4 per cent.
.- I rise particularly to refer to the remarks of Senator Johnston in relation to goldmining machinery. During recent months I have had some first-hand knowledge of the way in which the Customs Department has dealt with mining machinery which could not have been obtained in this country at reasonable prices. In every instance in which it could be shown that the cost of such machines, if made locally, would be greatly in excess of the cost of imported machines, free entry under by-law has been allowed. Having regard to the fact that gold is at a premium of about 100 per cent., it appears to me that the benefits arising from that premium should be shared by the manufacturers of mining machinery.
– Does tha honorable senator advocate exploitation?
SenatorFOLL. - There has been no exploitation. I remind Senator Johnston that Western Australia has benefited more from the high price of gold than has any other State.
– It has suffered more from the tariff than the other States have.
– In respect of many of the mines in Western Australia which have been re-opened refunds amounting to many thousands of pounds have been made by the: Customs Department ‘as the result of representations that ‘ suitable machinery has’ not . been . procurable in Australia at. competitive rates. Whenever it has been shown that themachinery required wasof a special kindtheCustoms Department,after inquiry from local manufacturers as to their ability toproduce it, has always allowed it to enter free. Senator. Johnston is aware that Wiluna Gold Mines Limited, which is one of the biggest and most successful companies “operating in “Western. Australia, made representations to . the Customs Department that it was unable to obtain certain machinery from Australian manufacturers; thereupon large refunds of duty . were made to this enterprise. In Queensland, one of the big mining shows has received much the same generous treatment from the Customs Department. Only recently I sent to the general manager of one of the big new mines which is being opened in “Western Australia a copy of a list, consisting of about five pages of typewritten foolscap, of goods exempted from sales tax because they come under the heading of mining machinery. In my opinion, it is unfair to suggest that the gold-mining industry has been penalizedby any action of the present Government. Senator E. B. JOHNSTON (“Western Australia) [9.2]. - I was gratified to hear the remarks of Senator Foll in connexion with the duties on mining machinery. If only he could persuade the Government, for whom he acts as Whip in this chamber, to give effect more generally to the practice that he has mentioned; greater encouragement would be given to the new mining companies which arc developing centres such as Youanmi and Big Bell. Will the Minister in charge of the bill (Senator A. J. McLachlan) give an assurance that effect will be givento the suggestions of Senator Foll? If he will inform honorable senators that the remissions of dutywhich Senator Foll has stated should be-
– I said have been.
– Which should be allowed, in the futureI shall be quite satisfied. : In my. opinion, ‘big miningplants from America, England, or elsewhere, whichwill be required for the. working ofenormousmines, such as the Big Bell and Wiluna,should be exempt from duties.I regret that Senator Pearce should choose this moment to leave thechamber.
– Order ! The honorable senator should confine his remarks, to the item under discussion. -
Senator E. B. JOHNSTON.Senator Foll stated that the Commonwealth Government would admit mining machinery free of duty.
– No; I statedthat the Government has admitteda considerable quantity of milling machinery freeof duty.
– I regret that Senator Pearce’s absence prevents him from confirming or contradicting the statement of the Government Whip. When I asked him to confirm Senator Foil’s suggestion that the machinery required by the Youanmi and other mining centres of Western Australia would be admitted without penalty, the right honorable gentleman, who heard every word of that statement, left the chamber. I recall that Senator Pearce dared not face a public meeting in Perth, at which federal matters were to have been discussed. At the approach of the Federal elections, he left the State.
The DEPUTY CHAIRMAN. - Order !
– I leave honorable senators to draw their own conclusions. I interpret Senator Foil’s remarks to mean that extensive mining plant required from abroad will not be subject to heavy customs’ duty, but unfortunately, that statement is contradicted by this tariff schedule. The gold mines of ‘ Western Australia employ thousands ofmen, and pay good wages. Is it fair that when enterprising, energetic and far-seeing persons are prepared to ‘ spend, not thousands of pounds, but sums in individual cases exceeding’ a million pounds on the development of the gold-mining industry, they should be saddled with duties up to 60 per cent.? As a resultof the enterprise of these prospectors and investors, isolated areas hitherto inhabited by only the kangaroo) the- dingo- and the rabbit, have witnessed the “establishment of townships with, populations of several thousand”people.” I feelvery; strongly upon this matter. I consider that the Commonwealth Government exposes itself to severe criticism in this connexion. I have stated many times that the futile federal administration of the tariff oppresses the primary producers. Under the present duties, if a company is desirous of developing the vast mineral resources of Western Australia, it is compelled to pay excessive duties upon machinery. Since being in this Parliament I have repeatedly tried, but with little result, to secure tariff relief for the mining and agricultural industries. I have also indicated many times that the tariff policies of all federal governments are advantageous to the manufacturers of the eastern States, but act to the disadvantage of primary producers. So long ns I am privileged to express an opinion in this Senate, I shall constantly oppose the imposition of excessive duties.
The DEPUTY CHAIRMAN”. - The honorable senator’s time has expired.
. –I am confident that Senator Johnston will appreciate a reference which the goldmining industry itself made to the manufacturers of machinery. At the Tariff Board inquiry, witnesses representing both the manufacturers of mining machinery and the mining interests of Western Australia showed a desire to cooperate. In particular the representatives of the mining companies recognized the general quality of the services rendered to the industry by the manufacturers of machinery; and on their part the latter have evinced a desire to assist the development of mining.
Senator Foll was correct in what he said regarding by-law admissions of mining machinery that cannot be produced in Australia at competitive prices. If honorable senators will turn to page 7 of the . Tariff Board’s report, they will find that, a request was made that a special item at by-law rates of duty be provided to cover specifically such machines as -
Air or pneumatic hoists for use underground in mines.
Mechanical shovels or loaders for use underground in mines.
Trolley electric locomotives’ for use underground in mines.
Diesel and battery locomotives for use underground in mines.
Cone crushers, delivering a product of i inch or under.
Effect has been given to the recommendation of the board, and permanent by-law rates have been prescribed to cover the machines I have mentioned. Senator Foll has commended the Trade and Customs Department for its administration in allowing the importation, at by-law rates of duty, of necessary mining machinery. I therefore suggest that the industry has nothing to fear, and I ask the committee to reject the amendment.
Motion (by Senator Collings) agreed to -
That the question be now put.
– I move -
That the House of Representatives bo requested to make the duties, sub-item (b)
– The committee has dealt with sub-items (a) and (b) and there now remain for consideration only sub-items (c) and (d).
– I rise, Mr. Chairman, to ask your guidance. Is the Senate to be detained any longer by an honorable senator who does not know what he wants, or what he is moving. Is anybody in charge of the committee proceedings? I am surprised that the Leader of the Senate does not take some action to preserve the dignity of the chamber, to ensure the smooth conduct of public business and put an end to this burlesque which has been going on all too long. I object to it, anyhow, and register my protest. Surely there is some procedure whereby we can be saved further indignity ?
– I have tried to bear with the honorable senator in the hope that we shall make some progress in the consideration of these tariff items. I ask him now to define his proposal and enable the committee to proceed with the business.
– The honorable senator is getting officers of the chamber to help him make up his mind.
Senator E. B. JOHNSTON (Western Australia ([9.20].- I move-
That the House of Representatives be requested to make the duties sub-item (d), general 15 per cent.
Evidence was given before the Tariff Board, on behalf of Australian mining interests, by G. L. Chilvers, representing the Broken Hill mining companies, and their associated treatment companies, and, through the Chamber of Mines of Western Australia, the mining companies associated with that body. The following is the board’s summary of Mr. Chilvers evidence : -
That opinion should be endorsed by the Queensland Labour senators, and especially the Leader of the Opposition (Senator Collings) who, strange to relate, now appears to object to any reduction of the duties in this sub-item.
The following is the summary of evidence given by Mr. G. S. Murray, representing Prank Manford Limited, and the Chamber of Mines of Western Australia .Incorporated. : -
Evidence was also given by Messrs. W. C. Harris and A. W. ‘Harris, gentlemen well known to me, on behalf of the Tariff Committee of the Chamber of Mines, Kalgoorlie. Their submission was -
Admission is sought at by-law rates of duty of several types of machines and’ plant required in the mining industry.
I now direct attention to -some of the Tariff Board’s comments: -
As a producer of wealth and an employer of labour, mining holds one of the foremost places in Australian industry. At ‘the present time the local mining interests are principally concerned with the production of gold, coal, iron, lead, copper, silver, tin and zinc.
Base metal mining in Australia is firmly established, and its requirement of machinery is largely confined to replacements of existing plant. On the other hand, chiefly owing to the attractive price of gold, which has now been maintained around or above £7 sterling per fine ounce since early in February, 1934, the gold-mining industry, which had reached a low ebb in 1029, has come rapidly to the foreground once more, and many old mines have been re-opened and new mines commenced.
It is gratifying to find that many mines in the Coolgardie, Kalgoorlie, Menzies and Leonora districts, which had been abandoned, are now being exploited with Australian capital. The board’s report continued -
Other ventures are still in the prospecting stage. The output of gold for the Commonwealth showed an increase from 427,-159 line ounces in- 1929 to 882,307 ounces in 1934. This new activity has led to a marked increase in the demand for equipment for gold-mining, and that section of the local mining industry is the one most vitally concerned in the board’s inquiry.
That represents an increase of more than 100 per cent., and Western Australia, which has contributed more than onehalf of the increased production, is proud of such an achievement. The Leader of the Opposition also should be pleased to realize that this increased production has been brought about by the honest labour and energy of the men employed in the gold mines of Australia, and particularly of Western Australia. The miningindustry in that State is enteringupon a new era of prosperity, as gold mines considered to be worked out twenty years ago are being re-opened and developed with Australian capital and Australian labour.
– The honorable senator’s time has expired.
Motion (by Senator Collings) put -
That the question be now put.
– There being more than the required number of thirteen senators present, and voting in the affirmative, and only one honorable senator voting in the negative, I declare the motion carried.
– I rise to order. As I have occupied only onequarter of an hour, and no other honorable senator is prepared to continue the discussion, am I not entitled to take my second period now?
The TEMPORARY CHAIRMAN.The committee has decided that a vote shall now be taken on the request moved by the honorable senator.
Item agreed to.
Item 171- 171. By omitting the whole of sub-item (a) and inserting in its stead the following sub’ item : - “ (a) Hay rakes, horse, ad valorem - British, 10 per cent.; intermediate, 45 per cent.; general, 45 per cent.; or each - intermediate, £3; general, £3, whichever rate returns the higher duty.
By omitting the whole of sub-item (b) and inserting in its stead the following sub-item: - “ (B) Reapers and binders, ad valorem - British, 10 per cent.; intermediate, 45 per cent.; general, 45 per cent.; or each - intermediate, £10: general, £10, . whichever Tate returns the higher duty.
By omitting the whole of sub-item (c) and inserting in its stead the following sub-item: - “(C) Mowers, ad valorem - British, 10 per cent.; intermediate, 45 per cent.; general, 45 per cent. ; or each - intermediate, £4 ; general, £4, whichever rate returns the higher duty.
By omitting the whole of sub-item (n) and inserting in its stead the following sub-item: - “(d) Metal parts, n.e.i., of reapers and binders, hay rakes (-horse) and mowers, ad valorem - British, 10 per cent.; intermediate, 4.8 per cent.; general, 45 par cent.; or per lb. - intermediate, 2d.; general, 2d., whichever rate returns the higher duty.
– I move -
That the House of Representatives bo requested to make the duties, sub-items (a), (b), (C) and (D), ad valorem - intermediate, 25 per cent. : general, 25 per cent, and omit the specific duties.
Those duties, covering four of the most important items in the schedule, were recommended by the Tariff Board after an exhaustive, complete and impartial inquiry. What is the use of having a Tariff Board if the Government completely ignores its recommendations, many of which apply to items of the utmost importance to the primary producers as a whole? Sub-item a of this item covers “ hay rakes, horse “, on which the Government proposes a duty of British 10 per cent., and intermediate and general 45 per cent., or £3 ad valorem on each implement, despite the fact that the Tariff Board recommended in the intermediate and general tariff a duty, ad valorem, of 25 per cent. The Minister, who at heart and apart from his official attitude, has always advocated low duties in this chamber supports the Government’s proposal. This item covers also reapers and binders. We find that recently at least one manufacturer of agricultural machinery increased the price of these machines from £70, which ruled over the last two years, to £75, less a cash discount of 2½ per cent. I have no doubt that he made this increase because he was assured that the Government would not allow importations to compete with its products. This increase of price applies throughout the Commonwealth. In’ this matter I stand practically alone; many members of theFederal Country party have put their loyalty to the Government before their duty to the farmers of this country; nevertheless, I intend to exercise my right as a member of this chamber to move for a reduction of these duties to the rates recommended by the Tariff Board. I repeat that the board is an independent tribunal which stands for a fair deal for the Australian manufacturer. Yet we find that when it recommends a very considerable reduction of duties on agricultural machines, which are essential to the man on the land, this Government will not accept its findings. The Government is strengthened in such opposition to the interests of the men and women on the land by the attitude adopted by some members of the Federal Country party, which, if all its members were prepared to stand behind the Tariff Board and fight for a fair deal for the primary producers throughout Australia, could make this proud Government-, tremble in its shoes. In the present crcumstances, however, it is prepared to flout the recommendations of the board. I stand for the imposition of at least the duties recommended by that tribunal. I recall that at the last and the preceding federal elections when the Seullin Government was defeated, the Country party and the United Australia party supported candidates in Western Australia for both the Senate and the House of Representatives who favoured complete implementation of the board’s recommendations for tariff reductions. On both those occasions I went from one endof Western Australia to the other supporting such candidates, including . Senator Pearce, Senator Lynch, and Senator Carroll. This item is one of, the most important in the, whole, of this schedule, and , I am amazed to find that from the seven members of the Country party in this chamber so little supportis forthcoming for the Tariff Board’s proposals. One would have imagined that there would have been a strong desire, at least on the partof members of the Federal Country party, that the’ recommendationsof the. board should be carried out, in order to enable the men and women on the land to receive the fullest possible relief in respect of duties on tools of trade which are vital to their industry. I have travelled over the whole of the wheat belt in Western Australia and over portions of the wheat belts in other States, and wherever I have gone I have found that the major complaint of the farmers is in regard to the high prices of agricultural machinery. There is no more necessary machine on the wheat farms of Australia than the reaper and binder. Every farmer uses one of these machines at harvest time in order to clear a passageway for the harvester and to obtain hay for his stock. In 1933, one of the leading implementmaking firms in Australia charged ?70 for a 6-ft. reaper and binder. The price remained the same in the following year, but in 1935 it was increased to ?72, and in 1936 to ?75. The Tariff Board- an independent tribunal in which, I believe, every honorable senator has confidence- hasreported that the duties on these machines should be decreased to 25per cent. Ifrankly admit that, if I had my way, these machines would be entirely free of duty. I have not, however, advocatedtheir free entry, b.ut in . my request haveadhered to the Tariff Board’s recommendation. In the opinion of the board a duty pf 25 per cent is sufficient protection for the efficient Australian manufacturer’s of these machines- I say “ efficient “ advisedly - especially when, inaddition, he has the benefit pf natural protection afforded by freight, insurance and other charges. To-morrow, when the committee is considering the duties on cement, the Government will, doubtless, stress the necessity to accept the judgment of the Tariff Board; but in regard to these machines, which are essential to one of Australia’s most important industries, it has seen fit to ignore that body.
- (Senator J, V, MacDonald).- The honorable senator’s time has expired.
Item agreed to
Item 172 (Washing machines, mangles and wringers).
.- I. should . like to know why the housewives ofAustralia should be penalized by the imposition of dutiesof, 12? per cent. British preferential, and 27? per cent intermediate and general tariff, on such necessary household articles as clothes washing machines, mangles, and wringers. The , requirements pf decency and cleanliness demand that these machines shall be in every house in this country. When I reflect that Australia depends for its national existence on that wonderful, but silent, unit known as the British navy, I,as an Australian, am often ashamed that we in this country “sponge” as we do on the Mother Country. We ought to spend a great deal more money than we do to protect ourselves. We are prepared to accept the protection which the British navy gives to us, but when manufacturers in the Old Country wish to send some of their minor manufactures to us, we impose heavy duties on them. I am prepared to believe that Australia without this heavy duty is capable of making all the machines required to wash the dirty linen of its people.
– I point out that there has been no alteration of the duty.
– Cannot this duty be abolished?
– If Great Britain manufactures clotheswashing machines and mangles for household use’ and ships them across 12,000 miles of ocean to Australian ports, we should acknowledge our obligations to the Mother Country by being prepared to admit these very necessary articles free of duty.
As a low tariffist, I consider that it is unjustifiable to charge the manufacturers of Great Britain a duty of 2s. 6d. in the ?1, in addition to exchange, freight an’d insurance, in connexion with these essential household conveniences. But in regard to the dominions, a more objectionable feature arises. They are included in the intermediate tariff, and any articles of this class which they may export to Australia ure liable to a duty of 27? per cent. This arrangement shows’ some inconsistency. As the late Sir Charles Kingsford Smith and other famous aviators have demonstrated, it is only a short hop by air across the Tasman Sea to New Zealand; but the Government has imposed a duty of 27? per cent, upon clothes-washing machines and mangles manufactured in thatdominion, while the same articles imported from Great Britain, which is much further away, are subject to an impost of only 12? per cent. A policy of fair play in the commercial relations of the members of the British Commonwealth of Nations should always’ be encouraged. If other members of the British Empire desire to sell these articles in Australia they should not be required to pay a heavy duty. I have respect for the Australian manufacturers of clothes-washing machines and mangles, but I consider that I know my compatriots sufficiently well to be aware that they do not desire to be granted such heavy protection in view of the fact that to the invoice price of imported goods are added freight, insurance and duty. On this matter we should adopt an Empire view. I hope that honorable senators will decide not to discriminate unfairly between the manufacturers in the various dominions and those in Great Britain. In my opinion, it is anomalous that a New Zealand manufacturer should be liable to a duty of 27? per cent, while the British manufacturer is subject to an impost of less than one-half of that amount. We should endeavour to observe the real spirit of the Ottawa agreement in this connexion. I appeal to the Opposition for its support. A Labour government is in office in New Zealand. I shall judge it entirely upon its work, not upon the opinions of a prejudiced capitalistic press in Australia. In view of the fact that the Leader of the. Opposition (Senator Collings) represents Labour constituents, I consider that he should have every sympathy with a Labour government in another dominion, and, therefore, should endeavour by every means in his power to, ensure that manufacturers in that dominion are placedupon an equality with the British manufacturers. A few weeks agoour kith and kin in New Zealand put a “Savage” gentleman at the head of their government.
- (Senator J. V. MacDonald).- I ask the honorable senator to refrain from making what mayberegarded as rude allusions to the Prime Minister of another dominion.
– I. regret that my allusion has been interpreted as being rude. If that meaning is placed upon it, I withdraw it unreservedly. I have great respect and affection for the people of New Zealand, and I have a great political regard for the honorable gentleman who is their. Prime Minister. If any remark of mine in reference to him is interpreted as being rude, I give my assurance that such was not my intention.
The TEMPORARY CHAIRMAN.The honorable senator’s time has expired.
. I assure Senator Johnston . that no alteration of the rate of duty provided under sub-item (a) has been made. The letters “ n.e.i. “ have been added to clothes washing machines, and that is the only change made to the sub-item. The provision of “ not elsewhere included “ is necessary as electric household clothes washing machines, the subject of Tariff Board report No. 678 of the 20th March, 1935, are now separately shown under tariff item 179 d 3 d. The rates proposed under sub-item b for present exchange show reductions of 5 per cent. British preferential tariff and 7^ per cent, general tariff. Australian requirements of clothes wringers for household use, which are covered by subitem b are estimated at approximately 15,000 per annum, of which about 4,000 are imported, principally from the United Kingdom. There are at least six manufacturers in Australia, and the local industry is capable of meeting all requirements as regards quantity, quality, and types of wringers. No Australian factory, however, is equipped wholly to manufacture these goods; instead, the manufacture of the various component parts is given to other concerns. The proportion produced by each local manufacturer varies considerably, with a consequential wide variation of efficiency. On the other hand, overseas manufacturers are reputed to be able to produce the complete wringer from raw materials. Most of the raw materials used in the local industry, apart from rubber, are produced in Australia, and are sold at prices less than the duty free landed cost of similar materials from the United Kingdom. Due, however, to the small local market as compared with the market overseas, higher rates than otherwise would be necessary are required. The British preferential rate recommended by the board has been adopted, but the recommended general tariff rate has been increased by 7$ per cent, to provide for treaty bargaining.
Item agreed to.
Item 173 (Weighing machines).
– I appreciate the courtesy with which the Minister in charge of the bill (Senator A. J. McLachlan) has received my many requests. I would be gratified if he would inform me why it is necessary to impose such a high rate of duty upon weighing machines.
– There has been no alteration of the duty. As in the case of the previous item the words “ not elsewhere included “ have been added to “ weighing machines because certain types of them are now mentioned elsewhere in the tariff.
– The amalgamation of the United Australia party and the ‘Country party in federal politics was a source of gratification to me, because I saw in it a possibility of reducing excessive duties. Being a low tariffist, I, in common with many of my supporters in Western Australia, derive no satisfaction from the experience that the combination of the two parties has not led to a substantial revision of the tariff. I thought that one of the results of this composite Government would be a substantial all-round reduction of duties The sub-item before the committee deals with weighing machines, which are to be found in all popular resorts, and are largely used by Australian citizens, in all States. People are advised by members of the medical profession to weigh themselves at regular intervals, in order to keep themselves informed about their general condition of health. I suppose that no one in Australia follows this advice more consistently than I do. A weighing machine seems to have a lure for me. Whenever I see one, I put my penny in the slot and. see how I am getting on. I have to confess that, on one occasion, I made an unfortunate mistake. I placed in the slot of a machine a two-shilling piece, instead of a penny, and as I claim Scottish ancestry, honorable senators will not be surprised when I tell them that my grief was accentuated when I discovered that the two-shilling piece gave me no return. The machine refused to register my weight ! I think it is a shame that the duty on imported machines should be 27 i per cent, under the British tariff, and 45 per cent, under the intermediate and general tariffs. I feel sure that if the duty were reduced, so many more machines would be made available that probably Australian citizens would be able to weigh themselves for £d. instead of Id. Speaking, however, in more serious vein, a business of which I have knowledge purchased a number of excellent machines from the Australian Scale Company for about £70 each, less 10 per cent, discount, and I do not mind telling the committee that the returns from persons who weigh themselves on these machines at1d. a time is considerable. Those unfortunate people who suffer from such diseases as consumption and diabetes are required to weigh themselves frequently, but I do not think that they object to paying1d. for the service given by these machines. In the circumstances it is not my intention to move a request. Nevertheless, I hope that the Government will give the sub-item further consideration, and if these machines are being manufactured in other British dominions, reduce the intermediate tariff below 45 per cent.
Item agreed to.
By omitting the whole of sub-item w and inserting in its stead the following subitem : -
Wood working machines and appliances, but not including extra knives, viz. :
. This item embraces machines, machine tools and appliances of a type not commercially manufactured in Australia. The rates of duty provided are free British, and 15 per cent, general, the policy being to exempt such goods from duty when of United Kingdom manufacture, and to apply as low a general tariff rate as is possible while retaining the margin of British preference required in terms of the Ottawa agreement.
The majority of the machines included in this item are used in Australian secondary industries, and, to ensure that every facility is afforded manufacturers to purchase modern and efficient machines at the lowest possible prices, it is essential that the duties should be the lowest possible. It is also desirable, in order that Australian manufacturers may be able readily to distinguish those machines which they may import free of duty from those com mercially produced in the Commonwealth, and thus subject to protective duties, that the former machines be specifically mentioned in the tariff schedule.
Honorable senators will recall that on the previous tariff I indicated that we were endeavouring to frame a schedule which would include items which had formerly been admitted at by-law rates of duty. That has been done. The proposals under consideration include a considerable number of amendments and additions to this item, 286 classes of machines having been added to those embodied in the item in the Customs Tariff 1933. Several of the types of machines now included were previously admitted at rates of duty similar to those now proposed, but under departmental by-laws. The information available with respect to the remaining machines is such that there would be no hesitation in placing them under departmental by-law also.
The by-law procedure has, however, proved rather burdensome, entailing as it does lengthy departmental inquiries before a decision can be reached. In consequence, the manufacturer requiring the machine is often considerably delayed in the placing of his order overseas. Such a procedure is not conducive to the most efficient and economical operation of Australian secondary industries, and, since March, 1933, the policy has been adopted of specifically mentioning in the tariff such machines as are not commercially manufactured in Australia, nor likely to be so manufactured in the near future. This policy has been actively pursued in connexion with the present proposals, and should considerably benefit Australian secondary industries by affording additional facilities for the purchase of modern machinery, thus enabling costs of production to be reduced.
Some of the machines and appliances now included in this item were added consequent upon recent recommendations of the Tariff Board. The majority, however, were the direct result of a special investigation into the commercial manufacture in Australia of machines for use in Australian secondary industries, in which the co-operation of chambers of manufactures and chambers of commerce was secured. Such of the machines as have been included in this item as a result of this special investigation were added consequent upon conclusions reached by an advisory committee representing manufacturers: and users’ interests to the effect that those machines were not being commercially produced in Australia. The inclusion of the additional machines in the tariff schedule does not, in effect, involve any. reduction of the rates of duty, as, from the information now available, the machines would be admitted under departmental by-law at similar rates. Thus the real effect of this item is to simplify administrative procedure and to clarify the tariff position. Australian manufacturers of machinery should not be adversely affected, and if at some later date, they should engage in the commercial production of any of the machines included in the proposed item, the way will be open to them to seek a protective duty through the normal procedure of application to, and inquiry by, the Tariff Board. In the meantime, the position is stabilized; and the incidence of the tariff, insofar as these particular machines and appliances are concerned, is brought clearly before’ all interested parties.
– I congratulate the Government upon the fact that some articles in the. Schedule are to be admitted free of. duty. . It may be of interest to primary producers and those engaged in mining to learn that although my efforts to reduce . the duties on agricultural And mining machinery, were .unsuccessful, . boot and shoe-making machines and cigarette machines are admitted under the. British preferential tariff free of duty, and under the intermediate and general tariffs at 15 per cent. I cannot understand why the Government should support the imposition of unnecessarily high duties ‘on agricultural and mining machinery, and at the same time admit items such as I have mentioned, free of duty. The following are a few of the articles admitted from Great Britain free of duty: Machines for reducing cocoa and chocolate by means of rollers or discs- of steel; wrapping machines; cordage, rope, twine, thread and cordage yarn working machines, and appliances, including cabling machines with vertical spindles, card-clothing or lagging; carding machines; chains, hackle, chain drives for flyers, with sprocket- and wheels;1 drawing machines ; dressing and scouring machines,; fore twists; frames, spinning or twisting;-
- (Senator J. V. MacDonald).- If the honorable senator does not propose to move a request what is his object in reading all these details from the items?
– My object in mentioning some of the articles admitted free of duty from Great Britain, and only 15 per cent under the intermediate and general tariffs, is to compare the treatment of them with that of the implements used by primary producers which are subject to duties of 35 per cent.’ and 40 per cent. It is amazing to find that, while such duties are imposed upon agricultural implements and mining machinery, ,the intermediate and general . duties on all the articles I have mentioned do not exceed 15 per cent.
– Australian .manufacturers who are in accord with the duties provided in this item do not adopt a dog in the manger policy; they favour the importation of goods which cannot be manufactured economically in this country. I notice that wood-working machines are still on the ‘free list, which will prevent their manufacture ‘ being undertaken- in Australia; i The Postmaster-General (Senator A. J. McLachlan) intimated’ that the Chambers of Manufactures had been consulted; .and the committee, of ‘which’ I was a’ member, had not the slightest objection to all of the 137 articles submitted to: it being admitted front Great Britain free of duty. It is only : right that the manufacturers should be given ‘some credit for supporting the imposition of duties only on articles which can be manufactured economically in Australia. I understand that the Minister for Trade and Customs (Mr. White) has agreed to include woodworking machines in the list of articles to be referred to the Tariff Board for further investigation and report.
– In- looking, further into this item I find that glass-making machines and appliances are admitted from Great Britain free of duty, and that when imported from the - dominions or foreign, countries they are subjectto a duty of only 15 percent. I am sure that these duties “will be appreciated by the fortunate shareholders in the Australian Glass Manufacturing Company, whose £1 shares are now quoted at £5. It would appear that all the requirements of secondary industries imported from Great Britain are admitted free of duty, and when imported from other countries are subject to a duty of only 15 per cent., whilst the implements used by theprimary producers are subject to a duty of 35 per cent, or 40 per cent. I support the action of the Government in providing that certain importations shall be free of duty, but I regret that the protection afforded to those engaged in secondary production has not been extended to our primary industries, upon which the prosperity of Australia depends.
Senator . DUNCAN-HUGHES (South Australia) . [11.0]. - This item of great length is most instructive and would bear very close examination , and discussion. No useful purpose would be served by discussing it at length, but I should like to have an explanation of one phase of it. Here is a large list of machinery which is to be imported . free of duty from the United Kingdom; and at a duty of only 15 per cent, under the intermediate and general tariffs,in order to enable Australian manufacturers to produce more successfully. I shall refrain at this juncture from saying more . than that I agree with Senator Johnston that it would be very desirable to give similar concessions to the primary producers in order that they also might be enabled to produce more successfully. What I cannot understand is this: These are machines of many various kinds, some of which, . I presume, will be of American origin. If the Government wants a bargaining weapon to use in its trade negotiations with the United States of America, why is it that a bargaining margin of only 15 per cent, is left in respect of all the machinery required for secondary manufacture, whilst a margin, of 30 per cent, to 35 per cent is applied to machinery required for primary production? Why is not this manufacturing machinery as well as the machinery of primary production used as a bargaining weapon in relation to the United States of. America ?
– The Government is alive to the position indicated by Senator DuncanHughes, and probably at a. later date honorable senators will have an opportunity to examine further proposals to be brought forward. The position in respeet of this schedule” has arisen out of an examination of our trade balance with the United States of America, and I know that attention is being directed to the features mentioned by the honorable senator.
– Do I understandthe Minister to say that it is intended to amend the schedule? It is unreasonableto ask. the committee to pass it with an intimation that it is not the . schedulewhich the Government in tends to bring into force.
– What the Government proposes to do is to pursue a course . similar to that which it proposes in , regard to Canadian importations. This schedule will operate until certain action is determined upon as a result , of impending negotiations, and if . any amendments are desired to be effected, a new schedule will be brought down to make the necessary adjustments. .
– Why is the difference 15 per cent, in respect of this machinery and from 30 to 35 per cent, in respect of machinery for primary production ?
– These provide for by-law admissions from the United Kingdom free of duty, with the Ottawa margin of 15. per cent, in the intermediate and general tariffs. That is all, that has been done to date.
.- This list of machinery is extraordinary. I have no objection to the proposed reductions of duty; . the Government could not further reduce the rates and has simply observed the Ottawa margin of 15 per cent, in favour of the United Kingdom.
SenatorA. J McLachlan. - These goods have always been admitted under by-law at rates of free British, and 15 per cent, intermediate and general.
– I have said that these duties represent the lowest which could be proposed in accordance with the Ottawa agreement. However, why discriminate between machines for primary production and machines for the manufacturers of this country? It is useless to say that machines covered by this item cannot be made in Australia. The whole of these machines could be manufactured here without the slightest trouble.
– I can name several which cannot be manufactured in Australia.
– Any class of machinery can be manufactured here. The rate of the general tariff on these machines is 15 per cent., as compared with 45 per cent, on reapers and binders, hay-rakes and mowers. Such a distinction is anomalous. Why should not the primary producer, who exports his products, be given at least the same measure of consideration in this matter, as is given to the manufacturer? If the latter were exporting his products, I could understand this distinction being made, but when he is receiving the benefit of protection of the goods made with this machinery, he should not be given concessions on his plant over and above the concessions given to primary producers. I think there is something radically wrong in the schedule.
– I entirely approve of the proposed duties on this list of machinery covering sixteen pages of the schedule. The list embraces all kinds of metals and machinery required for secondary industry. The duties proposed are - British, free ; and on goods from the dominions and foreign countries, only 15 per cent. I congratulate the secondary industries upon their success in getting all their requirements admitted at these concession rates. I desire to see our secondary industries thrive as the result of these low rates of duty on their imported requirements,’ but I cannot help feeling somewhat sad when I think that this Government, in which the Country party is so strongly represented, has refused to-night and throughout its history to extend a similar measure of consideration to the great primary producing in dustries of Australia. If I had my way - and divisions taken to-night show how improbable this is - I would make the duties on machinery required for the primary producing industries similar to the duties on these items, namely, British free and 15 per cent, intermediate and general. My complaint is that the Government has not extended to the primary industries the great measure of consideration which it has extended to the secondary industries. These proposals should be reversed in order that the benefits now enjoyed by the secondary industries might be enjoyed by the agricultural and pastoral industries ; alternatively, I would not hesitate to apply the rates now covering machinery required by the primary producers to the machinery requirements of the secondary industries. I do not object to the manufacturers being given these concessions, although, I point out that they also enjoy arbitration court awards which allow fair returns to every one engaged in their industries. I ask the Government, even at this late hour, to recommit the whole of this schedule, and, if it is not prepared to take away any of the present benefits given to secondary industries, at least to place the primary industries, so far as duties on agricultural machinery are concerned, on an equal basis.
– I move -
That the House of Representatives bo requested to amend paragraph (24) sub-item
Item 174 w 24 of the tariff proposals of the 28th November, 1935, limits the timber-slicing machines admissible thereunder to those of the rotary type. It has been ascertained that there are types of timber-slicing machines, other than the rotary type, which are not manufactured in the Commonwealth, and the amendment just moved has the effect of widening the scope of the item to include all types of timber-slicing machines, other than veneer-slicing machines. The limitation of item 174 w 24 to timber-slicing machines of the rotary type was the result of a recommendation by the Tariff Board.
The board was asked whether there was any objection to the item being amended to include all types of timberslicing machines, other, than veneerslicing machines. It has now intimated that it concurs in the wording of the item, as embodied in the request which I have moved.
Request agreed to.
Item agreed to, subject to a request.
Senate adjourned at 11.19 p.m.
Cite as: Australia, Senate, Debates, 6 May 1936, viewed 22 October 2017, <http://historichansard.net/senate/1936/19360506_senate_14_150/>.