14th Parliament · 1st Session
The Deputy President (Senator Sampson) took the chair at 11 a.m., and read prayers.
New Zealand Embargo
asked the Minister representing the Acting Minister for Commerce, upon notice -
If it be a fact that the New Zealand Minister for Agriculture has advised the Commonwealth Government that he is unable to accept the invitation of the Government to be present at the meeting of the Australian Agricultural Council, will the Government submit further representations to the New Zealand Government, urging that permission be granted to export to New Zealand citrusfruits grown on the Murrumbidgee irrigation areas, and other parts of the Commonwealth.
– The Acting Minister for Commerce has supplied the following answer: -
The Commonwealth Government is at present preparing information fur re-submission to the Government of New Zealand as the basis of further negotiations in connexion with various classes of fruits for export to that dominion.
– On the 7th May, Senator Johnston asked a question concerning Commonwealth grants under the Wheat Growers Relief Act 1936, and desired to know, inter alia -
How much is being paid in each State: (a) on an acreage basis per acre; (b) otherwise; and (c) for drought relief;’ under the provisions of the Wheat Growers Relief Act 1936?
I am now in a position to furnish the honorable senator with the following information : -
New South Wales - Total Grant, £565,284.
Payment of 2s. 6d. per annum on the area sown to wheat for grain during 1935-36 season. This will absorb about £472,000.
The balance of approximately £93,284 willbe distributed amongst growers who have suffered serious loss through unfavorable seasonal conditions.
Approximately £200,000 allocated to provide for payment at the rate of1s. 8d. an acre of wheat sown.
Approximately £191,948, to be applied as a contribution towards transportation and freight charges incurred by growers in the sales of their wheat.
£50,000 for relief of growers who have suffered loss through drought) hail, storm and flood.
£32,135 to be distributed to growers who have sown wheat for grain, in the proportion which the acreage sown by each grower boars to the total acreage sown for the State. The payment will be approximately 2s. 5d. an acre.
Balanceof £10,700 to be distributed unionist growers whose yields, through uncontrollable causes, fall below the1 935-36 average for the State.
£362,250 to be distributed on an acreage basis. The payment will be approximately 2s. 4½d. an acre.
£69,896 for allocation amongst those growers whose yields werethree bushels an acre and under.
£231,250 to be distributed on an acreage basis. This will provide a payment of approximately1s.11d. an acre.
£16 1,600 to provide sustenance for growers who have suffered from drought conditions.
Whole of the grant to be distributed on an acreage basis. This will provide for a payment of approximately6s.6d.an acre.
It is left to a State to decide the method of distributing amongst its growers the amount allocated to it.
The acreage payments shown for the various States under headings (a) above, are, therefore, not comparable one with another, because each State has reserved a different percentage of its total allocation for distribution on an acreage basis, e.g., in Tasmania, the whole of the grant is being distributed on an acreage basis, whilst in Victoria, only about 45 per cent. is being so distributed.
Motion (by Senator A. J. McLachlan) agreed to -
That leave be given to introduce a bill for an act to amend sections two and nine of the Wireless Telegraphy Act 1905-1919.
Bill brought up and read a first time.
Bill received from the House of Representatives.
Bill received from the House of Representatives, and (on motion by Senator Sir George Pearce) read a first time.
Bill received from the House of Representatives, and (on motion by Senator Sir George Pearce) read a first time.
Bill received from the House of Representatives, and (on motion by Senator Sir George Pearce) read a first time.
In committee: Consideration resumed from the 13th May(vide page 1597).
Division 8. - Earth en ware. Cement, China, Glass, and Stone.
Item 242 (Glass)
– This item consists of the bare passage - “By omitting the whole of subitem b (fourth time occurring).” But a reference to the memorandum setting out the 1933 and 1936 tariff rates shows that item 242 refers to glass. Last week I asked the Minister representing the Minister for Trade and Customs a number of questions concerning our trade relations with Belgium. Australia purchased considerable quantities of glass from this country prior to the establishment of the industry in the Commonwealth under a protective tariff of 75 per cent. in addition to primage duty. Last year imports of glass from Belgium were valued at £93,000; our total imports from that country amounted to £477,864. In contrast to these figures, our exports to Belgium during the same period were valued at £6,080,381. All these amounts are in
Australian currency. In view of the fact that on several occasions during the tariff debate the adverse trade balance with various countries, particularly the United States of America, has been raised, it seems to me remarkable that Australia is not endeavouring to increase its business with a country with which its balance is so favorable. Belgium exports to us only about one-fourteenth of the value of the goods that Australia sells to it; yet the Commonwealth Government is prepared to continue to squeeze it in respect of its glass trade with the Commonwealth. Exports of Australian barley to Belgium have decreased from80. per cent. to 51 per cent. of the total value of our exports to that country. The Minister representing the Minister for Trade and Customs supplied to me particulars of the rates of duty that have applied to plain clear sheet glass imported from Belgium, and I am gratified to note that there is a difference between the 1933 rates and those how operating. The Minister stated that the rates of duty on imported plain clear sheet glass are 2s. per 100 square feet British preferential tariff, and 4s. per 100 square feet general tariff, which are equivalent on the 1934-35 values to 8.5 per cent. ad valorem British, and 24.1 per cent. general tariff. Primage duty is now 10 per cent. Exchange varies according to the country from which the glass is imported. I compliment the Government on having recognized the value of our trade relations with Belgium, and reduced the duty on glass imported from that country. Honorable senators should remember that Belgium is one of the principal buyers of Australian barley, particularly South Australian barley. I hope that the Minister will afford the committee some information of the Government’s policy in regard to imports of glass, and the negotiation of a trade agreement with Belgium.
– The proposal under this item is for the deletion of the deferred duties which appear under the Customs Tariffs 1933. Since the 24th September, 1932, the importation of plain clear sheet glass has been prohibited, except with the consent of the Minister for Trade and Customs. Under cover of this prohibition, certain importations have been permitted. The arrangement now obtaining, consequent upon the trade agreement with Belgium, is that of the Australian demand of 7,500,000 square feet of sheet glass per annum, the local manufacturers are assured of 60 per cent., and 50 per cent. of any demand in excess of 7,500,000 square feet The remaining portion of the demand was offered to overseas countries in the form of an import quota based on the percentage of the market supplied by each country during the three-year period ended the 30th June, 1930. This arrangement commenced on the 1st November, 1934, concurrently with the operation of the trade agreement with Belgium. During the first year ended the 31st October, 1933, the local manufacturers supplied 9,194,000 square feet - 75 per cent. of the total demand of 12,133,000 square feet. The remainder of the demand consisted of 2,939,000 square feet of glass admitted at rates of 2a. per 100 square feet, British preferential tariff, and 4s. general tariff. In the first year during which this arrangement operated, the local manufacturers supplied a much greater percentage of the demand than that to which ordinarily they would have been entitled. It is not reasonable to assume, however, that this position will obtain in the second quota year. It is sufficient to say, however, that while the prohibition and the quota arrangements continue to operate, the local manufacturer will be assured of a substantial share of the Australian market. The Government takes the view that, during the currency of the present arrangements, there are no grounds for the maintenance in the tariff of the provision for deferred duties. In the event of the import quota in respect of plain clear sheet glass terminating, the local manufacturer will be assured of his market, as the prohibition of imports will, undoubtedly, be maintained until some other form of safeguard is promulgated.
– I note that the Minister stated that 60 per cent. of the Australian requirements of glass is supplied by the local industry, and the remaining 40 per cent. by overseas manufacturers. Both
Great Britain and Japan are also competitors in the supply of glass to Australia. Will the Minister inform honorable senatorswhat proportion of that 40 per cent. is enjoyed by Belgium? I am more concerned about that country, which, because of the action of a former government, in prohibiting the importation of plain sheet glass, refused to licence the importation of South Australian barley. There were serious repercussions at that time, and the trade relations between the two countries do not appear to have improved appreciably since, because Australian barley exports to Belgium have actually decreased, despite the reduction of the tariff. When this matter was under discussion in 1933, the price of the shares in the Australian Amalgamated Glass Company was about 40s.; to-day they are about 90s., an increase of more than 100 per cent. I consider that the Government would be well advised to investigate the operations of this monopoly. Last night the Government showed great anxiety to take steps to restrain the operations of a certain other monopoly, in order to secure a better deal for the consumer. In my opinion, the glass industry is in the same category as the cement industry. The high prices charged for both commodities are an obstacle to the erection of homes and business premises.
. -Belgium’s share of the imports of glass into Australia is equivalent to 74 per cent.
– That is 74 per cent. of the 40 per cent. of Australian requirements supplied by oversea manufacturers.
– Yes. Last year the total importation of glass into Australia was 1,662,182 cubic feet, of which Belgium’s share was 1,221,000 cubic feet.
Item agreed to.
Item 250 -
By omitting the whole of sub-item (b) and inserting in its stead the following sub-item : -
And on and after 2nd April, 1936.
Articles of cut glass, including bottles decanters flasks and jars of cut glass empty or containing goods not subject to an ad valorem duty and lamps and lampware of cut glass,but not including articles of etched or engraved glass, ad valorem - British, 15 per cent.; intermediate, 50 per cent.; general, 60 per cent.
By omitting the whole of sub-item (c) and inserting in its stead the following sub-item: -
And on and after 2nd April, 1936 -
And for each £1 by which the equivalent in Australian currency of £100 sterling is less than £1.25 at the date of exportation, an additional duty of, ad val., British, . 8 per cent. ; intermediate, . 8 per cent.; general, . 8 per cent., whichever rate returns the higher duty.
– I notice that the general rate for cut glass is 60 per cent., although the Tariff Board, in its last report, recommended that the rate should be 50 per cent. The remarks of the board upon this particular article are equally applicable to the next sub-item of glass, for which the board recommended a duty of 40 per cent. general tariff, but the Government has retained the rate at 50 per cent. I move -
That the House of Representatives be requested tomake the duty sub-item (b), general, 50 per cent.
I refer the Minister in charge of the bill to the remarks of the Tariff Board on this item. Its report, dated the 15th April, 1935, stated-
The Tariff Board is of the opinion that rates of 15 per cent. (British preferential tariff) and 50per cent, (general tariff) on cut glassware are all that are desirable under present conditions, with 35 per cent. (British preferential tariff) and 70 per cent. (general tariff) were exchange at par, its main grounds being -
These rates, when taken in conjunc tion with natural protection and exchange protection, form a very substantial measure of total protection;
The group of companies manufactur ing glass in Australia has been able to take a considerable amount of excess profits ;
Cut glassware is a line where a wide variety is essential, and while the Australian company is manufacturing a range to meet all general demands, and deserves a reasonable measure of protection thereon, the choice of purchasers should not be restricted by unduly high rates of duty.
The rates found reasonable by the board represent a reduction in the existing rates of 3¾ per cent. under the British preferential tariff and 10 per cent. under the general tariff, but represent an increase of 10 per cent. in both the British preferential tariff and general tariff rates were exchange at par. It is considered that, owing to the relatively high value of cut glassware, the fixed rate of1s. per dozen under the general tariff in the existing item would nut apply to these goods.
The glass industry is one of the most heavily protected industries in the Commonwealth, and, in my opinion, the duties on imports should be reduced. The Tariff Board has so recommended. Therefore, I feel justified in asking the Senate to request the House of Representatives to reduce the duty to 50 per cent.; that figure is still very high, but it is the rate recommended by the board.
– Honorable senators will recollect that there were a. number of similar items previously debated in the tariff on which the Government had increased the rate of duty recommended by the Tariff Board in order to leave a margin for the purpose of trade treaty negotiations. This committee has already expressed its views with regard to the matter. If trade treaties with certain foreign countries are concluded, the rates will be. adjusted in accordance with the terms of the treaties. I ask honorable senators to forbear from pressing the matter at this stage.
– I cannot see that any negotiations which may be proceeding with regard to this matter call for a departure from the rates recommended by the Tariff Board. The discussion on this item is linked up with the subject of glass generally, on which Senator Badman has made certain remarks with which I largely agree. The subject of glass has been subjudice for years.
– I informed honorable senators early in the discussion of this schedule that the intermediate rates had been re-introduced for the purpose of giving a margin for bargaining with the foreign countries with which trade treaties are being negotiated. I remind the committee that it has already pronounced upon the principle involved.
.- What will be the position if no trade treaties are effected ?
– The rates will then remain as at the present time.
– The Tariff Board took into consideration the possibility of trade treaties being arranged, and reported that 50 per cent. was a fair duty. Now the Minister says that if the Government is fortunate enough to negotiate a trade treaty the rate will be reduced from 60 to 50 per cent. ! Such a reduction would not make a difference of a farthing on each article. The Minister . gave us yesterday an interesting analysis of the affairs of companies operating in Australia, and quoted the board’s criticism of them. If there is one octopus in Australia, it is the Australian Glass Company; it is building up huge reserves; and its shares have increased in value by 450 per cent. Yesterday it was regarded as a crime for another industry to be successful, and I expected that the affairs of the Australian Glass Manufacturers Company Limited would be laid bare in this chamber. I support the amendment.
– I do not entirely agree with Senator Foll. The reason why I supported the Government at an earlier stage, when the principle now involved was decided, is that the whole of the tariff will be brought under review when the Government has completed its negotiations with Canada and the United States of America. It would be ludicrous for the Government to deal with a single item, seeing that many items may have to be reviewed. I agree that Australian Glass Manufacturers Company Limited has made a great deal of profit. Its shares are quoted at 88s., and, undoubtedly, it has benefited immensely under the tariff; but we must realize that it has obtained only 60 per cent. of the business in sheet glass. We should take into consideration the profit made by the various subsidiary companies. It must be admitted that the Crown crystal product is a fine specimen of cut glass. I pay tribute to the efficiency of that industry, but it is quite possible that it is making too great a profit, and that the price level should be reduced. That matter has been considered by the Tariff Board. I cannot support the amendment, because it would abrogate the principle determined at an earlier stage of the discussion.
. - Sometimes, on the vaudeville stage, we see a person representing the typical English sport, who says, “ It is a fine day; let’s go out and shoot something”. In this chamber, too, we meet men whose anti-Australian outlook leads them to remark, “ Here is a prosperous industry; let us knock it”. It is wonderfully refreshing to members of the Opposition to hear that the Government, which believes in the perpetuation of the present capitalist system, is violently opposed to profits. I hope to make a search some day into shareholdings in the wonderful profit-making concerns of which we hear so much. Probably it would explain some of the speeches made in this chamber. If they are not directed to the subject of glass, then it is cement, black bolts or hooks and slashers. We, on this side, are not interested in any of these items, except from the Australian point of view.
– What about sugar?
– I shall keep that interjection in mind. The outlook of members of the Opposition never changes in regard to the tariff, and the importance of protecting local industries. From the inception of federation, it has been conceded by every political party that the federal compact was entered into for the purpose of developing this country, but Australia could not, progress as it should while there were six warring States levying tolls one against the other.
– Why not make a few remarks on the item?
– I am dealing with cut glass bottles, and it ill becomes the right honorable gentleman to suggest that I should confine myself strictly to the item under discussion. Last evening he made a clever speech on a subject that had no relation whatever to the item before the Chair, and with that speech he was able to camouflage the issue-
– The honorable senator must confine his remarks to the item under discussion.
– I have visited the works of the Australian Glass Manufacturers Company Limited, which some honorable senators have said is making huge profits at the expense of the Australian consumers. Is it suggested that these profits, which I shall deal with later, are made out of cut glass or sheet glass. Are not honorable senators aware that this company is conducting successfully other subsidiary industries in order to maintain its output ? For instance, it has established a tongue-processing department, the products of which are placed in glass containers. This undertaking was established with the object not of competing with similar industries, but because it is determined to produce an article which the community requires, and at the same time provide greater scope for marketing its hygienic glass food containers. The company has also established engineering works necessary for the carrying on of other branches of the industry. I understand that the company’s shares are quoted at about 89s. 6d., but I have yet to learn that this Government, and those who support it, not only in this Parliament, but also outside, have held up their hands in holy horror at profit-making by other concerns. In view of the statements made by the representatives of the Government, and some of its supporters, we are correct in assuming that a concern operating at a loss is a “ backyard “ industry and unworthy of support, but an efficient industry that is showing a profit must be subjected to the most severe competition. Some time ago I wished to present a lady, about to be married, with a gift, and I visited Farmers Limited, in Sydney, with the object of making a suitable purchase. Realizing my state of perpetual impecuniosity, I was not prepared to spend an exorbitant sum, and finally decided that a cut glass article would be suitable.
– Why did not the honorable senator go to Woolworths?
– I am not sufficiently anti-Australian to visit either Woolworths or Coles, because I know that a large percentage of the goods they sell are imported from foreign countries where the labour conditions, wages and general standards of living are rotten.
I asked to see some glassware, and was shown some Stuart crystal and other makes’ which I cannot recall. I gave them a flick, as is customary when testing glass, and found that the quality appeared to be satisfactory. I then asked if the shop did not stock Australian glass. I was then shown a similar article made by the Australian Glass Manufacturers Company Limited, and it would have been difficult for an expert to distinguish the difference between the imported and Australian products. I purchased an article produced locally and despatched it to the lady, who was very proud of it, particularly as it was made in Sydney. Those who have inspected this company’s products must admit that they are of the highest standard, and that the prices at which they are retailed to the public are reasonable. I have not spoken on many of the items in the schedule, but I cannot refrain from expressing an opinion on this item because the products of this company will bear favorable comparison with imported goods. Some honorable senators wish to make the task of efficient industries even more difficult than it is to-day. I am an old man, and am able to speak with authority on the industrial development of this country. I am familiar with every move in the fiscal game. Time after time the same old arguments are trotted out in an endeavour to destroy industries which are conducted not only in the interests of those controlling them, but also to the advantage of the Australian people. Although we are urged to produce more of certain commodities there are some who prefer to obtain goods from cheap labour countries, such as Czechoslovakia or Japan. The Sydney Harbour bridge was designed and constructed by Australians, and generally speaking, the work of those engaged in Australian industries is equal to that of workmen in any other part of the world. We are endeavouring to develop our primary and secondary industries, and as the Australian glass-making industry is of great value to the Commonwealth, I intend to oppose the request moved by Senator E. B. Johnston.
– I agree with Senator Foll that the Government is attempting to use pro jected trade treaties with other countries to maintain unnecessarily high duties on glass and other commodities. It is ridiculous to suggest that the duty which is about 10 per cent. higher than that recommended by the Tariff Board, can be used effectively for bargaining. The Leader of the Opposition (Senator Collings) should know that Stuart crystal, which is of British manufacture, is subject to a high rate of duty, although not so high as that imposed on imports from foreign countries. Until recently, I believed that the Labour party opposed monopolies and excessive profit making.
– It has always said that it is opposed to monopolies.
– Yes, and in the past its representatives have not hesitated to direct attention to the damaging effect of monopolies upon the community. But the Leader of the Opposition now enters the arena as the champion of monopolies which he speaks of as successful business concerns.
– The Leader of the Opposition did not say that he supports monopolies.
– The claims of the Australian Glass Manufacturers Company Limited and other industries making excessive profits are supported by him. The honorable senator said that he would quote the profits of this company, but he refrained from doing so, because he know that they could not be justified. According to figures published in 1933, the Australian Glass Manufacturers Company Limited, over a period of nine years, paid a dividend of 10 per cent. on its ordinary shares and 9 per cent. on its preference shares. It also placed £500,000 to reserve, and purchased £500,000 worth of Australian securities. In ten years it has placed to reserve and expended in purchase. of bonds, an amount equal to its capital.
– What is the value of its £1 shares?
– About 89s. 6d. This is a monopoly which the Leader of the Opposition is supporting.
– Only a few months ago the company approached the Arbitration Court with the object of having the wages of its employees reduced.
– Yes, with its £1 shares at89s. 6d. and a large amount in reserve, it sought to reduce the wages of its workers. If a careful study were made of all the industries protected by high customs duties, it would possibly be found that the Australian Glass Manufacturers Company Limited is in a better financial position than almost any other Australian company. A short time ago when 1,500 men in South Australia were depending upon the export of barley to Belgium for a living, the representatives of this industry pointed a pistol at the head of the Government and said that if it did not ration the importation of Belgian glass it would retrench 250 of its employees. On that occasion the Government fell down on its job and agreed, on the representations made by the company, to ration sheet glass, and rationing is still in force. Are cut glass and glass bottles rationed in the same way as sheet glass?
– There is no rationing of glass.
– I shall support the request moved’ by Senator J ohnston.
. -I rise-
– To support monopolies.
– I do not support monopolies. The Labour party is opposed to any exploitation of the workers by monopolies, private individuals, or pastoral associations. The workers are doing the work of the country, and should receive the reward of their labours. The constant attacks made on Australian industry, ostensibly on the ground that they are making huge profits, but really for other reasons, are not justified. Running through the arguments of those who are opposed to Labour is the idea that conditions in Australia can be improved by dividing with overseas competitors the trade which should be given to local manufacturers. Labour is opposed to monopolies, and to all who would sweat the workers and reduce their wages. (Senator Toll interjected just now that the Australian Glass Manufacturers Company Limited recently applied to the Arbitration Court for a reduction of the wages of its employees. If that be so, the fighting forces of Labour will be ranged against it. Credit is due to the Labour movement for having fought to raise the standard of living in this country.
– Is that the exclusive privilege of Labour?
– Practically all the fighting for a better standard of living has been carried on by Labour, and paid for by Labour.
– The honorable senator supports monopolies.
– I remind Senator Badman that when the duties on cement were before the committee I pointed out that there was a proper way to deal with monopolies. The Government has never exercised its powers under the Tariff Board Act. It has ample power to deal with any monopoly which makes undue profits, or causes restraint of trade, but its supporters, rather than adopt the procedure laid down in the Tariff Board Act, prefer to continue their sniping, in order that cheap glass from Japan or Belgium may enter this country.
– Why should Australia not trade with Belgium?
– I am fighting for ideas which I hold strongly. I know better than do most honorable senators that, before long, those ideas will be dominant in Australia. We have heard a good deal about over-capitalization, in relation to certain industries. Australian manufacturers having erected factories to produce glass, Australian workers should be given the opportunity to work in them and to supply this country’s requirements. We should not do anything which might reduce the output of those factories. In saying that, I do not suggest that there is any justification for inordinate profits or unfair treatment of the workers. I have here a statement which sets out -
The landed duty-paid value of the glass and glassware and lightingware, of all kinds, that will be imported this year will approach £1,500,000. That is in Australian currency. We are deterred in going after that business by lack of confidence in the Government’s policy in regard to the extension of secondary industries. We do not know what support will be given us.
The Labour party contends that, if Australian capital is invested in factories for the production of glassware, those factories should be given the opportunity to produce the goods required by the people of this country. Were it not that the Government consists of canting humbugs, it would ask the Tariff Board to make inquiries into this industry. Why does the Government treat the various industries of this country differently? I am, naturally, one of the least suspicious of men, but in regard to the Government’s treatment of Australian industries I am becoming suspicious. Why is not the Government fair? Why does it not say that, because it is opposed to monopolies and undue exploitation, it intends to use its power so make full inquiry into all alleged monopolies, and to take action provided for in the act should it find that undue exploitation has taken place? The Government does not take that stand, and, therefore, I cannot help thinking that it is guilty of cant and humbug. Yesterday, the Header of the Senate (Senator Pearce) misled the chamber with a lot of canting humbug in regard to the Ottawa agreement. Wool is being drawn over the eyes of the people of Australia.It is time that the Government acted honestly, and refrained from accusing the Labour party of standing for things for which it does not stand. Those who on numerous occasions have heard the ideals of the Labour movement expounded in this chamber should be fair. “Fairplay is bonnie play “ not only in Scotland but also in this chamber; yet the Government and its supporters are so devoid of intelligence and argument that they can only attack the Labour party by accusing it of not believing the things that it does believe, and of standing for things for which it does not stand.
– I have known the honorable senator to vote for lower duties than the Government has proposed.
– I strongly resent the unfair and lying statements of those morons who say that the Labour party stands for monopolies and undue profits.
– Are we not entitled to the opinion that the Labour party does support monopolies?
– I am a believer in free speech, and, because of that belief, have, at times, suffered unjustly. Sena tor Hardy has a right to his opinion, but no senator has the right to malign me or the party with which I am associated by deliberately telling lies.
-The trouble is that the honorable senator is too free with his speech.
– I believe in being frank. In good English, those who accuse the Labour party of standing for things for which it does not stand are liars.
– I rise to a point of order. The remarks of the honorable senator are offensive to me, and doubtless to other honorable senators also. I am certain that no honorable senator deliberately tells lies about another honorable senator or his party. Any opinion that they express regarding the attitude of the Labour party towards monopolies is based on remarks made by honorable senators of that party. I ask the honorable senator to withdraw his remark, which is definitely offensive to me personally. I do not lie about any one.
– I ask Senator Brown to withdraw the statement complained of.
– I did not make a personal remark about Senator Hardy.
– The honorable senator referred to Senator Hardy as one who deliberately told lies.
– I did not say that
Senator Hardy deliberately told lies.
The TEMPORARY CHAIRMAN.The honorable senator must withdraw the remark to which exception has been taken.
– I have no desire to call Senator Hardy a liar; but I do say that if Senator Hardy, or Senator J. B. Hayes, or Senator Pearce, or any other senator says that the Labour party is not opposed to monopolies-
The TEMPORARY CHAIRMAN.The honorable senator must withdraw the remark to which Senator Hardy has taken exception.
– I did not say what Senator Hardy has attributed to me. How can I withdraw something that I did not say? If I said that Senator Hardy was a liar, that must have been a mistake on my part.
The TEMPORARY CHAIRMAN.The honorable senator made a remark which Senator Hardy regarded as offensive. I ask him to withdraw it.
– I withdraw something that I did not say.
– That is not a withdrawal. The honorable senator must withdraw the remark to which Senator Hardy took exception.
– I did not say what Senator Hardy says I did, but if he says that I said it, or even if he thinks that I said it, and if he will be satisfied by my withdrawal of something that I did not say, then I withdraw it.
– If that satisfies the Temporary Chairman, he is easily satisfied.
– The Temporary Chairman, who is in control of the business of the committee, is satisfied. Senator Arkins is like a barnyard cockerel.
The TEMPORARY CHAIRMAN.The honorable senator must not use such language.
– Then I say that Senator Arkins is not a barnyard cockerel. I have a deep regard for the honorable senator who has such a penchant for “ butting in “. It is time that we spoke frankly.
– It is time that the honorable senator dealt with the item before the committee.
– You, Mr. Temporary Chairman, allowed Senator Badman to accuse my leader of being a supporter of monopolies, undue profits, and exploitation of the workers.
– Order ! Had the Leader of the Opposition (SenatorCollings) taken exception to what Senator Badman said, I should have called upon Senator Badman to withdraw his remark.
– I am” taking exception to it, as I have a right to do under the Standing Orders. If honorable senators accuse the Labour party of supporting monopolies and excessive exploitation, then they are, in good, plain English, liars.
The TEMPORARY CHAIRMAN.The honorable senator must not describe honorable senators generally as liars. He must withdraw the offensive remark.
– Unreservedly, and without qualification, I say that if - I am dealing with a hypothetical case, and am speaking frankly- .
The TEMPORARY CHAIRMAN.The honorable senator’s time has expired.
– The Minister said that we had decided the principle embodied in my request. The committee’s decision related to something which was entirely different in principle. The Minister’s contention was that large quantities of agricultural machinery might come in from the United States of America with which country Australia has an adverse trade balance. In regard to cut glass, the position is quite different; our importations of these articles are comparatively small, and most of them come from European countries with which we have a very favorable trade balance, and some, if not all, of which have stated that they would like to take a good deal more of our primary products if we would take more of their manufactured goods. Glass is covered by a great many items. Details, as published in the Overseas Bulletin, of importations in 1934-35 of cut glass covered by item 955, are as follows: United Kingdom, £30,872; other British countries, £2; Belgium, £742; Czechoslovakia, £25,556; Germany, £20,590; Japan, £2,026; Sweden, £9,483; United States of America, £480; and other foreign countries, £1,092. Through its sub-consul in Perth, Germany has made repeated representations to the Government of Western Australia that it is prepared to take a good deal more of our wool and other products if we will take additional manufactured goods from it. Whenever the tariff has come under review, we have heard a good deal about the negotiation of trade treaties. In this case, however, I point out that we have the definite recommendation of the Tariff Board for a reduction of duty, and I am of opinion that, to enable us to negotiate trade treaties on lines that will be favorable to other- na tions, we shall have to reduce our duties a good deal below even the recommendations of the board. Under the item in respect of which I have just given the importations, it is clear that the majority of our importations, other than those from Great Britain, come from countries with which we have a very favorable trade balance. The Leader of the Opposition need not become alarmed at any reduction of duty which this committee may make so long as it is not below the rates recommended by the Tariff Board. That is all that this amendment entails. I repeat that the Tariff Board is an independent tribunal which gives efficient Australian industries more than a generous or proper share of protection; I can see no necessity, therefore, to give this industry a greater measure of protection than that recommended by the board. .
– There is very little room for argument on the proposal to reduce the general tariff on this item from 60 per cent. to 50 per cent. Honorable senators are aware that if we reduce the difference between the British preferential tariff of 15 per cent., as recommended by the Tariff Board, and the general tariff, we shall contract the margin which would otherwise be available to the Government in its negotiations for better treatment from foreign countries. The difference of 10 per cent. involved here may not be a matter of very great importance, but I point out that this committee has already committed itself, in respect of other items, to the course I have indicated. Senator Johnston’s argument regarding the trade balance was used earlier in this debate. I submit, however, that the real point with which we are concerned here is whether we should start with a foreign duty of 50 per cent., and thus restrict our bargaining with foreign countries, or 60 per cent., which would extend the margin for negotiation.
– I would not have participated in this debate had it been restricted to the suggestion that the general tariff should be reduced from 60 per cent. to 50 per cent. In asking for an additional 10 per cent. bargaining margin, the Government has made a reasonable request. Personally, I am not concerned whether the duty is 50 per cent. or 60 per cent., and I do not think that the Australian Glass Manufac turers Company Limited is very much concerned either. The Government, however, says that it would like to have an extra margin of 10 per cent., and if it believes that this will enable it to bargain on a better basis, I see no reason why the committee should oppose its proposal. This debate has developed into a general denunciation of the Australian Glass Manufacturers Company Limited, which has been represented as a vast monopoly, controlled by one or two men, who are exploiting the people of Australia. What are the facts? This industry has grown up within the last twenty years from very small beginnings. The Government has taken the British duty of 25 per cent. right off the main item, which covers bottles, flasks, earthenware and glass. It cannot possibly go further in this direction,unless it is to pay a bonus to importers on their importations! The Australian Glass Manufacturers Company Limited, has already reduced the prices of the articles covered by the main item on glass. In the last twenty years it has developed into a huge successful organization, having a capital to-day of £2,000,000. However, instead of being in the hands of a few people who are exploiting the community, it is a public company in which the shareholders number 2,900. It gives employment to over 4,000 workers, to whom it pays annually in wages £700,000. The company, therefore, is certainly worth encouraging. But so far as this particular amendment is concerned, I do not think the company is in the least perturbed as to whether the general tariff should be 50 or 60 per cent. ; the effect of any such alteration on importations of glass will be negligible. The Government, however, is entitled to ask for a greater bargaining margin in the negotiations it is now conducting with other countries, with the object of disposing of more of our primary products. Yet we find that the representatives of the primary producers in this chamber are opposed to giving the Government such a weapon to be used in the interests of the people on whose behalf they claim to speak. Apparently such honorable senators desire to see the Government left without any weapon at all in this respect.
I could say a great deal more about the Belgian glass companies. I might ask who controls the particular Belgian company which made all the fuss recently in connexion with our importations of barley. The original Belgian glass companies made such inroads into the market of the United States of America that American glass interests, in order to get some of their own back, established a factory in Belgium. It is this American company in Belgium, and not any of the original Belgian companies, which is kicking np all the row on this matter to-day?
– That company has the Belgian Government behind it.
– That is so ; if we had companies established here, whether they were American, English or French companies, I, for one, would do everything possible to preserve them and keep them here, because of their value to this country. I have no doubt that that is the attitude adopted by the Belgian Government towards American glass company now established in that country.
– .Did not the Australian distributors of glass also bring strong pressure to bear on this Government on this matter?
– The honorable senator knows that all importers object to any duty.
– I am not speaking of the importers, but of the Australian distributors, who, I am suggesting, protested to the Government because prices charged to them were becoming too high, and they could not get business.
– A retailer invariably wants to secure his goods on better terms than his competitors, and he does not care from what source be gets them. I point out that whilst in all other cases the duties have been substantially reduced, the 25 per cent. British duty in this case, has been abolished altogether. I am not protesting on that point, but when I find honorable senators denouncing the Australian Glass Manufacturers Company Limited, which, as I have already pointed out, employs 4,000 hands, and distributes £700,000 annually in wages, I feel that it is time for some one to speak on its behalf, and to point out that it has made such a success of its business that it has developed an industry vital to the welfare of Australia.
– I would not have been drawn into this debate but for certain remarks made by Senator Leckie. The honorable senator has overlooked an important aspect of this matter. He said that all the fuss to which he referred was made by an American glass company established in Belgium, simply because £50,000 worth of Belgian glass was excluded from this country. The fuss was made by the Australian primary producers on discovering that they were losing a market for meat and barley, valued at nearly £2,000,000, at a time when the Commonwealth was selling £9,000,000 worth of commodities annually to Belgium.
– What was the reason for the loss of the market?
– As a result of the embargo against the importation of Belgian glass, the Belgian Government imposed a prohibition upon Australian produce, and we had a long fight before we could prevail upon Belgium to grant us any relief. If that, in itself, does not justify a fuss being made by the primary producers’ representatives in this Parliament, I do not know what does!
– Senator Badman has stated that Belgium is buying less Australian barley now than a few years ago.
– In this connexion I find myself in agreement with Senator Hardy, particularly in regard to the trade negotiations with Canada, and I would not like to have to alter my views. But if anything would force me to cross the floor of this chamber, it would be remarks such as those made by Senator Leckie.
– The crux of the matter is whether the Commonwealth can negotiate a satisfactory trade agreement by the method adopted by the Government of maintaining various duties at high levels for the purpose of using them as a lever in the negotiations. Every honorable senator must admit that the Australian glass manufacturing industry is one of the outstanding monopolies in the Commonwealth; also, ils ramifications are likely to extend. I regret having to say it, but I consider that Senator Leckie made a misstatement “in regard to the capital of this company. The latest figures, issued on the 15th July, 1935, are:-
– ‘What are the reserves ? .
– I am speaking of the capital investment. Other particulars are: -
From the £1,105,478 invested, this enterprise has built itself to its present status out of profits. If profits count for anything in monopolies, those of the Australian Glass Manufacturers Company Limited must certainly be gratifying to the shareholders -
I come now to the dividends paid by the company -
I venture to say that no other company in Australia has such a brilliant record in regard to profit making. But then, no other company is so heavily protected. That is the crux of the matter. The Australian glass industry does not require such excessive protection-, the Tariff Board ha3 recommended a reduction of duties, but the Government has retained them as a lever for negotiating trade agreements. I seriously doubt the wisdom of such a policy. “Will the imposition of duties of 60 per cent, and 70 per cent, upon certain imported goods encourage other countries to enter into negotiations with us? I do not think so. If I desire to sell a horse for £50, and I tell the prospective purchaser that I want £60, but will take £50, what sort of a business man would he consider me? Yet the same principle applies to the retention of excessive duties on certain imported lines, for the purpose of using them as a lever in trade negotiations. It is high time that honorable senators took note of this fact, and supported any amendments designed to reduce such preposterous duties.
– Leaving out the matter of excessive profits, I think the strongest point in the debate was made by the Minister in charge of the bill (Senator A. J. McLachlan). He stated that, if the Government followed the recommendation of the Tariff Board in regard to the general tariff, there would be no flexibility left for bargaining with other countries. That assertion introduces the whole subject of bargaining for satisfactory trade agreements. I do notlike to see one nation bargaining with another, but when other countries approach Australia with a request for trade treaties, the facts must be faced, and commercial logic applied to them. If we have a certain amount of flexibility in our various tariff duties, we shall have a more powerful lever for negotiating a trade agreement than if we had already given everything away.
– But the Belgians are aware of that.
– That contention could be applied to the whole of the tariff schedule; it is public property. But what the Belgians do not know and what they cannot asume is the extent to which Australia will forgo its advantage in regard to certain high duties if Belgium will take a greater percentage of our primary products. Quite apart from profits Senator Badman desires countries such as Belgium to buy a greater quantity of Australian commodities. In order to achieve that object under existing conditions trade treaties must be negotiated and bargaining can be carried out on the lines indicated by the Minister.
– Why shut the door on those other countries?
– I do not desire to close the doors; I am quite prepared to endeavour to increase the exports, but we must apply business logic to the subject. We cannot obtain satisfactory concessions abroad if we have given away everything before we enter into the negotiations. I have never been through the factory of the Australian Glass Manufacturers Company Limited, but I have seen its products. For the information of the Leader of the Opposition (Senator Collings), I make haste to add that I am not a shareholder in any glass company. To-day, the price of sheet glass is lower in Australia than at any other time in my experience. The ordinary box frame and sashes used in the standard cottage throughout Australia is 10-in x 14-in. and contains a considerable quantity of sheet glass. The cost of that glass is lower than at any time during the last ten or fifteen years. While I do not deny that the company is making large profits and I am not prepared to say that I would not support a move to reduce the price of sheet glass, I consider that honorable senators should recognize that the industry has merit and should be treated impartially.
– A few days ago, considerable discussion took place in this chamber on exchange. Some honorable senators declared that 25 per cent. exchange does not give 25 per cent. protection to manufacturers. Senator Johnston pointed out that according to the formula in the schedule, if the rate of exchange fell there would be a pro rata increase of duty. Carrying that contention to its logical conclusion I suppose that if the exchange returned to par, the duty on that particular item then referred to would be increased by 25 per cent. Further, it was contended that because the Tariff Board recommended a formula to cope with fluctuations of exchange, that was conclusive proof that the manufacturers were getting the benefit of the exchange at the present time. The Opposition denies that assertion and I believe that economists will agree that it is impossible for manufacturers to obtain the full benefit of the 25 per cent. exchange rate. In this connexion I have a document, presumably prepared by those who are interested in the glass industry, although no specific names are mentioned in it. It says -
In determining the present rates of duty there has been an assumption that “exchange” is equivalent to a protective duty of 20 per cent. This assumption is not in line with actual experience. “ Bartering “ by Germany, depreciated currency values of Japan, and special export allowancesby other countries frequently reduce the landed cost of goods, in Australian currency, below the level of what they were when exchange was at par. Drastic duty cuts, therefore, on the assumption that local industries will be protected by exchange, leave the industries open to a competition that is detrimental to the best interests of Australia. If the assumed protective valueof exchange were halved, and placed at 10 per cent. instead of 20 per cent. and the rates of duty increased accordingly, the position would not be so unsatisfactory. The subsequent increases in duty rates as * exchange moved towards parity could then be . 4 per cent. instead of . 8 per cent, for every £1 advance so that the same rate of duty would eventually be reached as under the 1935 proposals, but the Australian industries would be safeguarded in the process of returning to normal financial conditions.
Sitting suspended f rom 12.45 to2.15 p.m.
– Evidently some manufacturers think that the protective value of exchange is only half what the Tariff Board assumes, and that the duties should be increased accordingly. I am pleased that the limelight of publicity has been directed to the profits of various companies. There is a tendency among Tory parties to favour the limitation of profits. I, in common with other members of the Labour party, am in complete agreement with those who say that the exploitation of the people should be restricted. This Government, by its bitter attacks upon the Australian cement and glass industries, shows that similar assaults may be expected upon other local industries ; but Ministers and their supporters would deeply regret it, if companies in which they have financial interests, were similarly treated. This committee is evidently unanimously of the opinion that excessive profits should not be allowed. Therefore, we should at least be fair, and should not discriminate between different industries. Even in the worst years of the depression, 15 per cent. dividends were paid, and millions were placed to reserves by wealthy banking corporations. But the Minister in charge of this bill did not get hot under the collar over that matter. Immediately Labour men advocate the nationalization of banking, a frontal attack is made upon them by the Government and its supporters.
The TEMPORARY CHAIRMAN.The honorable senator should confine his remarks to the item.
– I am told that the profit, made by Australian Glass Manufacturers Company Limited out of glass products is 8 . per cent. Senator Badman has made out a good case for the limitation of profits, but he failed to differentiate between profits on glass and those derived from other investments. It is said by honorable senators opposite that the prices of goods have often been reduced as the result of the development of Australian industries, and I am sure that the prices of certain goods have been considerably lowered by the competition of the local manufacturers. In regard to one glass product, I could give an instance of a reduction of the local price by 35 per cent. as compared with the rate charged before the manufacture of the article in Australia was commenced. I am extremely pleased to learn that public opinion is tending towards the limitation of excessive profits.
.- The item under discussion may be comparatively unimportant, because we are dealing with a luxury, article, but an important, principle is involved. The main item is sheet glass, which is used in every home. The important point to consider is that the Belgian market for Australian barley, which has. been worth £360,000 a year, is now practically closed to our growers. I understand that Belgium has served notice on the Government that it proposes to terminate the present trade agreement within a certain period. No exporter can now buy our barley with the expectation of finding a market for it in Belgium.
– We could give Belgium a 10 per cent. reduction of the duty on cut glass bottles. That might change its mind.
– We should not jeopardize our market for barley in that country. The people of Belgium buy produce from Australia to the value of about £2,000,000 annually, and every effort must be made to retain their goodwill. We cannot use the whole of the barley which is grown in this country.
-Senator Badman. stated that Belgium has taken less barley from Australia since the making of the: trade agreement.
– That was owing to the action of the Scullin Government in prohibiting the importation of glass.
– If the Government extended to Belgium the benefit of the intermediate rate, would not that get over the difficulty?
– In fixing the rate in the intermediate column we must preserve the Ottawa margin.
– Quite so. Belgium actually took from Australia, in one year, barley to the value of £477,000,but that trade has ceased completely.
.- - I am alarmed to hear it said that notice has been received from Belgium of its; intention to terminate its trade agreement with Australia. No such notice hasbeen given. We are still operating under the agreement, which, of course, can be terminated by the giving of notice by either party to it.
– I was led to believe that such notice had been given.
– I have informed the honorable senator as to the advice received by me from official quarters.. I do. not believe that there is any probability of such notice being given. The reason why the Government “departed f rom the Tariff Board’s decision was that it desired to have an extra 10 per cent. margin to work upon in negotiating for trade treaties: Turning to the amendment under consideration. . the British preferential rate is 15 per cent. The lowest duty we could give to a foreign country would be 30 per cent., because wo have to preserve a margin of 15 per cent. in favour of Great Britain. The duty under the general tariff is 60 per cent.
– Would a reduction of 10 per cent. have any value in negotiating a trade treaty?
– We are giving away our bluff.
– I do not think so. If we commenced to negotiate on a duty of 50 per cent., those with whom we are dealing, who are as keen as we are, will seek a further reduction, and ultimately the duty might have to be reduced to 35 per cent.
. - Last year the total imports from Belgium were valued at £203,000, while our exports to that country were valued at £6,080,000. Belgium does not export large quantities of glass bottles or cut glass to Australia ; most of these goods are obtained from Great Britain and Czechoslovakia. Can the Minister (Senator A. J. McLachlan) say whether the Government is likely to enter into any trade treaty with Czechoslovakia, and if so, does it propose to use the duties shown under this item as a lever? I was pleased to hear Senator Brown say that he is opposed to monopolies and the exploitation of the people.
– I am opposed to the exploitation of the workers.
– Are we not all workers? The honorable senator was incorrect in saying that the profits of the glass-making branch of the Australian Glass Manufacturers Company Limited are only8 per cent., and that all other profits are made by the engineering and other branches.
– The company made a profit of only 8 per cent. on its glass manufacturing business.
– If a profit of only 8 per cent. was made on its glass business, and its total profits in 1934-35 amounted to 13 per cent., excessive profits, which should be investigated, must be made in other directions. We should be able to adopt the recommendation of the Tariff Board and at the same time leave a sufficient margin to enable trade treaties with other countries to be negotiated successfully. I support the request moved by Senator Johnston.
. - It is unfortunate that the efforts of the Minister directing negotiations for trade treaties (Sir Henry Gullett) have been unsuccessful, but it is hoped that some definite trade arrangements will be made with the countries with which negotiations are being conducted. Under this item the Government has declined to accept the recommendation of the Tariff Board to reduce the duty by 10 per cent., but only yesterday it strongly advocated that the recommendations of that body should be accepted. The Government admits that a duty of 50 per cent. is adequate to protect the industry, but persists in asking the committee to support a duty of 60 per cent. because it contends that such a duty may assist it in negotiating trade agreements with certain countries. If the reduction recommended by the board were made the margin which the Government wishes to preserve under theOttawa agreement would not be affected, and the Government would be making a friendly gesture to Belgium, and in that way would assist the negotiations mentioned by the Minister. If the Government wishes to retain the higher duty for bargaining purposes, its intention should not have been made public. Surely the Minister is aware that the matter has already received a good deal of publicity, and that representatives Of the interests concerned are probably within the precincts of the chamber. The Tariff Board, which conducted a thorough investigation into the profits, dividends and development of the industry, recommended that the duty should be reduced from 60 per cent. to 50 per cent. If the duty recommended were adopted, it would benefit Belgium, which might then be prepared to receive a larger quantity of our exports.
.- Will the Minister (Senator A. J. McLachlan) explain the procedure to be followed in dealing with what has been termed “the most favoured nations “ ? I understand that friendly nations will ha ve the benefit of the duties shown in the intermediate column.
– What is a friendly nation?
– A nation willing to take a certain quantity of Australian exports, and an unfriendlynation is one that is unwilling to trade with Australia in any way. As an intermediate column has again been embodied in the schedule after many years, will the Minister explain which countries are to receive the benefits of intermediate duties?
– The intermediate column has been introduced with the object of providing duties which may be imposed on the exports of those countries with which we are able to make favorable trade arrangements. In 1934-35 the exports of cut glass from the United Kingdom to Australia were valued at £33,000; from Czechoslovakia, £49,846; from Germany, £21,000; and from Japan, £2,000. Small exportations from other countries were valued at £13,000. Trade negotiations are now proceeding between the Commonwealth and Czechoslovakia and Germany.
– Is not the Minister dealing with another item?
– Senator Herbert Hays talks of creating a feeling of goodwill. This is a matter of bargaining between Australia and other countries in regard to commodities which each has to sell to the other. The Government has asked Parliament to agree to higher duties under the general tariff than those recommended by the Tariff Board in order to facilitate negotiations with most-favoured nations. That can be done only by a process of bargaining. Negotiations are proceeding with a number of countries, but whether the weapon, which the Government proposes to use, will prove to be a good one, I cannot say at this stage. The principle has been endorsed by the committee in regard to a number of other items which have already been discussed.
– I fail to see why we should require this weapon in any negotiations which may be undertaken. The bad feeling, which was created in 1930, when the Scullin Government imposed embargoes on the importation of glass, did not end with a change of government, because, when the embargoes were removed, certain interests attempted to hold a pistol at the head of the new Government by demanding that embargoes be re-imposed. Belgium retaliated by refusing to grant licences to Belgian importers to import barley from Australia. The Commonwealth Government now proposes to take further hostile action; it suggests that the tariff be raised to permit of bargaining. The sooner these tactics are dropped the better. Let representatives of the countries with which we hope to trade meet with us round the table in a spirit of mutual helpfulness, and better results will be achieved.
Question - That the request (Senator E. B. Johnston’s) be agreed to - put. The committee divided. ( Temporary Chairman - Senator J. B. Hayes.)
Majority . . . . 4
Question so resolved in the affirmative.
– The same position arises in connexion with sub-item c, glassware, n.e.i. The Tariff Board’s recommendation has not been given effect by the Government under the general tariff. In order that the duties recommended by the board may operate, I move -
That the House of Representativesbe requested to make the duties, sub-item (c) general, per dozen pieces, 10d., or ad valorem 40 per cent.
I suggest that the vote just taken be regarded as deciding the principle to be applied to this and other sub-items relating to glass.
– I cannot understand the reasoning of the committee, for at an earlier stage it decided that the recommendations of the Tariff Board should not be given effect in the general tariff. The vote just taken reverses that decision, and indicates that the committee-is not in favour of an intermediate tariff giving mostfavourednation treatment to certain countries. I cannot accept Senator Johnston’s suggestion that the principle just agreed to shall apply generally, for I regard the vote as applying only to glassware, and not as a condemnation of a principle previously accepted by the committee.
– As Senator Hardy has pointed out, the committee has registered two different decisions on the same principle. At an earlier stage, the Government succeeded in establishing the principle of an intermediate tariff, in order to facilitate negotiations for trade arrangements with other countries. The vote just taken reverses that decision, but I take it that the com mittee intended that vote to apply only to glass. I cannot abandon, without instructions from Cabinet, the attempt to create a position of advantage for Australia, in the conduct of negotiations for trade treaties. There may be something in Senator Johnston’s suggestion that the vote on the previous sub-item shall apply to glassware generally; but if he intends that it shall operate in regard to other items also, I cannot consent. I shall have to seek a division on each item. I remind honorable senators that the requests which will go to the House of Representatives should show some consistency in regard to principle.
– The Minister’s statement is fair and reasonable. I did not. intend that the vote just taken should apply to the schedule generally, but only to item 250.
Question - That the request (Senator E. B. Johnston’s) be agreed to - put. The committee divided. (The Temporary Chairman - Senator J. B. Hayes.) Ayes . . . . . . 17
Majority . …… 4
Question so resolved in the affirmative.
Item agreed to, subject to requests.
Items 252, 253, 254, 255 and 259 agreed to.
Division 9. - Drugs and Chemicals
Item 266 agreed to.
By omitting, the whole of sub-item (a) and inserting in its stead the following sub-item: - “ (a) Sheep, cattle, and horse washes, in liquid or powder form; weed, scrub, and tree-killers n.e.i., ad valorem: British, 10 per cent.; intermediate, 25 per cent.; general, 33¾ per cent.
And in respect of sub-item (a) -
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, . 0 per cent. ; intermediate, 7 per cent. ; general, 7 per cent.”
– On this item the Government has again ignored the recommendation of the Tariff Board in regard to the rates in the general tariff. In its report, dated the 2nd May, 1934, the board recommended -
Under existing conditions, but without primage, reasonable and adequate rates of duty would be, for this item: British, 10 per cent.; general 27½ per cent.
The Government should accept the board’s recommendation in respect of the general tariff. I point out that all of these articles are needed by the primary producers. I move -
That the House of Representatives be requested to make the duty, sub-item (a). general, 27½ per cent.
. - The point just raised by Senator Johnston is identical with that voted upon in the last division. The Government proposes an intermediate tariff of 25 per cent., as against British 10 per cent., thereby maintaining the British preference under the Ottawa agreement. For the same reason the Government has deliberately fixed the general tariff at 33¾ per cent. We need not debate the amendment, for the issue is plain.
Item agreed to.
Items 270 and 271 agreed to.
On and after 21st March, 1936 - 274. By omitting the whole of sub-item (a) and inserting in its stead the following subitem : - “(a) Bromine Salts; Cyanide of Potassium,
Cyanide of Sodium and Calcium Cyanide, British, free; intermediate, free; general, free.”
– I move -
That the House of Representatives be requested to amend sub-item (a) to read - “(a) Bromine Salt being a mixture of sodium bromide and sodium bromate ; Cyanide of Potassium, Cyanide of Sodium and Calcium Cyanide, British, free; intermediate, free, general, free “.
In the 1933 tariff this item included “ bromide salts “. It was found, however, that there was no such term in the British Pharmacoposia, and the term was interpreted in accordance with the intention, that is, to cover a mixture of sodium bromate and sodium bromide, a mixture used in the gold-mining industry. Accordingly, when the opportunity occurred in March last the item was amended to give, as was thought, the correct description to this mixture, and the term “ bromide salts “ was changed to “ bromine salts “. The Commonwealth Analyst now points out that the term “bromine salts”, in the plural, renders all salts containing bromine classifiable under item 274(a). This was not the intention when the item was amended, and the. request I have just moved will limit the item to the mixture which was intended to be covered.
Request agreed to.
Item agreed to, subject to a request.
Item 278 (Bicarbonate of soda, sulphur chloride, carbon tetrachloride).
.- In view of the fact that chemicals covered by this item, particularly bicarbonate of soda, were admitted under by-law 404, will the Minister explain why it has been found necessary to impose any duty on them?
– The proposed item will have the effect of making all sodium carbonate, whether described as soda ash or as carbonate of soda, classifiable at the rate applicable to soda ash instead of at different rates of duty. Carbonate of soda, previously dutiable at 40s. per ton, or 25 per cent. British preferential tariff, but admissible in commercial or technical grades in packages exceeding 10 lb. for all purposes under by-law, is now bracketed with soda ash at free, British preferential tariff. I think that this explanation will satisfy the honorable senator; there has simply been a reclassification.
– I am referring particularly to bicarbonate of soda.
– I am informed that bicarbonate of soda is still admissible under by-law. I am not aware of the technical reason for this reclassification. A general tariff rate of 40s. a ton is now proposed on carbonate of soda instead of admission by by-law at 15 per cent. or the tariff rate of 80s. a ton, or 45 per cent. This is equivalent to an increase of duty through the cancellation of the by-law, although it is a decrease of 40s. a ton or 45 per cent. in the tariff. Under the bylaw mentioned, bicarbonate of soda, commercial or technical grades, unmixed or combined with other ingredients, is admitted free. Apparently the department has classified bicarbonate of soda and carbonate of soda in two divisions. One covers the article with which we are familiar in our homes; on the other, the commercial class, which is manufactured in Australia, this duty has been imposed.
.- Although it is a comparatively small industry, the manufacture of carbon tetrachloride was established not under the Scullin tariff but under the 1921 tariff. The British preferential tariff was 25 per cent. and the general tariff 45 per cent., but under this schedule imports from Great Britain will be admitted free of duty and the general tariff will be 20 per cent. I consider that these severe reductions of duty may endanger the existence of the industry. Carbon tetrachloride is made by only one company in Australia, the Federal Fertilizers and Chemical Company Limited, which, last year, sold’ about 50 tons of the substance, valued at £3,000. In consequence of this new schedule, its output this year will not exceed 30 tons. Tetrachloride is used as a component part of a drench for the treatment of fluke in sheep, for fire extinguishers, for the dry cleaning of clothes, and for certain alcohol products. I understand that the prices of British and Australian carbon tetrachloride will be £60 a ton, but the imports from Germany are capturing the local market. The Australian company does not fear the competition of the British manufacturer so much as it does that of the German product, which is supplied below the home price. Nor can the Minister in charge of the bill afford to disregard the fact that this enterprise manufactures caustic soda, which is most necessary for defence uses. If, in the event of an outbreak of hostilities we had no factory in Australia equipped to manufacture this necessary material, months or years might elapse before its production could be arranged. The recent happenings in Abyssinia should warn Australia that it should be prepared for any eventualities. In my opinion the Minister should report on this aspect to the Minister for Trade and Customs (Mr. White) in order to ensure that the industry is not extinguished. If I am correct in my contention that the output since the introduction of the present tariff has been reduced by 50 per cent., it shows definitely that the tariff is responsible for the decrease.
. - As Senator Lockie has pointed out, the production of this factory is small. During the last two years importations from Germany have been comparatively considerable; but Germany has always supplied the bulk of the imports of this commodity. Honorable senators will agree that its use in connexion with the drenching of sheep for the cure of liver fluke and worms is most important; also it has a certain significance in regard to defence. Representations have already been made to the Minister who has taken steps in the light of statements made and the attitude of the Defence Department, to refer the matter to the Tariff Board. It will be considered by that body in connexion with another report upon an allied industry. The Government is anxious to enable the pastoralist to obtain his tetrachloride as cheaply as possible, and if the exigencies of defence require that it be produced in Australia, the matter will be reviewed.
.- From the viewpoint of pastoralists and farmers, this is a most important matter. Pastoralists to-day are required to be scientists as well as raisers of sheep, and this particular substance enters very largely into the preservation of the health of the sheep. The reduction of the output of carbon tetrachloride in Australia can easily be accounted for. Those who are closely associated with the sheep industry are aware that the Council for Scientific and Industrial Research has recommended the use of bluestone nicotine sulphate instead of carbon tetrachloride for the treatment of sheep, and hundreds of farmers to-day are acting upon that advice. Bluestone nicotine sulphate is less expensive than carbon tetrachloride. The latter is invaluable for the treatment of the various diseases in sheep, as was explained by Senator Leckie. A year ago, when I visited one big pastoralist in New South Wales, I was surprised to learn that he drenched his sheep eight times a year with tetrachloride ; but he was about to accept the advice of the Council for Scientific and Industrial Research to use bluestone nicotine sulphate, which, while cheap, is also highly effective. If the duty were raised, thus increasing the price, I am quite sure that the use of it would greatly diminish.
Item agreed to.
Item 279 (Citric acid, tartaric acid, &c).
– I became interested in this item when I noticed that Australia imports argol to the value of £201,878. This enormous quantity ‘ impressed me, and I was rather puzzled, as I expect honorable senators are, as to what argol actually is. I discovered that argol is the basis or raw product out of which cream of tartar and tartaric acid are made. As there has been an enormous increase of the consumption of argol, particularly in Great Britain, for the manufacture of baking powder and self-raising flour, I began to make inquiries. I quote the following information from Thorpe’s Dictionary of Applied Chemistry: -
Production of cream of tartar in France. - The wine districts of southern and southwestern France and Algeria are the largest sources of supply of cream of tartar in the world. It is estimated that Southern France and. North Africa produce on an average 10,000 tons of argols per annum. These crystals contain 75 per cent, of cream of tartar. Sometimes the scraping of the casks is deferred until two or three years’ precipitation has accumulated.
This is a precipitate from wine, and the granulations are collected and refined to obtain cream of tartar and tartartic acid, which is used largely in baking powder, self-raising flour, and medicines, and is also used for dyeing. Tartaric acid is also used in the manufacture of drinks and confectionery. The dictionary proceeded -
In yearswhen the price of wine is low. the growers scrape their casks in order to supplement their income by the sale of the argols, and accordingly in such years as much as 12.000 tons of argols may be offered.
Dealing with the production and exportation of argol from France, it stated -
Of the average figure of 10,000 tons–
This figure apparently refers to the amount produced in. France, and, I understand, Northern Africa, which is controlled by France - it is estimated that some 4,000 tons find their way to two large American firms, whose importing head-quarters are at New York City. Of the remaining 6.000 tons, some 1.200 go to independent buyers in the United States of America, 2,000 ton’s come to England, 2,000 tons arc used in France, and 800 tons go to Germany. Many of the largest American baking-powder companies do not buy cream of tartar, as they manufacture alum powders. Even the oldest American baking-powder companies are now adding tartaric acid to their formulas to replace a part of the cream of tartar formerly used. The English bakingpowder companies employ a higher proportion of tartaric acid than has ‘been used in the United States of America until recently.
In 1933, 5,390 tons of argol were imported into the Commonwealth. Australia produces an average quantity of between 14,000,000 and 15,000,000 gallons of wine a year; but, so far as I can ascertain, only 50 tons of argol are made in the Commonwealth.
– Not so much.
– According to the report of the Tariff Board which I have perused, the annual value of argol produced in Australia’ is £3.300. Australia produces between 14,000,000 and 15,000,000 gallons of wine and approximately 50 tons of argol. France and northern Africa which produce 2.000,000,000 gallons of wine, manufacture only 10,000 tons of argol of which Australia . imports 5,000 tons. The United States of America produces between 80,000,000 and 90,000,000 gallons of wine. Judging by import figures the production of argol in that country is low, but consumption is high. Argol is a most important by-product of the wine . industry, being the raw material for the manufacture of valuable household commodities - cream of tartar and tartaric: acid. In its report on this subject the Tariff Board states -
A South Australian company is engaged in the production of tartrates from the waste products of the wine industry. At the present time it is treating lees and marc (pressed skins and seed) and is also purchasing argol from the wineries. The company is supplying material for about 50 tons of cream of tartar per annum, and estimates that if all the available material in Australia could be treated, the yield of tartrates would be sufficient to produce 400 tons of cream of tartar per annum. This would represent about 15 per cent, of Australian requirements.
A Sydney firm which was established in 1927 for the manufacture of cream of tartar is now producing yearly 2,400 tons of cream of tartar and 350 tons of tartaric acid. There must be some means of increasing two or three times the present production of argol from the quantity of wine manufactured in Australia.
Fermentation is a complicated chemical process, which it would be impossible for me to outline; but we well know that chemists in all countries are reporting wonderful achievements. When citric acid was produced from the skin of the lemon, Italy was the world’s chief producer of this commodity; now as the result of scientific research enormous quantities of synthetic citric acid are being produced in many countries. In view of the possibilities of increased production of argol in Australia, the Government would be well advised to refer this interesting subject to the Council for Scientific and Industrial Research. At the present time, France practically supplies the world’s requirements. Why this should be so, I do not know, although as I have stated, Franco and northern Africa are the world’s largest producers of wine. Next come Spain and Portugal, with 649,000,000 gallons, the Danubian countries with 371,000,000 gallons; central Europe with 80,000,000 gallons, and the United States of America with between 80,000,000 and 90,000,000 gallons. The governments of all countries are realizing that not infrequently a by-product is more valuable than the main product itself. For instance, at one time coal was used merely for heating purposes. Now it is regarded as probably the world’s most valuable mineral, yielding 80 different kinds of dies, and enormous quantities of oil and motor spirit, as well as many other by-products. The same interesting discoveries are related to copper. For many years Australian copper was sold to Germany, whereit was submitted to electrolytic treat ment, and yielded gold far greater in value than copper itself. Zinc concentrates were once regarded as waste. Now, in Tasmania, there is a thriving industry producing much wealth in the form of lead and silver from zinc concentrates. It is gratifying to know that South Australia has been so progressive as to utilize at least some portion of the waste products of the wine industry. I feel sure that the adoption of up-to-date methods for the extraction of the known valuable1 by-products of. Australian wine would lead to the establishment of an important industry in this country. I commend the suggestion to the consideration of the Government.
– Senator Arkins has delivered an informative speech on a most interesting subject. The board’s report states that in the manufacture of cream of tartar and tartaric acid,the local industry employs 81 workers, and distributes £23,000 per annum in wages. Prior to the commencement of local production, all requirements were obtained from abroad, the importations in 1927-28 of cream of tartar and tartaric acid amounting to approximately 2,900 tons; but since 1930 the local manufacturer has supplied the bulk of Australian requirements.
Cream of tartar is manufactured from argol, which is a deposit that forms on the inside of vats in which wine is matured. It has been estimated that 1,000,000 gallons of wine matured in wood for two years would produce a deposit on the wood of about 2¼ tons of argol, and the board considers that about 35 tons per annum would be available from this source.
A South Australian company is engaged in the production of tartrates from the waste products of the wine industry by treatment of the pressed grape skins and seeds. This company, in 1933, was supplying material for about 50 tons of cream of tartar per annum, and estimated that if all the available material in Australia could be treated the yield of tartrates would be only sufficient to produce about 400 tons of cream of tartar per annum. This would represent about 15 per cent. of Australian requirements. In consequence, most of the argol required for local manufacture is imported from the wine-producing countries of Europe, about 1½ tons of 70 per cent. argol being required for use in the manufacture of each ton of cream of tartar. The Tariff Board made a comparison of the costs of argol with United Kingdom manufacturers’ selling prices for cream of tartar, and found there was a general conformity in the price variations of the two commodities.
Between 1932 and 1933, the price of cream of tartar in the United Kingdom had fallen by £20 a ton, but a total reduction of only £41s. 3d. was effected in the Australian manufacturers’ price, and allowing for the fact that the local producers may not have benefited by the full assumed reduction of overseas costs of argol, it is clear that local prices were kept at an unjustifiably high level. In arriving at its finding the board had. two important aspects to consider: first, that the duty would provide ad equate protection and enable the local manufacturers to earn reasonable profits; and. second, that the cover would not be high enough to permit the manufacturers to continue their past policy of making excessive profits. The board reported that under present conditions a customs duty of1¼d. per lb. would provide adequate protection. In relation to the previous rate of 2d. per lb. the proposed rate of 1½d. per lb. would provide a net protection of £16 6s.11d. a ton of cream of tartar produced. The board also considered that the general tariff rate should be maintained at a rate not more than 2d. per lb. in excess of the British preferential tariff rate.
I understand that the light wines produced in France and Italy yield a higher percentage of argol than wines of the heavier types manufactured in Australia. Probably this is the explanation for the discrepancy in the production of argol in France and Australia, mentioned by Senator Arkins. In 1933-34, the imports of argol were valued at £231,000, of which £180,000 worth came from France, and £40.000 worth from Italy. In the following year the total imports amounted to £140.000. of which France supplied £118,000 and Italy £22,000. The suggestion made by Senator Arkins is worthy of consideration, but I doubt that the scientific chemist is yet so equipped as to be able to solve the mystery surrounding the production of argol.
Item agreed to.
Items 280, 281, 283, 285 and 290 agreed to.
Division 10 - Wood, Wicker and Cane.
Item 291 (Veneers).
– In Queensland several boards are operating under legislative authority to control various primary products, including plywood and veneer board. Apparently this body is afraid that the duties provided under this item will affect the Queensland industry which is of great importance to that State and also to those engaged in it. Can the Minister (Senator A. J. McLachlan) give the committee some information on this item?
– I presume that the Leader of the Opposition (Senator Collings) is referring to the veneers produced in the vicinity of Cairns, some of which are exported. In 1933 the Tariff Board conducted an investigation into the industry and decided that the duties were sufficient to protect the manufacture of Australian veneer. When I inspected the plant at Cairns beautiful veneerswere being produced. The United States of America, which imposes a duty on Queensland logs from which veneers are made, omitted to impose a protective duty on veneers and, in consequence of this oversight, the Queensland industry has developed to a considerable extent. The whole subjecthas been examined closely by the Tariff Board and the addendum to its report shows that the Board was unanimously of the opinion that the duties provided are adequate. I understand that most of the imports are admitted under by-law, and are of a kind which cannot be produced in Australia.
– Those connected with the Queensland industry are vitally concerned in this item, and in a published document containing a mass of figures I find a heading “Menace to Australian primary and export industry “. The document summarizes the position in this way -
Under the new tariff rates should exchange return to par the duties on better class Australian veneers will drop as low as 7.5 per cent. British, and 14.3 per cent. foreign. Under these conditions disaster to the industry is inevitable.
– Have they taken into consideration the paragraph relating to exchange ?
– They deal with the points emphasized throughout this discussion. Those engaged in the industry who are experts in the manufacture of veneers, contend that if they have to submit to unreasonable competition from the
United Kingdom and other countries it will be only a matter of time when complete disaster will be unavoidable. The industry, which the Minister has admitted is efficiently conducted, is producing and exporting beautiful veneers, but even if it is fortunate enough to have a share of the export trade it should not have to submit to unnecessary onslaughts.
– Inquiry by the Tariff Board has revealed that large quantities of plain veneers used in the manufacture of common plywood are produced in the Commonwealth, Queensland alone producing 90,000,000 square feet per annum. No evidence was available that plain veneers are imported, and. the local manufacture of plywood is protected under tariff item 291 sr. Duties, however, are required to protect the local industry against importations of Japanese oak and Russian birch and alder veneers which might be used in the manufacture of plywood, to the detriment of the industry using hoop and kauri pine. About 66 per cent. of the annual requirements, valued, at £44,000, of fancy veneers is also manufactured in Australia, and native timber is used. Australian-made veneers valued at £21,774 were exported during 1934-35, principally to the United Kingdom, Canada, and the United States of America. It is from these countries that walnut, sycamore, figured mahogany and other fancy veneers are imported. Veneers valued at £13,440 were imported during 1934-35. Local prices range from about 6s. to 60s. per 100 square feet, and the bulk of the sales are in the cheaper range. Evidence given to the Tariff Board tends to show that the local demand for high-quality veneers exceeds the available Australian production. The board considers that all the high-grade veneer produced in Australia will sell readily at good prices regardless of the competition from overseas varieties. The general complaint from Australian furniture manufacturers at the inquiry was in regard to the paucity of supply of highquality veneer of Australian manufacture, and the production figures obtained by the board substantiated the complaint. The board is of the opinion that the British preferential tariff rate recommended by the board will protect local makers against any lines manufactured in the United Kingdom which, because of price, might otherwise displace local veneers, and that, as regards any other lines, the rate is not excessive. Importations have been:
I understand that some of the veneers which are imported are used by local manufacturers in their own businesses. Their interests have not been overlooked by the department, and I give the committee an assurance that this valuable industry will not be imperilled by any careless action on the part of the Government.
– I thank the Minister for his statement, which proves that this Queensland industry is by no means unimportant. Although the industry is not an old. one, it has progressed favorably. The Queensland production is about 50,000,000 feet of ply-wood annually, comprising chiefly hoop pine, but also fancy timbers which compare favorably with the world’s best. Direct employment is given to over 600 workers in the factories, and indirectly a similar number engaged in logging and other operations, is dependent on the industry. The capital employed exceeds £500,000. That the industry is efficient is shown by the fact that it is able to export some of its products. I ask the Government not to do any thing which might injure this industry.
. - I assure the members of the Opposition that the interests of this industry are not being overlooked. On the 11th February, 1.933, the company most concerned employed eighteen men and seven youths in its factory. By 1934 the number of employees had increased to 67. The average number of workmen engaged in the production of veneers during the financial year ended June, 1935, was 68, and for theeight months ended February, 1936, it was 67. The production of veneers during tho first eight months of the present financial year exceeded that of the whole of the financial year ended the 30th June. 3933. In 1 934-35 Australia exported to the United Kingdom veneers valued at £6,000, and imported from that country other veneers to the value of £2,647. The respective figures in relation to Canada were £4,338 and £1.210. Exports of veneers to the United States of America in the same year were valued at £8,876, exceeding the value of the veneers imported from that country, viz.. £6,400. There must be an exchange of the better classes of veneers.
Item agreed to.
Item 305 agreed to.
Division 11. - Jewellery and Fancy Goods.
Item 310 agreed to.
Item 318 (Wristlet watches, n.e.i.).
– I have no personal knowledge of the manufacture of wristlet watches and wa tch cases, but I understand that a considerable volume of business in these articles is done in the Commonwealth. I have here a letter from a company in
Bendigo, Victoria, which manufactures nickelplated watch cases and similar articles, which states -
We are in the position to inform you that according to a letter of the 13th September, 1935, as received by us from a London agent representing one of the leading Swiss manufacturers in reference to their trade with Australia that the following paragraph is taken from this letter: - “Further for your information we would just add that on his last trip to Australia, our representative sold over 150 gross of ladies’ and gents’ nickel watches “, which you will observe equals 21,600 nickel cases lost to the Australian case-makers, and is the sales of one overseas firm only, and there are many others, as according to statistics, the value of nickelplated, nickel alloy chromium plated and steel watches imported under the present existing duty of 2s.10½d. or 30 per cent, ad valorem amounted to £30,355 for the six months ending the 31st December, 1935, representing approximately 72,000 watches, which means that 72,000 metal cases were lost to the Australian case-makers for manufacture in addition to the loss to the industries which supply the raw materials such as nickel silver, polishing and chromium compositions, glasses and straps, and in regard to the straps we desire to inform vou that straps attached to watches are classed under item 318(a) (4) (a) (1) 2s. 10½d. or 30 per cent, ad valorem duty and 1.0 per cent. primage, whereas if these straps were imported separately the duty would be 50 per cent, and 10 per cent. primage.
According to figures as supplied by the Department of Trade and Customs, the value of complete watches of gold, rolled gold, silver, metal and steel imported was as follows: -
Financial year ending the 30th June, 1933, £11.222: financial yearending the 30th June, 1934, £21,640; financial year ending the 30th June. 1935, £44,576; and for the six months ending the 31st December, 1935, of the present financial year as follows: -
Gold, rolled gold, and silver watches, £14,099; nickel alloy, chromium and steel watches, £36,355, total £50,454, from which you willsee that the present duty on watches of 2s.10½d. or 30 per cent, ad valorem is not sufficient protection for the Australian casemakers.
Honorable senators will see that in three years the value of the articles imported has been more than quadrupled. Obviously this industry is not receiving sufficient protection. The letter continues -
The importation of complete watches for the last six months has exceeded the previous twelve months, and thus the present duty is creating an open market for the Swiss complete watches on account of the low cost that the Swiss factories are able to -produce the cases owing to their low standard of wages compared to the Australian awards, and thereby eventually gain the monopoly for cases in addition to the movements.
During October, 1935, the Cabinet after repeated requests admitted movements free of duty, pending another tariff -board inquiry, but so far this lias had little effect, and we consider that the present duty of 2s. 10½d should be increased to 5s. Cd. in order that the wholesale houses will import their movements, and have them cased into Australian-made cases, as it is on the importation of movements that depends the success of the Australian case manufacturers.
It is not necessary for me to add to that statement, but perhaps the Minister will be able to give the committee some further information of value.
– The duty on these articles under the 1921-28 tariff was - ad valorem, British, 10 per cent.; intermediate, 20 per cent.; and general, 30 per cent. Their importation was practically prohibited in 1931-32. The duties were 7s. 6d., or ad valorem 10 per cent., until the Tariff Board inquired into this item. I have not separate information in relation to the importation of watches and chronometers, but in the peak year of importation the value of such articles obtained from Switzerland represented £60,000, out of a total of £85,000. In 1934-35, when the tide had turned somewhat, Australia, imported from Switzerland watches and chronometers to the value of £17,000, and from Canada similar articles to the value of £13,000, the total importations in that year being valued at £43,000. The United Kingdom does scarcely any business with Australia in wristlet watches and cases; almost all of the importations come from Switzerland. Out of importations valued at £21,166 in 1933-34, wristlet watches and cases from Switzerland represented £20.014. Wristlet watches and cases have been included in the proposals as a result of Tariff Board inquiries, and watches and cases of nickel plate, nickel alloy, chromium plate’ and steel are covered by the board’s report of the 14th August, 1933, and its addendum of the 14th November, 1934. The inquiry showed that the production in Australia of nickelplated cases is negligible, and probably non-existent. The cheapest case manufactured locally is made from nickel alloy, and plating in the cheaper lines is confined to chromium plating. The board’s report covered the cheaper classes of wristlet watches and cases which are competitive with the nickel-plated article. These include chromium-plated cases and those of nickel alloy and steel. The report states that the imposition of the high specific duty of 7s. 6d. each had a disruptive effect on the local trade. The usual channels of supply were cut off by the operation of the duty, which amounted to a prohibition of the cheap Continental types of wristlet watches and watch-cases. Watch movements are not manufactured in Australia. The object of the high duty was to protect the local manufacturer of the cases into which the imported movements are inserted. Conflicting evidence was given at the inquiry as to the quality and adequacy of the supply of locallymanufactured cases. The board stated that it was apparent that the suddenly increased demand imposed on local manufacturers, as a result of the prohibitive duty, led to many delays in the filling of orders. The board is of the opinion that the local case manufacturers have exerted every effort, to meet the difficult situation imposed on them, and that, ‘with reasonable co-operation of the wholesalers and the exercise of foresight in placing orders, no delay should be experienced in the future. Movements for insertion in nickel-plated, nickel alloy, chromiumplated or steel cases of Australian manufacture are admissible at rates of free British and free general, under item 404a.
The Australian industry consists solely of manufacturing the case and enclosing the imported movements therein. Evidence showed that the export price in Switzerland of the cheapest nickel-plated brass watch case of reasonably reliable quality was from ‘ 4d. to 6d. sterling, which price would include the charge for enclosing the movement. The cost in 1933 of encasing the movement in “Australia, plus the charge for any minor adjustment, was from 5d. to 6d. a watch, and the great bulk of Australian-made cases were sold at 2s. 6d. each, which included the cost of encasing. Prom the figures in its possession, the board concludes that reasonable and adequate protection would be afforded the efficient local manufacturer of nickle alloy and chromium-plated watches by reductions of the specific duties to ls. 9d. each, British; and 2s. 9d. each, general, for present exchange.
The alternative ad valorem duties of 10 per cent. British and 30 per cent. general, should, in the opinion of the board, he allowed to remain unaltered, and should provide ample protection in respect of the higher range of cheap cases.
Theboard considered that the reduction of duties should have no detrimental effect on employment ; on the contrary a reduction of local prices should promote increased employment. In the report of 1933, it was estimated that 80 employees were engaged in the manufacture of cases and the assembly of the complete watch. This figure also included those engaged in distribution. The industry has made surprising progress since that date, and the designs are most comprehensive in the range of plated or other cases. One factory which employed 30 hands in 1931 now employs 232 persons. This is in addition to the local industry at Bendigo, which also provides employment for many people.
The board’s report of the 9th July, 1935, dealt with the necessity for the retention of the duty of 7s. 6d. each on the other wristlet watches and cases, which are principally those of precious metals. It stated that the protection given by the duties is largely offset by the duty of 15 per cent., general, which is payable on the Swiss movement. Although the trade at the previous inquiry keenly contested the continuance of the specific duty of 7s. 6d. each, in respect of the cheaper watches, at this inquiry the witnesses almost unanimously supported the maintenance of a duty of 7s. 6d. each, under the general tariff, in respect of watches and watch cases of precious metals. From all sections of the trade the need for stabilization was stressed, and, in view of all the circumstances, the board was of the opinion that the alternative specific duty of 7s. 6d. each, under the general tariff, should be retained.
The trade from the United Kingdom is small ; the manufacturer there is at a disadvantage, because the encasing of a Swiss movement in a Britishmade case might cause the complete watch to be ineligible for admission under the British preferential tariff. The duty is the same on the watch case as on the complete watch; therefore, in comparison with the Continental suppliers of watches to the Australian market, the United Kingdom case manufacturer suffers the disadvantage of the duty of 30 per cent, general, payable on the Continental movement imported for insertion in his case in Australia.
The board was of the opinion that the disadvantage of the United Kingdom manufacturer would be reasonably met by a reduction of the specific duty under the British preferential tariff to 3s. 6d. each. This explanation, I think, meets the point raised by the honorable senator.
Item agreed to.
Items 319 and 320 agreed to.
Division 12. - Hides, Leather and Rubber.
Items 324 and 325 agreed to.
Item 328 (Goloshes, rubber sand shoes and plimsolls).
– I ask the Minister for further information on this item. As honorable senators probably are aware, a factory, which is now of Australia-wide importance, is operating in this industry in Queensland. Factories in other States are also turning out these goods satisfactorily. I have had 26 years’ experience in this trade; therefore I know something about it. In the course of my first-reading speech, I recalled the time when all our requirements under this item were imported from the North British Rubber Company’s factory in Canada. In spite’ of the Jeremiahs who contended that Australian factories could never produce rubber shoes and boots equal to the overseas product, they are doing so to-day. No better products are turned out in any part of the world than those now being made by such factories as Dunlop-Perdrian and the N.A.R.M. factory in Queensland. I ask the Minister whether the reports of either the Tariff Board or the Department suggest that any injustice is being done to the Australian industry, or that greater protection should be given.
– I can immediately put the honorable senator at his ease. The total importations of goloshes, rubber sand boots and shoes and plimsolls over the last few years have been as follows: - 1930-31, £2,018; 1931-32, £258; 1932-33, £313; 1933-34, £287; 1934-35, £867. The bulk of the importations in the last year mentioned came from Canada and Japan. For the first six months of the current year the importations were valued at £897. The proposed rates of duty compared with those operating in the 1933 tariff represent under the British preferential tariff, after allowing for the exchange adjustment, a reduction by approximately onethird of a penny a pair of the fixed rate of duty, and an increase of 1£ per cent, in respect of the alternative ad valorem rate of duty. Under the general tariff, the reductions are 2d. a pair, and 2$ per cent, respectively. Action now being taken is consequent upon the receipt of the Tariff Board’s report of the 30th September, 1935. The British rates of duty are in accordance with the board’s recommendation; the intermediate rates express the level of duties recommended by the board for the general tariff, and, in accordance with the policy of providing a margin for trade treaty negotiation with overseas countries, the general rates have been increased above the level recommended by the board. The manufacture in Australia of sand shoes, sand boots and goloshes represents a capital investment of approximately £1,393,000. The industry is an extensive employer of labour, and in the last trading year produced over 4,000,000 pairs of articles with a factory-selling price of more than £675,000. On the average over 1,700 persons - 700 males and 1,000 females - are employed in this industry, and the weekly wages paid approximate £5,300. Competition in the industry is keen, the quality of manufactured products is good, and the range is adequate; importations are negligible. Selling prices are reasonable and compare favorably with the prices of like footwear in the United Kingdom. The local manufacturers are not taking full advantage of the protection afforded by the tariff. Total importations in 1934-35 consisted of 7,319 pairs valued at £S67 ; whereas in 192S-29 they were 178,243 pairs valued at £33,S12. No representations were made at the board’s inquiry by British interests in accordance with the provisions of the Ottawa agreement, to establish the necessity for a reduction of the British rates of duty, nor were any requests made from any other source for a lowering of the rate. The incidence of exchange affords additional protection to the Australian industry, and was estimated by the board to be equivalent to 4d. a pair under the specific rate of duty and 5 per cent, under the alternative ad valorem rate of duty. Under par exchange conditions the proposed rates of duty will not be lower than those provided for in the 1933 tariff.
Item agreed to
By omitting the whole item and inserting in its stead the following item:- -
And on and after 2nd April, 1980 - 329. Boots, shoes, slippers, clogs, patterns, and other footwear (of any material), n.e.i. ; boot and shoe uppers and tops (except of felt) ; cork, leather, or other socks or soles n.e.i. - ad val., British, 25 per cent.; intermediate, 45 per cent.; general, CO per cent.
– The previous British preferential duty - that is the duty existing at the time the Ottawa agreement was signed - was 45 per cent., which it is now proposed to reduce to 25 per cent. What is the reason for this big reduction? I ask this question particularly in view of the following statement in the report of the Tariff Board dated the 20th February, 1935-
The local industry is efficient, caters for all requirements, is working on a reasonable profit margin, uses almost entirely Australian material, is a large employer of skilled labour, and has been developed by the investment of a considerable amount of capital; its future is, therefore, a matter of paramount importance to the community as a whole.
At the board’s last inquiry into this industry representatives of the Australian manufacturers made certain representations. Will the Miniser explain the reason for this reduction? Why should not the British preferential duty remain at that existing at the time the Ottawa agreement was signed? I recall that about two years ago Senator DuncanHughes, speaking in this chamber, made a very pathetic plea on behalf of some poor man who had no boots, and the honorable senator contended that if we could only reduce the tariff on these articles, persons in such a plight would be enabled to secure the necessary footwear. Answering the honorable senator’s argument at that time, I dealt with the Bata factory in Czechoslovakia - I notice that the board, in its report, also referred to it - and I pointed out that this enterprise was producing huge stocks of boots and shoes which were being sold at prices ranging from ls. 6d. to 12s. a pair. I have shown that if the tariff were lowered it might be possible for the Bata Company to flood the Australian market with cheap boots and shoes. According to reports of the Tariff Board, this enterprise has established factories in Great Britain, and there is every possibility of 24 factories .being conducted in the Old Country on Bata economic lines. The Australian boot manufacturers are apprehensive of this development, because they foresee that Bata boots manufactured in England may be exported to Australia and admitted under the British preferential tariff.
– Branches of the Bata Company, if established in Great Britain, would have no advantage over the British manufacturers when exporting to Australia.
– The Bata Company is a foreign corporation, which has highly developed the manufacture of footwear. If its methods are introduced into Great Britain, boots and shoes made under the Bata system will be admitted to the Commonwealth at a cheaper rate than if they were exported directly from Czechoslovakia. I make no apology for quoting the following statement issued by the Victorian Chamber of Manufactures, and taken from the English trade journal, The Footwear Organizer: -
One aspect of j,Ir. Bata’s plans, and one of the most important, appears to be completely overlooked. By establishing a factory in this country, he can bring his productions inside any tariff which may be imposed on foreign shoes entering Great Britain. In addition, his shoes made hero will enjoy the benefits of British preferential duties in the dominions and colonies, and most-favoured nation treatment elsewhere.
That danger is realized by English manufacturers of footwear.
The action of the Commonwealth Government in reducing the duties on imported footwear even below the rate permissible under the Ottawa agreement will give an inducement to a foreign concern to flood the local market, thus causing widespread unemployment. The Australian boot trade is, therefore, confronted with a serious prospect; I hope honorable senators will view it in that light before arriving at a decision. Boots manufactured in Australia are produced principally by factories in New South Wales and Victoria, but several concerns are now operating in Queensland. I am informed that the Government of Victoria has amended the Factories Act. to prevent the working of overtime in this industry. In this way, increased employment will be brought about. I am heartily in accord with that legislative action to diminish unemployment ; the governments of other States should follow suit. In Queensland the industry is governed by a. federal award, and the rates of wages have not been so high as they should, be. If the trade were governed by an award of the Arbitration Court of Queensland, I am confident that they would be increased. When dealing with the subject of reasonable and unreasonable competition, the Tariff Board should take into consideration the fact that the footwear industry in Australia is endeavouring to increase employment. Honorable senators should ensure that the industry is adequately safeguarded. Seme honorable senators may deny that we are competent to restore the proposed duty of 25 per cent, to the original rate, on the ground that it would conflict with the Ottawa agreement. The Opposition declares emphatically that Parliament has the power to take that action without violating the agreement. Last night the Leader of the Senate (Senator Pearce) yarded the senatorial sheep on to his side by his bluff that the action of the House of Representatives, in respect of the duty on cement, violated the Ottawa agreement; but the Chief Justice of the High Court (Sir John Latham), has definitely stated that it is possible for the Commonwealth Parliament not to accept the recommendation of the Tariff Board, without causing a breach of the agreement. Sir John Latham is the highest legal luminary in the Commonwealth; in view of his statement, I, for one, will not accept the doctrine laid down by
Senator Pearce to Government supporters. Sir Herbert Samuel, when discussing the dominion agreements in the House of Commons on the 18th October, 1932, also stated very clearly the powers of the various Governments under that agreement, and he cited tlie opinion of Sir John Latham. If honorable senators desire, I can obtain that statement from the House of Commons’ Ilansard. Speaking last night on the item dealing with cement, Senator Pearce made an eloquent plea to honorable senators not to cast a vote which would violate the Ottawa agreement. This plea was advanced in order to induce honorable senators not to go back on their party. In my opinion the right honorable gentleman advanced an astounding and utterly false argument.
– What has this to do with boot3?
– The two are closely related, as I shall proceed to demonstrate. If the Senate so desires, it can request the House of Representatives to restore the duty on imported footwear to the original figure without violating the Ottawa agreement. I am confident that this can bc. done. 1 repeat that Senator Pearce made an astounding statement that if honorable senators did not. accept the duty on cement, article 12 of the agreement would be broken and th. entire agreement would be jeopardized. If those were not the actual words used by the right honorable gentleman, he certainly conveyed that meaning. Such a contention is utterly specious. Under article 10 of the Ottawa agreement this Government undertakes, during the currency of the agreement, that the tariff shall be based on the principle that protective duties shall not exceed such a level as will prevent the producer of the United Kingdom from competing on a reasonable basis, with Australian manufacturers.
– The honorable senator’s time has expired.
– As I indicated during the discussion of the previous item I am familiar with the various aspects of the boot trade. Twenty-six years of my life were spent in the footwear- industry which I saw grow from its infancy to its pre sent dimensions. It is of immense value to the Commonwealth. The Minister, no doubt, has a record of the number of employees engaged in the industry, and other particulars concerning it, and I am well aware that he will not inform honorable senators that the factory owners are making exorbitant profits. Indeed, they are hard put to hold their own. I desire to add my support to the testimony of Senator Brown. In this instance the interests, not only of the manufacturer of footwear, but also of allied industries which supply the raw material for the manufacture of boots and shoes, must be taken into consideration. Leather enters largely into the composition of footwear; unfortunately competition has resulted in the use of certain substitutes which are not so satisfactory as leather. I remember when the Australian market for boots, shoes and slippers was supplied by overseas manufacturers. I have seen the industry grow to such an extent, that to-day the Australian manufactures are equal to, if not superior to, those of other countries. I recall perfectly the fight that the industry was obliged to make to overcome an antipathy against Australian boots and shoes. For a long while sole leather was imperfectly tanned. Before the mineral method of tanning was introduced, the leather was submitted to a vegetable process in which wattle and other barks were extensively used. The resultant smell of the leather thus treated was so pronounced that it was not at all difficult to know whether or not a person was wearing a pair of Australian-made boots or shoes. But Australian tanners have since improved their methods. Oak bark is now more largely used, and a large proportion of sole and upper leathers is also tanned by the chrome chemical process, which does not impart to leather the objectionable smell which was previously so noticeable. I well remember that it was the practice in some retail stores to keep Australianmade boots in two different boxes, one of which had on it the stars and stripes, indicating American origin of the contents. If a customer objected to an Australianmade pair of boots, nil that the assistant had to do was to take from another fixture a pair exactly the same as the first but in a box that suggested American manufacture, and. say to the customer, “ Now, madame, here is something really good.” The lady would then make the purchase and go away quite satisfied, although, as a matter of fact, she had really bought Australianmade footwear. I mention this incident to impress on honorable senators that the Australian boot and shoe industry is worth-while. It produces an article of undoubted quality, and I entirely agree with Senator Brown that everything possible should be done to protect it against overseas competition. My colleague referred just now to the inroads which Bata, the Chechoslovakian firm, was making into the industry in Great Britain. Not many years ago I inspected travellers’ samples of boots and shoes made in Japan, and could find very little fault with the general quality or appearance of the goods, so it will be seen that this Australian industry is threatened not only by the Czechoslovakia^ firm mentioned, but also by unfair competition from Japan. I hope that the Minister will be able to furnish the committee with a satisfactory explanation of the attitude of the Government which, it seems “to me, is worshipping unduly at the shrine of Ottawa, and meanwhile is whittling away the measure of protection so necessary for this great Australian industry.
. I understand, but do not share, Senator Collings’s concern for the Australian boot and shoe industry. Official figures covering a number of years show that it is holding the Australian market.
– Then why reduce the tariff?
– I might reply to the honorable gentleman by asking what purpose is served by retaining an unnecessary and provocative tariff? The United Kingdom manufacturers in their best trading years have only had £10,000 worth of the Australian trade, but the United States of America has kept a steady flow of exports to Australia, culminating in 1934-35 in exports valued at £11,000. I have no doubt that in all countries there are people who, if they had the opportunity, would prefer to wea r boots and shoes made in Australia, and I feel sure that Senator Collings, in the rarer atmosphere of the Senate, would not now approve of any retail salesman misleading an unsuspecting customer as to the country of origin of a particular commodity. There is nothing new in the information contained in the circular to which Senator Brown has directed attention. The Tariff Board had all the facts before it when it made its report, in which it stated that the local industry was efficient, that it catered for all requirements, was working on a reasonable profit margin, and used large quantities of Australian raw materials. It added that Australian factories were supplying over 99 per cent, of the local demand. The proposed rates, when compared with those iu the 1933 tariff, represent a reduction of the British tariff by8¾ per cent., and the general tariff by 5 per cent.
The Tariff Board recommended that, under present exchange conditions, reasonable and adequate protection would be afforded to the local industry by rates of 25 per cent. British, and 45 per cent. general tariff. The proposed British rate gives effect to the board’s recommendation. The intermediate rate of 45 per cent, is equivalent to the general rate recommended by the board, and the general tariff of 60 per cent, is 15 per cent, above the board’s recommendation. The item embodies a tariff proposal brought down on the 28th November, 1935, and an amendment made on the 2nd April, 1936. The only variation between the proposal and the amendment is that the intermediate rate of 55 per cent, in the former has been lowered to 45 per cent., at which level it gives full effect to the equivalent rate of duty recommended by the board for the general tariff. When the first proposals were given effect, the Government was not satisfied that tbe adoption of an intermediate rate of 45 per cent, would adequately protect this valuable industry, and, pending further inquiries, the rates of duty in both the intermediate and general tariffs were increased by 10 per cent, above those which, in ordinary circumstances, would have been proposed. Subsequent inquiries have shown that the rate of 45 per cent, in the intermediate rate, will give adequate protection to the industry. This rate, with the additional protective incidence of exchange, but excluding a 10 per cent, primage duty, gives a combined protection of at least 55 per cent, against principal foreign competitors. It is not proposed to vary the proposed general tariff of 60 per cent, as embodied in the November proposals. The higher margin above the intermediate rate will strengthen the hands of the Government in its trade-treaty negotiations with overseas countries.
Senator DUNCAN-HUGHES (South Australia [4.55]. - I am glad that Senator Brown has mentioned the action of the Czechoslovakian firm in establishing factories in England, because I remember that he and I had some discussion upon this item three years ago. I noted certain omissions from the honorable gentleman’s speech, when he was speaking of this particular matter. I shall endeavour to supply them, and, I hope, improve the committee’s knowledge of the case somewhat. For instance, he omitted to read this portion of the Tariff Board’s comments on page 7 of the report, issued on the 7th February, 1935:-
Bata’s venture in the United Kingdom can only bc successful, because of superior efficiency. The board considers it reasonable to assume that, following the practice of the past, Australian boot and shoe manufacturers will not fail to take advantage of all possible improvements and developments, and feels confident that the Australian industry is quite capable of successfully meeting competition of this nature.
In other words, the board indicated that it did not consider that there was any ground for alarm on account of competition from Bata. I fail to see why, if we do not object to foreigners settling in Australia to produce commodities in this country, we should take exception to Americans settling down in Belgium to use our barley, or Czechoslovakians settling down in Great Britain to manufacture boots and shoes. What cuts one way ought to cut another. It seems to me that we are a bit too critical about the dumping of foreign goods in this country, but not nearly so critical about dumping our goods in other countries. Senator Brown would have us believe that, if there were ;: Labour Government in power to-day, the workers would get more wages. The last occasion on which the experiment was tried in the Commonwealth Parliament the objective was not achieved, though I admit that the fault was not altogether that of the Government.
– That was not the experience under a New .South Wales Labour government.
– I do not think so; but whether in the Commonwealth, Queensland or New South Wales, Labour governments have not been responsible for the payment of higher wages.
– In Queensland, the basic wage is higher, the hours of labour shorter, and the industrial conditions better than in any other State.
– The honorable senator might also say that the taxes imposed in that .State are higher. Neither the Minister nor Senator Brown mentioned that the proposal before the committee does not coincide with the recommendation of the Tariff Board. Will the Minister explain why that is so? Is this another bargaining weapon to be used in negotiating treaties with other countries ? I suppose that it could be said that a boot could be used effectively, because that seems to be the weapon we are using in dealing with some countries. The Tariff Board, has recommended that the duties should .be British preferential, 25 per cent., and general, 45 per cent. The board stated -
With exchange, Australia on London, at par equivalent protection would be provided by ad valorem rates of 35 per cent. (British preferential tariff), and 55 per cent, (general tariff).
Exchange is not at par, and the Government has adopted the recommendation of a duty of 25 per cent, ad valorem, but has made the general tariff 60 per cent., which is not in conformity with the board’s recommendation. We have been informed that this industry supplies 99 per cent, of the footwear used in Australia. That is a reasonable percentage, but probably the members of the Opposition will say that 100 per cent, would be better ! We have also to study this subject from the viewpoint of other countries. In 1929-30, importations of men’s boots and shoes from Great Britain, were valued at £28,000, and in 1934-35, at £4,400. In 1929-30, the importations of women’s and children’s hoots and shoes were valued at £67,000, and in 1934-35, at about £4,000. I do not propose to deal in detail with the various items set out in the report, hut I direct the attention of honorable senators to the fact that a witness giving evidence before the board on behalf of the Incorporated Federated Association of Boots and Shoes manufacturers of Great Britain and Ireland, said -
A great decrease in the imports of footwear from the United Kingdom to Australia has taken place during the last three years. In no other country, British or foreign, has business fallen off to such an alarming extent.
It would appear that the value of importations from the United States of America was formerly much higher. In 1929-30, the value of the importations of men’s boots was about £8,500, and of women’s nearly £32,000, or a total of over £40,000. Last year the value of importations was about £12,000. The Tariff Board stated that the boot and shoe industry will not be able to engage in the export trade. One measure of the efficiency of an industry is its ability to compete with overseas manufacturers. I imagine that honorable senators will agree that as a general rule an industry is efficient only if it is able to engage in the export trade. Surely one proof of efficiency is that an industry can sell its goods to other than those who may be obliged to buy them.
– That is not the only test.
– No. But it is one of the tests that must be applied. On this point the Tariff Board stated -
A certain export trade is maintained to New Zealand and the Pacific Islands, but an appreciable development of these markets is not generally anticipated by the trade.
In 1933 our exports were valued at about £57,000, and last year at £64,000. Boots and shoes are manufactured almost entirely in two of the eastern States; the figures showing the States from which boots are exported are interesting. For instance, exports from South Australia in 1933-34 and 1934-35 were valued at £54, and nil respectively; Western Australia, £53 and nil; and Tasmania, £2 and nil. It will be seen that the reduction in Tasmania was not as great as in the other States! The boot and shoe manufacturing industry, which benefits only two States, constitutes a very heavy drain upon the other States. Possibly the Leader of the Opposition (Senator Collings) does not know that it was estimated by a South Australian committee which inquired into this matter that for the year 1932-33, the excess cost due to the protection afforded to the boot industry amounted to nearly £1,100,000. That is a considerable burden to be carried by the community as a whole ; but I do not suggest that it is borne almost solely for the benefit of two States. It is shouldered by the whole community for the benefit of those engaged in the manufacture of boots and shoes. This industry has had benevolent protection, but it should not be placed in a better position than the Tariff Board has recommended. I have never known the Tariff Board to make a recommendation which would induce me to think that it wished to damage or do an injustice to an organized Australian industry. When the Leader of the Opposition says that it is an efficient industry, he suggests that its products are equal to those manufactured in any part of the world; but has the honorable senator ever visited Europe or the United States of America to enable him to make a comparison? The real test of efficiency is the durability and dependability of the footwear produced. I could say a good deal more on this subject ; but I do not wish to weary the committee. At the same time, I feel that this is a subject upon which, we should express a definite opinion. I do not suggest that there should be any reduction under the British preferential tariff. I move -
That the House of Representatives be requested to make the duties - intermediate, 42½ per cent.; general, 45 per cent.
– The honorable senator has exhausted his time.
Senator A. J. McLACHLAN (South - Duties of 55 per cent, under the intermediate tariff and 60 per cent, under the general tariff were adopted in consequence of representations made to the Minister for Trade and Customs (Mr. White) subsequent to the first inquiry conducted by the Tariff Board.
The Minister referred the matter back to the board, because there appeared to be some doubt in the minds of the Minister and of the departmental officers in regard to the effect of the duties upon certain lines.
– Is there a later report than that, dated the 20th February, 1935?
– No ; but the Minister for Trade and Customs asked the board for an explanation. Its subsequent recommendation clarified the position and justified the adoption of the duties in the schedule.
– Wa3 that the final recommendation of the board?
– Yes. The Government has given effect to the Tariff Board’s recommendation in the intermediate tariff, and, in order to facilitate treaty negotiations, has added 15 per cent, to the general tariff. Honorable senators may be interested to know that Australia’s requirements of boots and shoes are valued at approximately £6,500,000 a year. The latest available figures in regard to this industry are for the year 1933-34. They show that there were then 309 boot and shoe factories in Australia; that the value of the land and buildings was £1,262,396, and of the plant and machinery, £699,941. The industry employed 15y690 operatives, whose salaries and wages amounted to £2,001,899 per annum. The value of the output of the Australian factories in that year was £6,395,859, whilst the raw material used cost £3,441,508. The Government’s proposals have the backing of the Tariff Board.
– »My request agrees with the Tariff Board’s recommendations.
– The honorable senator proposes to reduce its recommendation of 45 per cent, by 2$ per cent. I ask honorable senators to retain the 60 per cent, general tariff as a matter of principle.
– The committee has declined to do that.
– Its decision related only to glass. I ask the committee to accept the duties set out in the schedule.
– I am astounded that Senator Duncan-Hughes should move a request which proposes to reduce the protection granted to this industry. I am particularly astonished that he should seek to interfere with the intermediate and general tariffs after the Minister’s explanation that the Government wants some margin for bargaining purposes.
– With Czechoslovakia ?
– Boots and shoes from that country are menacing the Australian industry. During recent years ladies’ basket shoes, manufactured under exceedingly unsatisfactory conditions inside Australia, in places where the factory laws are not observed as strictly as they ought to be, have had a ready sale. Senator Duncan-Hughes asked whether I had been to Central Europe, where similar shoes are made, and was personally acquainted with the factory conditions there. I regret that I have not had the advantage of travel which Senator Duncan-Hughes has enjoyed. Nevertheless, I have a close acquaintance with this industry, because for some years, I travelled up and down Queensland with samples of goods made by a firm for which I worked for more than a quarter of a century. While representing that firm, I came in contact with commercial travellers whose business was to sell boots and shoes made in the United Kingdom, the southern States of Australia, and elsewhere. My acquaintance with the industry is, therefore, not superficial, and I have some backing for my statement that the Australian factories are efficiently conducted. The Minister said that 99 per cent, of the footwear worn by Australians is made locally. That is nothing to be ashamed of. Notwithstanding that Australian manufacturers now command practically the whole of the home market, they are afraid that they will have to face keen competition from overseas if the Government proposals are agreed to. If there is any real worth in the Ministry’s proposal to encourage the making of trade treaties by means of an intermediate tariff, it can mean only that the Government is prepared to offer to other countries some real advantage. I do not suggest that it would attempt to make a trade treaty with another country with the definite intention to sell that country “ a gold brick,” and, therefore, I am forced to the conclusion that the Government requires some bargaining margin in “the general tariff. It wants to be able to offer some advantage in return for other advantages, and, therefore, its proposals mean that some of the Australian market for boots and shoes, which the local factories are now supplying, will be offered to overseas manufacturers. There is no escape from that logic. I know that the boot and shoe industry is not in a flourishing condition. One reason is that there are too many boot and shoe factories in Australia. That state of affairs is inseparable from the system of society in which the Government believes. The Government holds that competition is the life of trade; I know that competition is the death of trade. I agree with Ruskin that competition in all things means anarchy and death ; whereas, co-operation in all things means harmony and life. If all the Australian boot and shoe factories were forced to keep their plant working at full capacity, the production would greatly exceed the demand. That state of affairs cannot be remedied by anything that this committee may do to-day. The Australian industry is not sheltering behind a wall of protection in order to exploit the users of its products; it is playing the game. It is claimed that these duties are an impost on the people of Australia. That cannot be denied. Nor can it be denied that every bounty paid to primary producers out of the revenue provided by the taxpayers of this country is an impost on the community. If I thought that I had any powers of persuasion I should exert them in an effort to get Senator Duncan-Hughes to withdraw his request. It is unworthy of him; I say that with all respect. The Australian industry, which is carrying on under difficulties, has pointed out that the danger point is not far ahead. I hope that, if the request be not withdrawn, it will be rejected by the committee.
– If there were a duty on words, Senator Collings would be the most highly taxed man in Australia. When one considers his fluency of speech, it is not hard to understand his advocacy of free speech. I cannot understand the antagonism which the Leader of the Opposition (Senator Collings) and Senator Brown invariably display whenever the name of Czechoslovakia, which is friendly towards Australia, is mentioned ; they do not conceal their repugnance for that country. We should view the industrial methods adopted in the boot and shoe manufacturing industry in Czechoslovakia with a certain degree of admiration; its working conditions are splendid. The Bata Company which members of the Opposition have criticized adversely is one of the best employers of labour in the world and its late chief can be justly regarded as the Henry Ford of Europe. At one time he was a private in the forces which materially helped to found the Czechoslovakian Republic; he developed the boot and shoe industry scientifically; and to-day his company produces 100,000 pairs of boots and shoes daily. He was able to penetrate not only the markets of Europe, which, in the case of Germany and other countries were highly protected, but also that of the United States of America which is most highly protected. This achievement about which the Leader of the Opposition complains, was based on the idea that the trade must not only manufacture efficiently but also sell efficiently. To-day in Sydney, under the influence of a similar development, many retailers are really wholesalers. Fostars Limited, for instance, are approaching a total output, since the company’s inception, of 2,000,000 pairs of boots and shoes, and instead of confining its activities to manufacture it is selling its products through what may be regarded as the chain-store system. By this method it is able to sell its footwear at the lowest possible price. I have found the business people of Czechoslovakia very fair-minded; Czechoslovakia ranks first among those countries which are disposed to make, a fair trade bargain with others, including Australia. I-t is ready to even up its sales in other countries by taking more of their products, and to-day it is anxious to even up its trade with Australia by taking our wool and many other of our primary products. The Tariff Board pointed out that Australian manufacturers supply 99 per cent!, of the boots and shoes used in this country; therefore, the importations must be almost negligible. The board stated -
The landed duty paid cost of a ladies’ slipper manufactured by the Bata Shoe Company, Czechoslovakia, invoiced at 3s. 9d. (sterling) per pair, was 8s. 4d. per pair, the cost of a comparable local production to the same purchaser is Ss. M. per pair.
Recently I interviewed a wellknown boot and shoe retailer with whom I discussed the products of the Bata Company. He agreed that the head of the concern must be a remarkable man. He produced from his stock a satin court shoe manufactured by that company. I found it to be a fine product; it was made on a beautiful last and the satin was of the highest quality; the product would have done credit to any manufacturer- It was selling at 8s. This retailer then asked his assistant to produce an Australian shoe selling at the same price. The assistant replied that the only Australian-made shoe in stock in the same range was priced at 9s. Although I am an Australian, and feel proud of Australian industry, I must say that the difference between these two products was as great as the difference between chalk and cheese; although the Australian article was dearer it was rubbish compared with the other.
– Does the honorable senator know sufficient about these products to be able to compare them?
– Does the honorable senator know whether the Czechoslovakia shoe had a composition sole and heel?
– It had not. The Leader of the Opposition also referred to the inferiority of basket shoes. I saw the first basket shoe which was imported into Australia; it wore for five years. To-day, of course, Australian manufacturers are able to supply this class of product. I impress upon honor able senators that other countries, including Czechoslovakia, are quite willing to trade fairly with Australia, and I suggest to those honorable senators who hold the view that this is the only country which gives good conditions in industry, that they read the history of such concerns as the Bata company. Every honorable senator should be satisfied with the protection proposed by the Government under this item; the manufacturers are satisfied. With the Minister I hope that we will be able to arrive at some arrangement with Czechoslovakia and other countries, for greater reciprocal trade. With such countries, we should be prepared to deal fairly and reasonably.
– We shall not encourage reciprocity by increasing duties on their goods.
– The honorable senator is aware that the present duties are not permanent. I support the Government in this matter. I do not want to displace any operatives in the Australian industry, but I wish to see improved trade arrangements made with other countries so that we may secure greater markets for our own products. After all, it is not the price, but the quality, of a product which counts; particularly is this so in the case of boots and shoes. Honorable senators cited the importations under this item from the United States of America. I point out that some of the products from that country are probably manufactured under patent; even the last may be patented ; and, perhaps, the leather is processed according to a secret formula. Such advantages are not given away. Today the highest quality American shoes would probably cost four guineas a pair. Regardless of the price, however, the quality of these shoes reveals the high efficiency of overseas manufacturers. Although I believe in protection of our industries, I do not want to let pass unchallenged, the suggestion that there is no other country with which we can trade satisfactorily; the majority of the countries mentioned in this debate are progressive and desire to act fairly in any trade negotiations with Australia.
– I do not claim to speak on this subject except as a wearer of boots and shoes. In this matter, I think we might “ let sleeping dogs lie.” According to the report of the Tariff Board, the Australian manufacturer enjoys 99½ per cent, of the Australian market ; from the protectionist point of view that seems a satisfactory position. We must accept the principle that all our industries should share at least a small portion of their markets with overseas products ; undoubtedly a little competition is always helpful. We should do nothing, however, that would injure Australian industry. Senator Arkins remarked that no protest was made on behalf of Australian manufacturers against a decrease of the duties under this item. The report of the Tariff Board records that, in evidence in support of the retention of the existing duties, Mr. L. Withall, the secretary of the Victorian Chamber of Manufacturers, said -
A reduction of the tariff, made with the intention of diverting a proportion of the local trade into the hands of overseas manufacturers, would be socially and economically suicidal. If only one-third of the local trade were lost, no less than 5,000 Australian footwear employees would be rendered idle.
Since 1931, a large number of Australian manufacturers of footwear have relinquished business, and many others have curtailed their activities and disposed of the major portion of their plant. The catalogues of 33 sales held in Victoria during the last three years are submitted for inspection.
It may be argued that there are too many factories in the industries; indeed it is recognized that leather manufacturers find it easy to branch out as manufacturers of boots and shoes. Senator Collings said that, generally speaking, the industry was not in a flourishing condition. I suggest that this is an industry which we should be able to develop to the point when imports will vanish altogether. It is one of our earliest industries and, I suppose, with clothing, perhaps, it comes second to the blacksmith’s trade in elementary importance. Thus it is a discredit to any small section of people, let alone a nation like Australia, if we find it necessary to import boots and shoes from countries 12,000 miles away. I fail to see the purpose of Senator DuncanHughes’ amendment. On other occasions he has been told by the Minister that the Government desires to have the advantage of a fair margin of protection for bargaining purposes. That is reasonable.
– With which country is the Government going to bargain in this case?
– I have no objection to its bargaining with Czechoslovakia.
– There has been much talk of negotiating a treaty with Czechoslovakia, but is such a treaty nearing completion? Have we treaties with any other European country to-day except Belgium?
– As one familiar with current politics, the honorable senator is aware that the Minister in charge of negotiations for trade treaties (Sir Henry Gullett) in his recent travels abroad, visited Czechoslovakia; certainly the Minister visited Poland, and Australians at the present time are very interested to discover what is the real effect of the negotiations he is reported to have entered into with that country. In view of the fact that the Government is, in a large measure, responsible for the prosperity of every Australian citizen, it should be granted some latitude or margin for the purposes of bargaining when negotiating a trade agreement. In all business dealings one generally starts by asking for a little more than he expects to get; he always keeps something in hand until he is forced to reduce his demands. The explanation given by the Minister is reasonable, and does not cast a slight on other countries. Senator DuncanHughes’s amendment does not propose to alter the present duty of 25 per cent. British preferential tariff, which is 20 per cent, less than the duty imposed less than three years ago; but he has moved for a reduction of the intermediate tariff to 42½ per cent, and the general tariff to 45 per cent.
– The Tariff Board did not recommend an intermediate rate.
– The Government has reduced the general tariff of 1933 by 5 per cent., and has interposed an intermediate rate of 45 per cent., whilst the British preferential tariff has been made 25 per cent., as recommended by the Tariff Board. Czechoslovakia and other European countries, if they desire to receive the favoured nation treatment from Australia, will have an opportunity to come under the intermediate tariff.
– Czechoslovakia is very much in evidence at the present time.
– No doubt. One has only to study the scale of imports from Czechoslovakia to realize that it is very much to the fore. I have read of the remarkable progress that the Bata Company and other Czechoslovakian industrial enterprises have made; boots and shoes provide a wonderful example of this development. During the last three years the system of bargaining between countries for the encouragement of trade between them has grown apace. Indeed, we have seen countries bartering their commodities for those of other nations. -I may be excused for using a pun, in this instance we have “bata-ing” as well as bargaining. Honorable senators will realize from the explanation of the Minister that the Government is quite alive to its responsibilities in bargaining with other countries. No matter how great may be our desire to trade with Great Britain, which we display so boldly in this tariff schedule, the modern trend is to bargain with every country in order to enlarge the markets for our exportable produce. I fail to understand why Senator Duncan-Hughes desires to reduce the intermediate rate to 42-J per cent. In 1933 the duties were 45 per cent. British preferential tariff and 65 per cent, general tariff. The Tariff Board recommended duties of 25 per cent. British preferential tariff and 45 per cent, general tariff, but made no reference to an intermediate tariff. Generally speaking, Senator Duncan-Hughes is distinctly pro-British; for practical purposes, with him, Great Britain always comes first.
– The honorable senator considers that he is too British?
– I know his outlook. If I may be permitted to say so, Senator Duncan-Hughes has the “ wool industry mind In the opinion of quite a number of people,, the wool industry is the only one of serious consequence, and they claim, with a certain degree of justice, that all other indus tries are carried on its back. Every little impost placed on an imported article is regarded by the honorable senator as another £1,000,000 to be borne by that industry. I fail to understand the reason why he has moved his amendment, which is inconsistent with his general attitude towards Great Britain. If he had moved to make the duties 22J per cent. British preferential, 42£ per cent, intermediate, and 55 per cent, general tariff, his course would have been logical. On this occasion, however, he seems to have omitted Great Britain from his calculations, and has moved to reduce the intermediate and the general tariffs, and so give the foreigner an advantage in the conduct of any negotiations for a trade treaty. For that reason I oppose the amendment, and I hope that other honorable senators will not vote for it.
– I appeal to Senator Duncan-Hughes to withdraw his amendment. I am not in a position to disclose the reasons foi making this request, but the honorable senator, being a man of affairs, will understand when I inform him that this discussion is causing the Government embarrassment. I am- not at liberty to acquaint honorable senators with the details of the negotiations which are now proceeding between the Commonwealth and another country. If honorable senators support the ^proposal of Senator Duncan-Hughes, to leave in the intermediate column the bare margin of duty allowed by the Ottawa agreement - metaphorically handing the reduction on a platter to the representatives of countries with which the Commonwealth Government may be negotiating - what will remain to the Government for bargaining purposes? More than that I cannot say. Honorable senators are accustomed to the carrying on of business negotiations; trade treaties are business negotiations. I am aware that a considerable amount of impatience has been expressed over the delay in completing new trade treaties, but I feel constrained to point out that such agreements are not negotiated. in a few minutes, or a few weeks, or, in some cases, a few months. The best interests of Australia are not being served when I am obliged to speak in this strain. Overtures are proceeding and documents have been prepared in regard to trade matters at issue between a certain country and the Commonwealth. When some hostility to the Government’s proposals was in evidence during the discussion on the duties on glass, I was not so perturbed; but in this instance I ask honorable senators not to press the amendment. Later on they may have an opportunity to deal with the matter in another way which will appeal to those honorable senators who hold certain opinions in regard to foreign trade.
– I oppose the request submitted by Senator Duncan-Hughes. The honorable Senator has apparently taken alarm from the fact that the value of our exports of footwear is a mere £57,000 a year; he questioned the efficiency of the industry because it is able to export goods to only that value. I direct his attention to the report of the Tariff Board, in the statements of which he appears to have a great degree of faith. The board pointed out -
Australia is producing 90 per cent, of its requirements of footwear, a result that has been achieved by the high efficiency of the local factories and keen internal competition.
Later on the report contained a further reference to the efficiency of the industry -
The boot and shoe industry as a whole is well equipped and highly efficient. The public is well and adequately catered for both in regard to range and quality, and because of extreme competition prices are kept at a relatively low level.
In spite of those tributes by the Tariff Board, Senator Duncan-Hughes has questioned the efficiency of the industry. I cannot conceive that the honorable senator has omitted to read the board’s reports. The first objective of the local manufacturers of footwear is to supply the home market. After having passed through difficult times, the local manufacturers have now captured that market, and they are in a position to increase their exports. Up to date, it has managed to export boots and shoes to the value of £57,000 only, but we are hopeful that in the near future that figure will be increased. If, as Senator Duncan-Hughes contends, a reduction of the duty would give foreign countries an opportunity to export their manufactures of footwear to the Commonwealth, what would be the effect on the local market? I can only conclude that men would be thrown out of work. The Tariff Board made specific mention of that fact -
A reduction of the tariff, made with the intention of diverting a proportion of the local trade into the hands of overseas manufacturers, would be socially and economically suicidal. If only one-third of the local trade were lost, no less than 5,000 Australian footwear employees would be rendered idle.
Bunning through the mind of Senator Duncan-Hughes is the idea of having a rate of duty that will enable foreign manufacturers to supply at least a percentage of the local demand. Further, he emphasized that owing to the inefficiency of the industry, Australia is not in a position to increase its export of footwear. He did not refer to the disparity between the costs of manufacture in Australia and in the foreign countries which may be disposed to export footwear to the Commonwealth. I feel certain that he would not suggest a reduction of wages, which are an important item in the cost of production. I venture the opinion that he would not dare to suggest making a reduction in that direction. How, then, does the honorable senator propose, without injuring the Australian industry and throwing men out of work, to give foreign manufacturers an opportunity to supply the local market? ‘Senator Duncan-Hughes also stated that the present rate of duties was a heavy impost on the Australian community. Clearly his intention must be to remove the duty in order to allow some imported footwear to enter. Australian manufacturers realize that they are extremely fortunate in having captured the local market, and I agree with the Tariff Board that it should be the first duty of this Parliament to see that the market is preserved to them. The honorable senator also took the industry to task, because apparently the manufacture of footwear is principally confined to New South Wales and Victoria. Would his opinion be different if large factories were making footwear in South Australia? To be perfectly fair to the honorable senator, I do not think that it would. I deduce that his grievance is against
New South Wales and Victoria more than against the boot industry itself, because those two States have practically the whole of the boot manufacturing trade. Later in the year, we shall be asked to approve the Government’s proposals to make grants to claimant States. New South Wales senators have invariably whole-heartedly supported these grants, so it is natural that occasionally we should feel resentment when New South Wales industries are subjected to severe and unfair criticism. It is true that the principal manufacturers of boots and shoes are established in Sydney and Melbourne, but they are operating for the benefit of people in all the States. I hope that the amendment will be withdrawn, because I object to any action that is likely to interfere with efficient Australian industries.
– In my second-reading speech I emphasized the intricacies of the schedule, and commented on the difficulties experienced by the ordinary individual in understanding it. At the time I was unaware that this business of tariff making is so shrouded in secrecy. During the last few days the Minister in charge of the measure (Senator A. J. McLachlan) has repeatedly told us that secret trade negotiations are in progress with countries that have not been specifically mentioned, and that, in order to further these trade arrangements, the Government is relying upon the intermediate duties which have been reinserted in the schedule. If this tariff is merely some half-baked proposal, liable to further alteration in furtherance of trade negotiations, about which we have had no precise information, honorable senators who are called upon to answer many pertinent inquiries from interested constituents are placed in a most invidious position. When we return to our respective States we meet people who are vitally interested in these items, and we are expected to be able to explain the reason for certain of the duties; but we have to admit that all is not clear to us. All we can do is to assure our constituents that certain items have been so framed as to enable the Government to negotiate secretly trade treaties with other countries. If -we are not to be taken into the confidence of Ministers, and if, after all, this schedule is merely a temporary expedient, I am afraid that we are wasting time in discussing it.
. - I fear that my South Australian colleague has given to the information which has been conveyed to the committee an interpretation that is entirely unwarranted. I have told honorable senators that this is the Government’s tariff schedule, and that we have reinserted the intermediate rate for the purpose of facilitating trade negotiations. In some of the items the rates are higher under the general tariff than those recommended by the Tariff Board. That has been done for the definite purpose of bargaining.
– The duties have not been increased against Great Britain.
– No. In every instance wo have complied strictly with the terms of the Ottawa agreement. My South Australian colleague may be a little embarrassed when he is discussing these tariff items with his constituents, but I assure him that he is not nearly so perturbed as are those who have to negotiate trade agreements with foreign countries under such a bombardment as we have been subjected to in this committee during the last few days. Any alteration of the Ottawa agreement must be ratified by this Parliament. In the meantime, this is the tariff schedule which we ask the committee to adopt. If, subsequently, alterations are made, honorable senators will know exactly what is being done, and what we are getting as the result of our trade bargaining.
[6.7]. - by leave - I desire to inform honorable senators that at the meeting of the Council of the League of Nations on the 11th May, a resolution was adopted which recalled the conclusions reached and decisions taken in the Italo-Abyssinian dispute since the 3rd October, 1935, and continued to the following effect : “ The Council of the League of Nations is of the opinion that further time is necessary to permit its members to consider the situation created by the grave new step taken by the Italian Government, decides to resume its deliberations on this subject on the 15th June, and considers, in the meantime, that there is no cause for modifying the measures previously adopted in collaboration by members of the League.” Representatives of Chile and Ecuador, whilst agreeing to the resolution, made a reservation regarding the last paragraph of the resolution, and expressed the view that sanctions should be raised forthwith.
As has been fully reported in the press, the Council was advised, at the commencement of the meeting, that the Italian representative had been recalled to Rome. Italy, however, has not given any intimation of what its future attitude as to continuation of League membership will be. The subject of sanctions is one which is being most earnestly considered by the Commonwealth Government, and by every State member of the League at the present time. The Commonwealth Government is of the opinion that the Covenant itself, as well as the existing League machinery to establish collective security and to maintain the rule of law in international relations, should be re-examined in the light of the experience of the past six months. In the meantime, sanctions will be continued by League members until the 15th June, when the question will be reviewed.
The action taken throughout this dispute by the Commonwealth Government and by all other governments of the State members has been collective, and the same risks and responsibilities have been shared by all. The sanctions policy has been one for consideration and recommendation by the Co-ordination Committee, acting on behalf of all State members, and . the question of the removal or continuation of sanctions will, no doubt, be referred to that body, to ensure that the collective principle shall be maintained. In the meantime, the Commonwealth Government feels that it would be unwise for individual governments to announce publicly their views and attitude on the question while sanctions are still in force, as this would only bring about disunity among League members, and add to the difficulties of arriving at a final solution.
The following papers were presented : -
Nauru - Ordinances of 1935 -
No. 7 - Census Repeal.
No. 8 - Appropriation.
No. 9 - Nauruan Royalty Trust Fund
No. 10 - Appropriation (Supplemental) (1934).
No. 11 - Nauruan Royalty Trust Fund Appropriation (Supplemental) (1934).
Sitting suspended from 6.12 to 8 p.m.
Debate resumed from the 4th December, 1935(vide vol. 148, page 2472) on motion by Senator Duncan-Hughes -
That the third report from the Regulations and Ordinances Committee, presented to the Senate on the 31st October, 1935, be adopted.
– I offer my congratulations to the chairman and members of the Regulations and Ordinances Committee for the painstaking manner in which they have discharged their duties. Those who are acquainted with the volume of regulations which is presented to the Senate must have due appreciation of the formidable nature of the task which the members of the committee have undertaken in addition to their ordinary parliamentary duties.
I shall not discuss the report of the committee,because the majority of its suggestions are to be given legislative effect by the Acts Interpretation Bill, which is now on the notice-paper. Thus, the committee has really achieved the object which it set out to attain.
– The work which the Regulations and Ordinances Committee performs is of the utmost importance. If honorable senators can be encouraged to take a greater interest in the regulations which are promulgated, good government will be promoted. The committee is essentially non-party, and has on it two members of the Opposition, who have rendered valuable service. The chairman (Senator Duncan-Hughes), with a characteristic thoroughness which does credit to the Senate, has spent a great deal of his spare time on this matter, and his industry deserves commendation. I hope that the Leader of the Senate (‘Senator Pearce) will accept our assurance that we have every desire to assist the Government, and that we fully appreciate the difficulty experienced by Ministers keeping in touch with the thousand and one details which demand their attention.
As a new member, I was amazed at regulation 3 of Statutory Rule (No. 29, which read -
Amendments effected by the preceding regulations shall be deemed to have taken effect on the 28th day of April, 1926.
The chairman, with the approval of the committee, moved in theSenate for the disallowance of that regulation because, in the light of the decision given in the broadcasting case, it was evident to us that the regulation was invalid. I was rather astonished at the opposition of theGovernment to its disallowance, despite the fact that the Acting AttorneyGeneral (Senator Brennan) had stated on the floor of the Senate that, in his opinion, it was invalid.
The committee presented its third report in good faith. It was actuated by a desire to impress upon honorable senators the importance of regulations, and to direct attention to those which it considered were invalid. I expected the report to have a more favorable reception than was given to it by the Leader of the Senate.
– I said that that was not the reason for the constitution of the committee. Not being a legal body, how do its members know whether regulations are invalid or not?
– During 1935, no fewer than 136 StatutoryRules were placed before the Senate, and two of them contained as many as 500 regulations, of which there were numerous sub-regulations and paragraphs. The book of regulations for 1935 contains something like 957 pages. Honorable senators will thus realize the vital importance of a careful scrutiny of them. In the course of his remarks, the Leader of the Senate criticized the committee on several occasions, because it is mainly composed of laymen.
– That was not the basis of my criticism. I questioned its competence to give legal judgments.
– Legal men of prominence and outstanding ability in Australia gave evidence before the select committee appointed by the Senate in 1930. They included Professor K H. Bailey, Mr. F. W. Eggleston, Sir Robert Garran, Mr. J. H. Keating, the Honorable R. G. Menzies, and the Honorable Sir John Peden. The report of that select committee enunciated four cardinal principles which should be observed in the close scrutiny of regulations. They are -
Those principles have guided, and still guide, the committee in its deliberations. I do not hesitate to say that a perusal of the 136 statutory rules presented in 1935 will disclose the fact that one or other of those four principles has been violated, not once, but on several occasions. In having drawn attention to that fact, the committee has acted in the interests of the people of this country. I understand that some regulations are not submitted to the Crown Law Department, and that others have not been laid on the table of the Senate within the stipulated fifteen days. We all know that it is an impossibility for the officers of . the Crown Law Department to scrutinize the thousands of regulations which are framed. It is no wonder, then, that they are haphazard, and, in some cases, invalid. All regulations should be placed before some responsible legal authority.
– Would the honorable senator describe the Commonwealth Crown Law officers as responsible legal authorities?
– I should say that they are.
– The regulations are placed before them.
– It is impossible for the Solicitor-General and his officers to devote the requisite amount of time to regulations. Every High Court decision which goes against the Commonwealth is a reflexion on the Senate, and if we take steps to avoid such a contingency we shall follow the right course. While considering the list of regulations, I noted that, on the 15th January, statutory rule No. 7, in connexion with the Meat Export Control Board, signed by T. C. Brennan, was gazetted, and that, on the 24th January, it was repealed by statutory rule Wo. 7, signed by Dr. Earle Page. I lay no blame for that on the Crown Law Department, but the officers of that department must share with Ministers the responsibility for it.
A prominent Adelaide legal gentleman, Mr. G. C. Ligertwood, K.C., read an excellent paper before the First Australian Legal Convention, held in Melbourne at the end of 1935. It was a plea for simplicity in statute law, and dealt with the haphazard character of regulations. I make the following quotation from it: -
The legislature is not directly concerned with legal principles. Its function is to govern, not to evolve a system of law. It makes a particular rule for a particular occasion. The occasions are haphazard, and the rules are consequently haphazard. If they fail to work they are amended, and the amendments are haphazard. From day to day, it almost seems from hour to hour, a steady stream of regulations, orders and by-laws pour forth to overwhelm the citizen.
It is for the legislature to see that the new despotism is made as tolerable as possible by being organized on principles which approximate to those of absolute justice.
There are no fewer than 70 sales tax acts, the regulations under which have been amended on twelve different occasions. That is a matter which should receive the attention of the Government.
– It has, because a consolidating Sales Tax Act was passed last session.
-I now direct the attention of the Senate to paragraph 8 of the committee’s report, which the
Leader of the Senate commented upon rather drastically. That paragraphreads -
The committee, further, draws attention to the provisions contained in Statutory Rules 1935, No. 93 (amendment of the telephone regulations) by paragraph (2), whereof a new regulation (16a) is inserted-
The change is so drastic that it should not be made by regulation. The paragraph continues -
Under these provisions the onus of proof is not only shifted from the department on to the person doing certain acts or suffering them to be done, that he acted without the authority of the department; but further, any prosecution for an offence made under this regulation, the averment of the prosecutor that the proprietor of the land or building upon or within which an offence is committed by any person permitted or suffered that person to commit the offence, shall be deemed to be proved in the absence of proof to the contrary. There appears to be no authority in the act enabling the department to so alter the burden of proof. In the opinion of the committee, such a provision trespasses unduly on personal rights and liberties, and should only be brought into force, if at all, by parliamentary enactment.
Such a vital amendment by means of a regulation demands the earnest consideration of the Senate. To justify the committee’s objection, and to strengthen my view, I asked a prominent Adelaide solicitor for a considered opinion upon that point. He said -
It is admitted that the object of the regulation is to prevent “ tapping a line “, but why should an unfortunate householder or landowner have cast upon him the onus of proof when by general principle of law he should be innocent until proved guilty. The principle in any event is, even upon the construction of a regulation by the court, upon, such an onus depends upon this, namely, whether the matter is essentially and peculiarly within the knowledge of the defendant. The department or its investigating officers or the police have every opportunity of questioning a defendant, of obtaining evidence and of satisfying the general and old-established methods of “ proving their case “. If such an undue interference by changing the onus of proof is kept up, the whole of our principle of criminal and quasi-criminal law will be altered. Persons now have sufficient to keep pace with the statute law, but Lord Hewart’s description in The New Despotism is certainly justified when one sees departments trying to prove wholesale their prosecutions, not by real proof, but by mere allegation or averment alone. Every man shall be deemed innocent until he is proved guilty is as important to-day as ever it was, and it should be maintained as a fundamental principle of British law and not continually and persistently whittled away inthe manner in which the parliaments are doing.
That opinion supports the views expressed in the committee’s report. I now propose to deal briefly with the speech delivered by the Leader of the Senate on the 28th November, 1935, and reported in Mansard at page 2016. The Minister said -
Thu committee is taking upon itself the functions of a court in that it makes a declaration as to the legality or otherwise of certain regulations. I submit that the committee was not appointed for that purpose. The proper authority to determine the validity or otherwise of a regulation is a competent court. Any citizen may take action to have a regulation declared invalid.
The committee took such action, but the Government opposed its recommendation. The committee has the right, not only to question the validity of a regulation, but .also to bring the matter before the Senate and to move for its disallowance.
– That is not correct. Any honorable senator may move that a regulation be disallowed on grounds other than its validity.
– The committee has a perfect right, apart from the question of validity,, to object to a regulation* on one of the grounds I have mentioned. On that point the Minister evaded the issue.
– I did not cavil at that; I challenged the right of the committee to determine the validity or otherwise of a regulation.
– I can mention an instance in which the Leader of the Senate admitted that some of the regulations were invalid.
– That does not justify the action of the committee in declaring regulations invalid.
– On that point the committee must satisfy itself to the best of its ability. On December 4, 1935, Hansard, page 2470, the Leader of the Senate quoted a report from the Crown Law authorities, a portion of which read -
It has always been the policy of the AttorneyGeneral’s Department to discourage the making of retrospective regulations. This is borne out by the fact that in October, 1934, general instructions were issued by that department to all Commonwealth departments in. which the following statement appeared: “ As a general rule it is not advisable to attempt to make regulations having retrospective operation.”
That notification was issued to departments in October, 1934, but regulation No. 3 under Statutory Rule No. 29 issued in 1935, was made retrospective for nine years. According to a recent decision of the High Court, the Government has not the power to issue such a regulation. I do not blame the Attorney-General’s Department, but the existence of such conditions shows that there is room for improvement. At a later stage, the Leader of the Senate said -
It is true, however, that the principles of the decision, in the broadcasting company’s case, are applicable to some of tine statutory rules in the list, and that there arc also other statutory rules made over a long period of years which might be affected by these principles. As a rule, regulations have been made to operate retrospectively only when they confer a benefit, and not in cases where they prejudically affect existing rights.
That statement was not borne out in the broadcasting company’s case. I sincerely trust that a majority of honorable senators will support the action for the adoption of the committee’s report ; in doing so, they will not be reflecting upon the Government. The committee made an honest attempt to place before honorable senators the far-reaching effect of government by regulation. I trust that the committee’s recommendations will be a warning to Ministers, and to heads of departments, that what are generally regarded as guiding principles in matters of this kind must not be violated. If the Crown Law officers said that the validity of a regulation was beyond doubt, the committee would not question it. Even if the High Court ruled that a regulation was invalid, it would not necessarily prove that the Crown Law officers were wrong, because in some instances the Privy Council has reversed decisions of the High Court. Under existing conditions regulations are necessary, but the power which the executive possesses in this respect should not be abused. We have been told that the validity of a regulation should be tested in the court, but what has happened in the broadcasting case and others ? An injustice may be done to an innocent person. For instance, the Leader of the Opposition, failing to obtain satisfaction, might decide to go to law, and, even should he win his case, he would lose financially.
I trust that the Senate will adopt the committee’s report, and in that way strengthen it in endeavouring to assist the Government in the important duties it has to perform.
– I have no desire to prolong the discussion on this subject, because I think it has been dealt with very ably by Senator McLeay. As a member of the committee, I desire to associate myself with the opinions expressed in the report which, I trust, the Senate will adopt. I cannot claim much kudos for the work which has been achieved, but I pay a tribute to Senator Duncan-Hughes and to Senator McLeay, and other members of the committee, for the industry and ability which they have shown in connexion with the committee’s work. The Government should seriously consider the appointment of a legal officer to peruse all regulations, and, when necessary, to assist the committee. Regulations tabled in the House of Representatives are not scrutinized by a regulations and ordinance committee ; the practice is peculiar, I believe, to this chamber. Therefore, it is all the more important that some very close scrutiny, whether by this committee or by some other person or body, should be made for the information of honorable senators, so that when they are asked to approve of regulations they need not fear that they may be carelessly consenting to something which may involve perfectly innocent citizens in litigation. I cannot help drawing attention to paragraph 8 of the report which refers to the offence of interfering with telephone lines. I suggest to the Senate a hypothetical case: While I am engaged on public duties in Canberra, my son may be looking after my little place in the country; someone may interfere with telephone lines passing through that property, and, under the regulation as it stood, I, as the registered owner of the land, might be held guilty of having permitted or suffered somebody to interfere with the department’s property. It might be contended that that is an exaggerated illustration because I, being in Canberra, could not have committed the offence, but one may act through an agent - my son, for instance - and I might have to prove that I was not guilty of the offence. The Senate should hesitate to approve of any regulation which so shifts the onus of proof. Apparently, in the Post and Telegraph Act itself, there is no legislative authority for the establishment of the principle of shifting the onus of proof to the extent attempted by this regulation.
– Does the honorable senator say that the committee is competent to give the opinion expressed in paragraph 5 ?
– I have heard quite a lot this evening about competence. I am perfectly willing to agree that if the committee is not competent to make a report, it is not competent to bind the Government even if the report is adopted. But not only is the committee competent to make the report, it also has a clear duty to report its honest opinion, right or wrong, and it is not for the Leader of the Senate to challenge that duty. It is a well known principle of law that a person exercising discretion, even if he exercises it wrongly or foolishly, will not be interfered with by a court of appeal. Therefore, if the committee is justified in making this report, so long as it is made honestly and sincerely, it should be free from the criticism levelled by the Leader of the Government, that it is not a legal committee and therefore not competent to express an opinion. If the committee is not competent to express an opinion, what precautions will be taken to prevent errors from being made in either the regulations or the principles on which they are founded, or to prevent departments from usurping the functions of the legislature ?
– That is not dealt with in paragraph 5. Paragraph 5 deals with legal validity.
– What is the honorable senator’s objection to that paragraph ?
– It contains a legal opinion expressed by a committee of laymen.
– The committee has a right to express an opinion ; indeed, it was appointed to do so. The honorable senator has a perfect right to object to, or disagree with, that opinion.
– I neither agree nor disagree with it.
– Whether a committee is composed of lawyers or laymen has no bearing upon this matter. It is entitled to express an opinion, and that, rightly or wrongly, it has done.
– Its job is not to interpret the law.
– It was asked to report whether in its opinion regulations referred to it may run contrary to the law. I urge the Senate to adopt the report, because it does not force an obligation upon the Government. Honorable senators must realize that to check the validity of a single regulation means looking up, not only the parent act under which the regulation purports to have been made, but also every amendment of that act, and over a period of years there may have been many amendments. If the whole of that labour is undertaken conscientiously, it is more than any committee of the Senate can be expected to do perfectly. The committee will, no doubt, make mistakes. The chairman of the committee has given enthusiastic attention to his work, and the Senate is indeed fortunate to have his services in that capacity. That the committee has served a useful purpose is demonstrated by the fact that the Government is bringing down legislation to cure defects which have been pointed out by it. If the Leader of the Senate or the Government disapproves of the committee-
– That is not so. I have never expressed any disapproval of the committee, but only with a particular phase of its report.
– I have no desire to quibble over words; if the committee is not regarded as satisfactory, I am sure none of its members will desire to continue to serve on it. I discussed the work of the committee informally with the Attorney-General some time ago, and pointed out to him that the work was sufficiently heavy to warrant the appointment of a legal officer attached to the Senate staff. Such an appointment would not be necessary for the House of Representatives, which does not follow the procedure adopted by the Senate for the oversight of regulations and ordinances. I suggest that if the committee as at present constituted is not considered satis factory, the Attorney-General and the Leader of the Senate should give consideration to that proposal. Such a legal officer could devote his whole time to the task. The work which the committee is called upon to carry out is much heavier than honorable senators ever imagined it would be.
– In the main, I echo the sentiments expressed by Senator McLeay and Senator Abbott. I did not ask to be appointed to the Regulations and Ordinances Committee, and I approached this service without enthusiasm. However, when I attended the committee, I found that included in its seven members were two barristers. There are only four barristers in this chamber, so the committee was fortunate to possess at least one-half of the legal strength of this chamber. Senator Duncan-Hughes, in view of his long membership of this Parliament and his eminent qualifications, scholastic and legal, was the inevitable choice ‘as chairman. Regulations and ordinances are promulgated by the Government with startling rapidity. No sooner is one dealt with than another comes along, and all must be read carefully to ascertain their meaning. The task of the committee is a difficult one, and I am sure that if the Senate wishes to declare my position on it vacant, I shall welcome relief from an onerous responsibility.. The work of the chairman is ten times that of a private member of the committee. The committee did not present its report with any idea of setting itself above the Senate; its members recognize that the committee is only a subsidiary of this august chamber. They do their work in a humble, but conscientious manner. The seven members of the committee probably compare favorably with any other seven members who might be chosen in the same way.
The DEPUTY PRESIDENT (Senator Sampson). - The question before the Senate is not the competency of the committee, but the adoption of its third report.
– The committee was set an onerous task. The volume of regulations and ordinances with which it deals is considerable, and the responsibility of studying them is great. In one instance, a regulation which was made retrospective for nine years came before it. I heartily support the recommendation of the committee in regard to retrospective legislation.
Another subject with which the committee dealt had reference to the onus of proof under Statutory Rule No. 93 of 1935. The regulation sought, not only to transfer the onus of proof from the Telephone Department to the person doing certain things, but also to make that person guilty of an offence in the absence of proof to the contrary. The committee thought that that regulation went too far. It may be that the Government thought that the end justified the means, but the committee was of the opinion that the means set out in the regulation were not justified, and therefore it reported -
There appears to be no authority in the act enabling the department to so alter the burden of proof. ft could not agree that -
The averment of the prosecutor that the proprietor of the land or building upon or within which an offence is committed by any other person permitted or suffered that person to commit the offence, shall be deemed to have been proved in the absence of proof to the contrary.
In submitting its recommendations the committee merely attempted to do its duty; it did not in any way seek to set itself up as an authority greater than the Senate. I cannot see that there is any reason to attack the committee’3 report or question its competence. The report should be adopted by the Senate and referred to the proper legal authorities in order to ascertain the best means to prevent a recurrence of some of the things which have happened in the past.
– As one who was conscripted to serve oi. the committee - I did not seek appointment to it - I desire to speak to this motion. When I was told that there wai. a job for me to do I, as a lawabiding citizen, accepted the position, and, as & member of the committee, I have endeavored to do my duty. In the task of studying ordinances and regulations, which is both irksome and monotonous, the chairman set his fellow members an example of intelligent enthusiasm. Only a lawyer could show enthusiasm for such a job. As a member of the committee I may, perhaps, be pardoned if I say that it has done good work, although I regret that the Leader of the Senate (Senator Pearce) appears to be not too pleased with its report. Nevertheless, the findings of the committee have been commended by the press of Australia. Throughout the Commonwealth there is a well-founded belief that Australia is governed too much by regulations. Rather than call Parliament together to deal with the affairs of the country, the Government prefers executive rule. Hence the large volume of regulations and ordinances with which the committee has to deal. In every democracy there is a tendency to govern in this way, and probably that is why the system has reached such dimensions in Australia, which is sometimes thought to be in the vanguard of democracy. Twenty years ago, I said that Australia was in the guard’s van, and I see no reason to alter that opinion.
– Jack Lang broke all records when he was in power.
– Jack Lang is not on this committee, but he is a nightmare to some people. The “ Cromwell of the Riverina” ought to be for ever grateful to Jack Lang, for without that gentleman’s existence he would probably not be a member of the Senate to-day. I draw attention to paragraph 10 of the committee’s report -
The committee refers again to two mutters mentioned in its earlier reports, viz.: -
The lack of an adequate act covering the air defence forces (mentioned in the committee’s second report presented w the Senate on the Sth December, 1933). The present act (No. 33 of 1923) consists only of three sections applying portion of the Defence Act and regulations: otherwise all provisions governing the air defence forces are prescribed by regulation …
It is not right that such an unsatisfactory state of affairs should continue. It would be easy for the Government to call Parliament together to consider legislation governing the air force. Had the committee not done more than call attention to the fact that this growing section of our defence force is practically governed by regulation, it would have justified its existence, and proved worthy of the commendation of all who believe in democracy rather than Fascism. I hope that the Senate will carry the motion, and that the committee will continue its good work.
. - The debate on this motion reminds me of a debating society whose members have forgotten the subject that they are supposed to discuss. Some honorable senators who have spoken appear not to have realized that the motion before the Senate is the adoption of the third report of the Standing Committee on Regulations and Ordinances, notwithstanding that you, sir, reminded them of that fact. The remarks of Senators McLeay, J. V. MacDonald and Brown were directed, not so much to the adoption of the committee’s report, a* to the general subject of the use of the regulation-making power. There are not many men in public life to-day who do not think that the power of government by regulation has gone too far. Especially since Lord Hewart published his book The New Despotism has that opinion become pronounced. The report of the committee does not deal with that subject,, yet a great deal of Senator McLeay’s speech was devoted to it. Senator Brown said that the value of the committee’.; report was recognized by most of the newspapers of Australia. The report does not deal with the general question of the regulation-making power. It takes specific illustrations, draws conclusions as to their validity or propriety, and then asks the Senate to adopt its report. Senator McLeay accused the Leader of the Senate (Senator Pearce) of having adopted an unfriendly attitude towards the committee, but I remind him that the right honorable gentleman paid a tribute to the good work that it had done. I now add my word of praise t;o his. The Leader of the Senate called attention to those things in the report with which he disagreed, and which he thought the Senate ought not to be asked to adopt. The motion before us asks the Senate to adopt paragraphs 5 and 7 of the committee’s report. Paragraph 5 reads -
The committee considers that these regulations it referred to a number of regulations issued in 1935, each of which in the committee’s view appeared to infringe the provisions of the Acts Interpretation Act by a retrospective clause of a similar type- are void or voidable, in whole or in pari:, and would be held so to be if contested in the courts, in view of the decision of the High Court mentioned above. In some of the statutory rules enumerated above, the retrospective regulations appear to be separable from other regulations to which the)’ have no reference.
Paragraph 7 submits either that the Government should withdraw and cancel such of the regulations as are mentioned in paragraph 3 or alternatively that it should move for their disallowance within the prescribed time. Two of the five members of the committee are lawyers, although one of them modestly disclaims that this is so ; another says that he is a bush-lawyer. The remainder of the committee is composed of laymen. Yet the Senate is asked to accept it as a guide as to whether the High Court would disallow regulations if they were placed before it. If honorable senators want an assurance that the committee is not made up of experienced lawyers, they can find it in the fact that it has ventured an opinion as to what the High Court would do. I am not unacquainted with the duties of the committee, as I preceded Senator Duncan-Hughes and succeeded Senator Sir Hal Colebatch as chairman. Furthermore, I have spoken strongly on the subject of regulation-making power, and I hope I shall continue to do so, but at the same time, the power of making regulations is one that is essential to the Government.
– But it should not be abused.
– There is no right in nature to abuse anything. But it is useless for members of Parliament to abuse regulations if they have neglected to discover that they are objectionable before they become law. Because they do become law, Senator McLeay paints a picture of the Leader of the Senate going to the Crown Solicitor’s Department, and saying, concerning a regulation against which he has offended, “ Look at this, can you do anything for me ?” He complains because the advice would be to take the matter to the High Court. Senator
McLeay would not expect officers of the legal department to interfere with the course of justice. What sort of criticism would it lay itself open to?
– We do not want regulations to go through which would be a laughing-stock if taken to the High Court.
– I have had greater acquaintance with the High Court than the honorable senator has had, and I have never seen any particular hilarity displayed in the consideration of regulations. The first thing members of the committee should remember - I am sure that the Chairman has not forgotten it - is that Parliament gave the regulation making power to the Executive. Unless that power were in the hands of the Executive, no regulations could be made. Therein, lies the first opportunity for honorable senators to interfere with the Executive’s right to make regulations. The second means for doing this in the possession of honorable senators or of honorable members of another place, is the stipulation that new regulations shall be laid on the table within 30 days of the making thereof, or within 30 days of the next meeting of the Parliament, and within fifteen days of the tabling the House may by resolution disallow, during which period either House may by a simple resolution, disallow any or all regulations which have been tabled. A regulation immediately ceases to have any force if it is disallowed by resolution of either House. It will be seen, therefore, that both Houses have full control over the power under which regulations are made, and also control over the regulations themselves for fifteen sitting days after they have been tabled.
– Does the Minister suggest that it is practicable for an honorable senator to scrutinize every regulation?
– No, but I do suggest that honorable senators should scrutinize all regulations in which they have a particular interest. Ordinarily, Parliament is representative of different sets of interest, and generally speaking, each member of Parliament has some interest in which he is concerned and, as a rule, he does know what regulations are made affecting the interest which he represents. The action taken by Senator McLeay when he induced the Senate to disallow the dried fruits regulations last year is a good illustration of the point I am making. Nothing can be done about dried fruits without Senator McLeay knowing it. If a new regulation were made changing dried fruits into wet ones, he would immediately place it before the Minister concerned, and show him his signature, which he may have forgotten that he had put there. But Senator McLeay does not forget ! It is also important to remember that a regulation may be disallowed for any reason or for no reason. The Leader of the Senate (Senator Pearce) pointed that out by interjection. A regulation could be disallowed for no other reason than one of caprice.
A great deal has been said about retrospective legislation by means of regulations. Again, this is a subject on which I have spoken, and, at times, voted against the Government- when I was not a member of it, of course. My views on retrospective legislation have not changed, but in many special cases, it is necessary, so long as it does not interfere with the accrued rights of any person. In this respect, it is extremely unfortunate that the Senate saw fit last year to reject the dried fruits regulations, because nothing better than they could illustrate the need for power to regulate retrospectively. These regulations dealt, inter alia, with the salaries of employees of the Dried Fruits Board in London. The right of the Dried Fruits Board to pay certain of its employees in London had been questioned. These employees had been employed for several years, but it had not been considered necessary to prescribe their salaries. When the matterwas questioned by the Auditor-General, it was decided to remove any doubts by fixing their salaries by regulation - the regulation being ante-dated to the date when the employees first commenced duty. That they were entitled to be paid some salary was not disputed, and to remedy the situation the regulations which the Senate disallowed were made. Naturally, those regulations had to be retrospective in order to validate the past payment of salary to the officers concerned. Therefore. the regulations were made, not to inflict a wrong, but to redress a wrong, despite which the regulations were disallowed when they came before the Senate. Since then, there has been no power to pay these men the money to which they were entitled, and they cannot be so paid until an act is passed by this Parliament to provide for retrospective payments to them. Numberless matters of a similar nature arise frequently; they are matters of minor administration, and it wouldbe most awkward if the Executive were not in a position to correct errors or injustices by the simple process of regulations, which have to go through the gauntlet of this Senate.
I do not think that, on any previous occasion, has a report of the kind provided by theRegulations and Ordinances Committee ever come before this Senate and a motion has been moved for its adoption.
– Because we have been weak in the past is no reason why we should not be strong now.
– When the honorable senator mentions weakness he forgets what I have just told him, namely, that I was once chairman of this committee, and Senator Colebatch was chairman on another occasion, and that Senator Duncan-Hughes is now chairman. If the Senate adopts the recommendation of the committee that certain regulations are invalid, the standing of all regulations will be imperilled, and with great respect to the committee, whilst fully recognizing the most excellent and painstaking work that it has had to do on these regulations, I suggest that it has no right to ask the Senate to adopt its report. By doing so, we might easily place ourselves in a very false position, because, later on, as one branch of the legislature, we may have to deal with a bill which may be in conflict with certain paragraphs of the report.
– The report is merely an expression of opinion.
– I accept the modification suggested by the honorable senator, and, to that extent, what I have said may be weakened, but if honorable senators look at the position, they must see that the whole of the individual members of this Senate and the Senate itself as a legislative body, would be placed in a false position if they adopted a report containing expressions of opinion which they themselves have no means of checking.
– What would be the attitude of the honorable senator in dealing with the report of a select committee on a certain subject? Would he still say that this Senate should not adopt it?
– I should look at the Standing Orders dealing with the appointment of the select committee and at the purpose for which it was appointed, and if the committee were appointed to decide some question of fact, I would accept the findings. But if honorable senators study the Standing Orders under which this committee is appointed, they will see that no such decision on a question of fact has arisen. Honorable senators would frankly admit that they have bad no opportunity to test what the committee reports, and if they adopted the report, I emphasize, they would place themselves in a false position. However, the Government recognizes the very excellent work that the committee has done. It is due to the efforts of the Regulations and Ordinances Committee that regulations issued are now subjected to a much closer scrutiny from the heads of the Attorney-General’s Department than they formerly received. Moreover, it is intended to amend the Acts Interpretation Act, and some of the clauses of the amending bill will have to be considered in connexion with the plight of the dried fruits employees in London. We, therefore, do not ask the Senate to reject the motion moved by Senator Duncan-Hughes. We feel that such action might indicate that the Government is ungrateful and ungracious and does not realize the importance of the work it has done. That would be a false impression, to avoid which I move -
That the word “ adoptedbe left out, with a view to insert in lieu thereof the word “ received”.
If the amendment were carried no offence
Could be taken by the committee. It would have commendation for the good work it has done, and the danger of this Senate being placed in a false position would be removed. I commend to honorable senators the amendment which I have just moved.
– As a member of the Regulations and Ordinances Committee, I have listened very attentively to the remarks of other members of the committee and those of the Acting Attorney-General (Senator Brennan) who was once the chairman of the committee. Even in bringing this matter before the Senate to-night, thus giving honorable senators an opportunity to discuss the matter of issuing the regulations, the committee has achieved something of value. I do not intend to discuss the merits or validity of its report. I assure the Government, however, that it has always been the aim of the committee to assist, and not to hamper, the Government. There is no doubt that at times regulations have been issued and I think honorable senators generally will agree with me on this point - without being given the necessary legal scrutiny. I state authoritatively that 25 per cent.. of the regulations have not been approved by the Attorney-General’s Department. I do not intend to labour the subject. Much has already been said on it. I ask honorable senators to remember that notice has already been given of proposed legislation, in connexion with an amendment of the Acts Interpretation Act, which, to some extent, will remedy the present practice; and the Regulations and Ordinances Committee has been largely responsible for this action by the Government. I feel sure that honorable senators will study the report of the committee and weigh carefully the implications of the amendment moved by the Acting Attorney-General.
– I rise to a point of order. I ask your ruling, Mr. Deputy President, as to whether the word “received’’ proposed to be inserted in lieu of the word “ adopted,” carries the motion any further. I submit that when regulations are formally laid upon the table of the Senate they are “ received “ ; it is a functus officio, and the Senate has no power to repeat what it has already done. If the facts are as I have stated, the amendment becomes meaningless as the committee’s report has already been “ received “ by the Senate.
– But not by a motion.
– No, but the Senate has already “ received ‘’ the report and, I submit, it cannot again “ receive “ the same report. I ask if the amendment proposed by the Acting Attorney-General is a substantial amendment on the motion before the Chair. Personally, I do not mind whether or not the amendment goes through, but I suggest that we should know exactly what we are doing. It may be that the word “received” does not accomplish what the Acting AttorneyGeneral has in mind.
– Members of the Committee do not desire to place the Government in an awkward position in this matter. The word “ adopted “ seems rather drastic ; and originally I was rather dubious about it. But it seems that the word “ received “ practically negatives the motion. In local-governing bodies, such as city and shire councils, it is generally agreed that to “receive” any communication or report is to treat it in a negligible manner, meaning that no further action is to be taken concerning it. It seems that something more is required.
– I shall meet the wishes of the honorable senators who have just spoken by asking leave to amend my amendment by adding, after the word “ received “, the words “ and commended to the consideration of the Government “. This, I suggest, will remove the objections just raised to the original amendment.
Amendment - by leave - altered to read -
That the word “adopted” be left out with a view to insert in lieu thereof the words “ received and commended to the consideration of the Government “.
– I agree with the Acting Attorney-General (Senator Brennan). Indeed, one of the first votes which I recorded in this chamber was against the growing practice of government by regulation. As such regulations were of a retrospective character, I recorded, by my vote, my opposition to this tendency in modern government ; but, while praising the work of the members of the Regulations and Ordinances Committee, I suggest that they have arrogated to themselves another form of authority; they are setting themselves up as a high judicial authority, and constituting them selves, as it were, a second high court of the Commonwealth, passing opinion on various laws. The committee includes, so it is said, three lawyers, one of whom apparently admits that he is only a bush lawyer; the other two, I admit, are fully qualified barristers.
Judging by the eulogies uttered this evening, the members of the standing committee are men of the highest possible qualifications, who have made a wholehearted study of the subject of government by regulation. They have devoted hours of time and thought to that matter. I grant that they have rendered very valuable service. I agree that the growth of government by regulation is undesirable; but it is not for the committee ‘to take a whole set of regulations now in existence, and point out to the community that, if their validity were contested in the High Court, they would be held to be null and void. It would be of some advantage, however, if the committee could show a way in which each member of the Senate could be given due notice of the intention to table regulations, with a view to having them withdrawn if they are regarded as wrong in principle. I do not claim to be qualified to express an opinion on all matters of this kind, nor am I prepared to accept the judgment of seven members of this Senate, two of whom are barristers. After all, the regulations are drafted by the high legal authorities in the AttorneyGeneral’s Department whose qualifications to judge the form and validity of regulations are possibly higher than those of the committee. The Acting AttorneyGeneral has made a most generous gesture by moving, as an amendment, that the report of the committee shall be received and passed on to the Government for its consideration. To ask more would be unwise.
Even the two barristers on the committee will agree, I should think, that, although I am a layman, I have shown good judgment in saying that it is not for them to set themselves up as legal authorities. Members of the committee have the right to express their opinions, but not to set themselves up as a body that has powers greater than those of the Senate. The committee, in my opinion, has shown a lack of good judgment, whereas the Acting Attorney-General, who has a keen legal sense, has displayed a great deal of commonsense and fine courtesy. Senator J. V. MacDonald remarked that to “ receive “ a report was to take no action upon it; but that is, at least, a pleasant way of dealing with it. The Acting Attorney-General has put salve on the wound, because he desires that the report should be not only “ received,-“’ but also “ commended to the Government for its consideration “. I support hi.3 amendment. At the same time, I object to government by regulation and desire to prevent the growth of the practice.
– The honorable senator who has just resumed his seat accused me of being a barrister. I plead not guilty to the charge, particularly as I heard Senator Brown remark yesterday that he knew barristers who were congenital idiots.
– in reply - The remarks of the Acting Attorney-General (Senator Brennan) to-night reminded me of several things. The first was that in giving evidence in the proceedings of the select committee, which led to the formation of the Regulation and Ordinances Committee, Sir John Peden, the present President of the Legislative Council of New South Wales, said -
I remember one barrister saying of an extraordinarily good under-secretary that his idea of an act of Parliament was that it should consist of two sections: (1) the title: and (2) provision that the department might make regulations to give effect to the purpose of the act.
Again, I do not see that any action would be forced upon the Government by the “ adoption “ of the report which has been submitted by the Regulations and Ordinances Committee. Some twelve years ago when a member of the other branch of the legislature, I submitted a private motion, and it was carried unanimously. It was passed on the voices without any speech being made in opposition to it, but as far as Australian legislation is concerned nothing has yet come of that motion, although I believe that a bill is to be introduced this session which is likely to be the first step taken as th result of it. It, therefore, is possible that, even if the present motion were agreed to in its original form, the Government would not be in a much worse position. The Regulations and Ordinances Committee is required to make occasional reports to the Senate. It is but a creature of the Senate, and it exists to safeguard the interests of the Senate, of the Parliament, and of the man in the street. Nothing could be more incorrect, if I may say so, than the remark of my commonsense friend, Senator Arkins, when he suggested that the committee was attempting to usurp powers belonging to the Senate and the justices of the High Court. It has done no such thing. It makes no claim to have legal acumen comparable with that of the justices of the High Court.
– In paragraph 5 of the report it. does.
– No. On that paragraph the Leader of the Senate (Senator Pearce) seems to base the whole of his opposition to the committee’s attitude. I think he said that the inclusion of paragraphs 3 to 7 was entirely improper, but his objection is now boiled down to one paragraph. The committee makes no claim to the right to override the rights of the Senate. It exists at the nomination of the Senate, for the purpose of giving its opinion as to the effect of regulations and ordinances which come before it. In its conclusions it may be wrong, or it may be right, but it is appointed at the behest of the Senate, which can reject its reports or eject the members of the committee at any time if it so desires. I should say that some members of the committee would not be heartbroken if they were ejected. No member of the committee wishes to force its opinions upon a reluctant Senate. We merely say what we think of regulations which we have examined, but which other members of the -Senate have not.
– But the motion invites the Senate to endorse the opinions expressed in the report.
– Yes. If the right honorable gentleman is returning to that point, I still maintain that the adoption of the report would be perfectly in order. I shall refer to the amendment later, but I do not wish to depart from the original motion.
The select committee took much evidence from legal lights in various parts of the Commonwealth. Sir Daniel Levy, Speaker of the Legislative Assembly of New South Wales, said the committee would have to consider whether or not regulations were ultra vires of the act. That, of course, is a quasi-legal matter. It was realized before this committee came into existence that it could not consider regulations and ordinances without acting in a quasilegal manner; but that did not involve setting itself up as a body to overrule the High Court. It involved what might be called concurrent jurisdiction. That aspect of the matter is dealt with extremely well by the select committee in the following: -
It is clear, therefore, that it was never intended that we should set up our opinion, against that of the High Court. Nor was it meant that any regulation should be kept from the purview of the High Court. It was always understood that the court could pronounce upon any regulation that was brought before it, but the select committee thought that, in the interest of the public, there should be an alternative and cheaper method, by which a committee of common-sense men would advise whether,, in their opinion, regulations complied! with the prescribed requirements.
– If the Senate adopts the report it agrees, in effect, with thelegal opinion expressed therein.
– Thecommittee does not give a legal ruling. It does not say that, if the cases went tothe High Court, that body would rule in each case against ‘the regulations concerned.
– But that is just what the report does say.
– No. We say that “ the committee considers “. We do not say that the regulations are void or voidable. To say that “ the committee considers “ is not to give a ruling; it is merely an expression of opinion, and the Senate is entitled to know what is our opinion.
– But the committee asks the Senate to agree with it.
– We ask that the report be adopted.
– Would that not be tantamount to adopting an opinion of the committee?
– The report has been challenged on the ground that we are not lawyers; but we are not meant to be lawyers. As a matter of fact, however, the committee includes the whole of the legal talent available in the Senate, except that of Ministers who could not act as members of the committee. It has also been stated that we were wrong in some instances, but I draw attention to the fact that, in only three out of fourteen cases, does the Government make any reply. Senator Pearce has said that there are other cases in the list which are not affected by the High Court’s decision, but he does not specify them. He also stated -
It is true, however, that the principles of the decision are applicable to some of the statutory rules in the list, and that there are also other statutory rules, made over a long period of years, which might be affected by those principles.
He admits that, in some of the cases under review we were right, and also admits that there were other cases in past years in which we were right also. That is surely evidence of the essential soundness of our report. Again I ask, if we are wrong, why is the Government bringing in a bill to amend the Acts Interpretation Act, which has stood since 1904?
– Our criticism is not directed to whether the committee was right or wrong. We say that these are legal questions, upon which neither the committee nor the Senate should be asked to express an opinion.
– If the Government thinks that we are ill equipped legally for our work, why does it not take steps to ensure that proper legal advice is available to us? If that were done, it would take a great deal of work off our shoulders.
– If the committee will make that recommendation, I am prepared to agree to it.
– I have personally not practised law since the first years of the war, and my law is very rusty. I would not presume to set myself up against the justices of the High Court. It is proposed that the amending bill will contain a provision validating all the flaws and errors of the past. That is sound, and I agree with the principle, but it is an admission that there were flaws and errors in the past. It is also proposed to give wider powers to the Executive than it enjoys at present. I do not propose to go into that now, because, when the bill is before us, we can discuss whether or not the Executive should enjoy those wider powers. 1 contend that, in the main, the report of the committee has been fully justified. The committee has no desire to thrust its opinion on the Senate or on the Government. It desires to co-operate in every way with the Government in the passing of more satisfactory laws. I think that the second suggestion of the Acting Attorney-General is quite a good one. While I believe that, hadwe gone ahead with the original motion, a considerable number of senators would have been found to support us, the amendment is a compromise which can be honorably accepted by all sections, and I am personally agreeable to its being accepted in its present form. I add that we hold ourselves completely free to deal with the amending bill when it comes before the Senate.
Amendment agreed to.
Motion, as amended, agreed to.
Bill received from the House of Representatives, and, on motion by Senator Sir George Pearce, read a first time.
In committee: Consideration resumed (vide page 1709).
Item 329 -
By omitting the whole item and inserting in its stead the following item : - “And on and after 2nd April, 1936 - 329. Boots, shoes, slippers, clogs, pattens, and other footwear (of any material) n.e.i.; boot and shoe uppers and tops (except of felt) ; cork, leather, or other socks or soles, n.e.i. - ad valorem, British, 25 per cent.; intermediate, 45 per cent.; general 60 per cent.
Upon which Senator Duncan-Hughes had moved hy way of amendment -
That the House of Representatives be requested to make the duties, intermediate, 42½ per cent.; general, 45 per cent.
.- The Leader of the Opposition (Senator Collings) inquired whether his eulogy of the boot-making industry had by any chance caused me to move my amendment. I assure him that it was not so. I had intended to move the amendment even before he gave me the additional ground of his eulogy for doing so. I emphasize that my amendment seeks to give effect to the recommendations of the Tariff Board. However, in view of the facts that the Minister in charge of the bill has said definitely that the prosecution of my amendment at this stage would prove embarrassing to the Government, and that I recognize that sometimes movements are on foot of which private members have no knowledge, I am prepared, though with great reluctance, to take a course that I seldom take, but only because I believe that it is proper for me to do so. I ask leave to withdraw my amendment. If the amendment be withdrawn obviously the higher duties provided in the schedule will remain in force, and, as subsequent events may prove, that the amendment need not have been withdrawn, I think it only fair to ask the Government for an assurance that when the next tariff schedule is being prepared it will reconsider this rate.
Amendment - by leave - withdrawn.
– The observations that I made earlier on this subject were inspired by serious considerations. I regret that I cannot give the honorable senator such a definite assurance as he desires, but I shall convey his request to the Minister for Trade and Customs (Mr. White). As I have been able to discuss the amendment with my colleague for only a couple of minutes, I am not able to say whether he is prepared to review the whole subject when the next tariff schedule is under consideration. If he does not do so, however, the honorable senator will still be able to move a similar amendment when the item is next before the committee.
Item agreed to.
Item 331 (first occurring) agreed to.
Item 331 (second occurring) (Rubber latex).
.- I ask the Minister to explain why a duty has been imposed upon the crude rubber content of rubber latex, which was formerly admitted duty free. Some confusion is felt about this item. If the new duty is agreed to, it may increase the price of the new rubber cushions which are increasing in popularity with upholsterers.
– A request has been made by the manufacturing company which uses the latex process for the admission of latex free of duty under by-law item 404a, when it is used in the manufacture of sponge upholstery rubbers. The company stated that the effect of the duty will be to increase costs to the upholstery manufacturers, and that the extra cost will seriously preclude the development of the rubber section of the upholstery trade. I have had thorough inquiries made in. the trade to ascertain what effect the proposed equalizing duty on latex will haveon the upholstery trade. I do not propose making available the manufacturing costs of the company which uses latex in making sponge rubbers, but I assure honorable senators that the company’s wholesale selling price of sponge rubbers appears to allow a sufficiently wide margin above material and labour costs for the equalizing duty cost to be borne by it without passing it on to the upholstery manufac- turer, and still permit a reasonable profit to be made.
.- The explanation of the Minister is inconclusive, for he has made no reference whatever to the reasons for imposing the new duty. If this is a revenue duty, the honorable gentleman should say so; if it is not, we ought to be informed of the reasons for imposing it. I fear that firms which are jealous of the success of the new rubber cushions may have inspired the imposition of this duty.
. - I regret that, in my previous remarks, I omitted to refer to the duty itself. The proposed rates of duty in this new subitem are equivalent to an increase of 2d. per lb. on the crude rubber content of rubber latex. Rubber latex was not covered in the 1933 tariff, and consequently was admitted free of duty as unspecified goods. A revenue duty of 2d. per lb., irrespective of the place of origin, is imposed on crude rubber, and the purpose of this proposed duty on the crude rubber content of latex is to bridge a revenue gap occasioned by the use of the latex in the manufacture of many lines of rubber goods in which crude rubber is generally employed. It is really an equalization duty.
Item agreed to.
Item 332 (Rubber hose).
.- I shall be glad if the Minister can furnishsome information with regard to the duties imposed in sub-item e, which covers rubber hose up to and including l inch internal diameter. This industry is being very efficiently conducted in Australia. I should like to know why the previous rates have not been retained.
– Action taken by the Government in connexion with sub-item e followed the receipt of the Tariff Board’s report on the 24th October, 1935. The British rates proposed are in accordance with the board’s recommendation, and the intermediate rates, subject to a correction of 2½ per cent. to provide the formula margin under the Ottawa agreement, express the level of protection recom mended by the board for the general tariff. The general rate has been increased above the intermediate rate in order to provide the usual margin for trade treaty negotiations with overseas countries. The principal raw materials used in the industry comprise crude rubber and cotton fabric. Both materials are subject to revenue duties. Crude rubber is dutiable at 2d. per lb., irrespective of origin, whilst cotton fabric pays a 5 per cent. duty under the British tariff. On representative lines of garden hose the revenue duties on the raw materials, plus primage, represent approximately 5 per cent. of the total manufacturing cost of Australian-made hose, and offset the duty on the imported article by approximately 1d. per lb. of hose. Allowance has, however, been made by the board in its recommended British rates to offset the extra cost in Australia of the revenue duties payable on these raw materials.
At the board’s inquiry concern was expressed by some local manufacturers that importations of rubber and other kinds of hose in 1934-35 to a value of £9,062 were approximately £3,500 in value above the importations made in the previous year. That factor, however, when reviewed in conjunction with the increased output of Australian hose in the same period, merely reflects an expanding market, and certainly is no indication that the competitive position of the Australian manufacturer is in any way impaired by these importations. In 1929-30 the importations of hose from all countries were valued at £28,800. The 1934-35 import figures show that, in a period of six years, the Australian manufacturer captured and held at least 70 per cent. of the former import trade. Fully 95 per cent, of the Australian demand is met by the local industry. The small quantities of hose which, in the past, have been able to surmount the high rates of duty in the 1933 tariffs, are practically all of United Kingdom origin. Imports from other countries are negligible.
The proposed British rate of 5d. per lb., even after allowing for the additional cost of duty and primage on raw materials represents a. protection of 40 per cent. on the main selling lines in Australia. This gives a generous measure of protection to the local industry, and permits a disparity in costs above material greater than that allowed for the manufacture of other goods of a similar nature.
Item agreed to.
Item 333 agreed to.
Division 13 - Paper and Stationery
Item 334 agreed to.
Item 338 (Posters, display signs, pamphlets, books, trade catalogues).
– I notice that it is proposed to admit free of duty all posters, display signs, pamphlets, books and other printed matter published, or issued under the authority of government bureaux, railway authorities, airway authorities, and steamship companies. This arrangement might operate unfairly against the work of Australian authors and artists. I shall be glad to hear what the Minister has to say about the matter.
– This provision is complementary to the admission, duty free, of educational films. Under a convention drawn up in October, 1933, by a special committee of the League of Nations, appointed for the purpose of facilitating the international circulation of films of an educational character, the High Contracting Parties undertook that educational films of any one contracting party would be admitted free of duty into the country of the other contracting party, if accompanied by a certificate issued by the International Educational Cinematograph Institute. Similarly, it was agreed that talking machine records and advertising posters connected with such films, should be admitted free of duty. The item seeks to carry out Australia’s part of the bargain with regard to the posters.
Item agreed to.
Item 340 agreed to.
Division 14 - Vehicles.
Items 352 and 355 agreed to.
Item 357 (Perambulators and go- carts) .
– I am somewhat concerned about the effect of the lower duties in this item, and shall be glad if the Min ister can give a satisfactory explanation of the reason. I understand that, in some of the lines covered by sub-items a and b the competition is very severe, particularly from Japan.
– The honorable senator need not fear competition from Japan or any other foreign country, in connexion with perambulators and go-carts. The industry is well established in Australia, and local manufacturers supply practically the whole of the requirements. The importations from countries other than the United Kingdom in the years 1930-31 to 1934-35 inclusive, were only £45, £2, £18, £6, and £9 respectively. Total importations have been exceedingly small. The Tariff Board reports that the 1933 rates have proved prohibitive, and considers that the duties now proposed afford adequate protection to the local industry. A natural protection against the importedproduct is provided by the heavy overseas freight on this class of goods, owing to their bulky nature. Wheels have been produced locally for about fourteen years, and the industry is well established. The board advises that it can see no reason why the industry should be protected by a duty in excess of that considered adequate for metal manufacturers generally, and is of opinion that the rates proposed are adequate to protect the efficient maker. The rates in the proposed item have been arranged so as to facilitate trade treaty negotiations.
Item agreed to.
By omitting the whole of sub-item (e) and inserting in its stead the following subitem : - “ (e) Parts of bodies enumerated in para graphs (1), (2) and (3) of sub-item (d), viz. : -
Pressed metal panels, not fabricated beyond trimming of edges -
For single-seated bodies, per lb:, British, 6d.; per complete set, intermediate, £20; general, £20.
SenatorFOLL (Queensland) [10.20].- It has been represented to me, and I think to most honorable senators, that importers of British cars are experiencing considerable difficulty in securing from Australian body manufacturers bodies for the chassis they import. I understand that one large manufacturer of British cars is months behind in the delivery of orders which have been received from clients in Australia. I should like to know whether the Government has decided to grant a tariff concession on the importation, either of panels or of the completed bodies, in order that importers may have an opportunity to bring their orders up to date. The greatest possible assistance should be given to these importers. I am not one of those who believe that English cars are unsuitable for Australian conditions. I recognize, and so must others, that during the war period and the reconstruction period which followed it, American interests obtained a big start over British interests in the advertising, sale, and servicing of cars imported from their country. It is now generally admitted that British cars are eminently suitable for Australian conditions. Their importation would do no injury to any Australian industry, but, on the contrary, would increase the volume of work provided by associated and kindred industries.
– Is the honorable senator advocating their importation as a complete unit?
SenatorFOLL. - If the local body builders are so deluged with orders for bodies for foreign cars that they are unable to fulfil orders given by the importers of British cars. I should be quite willing to permit the importation of the complete unit until arrears were overtaken. As Senator Guthrie has pointed out, when it was found that the local manufacturers of galvanized iron were unable to fulfil the orders they had received, corrugated iron was admitted under by-law until the pressure had eased. To ask that importers of British cars should be placed in a similar position, is not unreasonable. The importation of British cars should not be hampered because of the position in which the Australian body-building industry finds itself in relation to orders. I am not criticizing in any way the work of the local body builders. I believe that it is equal to what is produced in any other part of the world, but the representative of probably the largest manufacturer of British cars, has informed me that he is months in arrears with orders, and that, in consequence his business is being very adversely affected. The position is so serious that I cannot understand why no protest has been made to the Government by the British High Commissioner. To impede the placing on the road of thousands of pounds worth of British vehicles must be to do more harm to their manufacturers than the imposition of a duty on cement would do to the United Kingdom exporters of that commodity.
– The British High Commissioner will make his protest now.
– I hope that it has been made already, and that it is couched in the strongest terms. If the position is as I have stated it to be, he would be lacking in his duty if he failed to protest. I understand that representations in the matter have been made by interested parties as well as by honorable senators from all the States, and that the Minister has full information in his possession. Has he any suggestion to make for the removal of the difficulty?
– The duties now proposed represent a considerable reduction of the British preferential rates, but no alteration has been made under the general tariff. Under the item British panels, not fabricated beyond trimming the edges, are dutiable at 6d. per lb. British panels, when fabricated beyond trimming, are dutiable at 9d. per lb. The panel-manufacturing industry in the Commonwealth is well established and is efficiently organized. There are, however, certain panels which it is uneconomical to manufacture locally by reason of their high cost of production and the small demand. The manufacture of pressed panels for any particular body necessitates a heavy initial expenditure in making the essential dies available. Each different type or design of body requires individual dies for the pressing of the panels, and, unless the number of bodies to be produced is reasonably large, the die cost per set of panels is unduly high. In cases where a limited number of bodies is required, the car distributor is compelled either to import the panels and have the body manufactured locally, or to procure hand-beaten panels. The former course, by reason of the high duties previously provided for imported panels, unduly increased the cost of the completed body, while hand-beaten panels also proved expensive. In addition, the use of hand-beaten panels is stated to result in an unsatisfactory finish, which is detrimental to car sales. Car distributors in such cases preferred, therefore, to import the finished body, and pay the high duty under the 1933 tariff. Thus a certain amount of work was diverted from Australia. This position obtains more particularly in the case of the British body, as the demand in Australia for certain makes and designs of British cars is limited, thus reducing motor body requirements for those types to a quantity which is too small for local manufacturers to produce on an economical basis. The object of the new duties is to alleviate the position in respect of British cars not greatly in demand in Australia, and where, in consequence, the cost of wholly manufacturing the bodies locally, on account of heavy die expenses, is out of all proportion to the cost of the complete car. ‘The Tariff Board was divided in its opinion as to the rate which should be applied under the British preferential tariff, one member recommending the free admission of panels not fabricated beyond trimming the edges. The remaining members favoured a duty of 6d. per lb. on those panels. The Government has adopted the majority recommendation. In order to prevent additional stages of manufacture which can be undertaken economically in the Commonwealth from being performed in the United Kingdom prior to importation of the panels, increased duties are provided for panels further fabricated than the trimming of the edges. This should ensure that the maximum of manufacturing processes in the assembly and completion of the bodies is secured to the Australian industry. One person complained to me that he could not obtain bodies for a certain make of cars. Having perused the correspondence, I could see quite clearly that it would be impossible for him to get what was desired at a reasonable rate. He was anxious to secure a quotation for bodies for a 1936 model, but the dies could not be prepared until towards the end of this year. Although the order would have been probably for 1,000 cars no quotations were made by local body-builders. Moreover, the bodybuilders pointed out that it was uneconomic to provide a large number of bodies for this year’s model, when new models would be introduced early in 1937. Before the new dies were completed a new model would be on the market, and the capital expenditure would have been wasted. In that instance I concluded that the request was unreasonable.
– Does not the Minister think that that is an argument in favour of importing the panels and assembling the bodies in Australia?
– I am discussing the subject from another angle. The information I have given is a sufficient answer to those who say that bodies are not being supplied. From time to time I have investigated the complaints, and have had assurances from manufacturers that they were willing to meet the convenience of their clients but that it was inadvisable to do so. While there may be some substance in the arguments adduced by Senator Foll, I do not think that his proposition is workable. Manufacturers will not decline business or concentrate upon any particular make of car. They are anxious to meet the convienience of all clients.
During the 1936 season local bodybuilders have at times experienced difficulty in giving deliveries on the dates anticipated. In most instances these delays have been of a minor nature, although in one instance investigated deliveries were considerably in arrears.
In considering this aspect of the question it must be remembered that the sale of motor cars in Australia has increased abnormally in recent years. In 1933-34, 32,924 chassis were imported, in 1934-35 the number increased to 53,975, and in the first eight months of 1935-36 to 50,664. During the periods mentioned, bodies were imported for not more than 4 per cent. of these chassis and the burden of producing almost the whole of the bodies required fell upon Australian bodybuilders. An abnormal increase in production in such a short period must throw a great strain upon the capacity of the body-building works, particularly during the first few months of production for the motor car selling season. Distributors of all makes of cars are anxious to receive initial deliveries of the new models, and press the body-builders to fix the earliest possible dates for delivery of the bodies. Fresh dies required for new types of bodies must also be developed within the first few months of the season. It is only reasonable to expect that in these circumstances the programme of the builders must occasionally be disturbed and unforeseen difficulties encountered which render it impossible for some orders to be completed according to contract.
Another factor tending to delay production this year was a shortage of the skilled labour necessary in certain sections of the works. The small demand for bodies during depression years no doubt interrupted the training of skilled labour, and by reason of the sudden increase in “demand body-builders have at times found it difficult to obtain all the skilled labour necessary. Other factors also interfered with early production. In some instances the necessary blue prints and working details were not made available to bodybuilders as early as could be desired. In other instances these details, when received, were not complete. Delays in delivery of bodies certainly inconvenience the distributors of motor cars, but during the current season these delays have not been particularly frequent, and the Customs Department is aware of only one instance in which orders have been seriously in arrears.
I feel that honorable senators will appreciate the difficult position in which the motor body-‘building industry has been placed by reason of the sudden increase of the demand for bodies. On this account the capacity of the industry to cater for Commonwealth requirements generally should not be judged upon the results of an abnormal season, and the few instances of delayed deliveries which have occurred. In consequence of the complaints made the Minister for Trade and Customs caused a special investigation to be made, and I understand that assurances were given to him that any of the motor bodybuilding firms will undertake the work if it is a reasonable commercial proposition. Agents cannot expect builders to incur heavy expense in the provision of dies for the making of bodies for cars that will be shortly superseded by later models. The inviting of quotations in such circumstances almost makes one think that the object is really to obtain a. refusal. From correspondence which I have seen, the manufacturers, so far from refusing orders, have catered to the fullest extent for the trade and have done everything to facilitate business, but have pointed out at the same time the lack of wisdom of having dies made in this country for body designs which may be obsolete next season.
– I listened with a great deal of interest to the explanation given by the Minister, but I feel that in view of the continuous agitation by the Australian representatives of British cars, there must be at least some uncertainty regarding deliveries of bodies. The Minister said that the Customs Department knew of only one instance in which deliveries were seriously retarded. I would like the Minister to have given the name of the car in respect of which body deliveries were retarded. We have definite evidence from a number of selling agents that late deliveries are a very real hindrance to their business. It is the announced and implemented policy of the Government to give preference to British products, and this applies to motor cars, chassis from the United Kingdom being admitted free of duty while foreign chassis are charged a duty of 32 per cent. What is the use of allowing British chassis to come in free of duty if the people who import them cannot procure suitable bodies for them? When this happens, the preference extended to British chassis is rendered abortive. We should seriously consider whether the assurances given by the body manufacturers on the question of delivery are; really backed up by- facts. I do not deny that the Minister has made an investigation of this matter, but does he think that the body-builders would admit that they are hopelessely behind in deliveries, knowing that if an official inquiry were made by the Minister a finding unfavorable to them might be followed by political action-
The result of such an inquiry would not be likely to he reliable, because in most cases the manufacturers would hasten to assure the Minister that although there may have been a certain amount of delay any cause for complaint would be removed in the near future. The Minister put up an excellent case as to why, owing to the cost of dies, the manufacture of small numbers of bodies would be uneconomic; but by that contention he supported most strongly the arguments advanced for the importation of motor body panels. I am given to understand that certain types of dies cost up to £6,000. I submitted to one of the gentlemen who made representations to me to-day, that if the Government by any chance owing to these late deliveries allowed importations to be made under license, it could not restrict the privilege to one particular make of car, but would have to extend it over the whole field of British car importations. If that were done, motor body manufacturers handling successfully a certain number of British chassis would lose a good deal of business, because, immediately there would be a rush for the extension of the licensing system over the whole field of motor car importations.
– That would not apply where an order has been fulfilled.
– No; if the Government did by any chance adoptthe licensing system and admit bodies under bylaw, it could do so only when the Minister was satisfied that deliveries were not being made promptly, and the delays were seriously interfering with the conduct of business by British car importers.
– Can the honorable senator say in respect of what particular makes of cars delay has occurred ?
– One of them is the Morris car, bodies for which are built by Ruskin & Company. From information which I have received to-day, it appears that deliveries were not slightly behind, but quite a long way behind. I do not think there would be any difficulty in convincing the Minister that serious inconvenience is being caused to this company. I have no desire to jeopardize the Australian body industry, the rapid progress of which is one of the romances of Aus tralian development. If the Minister is satisfied on investigation that deliveries are slow, although the plants are running at full capacity, I see no reason why the licensing system should not be extended to the cars whose marketing is being prejudiced.
– Does the honorable senator suggest by-law entry ?
– Yes, in cases in which it can be proved to the satisfaction of the Minister that bodies cannot be obtained in Australia without considerable delay. If some form of documentary evidence were supplied to the Minister for Trade and Customs that on certain dates motor car distributors entered into contracts with body-builders, that the contracts have been broken, with the result that the distributors’ goodwill has been destroyed and their organization jeopardized, and that not only is prompt delivery not given, but also that weeks or possibly months may elapse before the contracts are fulfilled, all interests would be safeguarded and admission under bylaw justified.Representations along these lines have been more or less continuous for a long time. The aim of the distributors of British cars is not to cut the prices charged by Australian body builders, but to obtain bodies for chassis which have already been imported by them.Without bodies, the chassis are of little use. British chassis are given preference under the tariff, and surely if it can be proved beyond doubt that bodies cannot be obtained for them within a reasonable time, the temporary adoption of the licensing system is justified.
– Inquiries made by the departmental officers are comprehensive and impartial. The officers do not confine their examination to interviews with individuals; they also examine books, contracts, and other documents, with a view to ascertaining whether or not there is substance in these charges.Recently representations were made to me in this connexion by a distinguished British car manufacturer who visited Australia. I said that, in view of the delay in obtaining bodies for British chassis, it appeared strange that the manufacturers of British cars did not combine to manufacture bodies in Australia. He replied that Australia already had sufficient motor body builders to supply all the cars that this country required.
– If that be correct, it would appear that the body builders give preference to other makes of cars.
– In answer to an interjection which I directed to Senator Hardy, the honorable senator said that the contractors for the bodies of Morris cars were a long way behind with their deliveries. I have obtained a report which shows that the company which has the contract for bodies for Morris cars is up to date with deliveries with the exception of bodies for the 18-25 horse-power saloon. The contract for those bodies stipulated that delivery was to be made by the 28th December, 1935, but the builders were unable to commence delivery until late in March, 1936. Since that time, however, deliveries have been made regularly, but the company has not been able to overtake the arrears, although it is gaining ground. The body for that model car is of a new type, and requires fresh dies, which, as honorable senators know, take a long time to make, and cost a great deal. The delay in this case is mainly attributed to a shortage of skilled labour. The company has made every effort to avoid delay in delivery by working extra shifts, including week ends. It would appear that the local builder was too optimistic regarding his capacity to produce bodies, and as a result he has placed the car distributors in an awkward position.
– Did the contractor give preference to other makes of cars?
– The departmental officers say that that has not occurred. The position of a builder who has orders for 1,000 bodies is very different from that of a builder with, say, only 100 new bodies to make. The Government is convinced that there is no attempt on the part of body-builders to drive the British car off the Australian market: I give an assurance that the position will be closely watched by the officers of the Customs Department. The Government does not desire that the preference now given to British chassis should be subverted.
Amendment (by Senator Hardy) proposed -
That the House of Representatives be requested to amend paragraph 1 of sub-iteme by adding a new sub-paragraph (d), viz.: -
As prescribed by departmental bylaws, British, free.
– I understand that the Customs Department would feel that its hands were strengthened if the request of the honorable senator were agreed to. Neither the department nor the Government wishes to injure the motor body-building industry in this country, but, in the circumstances, the Government will accept the request.
.- In all these discussions the onus is placed on the Australian manufacturer, rather than on the British manufacturer to whom it rightly belongs. It must be remembered that dies for motor car bodies are costly, running into many thousands of pounds. Agents for British motor cars, who require bodies for a small number of chassis, cannot get them as cheaply as if they were ordering bodies in thousands. In myopinion, the blame for the present unsatisfactory state of affairs lies with the British car manufacturers themselves. There are probably a dozen British cars of practically the same size and shape in Australia, but not one body is interchangeable with another. A little organization on the part of the manufacturers, resulting in slight alterations of their chassis, would enable similar bodies to be fitted to all the different makes of chassis, thereby making it possible for large orders for bodies to be given, with a consequent reduction of their cost. If that were done, the delays which now occur would be avoided, skilled labour would be available to turn out the bodies in thousands, and the cost to the purchaser of British cars would be less. It is impossible for a manufacturer to supply an order for a dozen or twentymotor bodies at the same relative cost, or with the same expedition as he would turn out an order, say, for 1,000. In this instance the British Government should say to its manufacturers, “It is up to you to do a little organization on your own side and help us to help you “. I am familiar with die-making and this class of work. If the British manufacturers combined and made slight alterations of their chassis, for instance, by putting the bolt holes within two or three inches of their p resent positions, interchangeable bodies for the Austin, Singer, Morris, Hillman and other British cars could be made, and the whole of this difficulty overcome. There would not be the slightest difficulty in getting bodies, and, furthermore, they would cost only about two-thirds of the present price.
– If the British manufacturers acted on the good advice just given by Senator Leckie, the position would be improved, but the fact remains that, in the meantime, these manufacturers, through no fault of their own, are in difficulties. The amendment moved by Senator Hardy should make it possible to extend to these manufacturers that preferential treatment which should be given to British cars. I was rather disappointed that the Minister (Senator A. J. McLachlan), when referring to the orders given to Australian manufacturers, did not give details. I do not know whether he has the figures. However, I have been told that one maker is at present over 200 cars in arrears. The Minister, in a spirit of optimism, remarked that these particular manufacturers had accepted more orders than they could possibly hope to cope with. We have repeatedly been given assurances, but assurances of themselves will not put ears on the road ; the only thing that counts is delivery. Nor will assurances turn chassis into money. I hope that the department will employ this amendment, which I have little doubt will be carried, for the purpose of enabling these manufacturers not only to catch up arrears, but also to reap to the full the preferential treatment which we have undertaken to give them as British companies. In following that policy the Government would be quite justified, perhaps, to keep in mind the suggestion made by Senator Leckie. We should make every endeavour to continue in the fullest measure that preferential treatment to manufacturers of British cars, which, in the past, this Government, and, through registration concessions, State governments have tried to give them.
– In reply to Senator Abbott, my suggestion was much on the same lines as put forward by Senator Leckie. I put it to a gentleman who is interested in British cars, that if he were not satisfied with what is happening his company should attend to its organization side. However, that gentleman pointed out that there are too many motor body factories established in this country to-day. At present we are passing through abnormal times in the matter of the output of motor bodies. During the depression, people were content to use old and decrepit machines, but since the revival of business generally orders have increased enormously, with the result that these people over the last eighteen months have imported cars in greatly increased quantities, and the local body manufacturers have been overwhelmed with orders. Senator Hardy’s amendment, which I am prepared to accept, should overcome the difficulty. This by-law provision will serve two purposes. It will relieve the difficulty in which the distributors of these cars are now placed and will also provide extra employment in the local body-building industry. As a number of the bodies for these cars are at present imported, the local bodybuilder will not be disadvantaged. The assembly of the panels admitted under by-law and the completion of bodies therefrom, will provide additional work for the Australian industry. In any case, these by-law admissions will be made only under the circumstances which I have indicated - if there are no panels available in the Australian works for British cars. This clause will relieve the situation without detriment to the Australian industry.
– Can the Minister give an assurance that the amendment which has been moved and which he has expressed his willingness to accept, will be applied only as a temporary measure to enable the present arrears to be overcome ?
-i give that assurance.
– I asked for it, because Senator Abbott expressed the hope that its application would be more or less of a permanent nature.
– No; only to relieve the present situation.
– I am glad that the Minister is prepared to give such an assurance. Senator Hardy said that the history of motor body-building in Australia was one of the romances of industry. This committee, therefore, should take care that it does nothing to destroy the romance. The history of General Motors-Holden. Limited is remarkable. Some years ago I inspected the company’s great works in Adelaide and Woodville, and I realized their enormous value to Australia.. Honorable senators may be surprised to know that for a number of years the company was unable to show a profit on its operations. The business had to be thoroughly established before a profit could be obtained. It is a remarkably efficient industry, and has satisfied all demands made upon it. It has not exploited the public. In 1917, shipping space was required for goods of much more importance to Australia than motor cars, which took up a tremendous amount of space when imported in the assembled form. In that year, the Government proposed to prohibit, under tlie War Precautions Act, tb importation of motor cars, in order to conserve shipping freight space. This was necessary on account of the destruction of shipping during the war. A very strong protest was entered by the motor distributors at that time, as such a prohibition would have meant the closing down of their businesses. Figures were produced showing the amount of capital invested in the automobile industry. The difficulty was eventually got over by the suggestion by the importers that they should be allowed to import one complete car with every two chassis, thus economizing freight space. This course was decided upon. Then Holdens decided to embark upon the business of building bodies in Australia, and the undertaking has assumed remarkable proportions today. The men engaged in the industry desire that nothing shall be done to retard its progress. The secretary of the trade union to which the employees belong told me in Adelaide a few years ago that they had no difficulty whatever with their employers, and had always been able to settle their -differences at round-table conferences.
The report of the directors of General Motors-Holdens Limited submitted at the annual meeting of shareholders of the company held in Melbourne in March last, showed that the number of its employees in Australia is 5,450, of whom 3,900 are engaged in passenger car body manufacture. The total amount paid iri salaries and wages in Australia for 1934 was almost £900,000, of which over £600,000 was paid to employees in the body-building plant. The expenditure on Australian materials during the year amounted to £1,400,000, of which £750,000 was for the requirements of body manufacture. The operations of other Australian body-builders show figures equally impressive in their contribution to Australia’s economic welfare. Those figures illustrate the importance of the industry, the efficiency of which is generally admitted. I suggest that the Government, whilst accepting the amendment, should see that the proposed duties operate only as long as is necessary, and that everything possible is done to protect the industry.
– Will the Minister inform the committee as to the difference between panels described as “ not fabricated “, on which the British rate is 6d. per lb., and those “ fabricated “, on which the duty is 9d. per lb. ? Has it been reported to the department that the move of the board to reduce the duty on fabricated panels to 9d. per lb., to assist the British industry, has proved that these panels cost more for the complete body than the locally-produced article? Is it a fact that Ruskin Motor Bodies Proprietary Limited and James Flood Proprietary Limited are both behind in deliveries for firm orders, and have no hope of catching up during 1936?
– To what makes of cars does the honorable senator refer ?
– To British cars; I can supply the names later. Has the department been advised by distributors in various States that they have been compelled to allow the chassis of British cars to go into bond, because they are unable to get deliveries of bodies from the local factories? These charges have been circulated widely, and I think that the department has gone fairly closely into the matter.
– Investigation revealed that there had been no delay in connexion with the delivery to “Western Australian distributors of bodies for Singer cars. The order for Australian requirements of Singer bodies was placed with James Flood Proprietary Limited, Melbourne, delivery to be made within the usual period of twelve weeks. The order was for over 300 bodies, of which the “Western Australian share was only 32, approximately 10 per per cent, of the total. Completed bodies are invariably delivered by the bodybuilders to the different State distributors in the proportion which their respective requirements bear to the total requirements in Australia. The fact that no complaints have been made by distributors in other States, who absorb about 90 per cent, of the total Commonwealth requirements of locally-made Singer bodies, tends to confirm the result of the investigations, which disclose that deliveries have been made according to schedule. I have already stated the position in regard to Morris bodies. - It is a fact that Buskins are in arrears with the supply of bodies for certain models of Morris cars, but they also supply bodies for Hillman, Hudson, and Nash cars, and no complaint has been received in respect of them. Senator McLeay asked what was the meaning of “ unfabricated “ as applied to panels. The term “ unfabricated “ is used to describe the condition in which the panels leave the press, except for the trimming of the edges. If any further work is done on them, such as cutting, drilling, &c, they are classified as “ other “.
– It has been stated that the duty on unfabricated panels is fixed at 6d., in order to assist British distributors, but the distributors complain that, if the panels are brought out in an unfabricated condition, it takes nearly as long to prepare them for assembly here as it would to have the panels made in Australia. That is a serious complaint, and I should like to know if there is any ground for it. If the making of the holes, &c, in the unfabricated panels takes so long, that raises a new issue.
– Why should it?
– Because it raises the questions of cost and delivery.
– I endorse what was so excellently said by Senator Foll on this subject. Senator Leckie has suggested that if there is a fault anywhere, it lies with the British manufacturer, and not with the Australian manufacturer. Surely he must admit, however, that the British manufacturer is at a disadvantage in having to comply with Australian conditions and to pay the high duties which have been imposed, and which make it so difficult for him to compete. Senator Leckie even went so far as to say that the British manufacturers had displayed no gift for organization. It seems to me that if protection is rendered, there should go with it an obligation upon the protected industries to provide the service required of them. To a very large extent, that obligation has been recognized in this industry and in others, but not always. One ground for complaint against high protection is that it tends to create a situation in which it is difficult or impossible to get adequate supplies. Within recent years, as many honorable senators know, there has been in Australia an ^sufficiency of glass, galvanized iron, textiles, motor car bodies and even molasses. Recently some one who had occasion to order from Adelaide a quantity of molasses on my behalf was informed by the firm to which he had given the order that it had repeatedly applied for a stock of molasses without success, though in Queensland, the material was practically being given away. This shortage of supplies in Australia has, in some cases, induced the Minister for Trade and Customs to lift temporarily restrictions upon imports.
We should not forget, when considering the motor-car industry in Australia, that, during the war, the British motor business was completely disorganized.
It was during that time that the American motor business obtained a tremendous advantage, which it has held since. I know that some honorable senators will say that the American manufacturers produced cars suitable for the Australian market, while the British manufacturers did not. That may he so, or it may not, but at least it must be conceded that the British manufacturers started after the war, at a tremendous disadvantage, and I am anxious to ensure, if I can, that they are now treated fairly. There are three large motor-body building firms in Australia, two of which happen to be in my ownState. The largest of these is Holdens, as it is called, and the building up of this enterprise was a remarkable achievement on the part of Mr. £. W.Holden. However, I think I am right in saying that there is now in this firm a preponderating proportion of American capital, so that, in the nature of things, the work done by the firm will be the work which General Motors wishes to have done.Ricbards’ is very closely affiliated with the Chrysler company. Our only other large motor bodybuilding firm, is Buskin Motor Bodies Proprietary Limited of Melbourne. The body on a car which I own was built by that firm and is, I believe, quite a good job. But the firm is hopelessly over-glutted with work. Surely in such circumstances it would he wise for us to permit a limited number of motor bodies to be imported, so that British chassis which have been standing in showrooms and elsewhere for many months may be fitted with bodies without further delay. I do not desire to impute motives in this connexion, hut I have had submitted to me what I regard as irrefutable evidence that the big English motor manufacturing firms are not able to obtain deliveries of bodies in Australia at anywhere near contract time.
– Have Holden’s Limited been asked to supply bodies for those cars?
– I cannot say. If inquiry were made on that subject, I have no doubt that conflicting reports would be obtained, but I do not base my case on what I hear from one or the other. The plain fact is that the supply of motor bodies in Australia is, undoubtedly, lagging far behind the demand. The Leader of the Opposition may think that this is proper, but I hold a different view. It is much better that the supplyshould be waiting on the demand. Undoubtedly, the British motor manufacturing industry is being detrimentally affected in Australia by the existing state of affairs. Great Britain, as we all know, is our best customer, a far better customer of Australia than the United States of America, and we should do what we can to encourage the sale of British motor cars in this country.
Request agreed to.
Senate adjourned at 11.34 p.m.
Cite as: Australia, Senate, Debates, 14 May 1936, viewed 22 October 2017, <http://historichansard.net/senate/1936/19360514_senate_14_150/>.