House of Representatives
1 April 1936

14th Parliament · 1st Session

  1. House of Representatives
  2. 14th Parliament
  3. 1936

Mr. Speaker (Hon. G. J. Bell) took the chair at 2.30 p.m., and read prayers.

page 739

PAPERS

The following papers were presented : -

Wheat, Flour and Bread Industries - Royal

Commission - Third, Fourth and Fifth Reports.

Ordered to be printed.

Customs Act - Regulations amended - Statutory Rules 1936,No. 38.

Quarantine Act - Regulations amended -

Statutory Rules 1930, Nos. 36, 37.

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QUESTION

PRICE OF CEMENT

Mr NOCK:
RIVERINA, NEW SOUTH WALES

– Has the attention of the Minister for Trade and Customs been drawn to the statement published in the Sydney Morning Herald to-day, that the lowest tender received by the Metropolitan Water Sewerage and Drainage Board, Sydney, for the supply of cement for the ensuing three months is 14s. 7d. a ton net above the price paid during the last twelve months? If so, will he cause inquiries to be made to ascertain if such a rise of price is justified?

Mr WHITE:
Minister for Trade and Customs · BALACLAVA, VICTORIA · UAP

– I have not seen this particular statement, but a reference of a similar nature was made in a recent report of the Tariff Board on the same subject.

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QUESTION

RELIEF OF WHEAT-GROWERS

Mr HAWKER:
WAKEFIELD, SOUTH AUSTRALIA

– Will the Assistant Minister for Commerce state whether any payments have so far been made to the States in respect of the assistance granted to wheat-growers by this Parliament this year?

Mr THORBY:
Minister without portfolio assisting the Minister for Commerce · CALARE, NEW SOUTH WALES · CP

– The sum of £50,000 has been divided between the States of Western Australia and South Australia. No further payments have been made, because I am waiting to be supplied with particulars concerning the names and offices of those whom the States wish to nominate as prescribed authorities. I have made two telegraphic requests for this information.

Mr GREGORY:
SWAN, WESTERN AUSTRALIA

– The Minister for Agriculture in Western Australia, Ms. Troy, has stated publicly that the distribution of the federal grant for the assis tance of wheat-growers might more appropriately be made by the Commonwealth. Will the Minister follow that course?

Mr THORBY:

– I have noticed the criticism which has been levelled at the Commonwealth Government by the Government of Western Australia in connexion with wheat grants generally. The whole of this criticism has been conducted through the columns of the press. I cannot assign a reason for that attitude, in view of the fact that officially the Government of Western Australia has complied with every request made to it and has met the Commonwealth in every other way except in regard to supplying the name of the person, and the office that he holds, whom it desires to nominate as the prescribed authority. If it definitely objects to act for the Commonwealth in the distribution of the grant, and asks to be relieved of that responsibility, the Commonwealth will have to reconsider its position.

Mr NOCK:

– In view of the fact that the 31st March was the last day in New South Wales on which farmers could apply for stay orders with the object of obtaining relief under the rural rehabilitation scheme, I ask the Acting Minister for Commerce whether he will make representations to the Government of New South Wales to secure some further provision to enable those farmers who have applied but have not obtained stay orders to participate in the relief being provided ?

Mr THORBY:

– The act passed by the Parliament of New South Wales provided that the 31st March was the last day on which applications could be made for the issue of stay orders to primary producers of that State. I am not aware of the intentions of the State government in this matter. I do not know whether it is proposed to amend the existing legislation to extend the time in which orders may be obtained. I know, however, from official sources, that numerous applications are already in hand. The amendment of the Farmers Debt Adjustment Act, agreed to a few days ago by this Parliament, clears the way for the Commonwealth Government to carry out its obligations in regard to applications already in hand.

Mr GREGORY:

– In view of the delay that has taken place in giving effect to the Farmers Debt Adjustment Act, by granting relief to wheat-growers, and of the urgent need for such assistance, I ask the Acting Minister for Commerce whether he will insist upon immediate replies being furnished by the State governments in regard to the matter? If such replies are not furnished at once, will the honorable member take appropriate action himself?

Mr THORBY:

– I have no power, under the legislation passed by this Parliament to do other than make payments to State authorities in accordance with the act. The one thing that has delayed the distribution of the money has been the failure to supply the names of the statutory authorities provided for in the act. Some State governments have supplied the required names. I hope to have complete information from all States to-morrow.

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QUESTION

OTTAWA AGREEMENT

Duties on Cement.

Mr BAKER:
GRIFFITH, QUEENSLAND

– I ask the Prime Minister whether it is correct that the Government has radioed the Deputy Prime Minister (Dr. Earle Page) and the AttorneyGeneral (Mr. Menzies) asking for information concerning the holding of an early general election because of a supposed breach of the Ottawa agreement caused by the recent vote on the Government’s tariff proposal in relation to cement? Is it also correct that the Government has departed from its traditional policy of not compelling its supporters to vote as it desires on the tariff, and has decided to defeat the decision in regard to cement duties upon the return of the schedule from the Senate? . Is it further correct that the Government has advised its followers that another defeat on the tariff will result in their being forced to an election?

Mr LYONS:
Prime Minister · WILMOT, TASMANIA · UAP

– There is so much rubbish in the questions put by the honorable member that they are not worthy of an answer from the Government.

Mr.CURTIN.- Is it a fact that the Government has consulted counsel other than counsel attached to the Commonwealth Crown Law Department, for an opinion regarding the validity of the action taken in connexion with the proposals of the Government concerning cement, in view of the terms of the

Ottawa agreement? If counsel has been consulted on the point, will his opinion be made available to honorable members?

Mr LYONS:

– As the Cabinet has not consulted such counsel, there is no opinion to be made available to honorable members.

Mr CURTIN:
FREMANTLE, WESTERN AUSTRALIA

– Is the Prime Minister aware that Mr. David Maughan, K.C., of Sydney, has expressed an opinion regarding the Ottawa agreement in terms which, shortly stated, are these -

I am clearly of the opinion that, on the . true construction of the Ottawa agreement, the articles in question do not contain any explicit or implied provision compelling the Government to adopt these particular reductions recommended by the Tariff Board, and that the amendment recently carried by the House of Representatives is not in conflict with the Ottawa agreement.

Mr LYONS:

– I have no knowledge of the opinion referred toby the Leader of the Opposition, nor does the Government need any outside legal advice in the decision of what its obligations are under the Ottawa agreement. As it was not Mr. Maughan or any other barrister or solicitor who entered into that agreement, but the Government of the Commonwealth of Australia, it is for that Government to decide what its obligations are under the agreement.

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QUESTION

CANBERRA MILK SUPPLY

Mr JENNINGS:
WATSON, NEW SOUTH WALES

– In view of the grave nature of the report published this morning concerning Canberra’s milk supply, will the Minister for Health state what action is to be taken to remedy the position ?

Mr HUGHES:
Minister for Repatriation · NORTH SYDNEY, NEW SOUTH WALES · UAP

– I have read the report published in the Canberra Times this morning, and am requesting the DirectorGeneral of Public Health to confer with me on the matter. I fully appreciate the importance of a pure milk supply. The honorable member may rest assured that everything which is necessary and proper will be done without delay.

page 740

QUESTION

AVIATION

Services to Papua and New Guinea - Civil Aviation Department

Sir CHARLES MARR:
PARKES, NEW SOUTH WALES

– I ask the Minister for Defence whether any applications have been received by the Government for permission to inaugurate an aerial service from Australia to

Papua and New Guinea ? If so, has any such applicant offered to provide a service without subsidy except in regard to the carriage of mails ?

Mr ARCHDALE PARKHILL:
Minister for Defence · WARRINGAH, NEW SOUTH WALES · UAP

– An application of the nature referred to by the honorable member has been received from SirWalter Carpenter, acting on behalf of Messrs. W. R. Carpenter and Company, but it was not approved pending a decision by the Government in regard to aerial services generally. When such a decision is made tenders will necessarily need to be called for any proposed services. An intimation to this effect has been communicated to Carpenter and Company.

Sir Donald CAMERON:
LILLEY, QUEENSLAND · UAP

– I ask the Minister for Defence whether it has been correctly reported in the newspapers that the Civil Aviation Department willbe transferred to Canberra in the near future ?

Mr ARCHDALE PARKHILL:

– I have made no statement on this subject, although I have seen some reference to it in the newspapers. It would be advantageous and would also assist in administration if the officers of the Civil Aviation Department were closer at hand than they are. But, although the Government is at present considering the removal of various departments to Canberra as rapidly as possible, I have no knowledge that the Civil Aviation Department is among those due for early transfer.

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QUESTION

SHIPBUILDING

Mr McCALL:
MARTIN, NEW SOUTH WALES

– Following upon the successful launching of H.M.A.S. Swan last Saturday at Cockatoo Island Dockyard, and having regard to the fact that the work on the vessel will soon be completed, I ask the Minister for Defence whether the Government has considered the placing of further orders with the Cockatoo Island Dockyard? If not, will it give urgent consideration to the taking of such a step?

Mr ARCHDALE PARKHILL:
UAP

– The Government has a very high opinion of the quality of the workmanship of the Australian artisans engaged at Cockatoo Island Dockyard on H.M.A.S. Swan, and it is desirous to do all that it can to keep intact the staff that has been gradu ally assembled there. It is at present considering what can be done in order to maintain the staff there.

Mr ROSEVEAR:
DALLEY, NEW SOUTH WALES

– As the Government has the high opinion of the efficiency of the Australian shipbuilders indicated by the Minister for Defence (Mr. Parkhill), I ask the Prime Minister whether consideration will be given to the placing of a prohibitive tonnage tax on ships built overseas for use in Australia in order to prevent Australian companies, including ferry companies, from ordering ships from overseas?

Mr LYONS:
UAP

– The Government will do everything in its power to encourage Australian industry and the employment of the Australian people, but it is not prepared to impose a definite prohibition in the interests of any particular section of the people.

page 741

IMPORTS FROM THE UNITED STATES OF AMERICA

Formal, Motion for Adjournment

Mr. SPEAKER (Hon. G. J. Bell).I have received from the honorable member for Flinders (Mr. Fairbairn) an intimation that he desires to move the adjournment of the House this afternoon for the purpose of discussing a definite matter of urgent public importance, namely, “ The alarming growth of imports from the United States of America which, in view of Australia’s general trade balance position, is a grave menace to trade with the United Kingdom and good-customer nations, and consequently to our export industries “.

Five honorable members having risen in support of the motion,

Mr FAIRBAIRN:
Flinders

.- I move -

That the House do now adjourn.

I make no apology to honorable members for suggesting that some time should be spent in discussing “ the alarming growth of imports from the United States of America which, in view of Australia’s general trade balance position, is a growing menace to trade with the United Kingdom and other good customer nations and consequently to our exporting industry “, particularly in view of the fact that a considerable amount of time has been spent by the House in discussing, in the last day or two, whether or not a certain industry should be allowed to make an excessive increase of cost at the expense of our domestic comfort. The case which I shall submit to the House, and through it to the country, will not require any special pleading. A plain, straightforward statement of the position will sufficiently call attention to the very definite menace that is confronting our economic structure. In the financial year 1933-34 our imports from the United States of America were valued at £9,790,000. In the next financial year they increased by more than £4,000,000 to £13,820,000. In the first six months of the current financial year they were valued at more than £S,000,000, indicating that by the end of the year they may amount to more than £16,000,000. To put it in another way, during two and a half years, the value of our imports from the United States of America has exceeded the value of our exports to that country by £22,000,000. That means that our ability to trade with our good-customer countries is being whittled away to the extent of more than £700,000 a month - a most alarming position, particularly taking into consideration our general trade balance position. Opinions on this matter vary. The Leader of the Opposition has expressed the view that our overseas trade position i.s already most dangerous and that immediate drastic action should he taken to stem the volume of imports. From that extreme opinion ranges to that expressed by the Government, that in view of the increase of exports during recent months, the trade position, although not serious, nevertheless requires watching. In other words we are reaching the stage when it may become necessary to effect some curtailment of imports from abroad I can see two very definite dangers in the present situation; first, that we may have to curtail severely the total volume of our imports, and secondly, that we are unable to increase our trade with good customers. In regard to the first danger, although it is quite possible that our exports may be maintained at such a level that general curtailment of imports may not be necessary, wo must realize that a fall of wool values or a further increase of imports will definitely precipitate action. For that reason we should be prepared for action and should know the direction in which such action should be taken. Pour possible courses are open to us : The first is a general tariff restriction of imports, which I consider would be disastrous. Without going into the merits or demerits of the action of the Scullin Government in restricting imports during a period of extreme financial emergency, I am sure that the majority of the people would consider a general curtailment of imports a disastrous way of facing the situation. Secondly, action may be taken to bring about a general restriction of credit in Australia, thereby limiting our ability to buy from abroad. That, I feel, would be even more disastrous, as it would bring about a restriction not only of overseas trade, but also of trade and development within Australia. Thirdly, the position might be met by a manipulation of the exchange rate, raising it still higher. Compared with the two previous methods, I consider that that method would be infinitely preferable. Nevertheless, for very definite reasons, which in the short time at my disposal I do not think it necessary to elaborate, that would not be satisfactory. Fourthly, and this is the method I suggest should he adopted, we can restrict the total volume of imports by curtailing the importation of goods from that country in particular, which for its own economic reasons, refuses to buy from us, although prepared to sell to us in unlimited quantities. Export prices are improving, and the wool position, apart from the international unrest, is more or less assured, and with indications in the northern States that we may reasonably expect a cycle of better years, it is quite likely that our exports will be able to keep pace with our imports and that a more equitable balance of trade will result.

Mr Beasley:

– Would the honorable member suggest that the tariff should bc used in the application of his fourth proposal ?

Mr FAIRBAIRN:
FAWKNER, VICTORIA · IND PROT; LP from 1910

– I fear that the tariff is the only weapon with which we can give effect to that proposal. Certainly it is the only one which occurs to my mind. Although it seems quite probable that we shall not have to curtail general imports in the near future, there remains the difficulty that we have not the ability to increase our trade with our good customers - the United Kingdom and other countries, which buy readily from us. I know there is a theory that trade will find its own level, and that an unfavorable trade balance in one direction will be offset by a favourable trade balance in another. But at present many nations are not prepared to accept that theory, and it seems essential that we should increase our purchases from our good customers, because not only is it necessary to retain our present markets, but it is also essential that in the years to como our markets abroad be greatly increased. I am afraid that those countries in which we desire to increase our markets will insist on receiving in return a more adequate share of our import trade. Quite apart from the general situation, one can point to two industries in Australia - dairying and fat lamb - which have tremendous possibilities of increasing their production. In fact it is difficult to set a limit to the scope of those industries. It is, to my mind, absolutely essential that we should be prepared to increase our trade with countries that are prepared to take our products in return. The only way we can do that is by restricting trade with a country which will not buy our goods, and by deflecting it to those countries which are willing to buy from us. That case is not to any extent arguable, and the more I enlarge upon it the more are the chances of clouding the issue. I feel that I would be comparable to the young gunner officer who got into trouble for not having fired a royal salute. He gave twenty excuses and the twentieth was that he had no ammunition. There are many grounds on which we can argue the advisability of building up our trade with the United Kingdom, but the all important fact is that Australia cannot afford to continue trading with the United States of America on the present basis.

Mr Beasley:

– Would the honorable member tackle the oil companies?

Mr FAIRBAIRN:

– I am afraid that oil does not give us a great opportunity for deflecting trade to good customer nations. I shall leave it to other honorable members who may be interested in this subject to go into details, but in elaboration of my contention, I shall refer briefly to the possibility of deflecting our purchases of motor cars from the United States of America to the United Kingdom. Upon that phase I have some illuminating figures. Although at one period in 1933 of the motor cars imported into Australia, 44.7 per cent, came from the United Kingdom during the last six months of the financial year ended the 30th June, 1935, such importations had fallen to 22.2 per cent.

A comparison of the Australian and New Zealand figures in relation to motor ear importations is illuminating. At a time when only 22 per cent, of the Australian importations came from the United Kingdom, British motor cars entering New Zealand represented 53 per cent, of the total imports. Last year, New Zealand purchased about 2,600 “Morris” cars, whereas Victoria, in which State conditions are most akin to those in New Zealand, purchased only 250 cars of that make. The imports of “ Austin “ cars were respectively 2,300, and between 500 and 600, notwithstanding that Victoria has a larger population than that of New Zealand. I do not subscribe to the theory that the comparatively small proportion of British cars in Australia, compared with cars of foreign manufacture, is evidence of a lack of British sentiment, for I am of the opinion that in regard to Empire preference, Empire unity and Empire defence, Australia’s record compares favorably with that of the sister dominion of New Zealand. I am convinced that the existing state of affairs is due to the more adequate protection given to British car manufacturers by New Zealand. I shall not go into details, but I suggest that of the things which should be done in order to remedy the present unsatisfactory position, one of the first is a complete removal of the primage duty on British motor chassis - a duty which does not protect any Australian industry. I am sure that I am correct in saying that Australian motor body-builders would as readily build bodies for British as for American chassis.

Mr Beasley:

– British cars are not suitable for Australian conditions.

Mr FAIRBAIRN:

– I welcome that interjection, enabling me, as it does, to explain that I have not set out to attack the motor car industry of the United States of America. American manufacturers have not only built a type of car which is eminently suitable for Australian conditions, but also have backed their product by a service organization in this country which is most exemplary. Nor am I defending the British industry in that connexion. In my opinion, British motor car manufacturers might have gone to a great deal more pains to produce cars suitable to Australian conditions, and to back their cars with a proper service organization.

Mr White:

– That is the main point.

Mr FAIRBAIRN:

– Most modern motor cars are good. What is wanted more than anything else is an adequate service organization. I do not wish to discuss that point farther now, because I want to confine myself to my main contention, namely, that we cannot afford to continue to import American cars at the present rate.

I wish to anticipate one or two things which may be said in reply. It may be argued that in 1928-29 our imports from the United States of America were valued at £30,000,000, or almost double the value of the probable imports from that country this year. I do not consider that that fact refutes my contention in any way. When one remembers that that peak was reached immediately prior to the crisis of 1929, it only proves the truth of my remarks regarding the danger that lies ahead. It is not so much the total volume of Australian imports as their sources that matters. Not wishing to overstate the case, I point out that during the first six months of this year Australian exports to the United States of America showed a material improvement. Unfortunately, the greater volume of exports was not due to any alteration of the attitude towards Australia of the United States of America, but to the fact that there was a shortage of wool in that country. In spite of the policy of the United States of America to keep out Australian wool by the imposition of a prohibitive duty, a local famine in wool necessitated purchases from Australia. The greater imports from Australia do not indicate a change of attitude. I wish to make it clear that I am not attacking the United States of America. In the present dangerous state of the world, no greater contribution towards security could be made than complete cooperation between the United States of America and the British Empire. Such co-operation would make for greater stability in world affairs than any alliance which Britain might make with other countries. The United States of America, however, has possibly showed wisdom in refusing to be entangled in European affairs, and, consequently, close co-operation between that country and the British Empire does not seem practicable at the present time. Nevertheless, it is something worth striving for. A continuance of the present one-way traffic constitutes a grave menace to Australia, which we cannot afford to ignore.

Mr SPEAKER:

– The honorable member has exhausted his time.

Mr HENRY GULLETT:
Minister directing negotiations for trad treaties · Henty · UAP

– This motion affords the Government an opportunity to express its views on the important subject of trade with the United States of America, and to explain to the House the steps which have already been taken to rectify the adverse trade balance with that country, and the further steps proposed to betaken immediately. I compliment the honorable member for Flinders (Mr. Fairbairn) on his comprehensive, restrained, and pointed speech; but I take exception to a remark he made in reply to an interjection by the Minister for Trade and Customs (Mr. White). The honorable gentleman was most unfair when he charged the Minister with standing for American interests.

Mr Fairbairn:

– That was not my intention.

Sir HENRY GULLETT:
Minister without portfolio, directing negotiations for trade treaties · HENTY, VICTORIA · UAP

– If there is one thing more than another that the present Government has done in respect of trade relationships, it is its encouragement of reciprocal trade between Australia and the Mother Country. No Minister for Trade and Customs in the history of the Commonwealth has introduced so much legislation to give preference to Great Britain as has the present holder of the portfolio, the honorable member for Balaclava (Mr. White). When I state that the Government has had this matter of trade with the United States of America under consideration for some considerable time, I desire to emphasize that the redressing of an unfavorable trade balance of this nature is not quite so easy, nor is it so completely desirable, as was suggested by the honorable member for Flinders. Years ago, as a rule, individual countries paid very little attention to their trade balances with other individual nations. Each reckoned its trade in the aggregate, and if, as a whole, it did not show a substantial balance of imports over exports, the position was deemed to be satisfactory. That system prevailed up to the years immediately preceding the Great War, but after the war, owing mainly to the creation of new States, and the fostering of suspicions and fears of war, policies of economic nationalism and national self-containment were generally adopted. That development in Europe was, of very necessity, adopted by all advanced countries of the world; and it still largely prevails. Following that change, it immediately became necessary for most countries to watch their trade relations with individual countries and to endeavour, as far as practicable, to effect balances with each nation. Happily, Australia has so far been able to continue down the old road; we have continued up to date to count our trade, apart from preferential arrangements within the Empire, not as balanced with this or that country, but as balanced in the aggregate.

Now, however, we come to a very special position in regard to the United States of America; indeed, I might say, with North America as a whole, but I propose to-day to deal, as the honorable member for Flinders has done, only with the trade balance of the Commonwealth with the United States of America. It is a simple matter to speak of taking steps to redress an adverse balance, but I remind honorable members that, if other countries with which Australia has an extremely favorable balance of trade, applied to us the same medicine as the honorable member for Flinders has prescribed, it would be a most unhappy occurrence for us. Therefore, in matters of this nature, we must proceed with extraordinary caution, and at every stage be on sound, well-surveyed ground. The taking of steps to redress an adverse balance of trade in one particular country is an unpleasant action; and, altogether apart from the trade aspect, this Government makes no apology whatever for having exercised considerable restraint in adopting a course which might possibly be interpreted as being unfriendly towards this great and friendly English-speaking nation, whose shores are washed, as are those of Australia, by the waters of the Pacific Ocean. I am sure that all honorable members will deem it unfortunate if we should be pressed, as we seem likely to be pressed, into taking arbitrary steps to bring about a better balance of our trade with the United States of America. The honorable member for Flinders has already mentioned the magnitude of these operations, and how unfavorable to Australia they are. For example, in the five years ended 1929-30, the average adverse balance with the United States of America was £25,000,000 sterling a year. For the ten years ended 1934-35, the average was £1S,000,000 a year. During the five years of the depression, beginning in 1930-31, the average of the adverse balance per annum was about £7,000,000 ; the estimate for the current financial year is between £9,000,000 and £10,000,000.

Sir Frederick Stewart:

– Do those figures refer only to commodities, or do they include debts?

Sir HENRY GULLETT:

– They refer only to commodities. This unfavorable balance, as honorable members may expect, since America went off the gold standard in 1933, has been strongly progressive; in that lies the weightiest argument in favour of corrective action. The honorable member for Flinders stated that the exports from the Commonwealth to the United States of America were somewhat heavier this year. That is true; but the trade balance is still growing in favour of the United States of America. For the first seven months of the present financial year, despite th>increased sales of wool to the United

States of America, the balance in favour of that country was £376,000 more than it was for the corresponding period of last year. It is perfectly clear, therefore, that if this progress, which,I believe, will be very swift, is permitted to continue, it must make the meeting of our overseas obligations more difficult than at present; but also it will tend to offset any other steps that we may take to rectify our trade balance as a whole.

I come now to the story of the negotiations, which have been initiated by the Commonwealth to obtain a more favorable balance with the United States of America. I do not pretend that up to the present time they have shown any result at all ; however, I consider that the very steadiness with which they have been pursued is quite justifiable. The first active step was taken in June, 1934, by the honorable member for Parramatta (Sir Frederick Stewart) when he was Minister for Commerce. A letter was sent, either directly from the Department of Commerce, or from the Prime Minister’s Department, through the ConsulGeneral, to the Department of Commerce of the United States of America, setting out the position as a whole, and the intolerable nature of it from the Commonwealth’s viewpoint, and urging the opening at an early date of negotiations for a trade treaty. The honorable member for Parramatta also forwarded certain proposals as a basis for the suggested negotiations. I returned to the Government in October, 1934, and upon referring to the correspondence a short while later, I found that no reply had been received from the Government of the United States of America. Towards the end of that year, therefore, I made representations to the Consul-General, urging that his Government should reply to the letter. In January, 1935, he forwarded areply from the Department of Commerce of the United States of America refusing, in effect, to open negotiations at that time. The main reason given for that refusal was that it had its hands full with negotiations for trade treaties with other countries. The United States of America was then at the beginning of trade treaty work, and, as we ourselves are experiencing now, the beginning was longsus- tained. The Department of Commerce was negotiating with countries from which it hoped to secure better results than formerly, or with which it had pro pects of obtaining a more advantageous treaty than it could make in Australia. The department pointed out that owing to the agricultural position in the United States of America, there was little opportunity for an extension of the marketing of our primary products there, particularly at that time when the Government was taking special steps actually to reduce primary production in that country. Soon after that letter was received the Prime Minister’s delegation went to the United Kingdom, and it was hoped that, after the work there was concluded, one or more Ministers, including myself, would return by way of the United States of America, and initiate trade negotiations at Washington. Because of the prolonged nature of the negotiations concerning the meat trade in Great Britain, I was unable to go to the United States of America. The Prime Minister, however, went to Washington, and discussed this subject both with the President and with the Minister for Commerce, Mr. Hull, but the discussion was of only a general nature. The Prime Minister had neither the time nor the staff to enable him to enter upon detailed negotiations. He was told by the American Minister for Commerce that it was extremely difficult for the United States of America to contemplate the importation of agricultural products from Australia while steps were being taken to reduce the production of such commodities within the United States of America.

Mr McCall:

-To what extent is Australia affected by the most-favoured-nation arrangement?

Sir HENRY GULLETT:

– The American representatives pointed out that Australia would receive mostfavourednation treatment - provided we were willing to give a similar concession - in any of the treaties made with countries other than Australia. The United States of America has already made nine such treaties, but, so far as we can see, Australia has not benefited at all, or at any rate, very little. I came back to Australia at the beginning of December last, and very early this year 1 took the matter up again with the Consul-General for the United States of America. I pointed out chat the unfavorable trade-balance against Australia, which was becoming progressively greater, could not be allowed to continue. I informed bini that if it were not possible for the United States of America, to negotiate with Australia, we should be compelled to take arbitrary action in an attempt to redress the balance. A fortnight ago last. Saturday, the Consul-General came to Canberra, and conveyed to me personally the cabled reply which he had received from his Government in response to his communication on the subject. That reply, 1 am sorry to say, was merely another refusal to enter into negotiations, and the same reasons were advanced. However, n point was made which demonstrates the difficulty experienced by the Government of the United States of America in even entering into negotiations with us. The Trade Treaty Act, which gives the President power to negotiate trade treaties with other countries, authorizes him to do so only for reciprocal benefits, or on a basis seeking reciprocal benefits. He cannot negotiate a trade treaty of a defensive kind merely to protect, an existing market. In other words, he cannot enter into negotiations with the Commonwealth except for the purpose of obtaining a still larger market in this country. Of course I pointed out how unfair this was to Australia, but the fact remains that such is the American law. Since then the Government of the Commonwealth has taken decisive action. So long as there was a reasonable prospect of making an amicable arrangement. I felt justified in not taking arbitrary action which might have been interpreted as unfriendly. It now appears that no such arrangement can be made, and the Government is regretfully obliged to enter upon a plan, the object of which is to correct our adverse tradebalance with the United States of America. So seriously does Cabinet regard this matter that a special subcommittee has been appointed to assist rae in the work. That committee has already begun its deliberations, and we shall examine carefully every aspect of our trade relations with the United States of America, and explore every avenue which seems to offer a prospect of achieving the object we have in view. It is not wise at this stage to indicate the directions in which we think we may be able to ensure success. I express the hope that the Government of the United States of America will clearly recognize that we are entering upon this task in no unfriendly spirit. We are taking action because we are impelled to do so by the economic and financial position in which we find ourselves. I trust that this will be clearly understood by the Government and the people of the United States of America. I give an undertaking to honorable members that this work will be pushed forward without delay.

Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP

3.27. - I am sure that every member of the House will agree with the sentiments expressed by the honorable member for Flinders (Mr. Fairbairn), and I desire merely to point out some of the difficulties which, have been encountered by those who have sought a successful solution on this problem. The honorable member will agree, I am sure, that no nation, can balance its trade with all its customers any more than an individual can. Australia, being both a buyer and seller of raw material, must have an adverse trade-balance with some countries, and a favorable balance with others. From India, for instance, we buy large quantities of cornsacks, which are needed by our primary industries, but we have found no market worth mentioning in that country for our own products. Australia is a buyer of manufactured goods, and, in order to help Great Britain, we have, for the last 27 years, granted to the goods of that country preference under our tariff, with the result that British trade has benefited te the amount of £3,000,000 to £10,000,000 a year. There is a limit to the extent to which we can raise the tariff against countries which supply us with goods wc need. Our principal imports from the United States of America are motor chassis, tobacco, films and oil. At the present time we are producing in Australia only one-quarter of the tobacco consumed. If we shut out American tobacco we must seek supplies from Rhodesia, and the change might not appeal to Australian smokers. Motor chassis are imported principally from Britain, Canada, and the United States. When the honorable member for Flinders gave certain percentages which I thought might be misleading if they were not put alongside the actual figures I corrected him and drew from him a most unwarranted retort. I was glad to have an explanation by interjection later that he had not meant what he had said. The honorable member has been very prominent in deputations which waited upon me in regard to British motor chassis and bodies, and we have heard the story in full from that quarter, but it is desirable that honorable members should read the answer given in the Senate on the 19th March to a question asked by Senator Collett. It showed that Britain has increased its exports of motor chassis to Australia by 50 per cent, in the first eight months of this financial year, compared with the corresponding period of last year. The increase of imports of motor chassis from the United States of America has been approximately 33 per font., but Canadian exports have increased by nearly 100 per cent. Canada is equally a part of the British Empire and we should not omit it from consideration.

Mr Price:

– We have increased the British content.

Mr WHITE:

– This Government two years ago doubled the requisite British content of motor car imports from Canada. I use a British car, but I question whether many of the present champions in this chamber of British manufacturers do; in fact, I noticed at the recent deputation that very few of ir.i members used British cars. The complaint has largely arisen because certain importers of British cars, who did not apply to the largest bodybuilding firm in Australia, cannot get immediate deliveries of bodies, but that is a subject which might more conveniently be discussed on the appropriate tariff item.

It is suggested that cinematograph films afford further scope for reducing the imports from America.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– Cut them out !

Mr WHITE:

– I doubled the duties on foreign films eighteen months ago. The duty is now 8d. a foot on feature films aud 4d. a foot on ordinary films, British films being entirely free, but because the American producers had more or less a. flying start they maintain their preeminence. At any rate they are still sending great numbers of films to Australia. If any reprisal is to be taken, if any quota is to be imposed, we must first consider the effect that such action may have on employment. Reverting for the moment to motor cars, in South Australia 12,000 persons are directly or indirectly connected with the motor body-building industry. Therefore, any action to divert the import trade from one country to another must bo taken prudently. Ill-considered action might jeopardize an Australian industry and cause considerable trouble.

Among our principal imports from the United States of America are machines and machinery, including office and electrical appliances. In 1934-35, importations under this category amounted to £1,931,300 sterling. In every instance under the provisions of the Ottawa agreement, British machinery, if obtainable in the required types, is given preference and the full rate of duty is levied upon importations from the United States. In regard to motor chassis, British makes are admitted free, whereas those from the United States of America and other countries are subject to a duty of 32^ per cent. I remind the House that the chassis may include the lamps, but the bodies, batteries, tyres, tubes, shock absorbers, bumper bars, sparking plugs, and springs are added in Australia, and when the car is finished it is 80 per cent. Australian. I am sure all honorable members hope that the time is not far distant when the product will be 100 per cent. Australian and the trade balance will not, perhaps, be in the precarious position which, it occupies at present. Some honorable members may think that appropriate action has not been taken against imports from, the United States of America. Yet recently we heard complaints that effect has not been given to the Tariff Board’s recommendation in regard to agricultural machines and implements-

Mr SPEAKER:

– Order ! The Minister may not revive the tariff debate.

Mr WHITE:

– I shall generalize, but it is difficult to explain without being specific. In many cases the Government, while accepting the Tariff Board’s recommendations as regards the British duty, did not accept the recommendation regarding the foreign duty, particularly when it related to American goods. The margin of preference given to Britain under the Ottawa agreement, which is a minimum of 15 per cent, has, therefore, been widened, and importations from America of many items have accordingly been minimized. While it is the sentiment of all of us to give to Britain as much trade as is possible, there is a certain percentage of trade which must go to foreign countries - India, Java, and America, for instance. The goods imported are in the nature of raw materials which are employment-giving in our own country. Although the Government will adhere to the principle enunciated by the honorable member for Flinders, as explained by my colleague the Minister in charge of negotiations for trade treaties, I hope honorable members will remember that very careful consideration must be given to any proposed action against another country, if employment in Australia is not to be jeopardized.

Sir Donald CAMERON:
LILLEY, QUEENSLAND · UAP

– I listened with much attention to the honorable member for Flinders (Mr. Fairbairn), and I was very glad to hear the Minister in charge of negotiations for trade treaties (Sir Henry Gullett) and the Minister for Trade and Customs (Mr. ;White) speak on this matter. In my opinion the future peace of the world depends, in great measure, upon the friendly co-operation and understanding of the English-speaking peoples, whose influence will be exerted always for the maintenance of law and order and the settlement of disputes by pacific means, as opposed to aggression and might. - At no time since 1S12, over 100 years ago, has the friendly feeling of our American cousins towards us been so marked as at the present time, and it had its greatest manifestation upon the death of King George V. There was mourning throughout the United States and both the Congress and the Senate passed resolutions expressing sympathy and sorrow at the death of our beloved King. The feeling in America was very different in 1921-22, at the time of the Washington

Conference, and there was considerable criticism of Britain’s naval disarmament proposals and a measure of jealousy. There was a feeling that the navy of the United States of America had been more or less “ done in the eye”. The five-five-three basis proposed by Britain was not very acceptable. Many Americans believed, that as a result of the war the British people were more or less finished, and it was the turn of others to come to the top. This feeling had entirely disappeared at the recent Naval Conference. It has been obvious from various statements made public that there was complete unanimity of the British and American views. America believes in triangular or multilateral trade. In the Pacific zone as a whole its trade, I understand, is an adverse one. It has definitely an adverse trade balance with Japan, whereas our trade with Japan is entirely the reverse. We too must believe in a triangular or multilateral trade. Reference has been made by the honorable member for Flinders and the honorable member for Henty (Sir Henry Gullett) to our trade position in relation to the United States of America. In ten years’ trading with that country our imports have exceeded exports of merchandise by £1S1,000,000, representing an adverse commodity balance of £18,000,000 sterling annually. The adverse balance averaged £25,000,000 per annum during the years 1925-26 to 1929-30, and £7,270,000 per annum during the period 1930-31 to 1934-35. For the first seven months of the current financial year imports were £7,810,000 sterling, and exports of merchandise £2,442,000 sterling, leaving an adverse commodity balance of £5,368,000 sterling on the seven months trading. These figures exclude bullion and specie. Within the 10-year period mentioned, bullion and specie to the value of £21,134,000 were sent to America.

The exact position of the trade balance between the United States of America and Great Britain is interesting, and, I suggest, has some bearing upon this debate. In 1926-27, Britain imported from the United States of America goods to the value of £216,279,000, and exported to that country goods valued at only £49,116,000. In 1929, British imports from the republic totalled £183,977,000, and its exports to that country £45,55S,000. In 1935, British imports from the United States of America were valued at £S7,501,000, and British exports to that country amounted to £22,SS4,000. During recent years the value of Australian importations from the United States of America has markedly declined. For instance, our importations of metals and machinery in 1926-27 were valued at £12,000,000; in 1929-30, they had risen to £20,000,000, but “ in 3934-35 they dropped to £5,000,000. Motor cars imported in 1926 were valued at £10,000,000, and in 1934-35, £2,250,000. Timber imports in 1929-30 were valued at £2,250,000, and in 1934-35, largely as a result of the tariff preference given to Canada, only £300,000. American oil imported in 1929-30 was valued at £6,000,000, and in 1934-35, £1,700,000. Other imports were - Apparel and textiles, 1926-27, £2,000,000; 1934-35, £334,000; canned fruit, 1929-30, £165,000; 1934-35, £1,000.

I was particularly glad that the honorable member for Flinders (Mr. Fairbairn) submitted his motion this afternoon, if for no other reason than it gave the Minister directing negotiations for trade treaties (Sir Henry Gullett) the opportunity to tell the House what action is being taken by the Government to deal with the trade balances beween Australia and other countries. The Government would be well advised to appoint immediately an Australian High Commissioner to the United States of America in order not only to improve our trade relations with that country, but also to bring about a better understanding between Australia and citizens of the friendly country across the Pacific. The latter aim is, in my opinion, most important.

Mr BLACKBURN:
Bourke

.- The condition of Australia’s trade balance is a subject in which I have taken a good deal of interest for many years, and I was exceedingly pleased to note a complete absence of anti-American prejudice on the part of the speakers who preceded me. It would be a great misfortune for us in Australia if anything were done to encourage ill-feeling between the people of this country and citizens of the United States of America. It is of supreme importance that we should at all times seek to remain on the most friendly term:; with our great neighbour. The trade balance problem is a perplexing one, first of all because the consumer is always right. Our people undoubtedly like American tobacco, American films, and American motor cars.

Sir Henry Gullett:

– If this motion be adopted, none of its supporters should be seen in an American motor car after to-day.

Mr BLACKBURN:

– We cannot expect to overcome entirely the predilection of our people for goods of American manufacture by discriminating against their importation. There has been some talk of taking action with regard to the film industry, and it has occurred to me that wc might do something by an amendment of the Patents Act, to meet attempts that are being made by British and American manufacturers to compel us, willy-nilly, to use imported machinery, instead of machinery which we could manufacture in this country.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– Canada is economically a part of the United States of America.

Mr BLACKBURN:

– Precisely. I was about to remind the House that any attempt to divert trade from the United States to Canada means, in effect, an attempt to divert trade from manufacturers in the American republic to manufacturers in Canada financed with American capital, because Canada is very much, an economic dependency of the United States of America as is the Argentine an economic dependency of Great Britain. We have to realize that political facts do not always square or correspond with economic facts, and I support the suggestion made by the honorable member for Lilley (Sir Donald Cameron) that, in order to improve our relations with the United States of America, we should have in Washington a permanent official of high standing to watch over our interests in the republic. It should be borne in mind that this i3 the year of the presidential election in the United States of America, and that the party in power is the party of low tariff traditions. The Democratic party lias always stood for low tariffs and reciprocity in trade. If we are not able to make a satisfactory trade arrangement, it will be because of the belief of the Government of the United States that the electorate will not tolerate it. The Republican party, which hopes to come into power at the end of this year, has endorsed a programme of economic isolation which has, in effect, been carried out by the Democratic party. It was enunciated several years ago by ex-President Hoover when Secretary of Commerce to President Coolidge. He warned the primary producers of his country that they must reconcile themselves to the protective policy that, in the course of the industrial development of the republic, its secondary interests had become its paramount interest. But he said that the benefits’ of protection must be extended to the- primary producers, so to the prevent the importation into the United States of any primary products which could be produced there. His declaration was made, I think, in 1923. He said it would not be long before the importation of wool, as well as other commodities which are produced in Australia, would cease entirely. It would therefore seen that Australia can expect to receive more consideration from the party at present in power in the United States of America than from the party which hopes to defeat it. To take up an attitude hostile to the United States, to threaten it with preferences that we know we cannot give - because we cannot divert from it Australian purchases of tobacco, motor cars and cinematograph films as easily as we can talk of doing so - may be to destroy our only chance to establish more satisfactory trade relations with it. The establishment of those relations is a very difficult task. Our real hope lies in a realization by the nations of the world of their interdependency, and the necessity of trade with one another. I remind honorable members that our past borrowing policy was one of the factors which enabled the United States of America to secure a balance of trade favorable to itself and unfavorable to us. Borrowing as we did so largely in Great Britain, wo acquired there credits, portion of which were used to discharge our indebtedness to American concerns that supplied goods to Australia. That was one of the reasons for the cessation of the open borrowing policy in Great Britain. The Bank of England emphasized the fact that Australia was borrowing largely in Great Britain, and thereby acquiring credits, not even the major portion of which was utilized in payment for British goods. In the early days of the economic crisis in Australia, while I was a member of the Parliament of Victoria, the question was asked, why would not the British people lend to Australia as they did to Argentina; why could Argentina raise in Great Britain a loan of £3,000,000 when Australia could get nothing? The answer was, that Argentina pledged itself to take every penny of the loan in the form of British goods. There is not the slightest doubt that had Australia made the same offer it could easily have obtained the credits it wished to raise. I mention this by the way, as an historical explanation of the favorable balance of trade with this country which the United States of America enjoys.

Mr HUTCHINSON:
Indi

.- This motion is of great importance in respect of, not only the maintenance of a favorable trade balance, but also the obtaining of greater access to markets in the United States of America. I regret that the Minister directing negotiations for trade treaties (Sir Henry Gullett) did not pass through the United States of America On his return journey to Australia from Great Britain. I believe that such personal contact would have been of considerable value to Australia. Negotiations with the United States of America should not only be conducted with absolute firmness, but also be assisted by personal contact. I found in the United States of America scope for an enlargement of wool imports. Generally speaking, its woollen goods, are largely imported from Great Britain, while the cheaper, locally produced goods are of poor quality, and are manufactured in a slipshod fashion. The reason for that is partly a desire to protect not only the local wool-growing industry, but also the local cotton-growing industry, which, for some years, has been producing in excess of requirements. There is definite need for more woollen manufactures. Because of their importance to the wool industry alone, our negotiations should not be allowed to slacken, but should be prosecuted with the utmost firmness and speed. Another Australian product, which might find a market in the United States of America, is wine, but considerable difficulty would be experiencedeven though a fairly substantial measure of preference were given, because prohibition not only wrecked the psychology of the people of the United States of America in regard to the maintenance of law and order, but also definitely ruined their palate for alcoholic liquor of high quality. The matter is so important, however, that it should not be overlooked. The Minister directing negotiations for trade treaties has already stressed the difficulty of making a trade treaty with the United States of America owing to the peculiar law of that country which empowers the Government to conduct trade negotiations with other countries without the consent of congress, not on the basis of maintaining trade, but purely and simply on the basis that, if something is given away, there must be reciprocity. The United States of America has secured a large market in Australia for motor cars, films and petrol, because of the value it has given. That is true, however, only up to a certain point. I should say that to-day Great Britain is definitely making a more determined effort than it. previously made to compete in certain lines. For example, it is now turning out motor cars and films which meet Australian requirements, and with a little assistance from the Commonwealth Government a considerable volume of the trade which at present goes to the Uni ted States of America would be swung to the United Kingdom. The honorable member for Macquarie (Mr. John Lawson) will bear me out when I say that while in England, we saw remarkable evidence of the rapid strides that are being made in the development of the film industry. Before long British films will be the criterion by which others will be judged. The honorable member for Macquarie and I did what we could to induce the investment of English capital in Australia, and steps are being taken in that direction. We must endeavour by every means in our power to swing trade to the country which trades with us. That is vitally important from the viewpoint of our exports. From every point of view it is necessary that Australian trade should be swung to the United Kingdom as increased production there leads to the establishment of a consumptive capacity which will absorb a larger proportion of our exports.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

. - However much we may deplore the somewhat alarming figures quoted by the honorable member for Flinders (Mr. Fairbairn) in his opening remarks, we have to confess that the position enjoyed by the United States of America to-day in relation to its trade with Australia has been won because it has catered probably better than any other country for the requirements of the Australian consumer, despite the handicap of having to pay very much heavier duties on those of its goods which come into competition with British goods. That is a meritorious performance, and our judgment must be tempered by it. I suggest that the favorable trade-balance which Australia enjoys with Great Britain does not place us under as great an obligation to that country as many people believe. The visible favorable balance is in the vicinity of £20,000,000 annually. I have figures prepared by an officer of the Department of Trade and Customs dealing with the balance of trade on the basis of retained imports only, by which I mean imports which are distinct from those used in the manufacture of goods exported to other countries, including Australia, at a profit. I submit that Australia is under no special obligation to Great Britain in respect of those raw materials which the latter manufactures with British labour and exports at a substantial profit. The figures which I have, show that for the thirteen years from 1921 to 1933, on the basis of retained imports only, Australia did not enjoy a favorable trade balance, but as a matter of fact experienced an unfavorable trade balance totalling £45,871,267.

Mr Fisken:

– What did Australia borrow from Great Britain during that period ?

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– That total does not take into account Australian borrowings, but is merely the visible trade-balance on the basis of retained imports only. Our borrowings, and our service of debts owing in Britain, make our balance even more unfavorable. I suggest, therefore, that our obligations to Britain are not as great as the visible trade balance usually indicated by statistics would suggest. I do not hold a brief for the United States of America, but I do not think that it is possible to divert very much trade from America to Great Britain by a further adjustment of duties. The honorable member for Flinders led us to infer that he also held that opinion. Any attempt to do that kind of thing would be harmful.

Mr Beasley:

– The honorable member for Flinders suggested the adoption of discriminatory tariffs.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– These already exist. We cannot make the margin in favour of Great Britain very much greater than it is at present. Great Britain, by ratifying the Ottawa agreement, indicated its approval of the existing margins, and any attempt to increase them by arbitrary action would, in my opinion, react very much to the detriment of Australia. I stress, as the Minister himself suggested but did not stress, that there is great danger in the adoption of any attitude which seeks to equate the visible trade balance between Australia and the United States of America. If the Government were to enunciate such a policy it would invite other countries, such as Japan, China, France and New Zealand to retaliate in respect of the favorable trade balance which we enjoy with them.

Sir Henry Gullett:

– The Government has not suggested that the trade balance should be even.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– That has been the tenor of some of the remarks made during this debate; but it would be impossible of achievement.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– Does the honorable member suggest that nothing can he done to remedy the position?

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– I am about to make a suggestion. It seems to me that we are almost wholly neglecting our opportunities of trade with Russia, which is capable of supplying Australia with large quantities of flow oil.

Mr Blain:

– I understand that Russia is not keen on doing so.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– It should not be impossible to come to a mutually satisfactory arrangement with Russia in this connexion. During the last five or six years the live stock population of Russia has been heavily depleted, but with the economic advancement which we must admit is proceeding in that country, an increased demand for wool must arise there within the next few years. I suggest, therefore, that some of our orders for flow oil should be diverted from the United States of America to Russia. We spend about £2,000,000 a year in purchasing oil from the United States of America, and if we could spend some of this money with Russia the people of that country would be able to buy Australian wool. I hope that this suggestion will be fully exploited. I do not accuse the Government of having wholly disregarded the possibility of developing a trade in this direction, but I believe that more could be done than has been done. Russia will, undoubtedly, require to purchase larger quantities of wool in the near future and we need oil. If a trade treaty could be made with Russia to cover these items, something at least would be done to achieve the object aimed at by the honorable member for Flinders.

Mr HAWKER:
Wakefield

.- Nothing could have demonstrated more effectively the wisdom of the honorable member for Flinders (Mr. Fairbairn) in initiating this discussion than the attitude of the two members of the Government who have participated in the debate. One of those honorable members amiably deprecated the introduction of the subject, while the other adopted a somewhat more perky discouragement of it; but they both gave it their blessing with a sickly kind of sentiment designed to rob it of its vitality.

Sir Henry Gullett:

– That is most unfair.

Mr HAWKER:

– I realize that problems relating to trade balance are always difficult. Recently the Leader of the Opposition (Mr. Curtin) used the drift of our trade balance as a justification for proposing a motion of censure of the Government. It may become necessary for the Government to take some drastic action to check the drift of our trade balance. A long-range policy and long-range methods should be pursued, designed to divert Australian purchasers in the direction of the countries which are good customers of Australia. The only alternative to that policy may well be to place general restrictions on all trade of a certain character or to increase the exchange rate substantially. The honorable member for Bourke (Mr. Blackburn) pointed out that Australian people have a preference for American motor cars, American tobacco and American motion pictures. This cannot be denied. Such preferences cannot be changed rapidly. No honorable member sitting in his corner suggests that the Government could do. anything to obtain an even trade balance with the United States of America or Canada, but we say, emphatically, th,it steps could be taken to prevent the balance from becoming more adverse than it is. “We should seek to turn some of the trade at present being done with America i’. the direction of other nations which artgood customers of ours. In the last year or two, certain good customers of Australia have adopted restrictive measures which have had a detrimental effect upon the prices of our export commodities. When Germany withdrew from our wool market during the year before last, the price of the whole wool clip of Australia was lowered. It is particularly important that our trade balance with the United States of America should not be allowed to drift, for that country does not help the general trade of the world. We cannot feel confident that America will allow any trade to come back to us through other channels. Everything possible, in fact, is likely to be done to prevent such a happening. The United States of America, more than any other country of the world, has been responsible for the upset of world trade by seeking to sell everything and to buy as little as possible. As a big commercial country, it is having somewhat the same destructive effect upon the circulation of trade as a central bank would have on the circulation of money if it cancelled bank notes returned to it, and failed to issue others to take their place. Our trade position with Canada has also drifted seriously, but the fiscal policy of that country allows for more freedom of trade with other countries than does that of the neighbouring republic. Because of that, some of our good customers, which purchase large quantities of Australian products, are able to pay us through imports of Canadian products. It is, however, urgently desirable that the Government should adopt a long-range policy to meet the unsatisfactory situation which confronts us. The Consul-General of the United States of America, has given the Government “ the office “ to do something by saying that it is impossible to negotiate for the protection of the United States’ position, but only for its improvement. If the Government will accept that invitation a beneficial result might follow.

Sir Henry Gullett:

– That is fairly obvious to the Government.

Mr HAWKER:

– I trust also that the Government will take some of the hints that have been dropped by honorable members in the course of this debate. I am always very reluctant to do anything which tends to restrict the free movement of trade, and if it were not for the very unbalanced position of the trade of the United States of America with the world generally, I should not be supposing this motion. To-day, the goods which the United States of America sells us are principally oil products, and these are not readily available from other countries, which are good customers of Australia. It would, however, be far more desirable for us to buy oil products from countries where the wells are owned by citizens of countries which are among our good customers rather than from America. There are good oilfields in the Dutch East Indies, the Persian Gulf and Roumania I support the suggestion of the honorable member for Macquarie (Mr. John Lawson) that inquiries should be made to ascertain whether we could build up a trade in oil products with Russia, but I understand that the prospects of success are not bright. Anything that the Government might do in that direction would have my support.

While I think we should do everything we can to have as much work as possible performed on imported motor chassis in Australia, we should also attempt to influence the prospective purchasers of motor cars whose inclinations hover on the borderline between American, British, Trench, Germany or even Italian cars to swing their preferences towards a country that is a good customer for our own products. I believe, moreover, that a good deal more could be done in regard to tobacco. In the past I have steadfastly supported the efforts of the Government to maintain for the Australian tobacco industry, a degree of protection which might be called generous as distinct from extravagant: but the position in which we find ourselves to-day is such that I must seriously reconsider my position. I would be u ready supporter of any alteration which the Government is prepared to make in tobacco duties with the object of improving our trade balance with the United States of America. I do not say that I am prepared to do anything to embarrass the Government, but 1 would like to assist it to correct the existing trade position. Certain other items of trade could be considered. For example, we import from the United States of America substantial quantities of drugs and chemicals, a fair proportion of which could be obtained from Germany. Paper and stationery of a particular description could also be obtained from some European countries which would be prepared to trade with Australia. Our imports of apparels and textiles are substantial, and something could be done in this regard, last, but not altogether least, I direct attention to our imports of foodstuffs of animal origin, which I understand are mostly tinned salmon. On nearly all those items at slight extra cost to our own people we could help to develop a market for our own products by dealing with those countries which are prepared to enter into reciprocal trade with us.

Mr NAIRN:
Perth

.- This debate is useful if only to show the disinclination that exists to attack this very serious and very difficult problem. If some steps are not taken to remedy the trade position, the drift will continue to go on as it has done for many years, and the longer appropriate action is delayed, the more difficult will the problem become. During the decade preceding 1921, Australia was importing loans from Great Britain and spending a large proportion of the money in the United States of America. During that period our adverse trade balance with the United States of America was about £250,000,000. Indeed, it is fairly safe to say that one-half of our national debt abroad is represented by money borrowed from Great Britain and sent to the United States of America to pay for goods purchased in that country. Partly as the result of the depression, but mainly owing to our inability to continue borrowing from Great Britain, that process has been somewhat reduced of late, but with the return of a small measure of prosperity in this country, it is being renewed - we are again buying more and more goods from the United States of America. It is therefore a matter of no little concern that our adverse trade balance with that country is about £.10,000,000 a year. The Government, in my opinion, is not facing up to the problem. A short history of its efforts to rectify our unfavorable trade balance with the United States of America was given by the Minister directing negotiations for trade treaties (Sir Henry Gullett). He indicated that the first step in this direction was taken in June, 1934, when the honorable member for Parramatta (Sir Frederick Stewart), then recently appointed to the Ministry, wrote to the Government of the United States of America proposing negotiations for a mutual trade treaty. After a lapse of nineteen months all that has been achieved is a final reply from the Consul-General of the United States of America in Australia, that that country is not prepared to discuss a trade treaty. In addition, the Government, we are given to understand, appointed a sub-committee to examine the matter. From the Opposition side of the House a friendly critic has advanced the suggestion that the Government should appoint, a trade commissioner in the United States of America. This afternoon, for instance, the Labour party has shown that it is quite disinterested in this question, its attitude being in marked contrast to that adopted by it in 1929-30. In that period, when the trade balance of the country was so adverse that Australia was threatened with national bankruptcy, Labour lost no time in imposing embargoes andprohibitive duties on importations for the purpose of revelling up the trade balance. But those embargoes and prohibitive duties were directed, not so much at the United States of America, as at Great Britain, a country to which we owe our national solvency. 1 regret that the honorable member for Macquarie (Mr. John Lawson), who is usually very logical and very loyal, should suggest that we owe no obligation to Great Britain for the favorable trade balance of about £20,000,000 which we enjoy with that country.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– I did not say that.

Mr NAIRN:

– The honorable member said that we owed no obligation to Great Britain for the purchase of our goods and raw materials which its manufacturers fashioned into finished goods and sold abroad at a profit. Substantially, the only goods we are able to sell are raw materials. Australian bonused industries are not able to exist in competition with industries abroad. Only 3 per cent. of the output of our secondary industries is exported. The great bulk of our exports to Great Britain and other countries is represented by raw materials which those countries will either consume or fashion into finished articles and sell at a profit. The suggestion of the honorable member for Macquarie was that it would be dangerous to take any active steps for the purpose of equating our adverse trade balance with the United States of America, lest other countries with which we have a favorable trade balance would apply the same treatment to Australia. No reasonable person would suggest that Australia should completely equate its trade relations with the United States of America.We are merely asking that the unfavorable balance of trade with that country should be reduced to more reasonable proportions. Certainly countries like Japan would have no complaint if we. proceeded to impose embargoes against the United States of America, because the lessening of imports from the United States of America would make us better potential customers for their own products. The purpose behind the motion moved by the honorable member for Flinders (Mr. Fairbairn) is that we should so adjust our trade arrangements that trade with countries like the United States of America will be curtailed and countries like Japan, from which we receive more favorable treatment, should ‘be encouraged. A comparison of the trade between those two countries and Australia is illuminative. This year the unfavorable trade balance with the United States of America is £10,000,000, whereas with Japan Australia has a favorable trade balance of £8,000,000. What would be the position of Australia to-day if Japan refused to buy our wool ? A season or two ago, Japanese buyers were absent from the wool sales and wool prices immediately dropped, whereas since Japanese buyers have again been active in the market, wool prices have risen. We are under an obligation to Japan, whether that country wants our goods or not, because the operations of its wool buyers in the Australian market have brought about an increase of the price of wool. If we consider the interests of Australia as a whole we should direct our efforts towards diminishing the volume of our trade with countries such as the United States of America and increasing it with those countries with whom we have more favorable trade arrangements. We might even barter with Italy for the purchase of motor cars. The purchase of oil from Russia has been suggested in this debate.

Mr SPEAKER:

– The honorable memberhas exhausted his time.

Mr FISKEN:
Ballarat

.- I understood the Minister for Trade and Customs (Mr. White) to say that he considered the honorable member for Flinders (Mr. Fairbairn) had moved this motion in order to further the interests ofsome British motor car manufacturers in whomhe has recently been taking an interest. I think that is obviously incorrect. The reply of the Minister directing negotiations for trade treaties (Sir Henry Gullett) made it clear that the Government has been considering this problem for some time, thus admitting that it is definitely a problem of considerable public importance. I am sorry that more time lias not been devoted to the discussion of this question of international trade. Since I have been a member of this House this is the first opportunity which has been presented to honorable members to discuss it, hut it is regrettable that the only opportunity afforded for such a discussion should be on a formal adjournment motion during which speeches must necessarily be restricted. I am surprised to find that the Labour party is taking practically no part in a discussion of such vast importance to Australia.

My maiden speech in this House was devoted to the question of trade treaties. At that time I spoke with considerable diffidence, because I realized that bilateral trade was extremely dangerous for any nation to attempt. I still maintain that opinion. Looking at this matter broadly, as the honorable member for Lilley (Sir Donald Cameron) did, I consider that the great nations of the Pacific do practically balance their trade. Australia buys more from the United States of America than does that country from Australia; Japan buys more from us than we sell to it, and the United States of America in turn buys more from Japan than it sells to Japan. Therefore, generally speaking, these three great nations of the Pacific do balance their trade. With other trading nations of the world deciding that they must concentrate on bilateral trade, it i3 questionable how long Australia can continue to go on under the old system of trade in vogue in predepression days. The time is not far distant when it will have to take steps either to decrease its imports from the United States of America or to increase its exports to that country. T find myself in complete agreement with those who suggest that whatever negotiations are carried on with the United States of America, they must be pursued in a most friendly spirit. There is no question that the two great white Englishspeaking nations bordering on the Pacific cannot afford to quarrel. While engaged in friendly negotiations we can still be firm. During recent trade talks with Great Britain it has not always been possible to see eye to eye with the representatives of that country, and consider able firmness ha3 been necessary to bring about the satisfactory results which have been achieved, yet in all of those negotiations mutual friendship has been maintained. I therefore do not see any grave danger from that point of view.

Pressure will have to be brought to bear on the United States of America. That country was one of the first countries in the world at the commencement of the depression to erect high tariff barriers. The Hawley-Smoot Tariff introduced into the Congress of the United States of America during 1929-31 was the first of the main tariff barriers erected in the world. The United States of America understands what economic pressure means because it has brought pressure to bear on other countries and will understand what it means if we in turn bring pressure to bear on it. We in Australia know what economic pressure means. We have felt the effect of economic pressure being brought to bear on this country by Belgium, and we have had to give way to it. Indeed I am glad to be able to congratulate, the Minister directing negotiations for trade treaties on the fact that we have had to give away such an extraordinarily small amount.

The honorable member for Macquarie (Mr. John Lawson), in an attempt to show that Great Britain was not the excellent customer for Australian goods that some people believe it to be, pointed out that between 1923 and 1933 Australia had an adverse trade balance with that country. I interjected that that position was due to the fact that Aus.ralia had borrowed enormous sums of Roller from Britain, but I am afraid that the honorable member did not understand mc. I intended to show that the only way in which the money could come into Australia was by means of imports from Britain, and that the adverse trade balance was largely accounted for bv that fact.

During the discussion of this motion, our purchase of motor cars has been mentioned, and a transfer of those purchases from the United States of America to the United Kingdom has been advocated. That suggestion is all verywell, as far as it goes, but there are other directions in which the subject may be pursued. I urge the Government to continue to explore the possibilities of increased trade with the great manufacturing countries which are still on the gold standard, such as France and Germany, and, when conditions become more normal, Italy abo, for I believe that n fertile field may be found there.

Another commodity, the purchase of which might be diverted from the United States of America, is oil. I was amazed to learn recently from a man in the service of one of the great American oil companies that during 1935 his company sold in Australasia various kinds of oil to the value of £10,000,000. During the last three years that company has increased its sales of petrol in the Ballarat district by 50 per cent., whilst its sales of power kerosene and of lubricating oils increased by 100 per cent, and 60 per cent, respectively. I remind the House that the Commonwealth is interested, as a shareholder, in Commonwealth Oil Refineries Limited. In my opinion, that company should endeavour to obtain for itself some of the increased business in petrol and oil in Australia. It may be that the company will not bc able to refine or distil in Australia all the oil required, but in that respect it would not be alone; there are other great oil distributing companies in Australia which neither refine nor distil oil here.

Sir Henry Gullett:

– lt may interest the honorable member to know that the possibility of exchanging Russian oil for Australian wool was explored last year, but Russia was not interested.

Mr FISKEN:

– L did not. have Russia in mind when 1 spoke. 1 intended to refer to the Anglo- J. ran Oil Company, some shares in which are held in Britain. J am interested also in the selling aspect of our trade relations, particularly the sale of our wool. At present, the Australian wool clip is bought chiefly by two customers - Great Britain and Japan. It is essential that those sales should be spread over a greater number of buyers, particularly since Japan is buying practically only cross-bred wool. I see grave danger ahead unless we can spread the sales of that commodity to other countries.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– I am not amazed at the attitude adopted by the United States of America an reply to Australia’s invitation to enter into a trade treaty, seeing that the Australian trade is, after all, a very small matter to that country. On the other hand, the United States of America looms large in our reckoning. Moreover, that country has recently entered into trade agreements with other countries, among them France and Belgium, the result of which is that Australian wine is almost excluded from the United States of America. At the moment, I am unable to recall the exact terms of the agreement with France, but it is of such a nature, and is so favorably disposed towards tha entry of French wines into the United States of America, that it is now extremely difficult for Australian wines to find a footing there. A further point, is that Australia obtains from the United States of America a great deal more than the trade returns show, because many of the manufactured articles imported from Canada really come from the United States of America. In addition to the direct imports of oil from the Gulf of Mexico and California, we should take into account oil obtained from fields in other countries owned by Americans. The data contained in the statistical returns are misleading, not only in regard to oil, but also in relation to moving picture films imported. The returns show importations of films valued at only £300,000 or £400,000 a year, but I am certain that; a sum greatly in excess of that amount is transmitted annually to the United States of America in payment of royalties and other fee3 in respect of films exhibited to Australian audiences. Personally, I. would be prepared to support the Government if it took drastic action in regard to moving picture films, for I consider that one of the greatest influences in the world to-day tending towards the downfall of western civilization as we knowit is the Hollywood film. It would be a good thing if Hollywood and all connected with it went up in smoke one night. Any person who studies the history of the American film, and knows anything of its influence in countries peopled with coloured races, cannot fail to realize that the white man’s civilization is in danger.

Mr Holt:

– What does the honorable member think of the bombing of Harrar?

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– The truth regarding that happening has not beentold, and is not likely to be told for sometime. We shall not get the true facts of the Abyssinian situation from press reports. That every honorable member is concerned that friendly relations should continue between this country and the United States of America has been evident during this debate, for not one word of hostility against that country has been spoken. But we cannot overlook the fact that the policy it applies is “Everything for the United States of America and nothing for the other fellow “. In my opinion, the stupid management of the war debt situation by the people of the United States of America was largely responsible for the world depression. At the end of the war they were in a position to impose on other countries conditions which, economically, those countries could not carry out. By demanding payment when payment was impossible, they caused chaos in world trade, and now ways and means to remedy the existing state of affairs must be found.

Reference has been made to the motor industry in this country. What is true in. regard to motor cars is true also of other things. Generally, I believe in allowing the individual the greatest possible freedom of choice that is politicallypossible, and consequently it israther distasteful to me to have to discuss any other possibility. I am afraid, however, that before long we shall have to decide whether every individual in this country is to be allowed absolute freedom of choice in bis purchase of a motor car, or whether only a limited number of makes of cars shall be allowed to enter Australia. I understand, on what I believe to be reliable authority, that there is a greater variety of motor vehicles in Australia than in any other country. That causes complications, because of the need to keep in stock spare parts for a great number of different kinds of cars, and creates other problems also.

Debate interrupted under Standing Order No. 257b.

page 759

TARIFF PROPOSALS 1935-36

Customs Tariff Amendment (No. 5); Customs Tariff (Exchange Adjustment) Amendment (No. 5) ; Customs Tariff (Canadian Preference) Amendment (No.3)

In theCommittee of Ways and Means:

Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP

.- I move -

Customs Tariff Amendment (No.5).

That the Schedule to the *Customs Tariffs* 1933 as proposed to bo amended by Tariff Proposals be further amended as hereunder set out, and that on and after the second day of April, One thousand nine hundred and thirty-six, at nine o'clock in the forenoon, reckoned according to standard time in the Territory for the Seat of Government, Duties of Customs be collected in pursuance of the *Customs Tariffs* 1933 as so amended. That in this Resolution " Tariff Proposals " means the Customs Tariff Proposals introduced into the House of Representatives on the following dates, namely : - 28th November, 1935 ; and 20th March, 1936.

Customs Tariff (Exchange Adjustment) Amendment (No.5)

That, on and after the second day of April, One thousand nine hundred and thirty-six, at nine o'olock in the forenoon, reckoned according to standard time in the Territory for the Seat of Government, the Schedule to the *Customs Tariff (Exchange Adjustment) Act* 1933-1934 as proposed to be amended by the Customs Tariff (Exchange Adjustment) proposals introduced into the House of Representatives on the twenty-eighth day of November, One thousand nine hundred and thirty-five, and on the twentieth day of March, One thousand nine hundred and thirty-six, be further amended as follows : - by omitting " 157 ". {:#subdebate-8-2} #### Customs Tariff (Canadian Preference) Amendment (No. 3) That the Schedule to the *Customs Tariff (Canadian Preference)* 1934 as proposed to be amended by the Customs Tariff (Canadian Preference) Proposals introduced into the House of Representatives on the twenty-eighth day of November, One thousand nine hundred and thirty-five, be further amended as hereunder set out, and that on and after the second day of April, One thousand nine hundred and thirty-six, at nine o'clock in the forenoon, reckoned according to standard time in the Territory for the Seat of Government, Duties of Customs becollected in accordance with the *Customs Tariff (Canadian Preference)* 1934 as so amended. The resolutions which I have just introduced provide for - (a) amendment of the customs tariff; (b) amendment of the Customs Tariff (Exchange Adjustment) Act; and (c) amendment of the Customs Tariff (Canadian preference. The only amendment effected by the customs tariff proposals relates to item 157 - barbed wire. The Tariff Board has recommended for present exchange conditions rates of free British preferential tariff, 160s., general tariff, as against the present rates of 68s. a ton less exchange adjustment British preferential tariff,180s. a ton general tariff. The rates recommended by the board are incorporated in the proposals with provisions for an increase of 2s. a ton in the British preferential tariff rate for each £1 by which the equivalent in Australian currency of £100 sterling is less than £125 at the date of exportation. The board points out that the Australian manufacturer's selling price delivered into store is £21 12s. 6d. as against the landed into store cost free of duty of £24 for United Kingdom barbed wire. Advice has since been received that the local manufacturer's price has been reduced by 7s. 6d. a ton. It is therefore apparent that there is no necessity for a duty against United Kingdom barbed wire. I point out that wire-netting is being manufactured in Australia without the aid of a protective duty. The Tariff Board report on the matter is being tabled and circulated to-day, and an opportunity to debate this item will be given immediately following on the conclusion of the consideration of the items in the customs tariff proposals at present before the committee. As regards Canadian barbed wire which is at present admissible under the British preferential tariff at 68s. a ton less exchange adjustment, the board states that local manufacturers would be prejudicially affected if duty free admission of the Canadian product were permitted. Accordingly the rate of 50s. a ton is proposed under the Canadian preference tariff, the proposed rate being practically equivalent to the 1933 tariff net rate, that is, after exchange adjustment. As the rates proposed under the customs tariff are for present exchange conditions, action has been taken in the exchange adjustment proposals to delete item 157 from the general exchange adjustment. Progress reported. {: .page-start } page 761 {:#debate-9} ### QUESTION {:#subdebate-9-0} #### TARIFF PROPOSALS 1935-36 Customs Tariff Amendments Nos. 3, 4 and 5 In Committee of Ways and Means: Consideration resumed from the 31st March *(vide* page 735), on motion by **Mr. White** *(vide* page 2044, volume 147)- {: type="1" start="1"} 0. That the schedule to the Customs Tariffs 1933- (a)be amended by inserting in that schedule between the columns headed " British Preferential Tariff" and "General Tariff" a column headed" Intermediate Tariff"; and {: type="a" start="b"} 0. be further amended as set out in the schedule to this resolution . . . And on further motions by **Mr.** white - >That the schedule to the Customs Tariffs 1933 ... he further amended as hereunder set out . . . (vide pages 441 and 759). Division 8 - Earthenware, Cement, China, Glass and Stone Item 242 {: #subdebate-9-0-s0 .speaker-F4U} ##### Mr FORDE:
Capricornia -- As there are a number of items dealing with glass, it would expedite the consideration of them if I be allowed to make my observations now on item 242 and subitems 250 abcdf andh. {: .speaker-KZR} ##### Mr White: -- I am agreeable; but it will be necessary to take a separate vote on sub-item 242 b, because it is detached, and minor amendments are to be made to it. The **CHAIRMAN (Mr. Prowse).As** the committee has expressed no objection, the Deputy Leader of the Opposition **(Mr. Forde)** may refer to the other subitems in discussing this item. {: #subdebate-9-0-s1 .speaker-F4U} ##### Mr FORDE:
Capricornia .- When speaking on the lamp-ware items in this House last week, I mentioned that the Government, in deciding what duty was necessary for the protection of the Australian glass industry, had overestimated the protective value of exchange. The Minister for Trade and Customs **(Mr. White)** replied to the effect that the duty recommended by the Tariff Board had been adopted; that such duty was whatthe board considered to be necessary underpresent exchange condi tions; and further that if a 25 per cent. exchange is not worth protection of 20 per cent., then the 20 per cent. proposed protection should be reduced. In my opinion, the Minister's reply did not meet the position. If the Tariff Board's report can be taken in the way that the Minister has explained, I contend that it is not in line with the evidence submitted. The evidence given before the Tariff Board in June, 1935, showed that the value in Australian currency of importations of glass and glassware for the year 1934-1935, was approximately £1,500,000 ; Australian manufacturers estimated that at least half of those imports could, and should be, manufactured in Australia. Since that evidence was given, the Government has reduced the duty on many lines of glassware and has directly encouraged further importations. It is useless for the Government in the face of the import statistics, which each month show a steady increase, to contend that an industry is adequately protected. I admit that, in many directions, the Australian glass industry has been developed ; but in others, the expansion is only a fraction of what it might have been, and what it would have been, if the Labour party were still in office. There is a market in Australia for £750,000 of glass which our manufacturers are not supplying, but which, I think, they ought to be supplying. The policy of the Government is one of restriction - not development - in regard to this secondary industry and various others. I take, by way of illustration, the restriction on sheet glass through the quota system introduced by this Government. This industry was established as the result of a definite promise by the Bruce-Page Government that it would receive adequate protection. That obligation was honoured when I was Minister for Trade and Customs. The present Government, however, " scrapped " the pledge given to local manufacturers, and introduced in its stead, what is known as a quota. This is not the way in which to develop Australia and provide work for its people. As Deputy Leader of the Labour party in this House, I stand for the development of Australia's industries; when our turn comes again to direct the destinies of the Commonwealth - and that turn is coming - there will be no hesitation on our part in granting adequate protection to an industry such as that now under consideration. That policy we shall also apply to a number of other secondary industries whose development is being retarded because of the difficulty which this Government is experiencing in satisfying the low-tariffists as represented by the Country party and the " reasonable protectionists ", as another group styles itself. Taking the annual requirements of sheet glass in Australia at 7,500,000 square feet, under the quota system overseas countries are entitled to export 3,000,000 square feet to the Commonwealth as follows: - Overseas countries are entitled to supply 50 per cent. of any demand in excess of 7,500,000 square feet, the proportion allotted to each country being as shown in the table. In return for the quota of glass Belgium grants to Australia rates of duty not less than those applying to goods, the produce of other countries. Yet honorable members are told by the Government that this trade arrangement is of particular benefit to tie growers of barley and the primary producers of Australia. I point out that the Government is arresting the natural development of the glass industry without any commensurate gain to Australian primary producers. In effect, this Parliament informs the manufacturer of glass that he has no right to supply the whole of the requirements of the Commonwealth- that of the 7,500,000 square feet of glass annually required by Australia he must be prepared to allow the foreigner to supply 3,000,000 square feet, and that overseas manufacturers areentitled to one-half of the demand in excess of 7,500,000 square feet. In other words, the Government is giving away one-half of the additional demand which is due to the increase of population and to expansion of the building trade. If that practice does not amount to stifling the development and growth of a great Australian industry I do not know what does. We are told that meat, wheat, wool, silver and silverlead are industries which benefit as a result of the quota system. {: .speaker-KZR} ##### Mr White: -- So they have. {: .speaker-F4U} ##### Mr FORDE: -- I have obtained figures showing the exports of various Australian commodities to Belgium. They are as follows : - These figures indicate that there has been no substantial increase of exports of Australian commodities to Belgium. At any rate where there has been an increase it cannot be attributed to the quota system. I am aware that a good deal of propaganda was advanced by free traders, that by the lifting of the duty on Belgian glass, Australia would open up a great market for commodities in Belgium. I quote the following from *Hansard* of the 3rd November, 1933:- {: .speaker-KYI} ##### Mr Prowse: -- Has the Acting Leader of the House noticed in the press the serious report that reprisal tariffs are being operated by Belgium against the importation of Austral ian cereals, meat, and other primary products? What action does the Government propose to take to avert the disaster which willbe caused to Australia by such a policy? {: .speaker-KXQ} ##### Mr Archdale Parkhill: -- The Government is fully cognizant of the circumstances to which the honorable member refers, and realizes their importance. The steps taken by the Belgian Government are general in character, and are not directed solely against Australia. The position is being closely watched by the Government; and, as was intimated a few days ago, representations are being made to the Belgian Government by the High Commissioner in London, with whom this Government is in constant touch. I quote that opinion of a Minister in the present Government in order to show that the propaganda advanced by those who were unsympathetic towards the glass manufacturers, that Belgium was prohibiting exports from Australia because the Commonwealth was protecting a great Australian industry, was not founded on fact. The contentions of free traders at thattime were contradicted by a Minister of the present Government, who stated that what Belgium was doing to Australia it was also doing in respect to other countries; that Australia had not been singled out for disadvantageous treatment. The duties on sheet glass up to June, 1930, per 100 sq. ft., were 2s. British preferential, and 4s. general. From June, 1930, until September, 1932, the duties were11/2d. per lb., or 45 per cent. ad valorem, British preferential, and 2d. per lb. or 60 per cent. ad valorem, general tariff. In September, 1932, the duties were made 2s. and 4s., respectively, per 100 sq. ft. In September, 1932, importations of sheet glass were prohibited, but since 1934, glass has been imported under a quota system. The Minister referred to the report of the Tariff Board,and I desire to quote some extracts from various reports by that body on different products of the industry which throw a different light upon the matter. A report dated the 15th October, 1935, contains the following : - >The Tariff Board recognizes the efficiency and enterprise of the localmanufacturer and is of the opinion that the company has attempted to supply variety sufficient to meet all reasonable general demands. Considerable improvement in the quality of the product has also been effected since the commencement of the industry. Nevertheless, the Australian manufacturer has secured only about onefourth of the Commonwealth market, and claims that this proportion has been secured by selling goods at a loss. For this position two reasons must be ascribed, viz., price difference and the demand for exclusive design and quality. It is clear that at that time the board recognized the efficiency of the Australian industry. **Mr. H.** E. Ross, representing the Institute of Architects ofNew South Wales, gave the following opinion of Australian sheet glass : - >My examination was quite impartial in that respect, and it was comparative ... In making this comparison I would like to say that I regarded the Australian-made glass whichI investigated in sheets in the works - sheets picked at random and in many cases covered with dust, the accumulation of some weeks - as being distinctly superior to the average of the not-identified imported glass. The representative of the Australian Glass Company, giving evidence before the Tariff Board on the 24th June, 1935, stated - >The Australian glass industry started in Melbourne in 1872 as a small bottle works but the Australian Glass Manufacturers Company Limited was not formed until 1915.In the course of twenty years, therefore, from a comparatively small bottle works has been built up one of the largest industries in the Commonwealth with capital amounting to nearly £2,000,000, subscribed by 2,900 Australian shareholders, directly employing nearly 4,000 workers and distributing wages at the rate of approximately £700,000 a year. The protective policy of the Government has played an important part in the development of this industry, and we have never claimed to be able to develop without assistance from the tariff for the reason that much of their competition conies from countries in which the glass industry has been established for years., where the standard of living is lower than here and where the wages paid are only about one-quarter of what they pay. > >The landed duty paid value of the glass and glassware and lighting ware 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 willbe given us. The trade we have at present is not sufficient to keep our factories fully employed. Anything that is taken away will increase our costs of production. This inquiry shows that overseas manufacturers are seeking an opportunity to exploit this market to their further advantage and profit. There can be no other reason so far as we can see for the effort to reduce their protection. Any material loss of our trade will leave us with surplus plant. The question must then inevitably arise what are we to do with that plant? This company has used its capital and other resources in Australia in developing the glass industry. It has trained large numbers of artisans. It has given employment to thousands of skilled and unskilled workmen The benefits accrued have been of a national character. We fear now that the " work which we have builded ", in men and materials, is at stake. During the past years, while we have been erecting this industrial structure, we have had the assurance of the support of the Government. No matter what party may have been in power, we have always had confidence that necessary protection would be given. We have always worked, therefore, in complete harmony with the Government's policy, and have done our part in giving practical effect to its desire to have efficient secondary industries. We will continue to work in harmony with the Government's policy. If the policy changes from one of "adequate protection " to one of international trade " in which Australian secondary industries have to bc sacrificed in order to permit the importation of manufactured goods from countries that want to buy our primary prducts, we are uut going to fight against the Government. We have already been invited to amalgamate with overseas glass manufacturing' interests. Overtures have been made to us from three separate countries. Up to the present, we have refrained from going beyond the borders of our own land, but, if our Government would rather have low tariffs and trade treaties than protected industries, it will decide our future actions. In the manufacture of " hand-worked " goods, labour represents a very substantial portion of the costs, lt is in such goods that competition is hardest to meet, and, necessarily, it will be. the manufacture of such goods that will he lost to Australia. It is not the company's output that is at stake over this inquiry so much as where we shall have the output, and who will be the workers. That is the issue with which we are faced - whether glass shall be made in Australia by Australian workmen, or be made overseas, and imported as required. The Labour party stands for the protection of the Australian industry so that the work may be done in this country. Without adequate protection the industry cannot expand. On behalf of the Opposition, I protest against this constant whittling away of tariff protection. Every reduction of the tariff results either in the displacement of a certain number of Australian workers, or the prevention of additional employment in Australian industry. {: #subdebate-9-0-s2 .speaker-KHL} ##### Mr HOLLOWAY:
Melbourne Ports -- Under the previous tariff the duty on glass bottles was 25 per cent. ; now it is proposed that they be admitted free. Will the Minister state whether the item covers ordinary glass bottles such as nrc manufactured in Victoria? {: .speaker-KZR} ##### Mr White: -- Yes, but, there is a very good reason for the abolition of the duty, as is explained in the report of the Tariff Board. {: .speaker-KHL} ##### Mr HOLLOWAY: -- It seems to me that the Australian industry will be placed in mi impossible position. The Victorian factory has been struggling along for years. It has now installed the latest machinery, but is unable to get sufficientbusiness to keep it fully employed. {: .speaker-KZR} ##### Mr White: -- I can quote figures to show what profit the firm i3 making. {: .speaker-KHL} ##### Mr HOLLOWAY: -- I represent the workmen employed in the factory, and I know that many of them are working only half time, and some only quarter time. I do not know what will happen now that the duty has been abolished. This factory manufactures bottles only, chiefly beer bottles. At one time it was suggested that bottles should be imported from Japan, but we were able to prevent that. There was another fight over the importation of straw envelopes - a matter which concerns the Country party - but eventually we were able to establish the principle that the bottles, the envelopes and the beer should be manufactured in Australia. {: #subdebate-9-0-s3 .speaker-K9C} ##### Mr GARDEN:
Cook .- When this subject was debated on a previous occasion the Minister for Trade and Customs **(Mr. White)** justified the admission of Belgian sheet glass on the ground that the concession was necessary in order that Belgium might be induced to buy Australian barley. Now we are importing 40 per cent, of our sheet glass requirements from Belgium, but that country ha3 bought all the barley it needs from France. {: .speaker-KZR} ##### Mr White: -- Australia is still exporting barley to Belgium. {: .speaker-K9C} ##### Mr GARDEN: -- Our exports of barley to Belgium are very small. It has been stated before the Tariff Board that the quality and price of Australian sheet glass cannot compare with the quality and price of English or Belgian glass. There seems to be a dispute among various authorities regarding the quality of Australian glass. Architects like **Mr. II.** E. Ross have stated that Australian plain sheet glass is equal to anything that has ever been imported from Great Britain or Belgium. On the other hand, merchants have stated that the Australian product is of inferior quality, and cannot compare with the imported article. We have found in the past that certain interests which are opposed to Australian industry are not above taking an inferior sample of imported goods, and putting it forward as a sample of Australian manufacture. The only fair test to make would be to take a sample of Australian glass from the Australian factory, and compare it with the imported article. I have a number of letters from persons engaged in tomato-growing and some- what similar pursuits which show not only that the Australian glass meets their requirements but also that they are satisfied that its quality is better than that of the imported glass. It has been argued that the Australian industry is not able to meet demands. True, there was a shortage of supplies at the start of the industry, but it cannot be disputed that it is now in a position to supply all Australian requirements. The factory has two idle furnaces thrown out of use because the company cannot compete with the cheap imported glass. If these wore put in operation, there would be no possibility of a shortage. When last this item was discussed, the Minister for Trade and Customs declared that Labour was standing for a monopoly. lt is true that the Australian Window Glass Company is a monopoly. It is equally true, however, that the manufacture of glass in Belgium and in England is in the hands of a monopoly. I am always disagreeably surprised at our own people talking about a monopoly in our own country when their talk really amounts to insidious propaganda to bolster up monopolies in other countries. We heard a discussion to-day initiated by the honorable member for Flinders **(Mr. Fairbairn)** concerning American importations. The Belgian glass industry is owned and controlled by an American company. The very people who support ihe statements made to-day by the honorable member for Flinders are the people who support the action of the Commonwealth Government in allowing the importation of cheap Belgian glass manufactured by a monopoly controlled by Americans. There is not, on our part, very much controversy about the British industry although it, too, is a monopoly, but we object to a Belgian monopoly being given preferential treatment over our own industries. The statement of the Minister for Trade and Customs that the rate of exchange is equivalent to an additional duty of 20 per cent, is not borne out by actual experience. Germany is down to the stage of bartering, which is merely the exchange of goods for goods. The exchange rate does not enter into such trade. Again, Japan has depreciated the yen so that the exchange works the other way in respect of Japan. If there were no exchange at all, with Germany's bartering and the depreciation of the yen in Japan, the Australian Window Glass Company would be on a better basis on a 20 per cent, protective duty. As a matter of fact this company could operate outside Australia, because already it has been asked to co-operate with the overseas combine. If it would agree to link up with the Belgian and English companies, thus forming a huge glass combine and enabling it to charge any price it liked for its glass, there would not be any complaint from Belgium or England. But it has not done so. England has found that it is cheaper to manufacture in China, India, or even to invest money in Japan, than to manufacture in England. Yet day after day we hear the same oM claim - that we must protect British industries. I do not hold the Australian company up as an ideal. We have fought it for Australian conditions when it would not give the workers what they wanted. We do not believe that industry should exploit labour engaged, in the production of goods. We have fought and always will fight against the lowering of wages or conditions and the lengthening of hours as it is our duty to do. It has been claimed against the interests of this company that the prices it charges are too high. The price is equivalent to the Belgian price when the conditions which prevail in Australia are taken into consideration. Working costs, wages and other things which come into purview in consideration of actual prices arc higher in this country than in Belgium. We believe in high wages and a short working week and that the conditions of the workers should be better in this young country than in any other country. I should like the Minister to supply me with accurate figures of imports, but I believe that this year they will approximate £1,500,000 worth. The Australian industry should be encouraged. In 1925 a government of the same political colour as this Government introduced a tariff schedule which gave impetus to the Australian manufacture of glass. **Mr. Pratten** was then Minister for Trade and Customs. The industry was encouraged, and it naturally believed that the Government would continue to assist it. It came to pass, however, that the Ottawa agreement was made. We have heard a great deal about that agreement in the last few days. As an excuse for discontinuing the protection which was first given in 1925, this Government says that we must, under the Ottawa agreement, bring our tariff policy into harmony with it, but honorable members who adorn the legal fraternity have described the Ottawa agreement as "just an agreement", and the glass duties imposed in 1925, long before the Ottawa agreement was made, are as. much an agreement as is the Ottawa agreement, and should be just as binding. I am sure, however, that the sheet glass duties were lowered, not at the request of the British Government, but at the behest of a foreign government, to enable it to send its goods to this country. The Tariff Board has reported - >The industry was brought into being on the distinct understanding that adequate protection would be afforded by the Commonwealth Government. That understanding was created by the action of the Federal Parliament, after inquiry and reportby the Tariff Board, providing a specific rate of duty (as a deferred duty ) that would give an Australian manufacturer a reasonable chance of successfully competing with imported glass. The company is producing plain clear sheet glass in quantities sufficient to meet practically the whole of the requirements of the Commonwealth. . . {: .speaker-KFE} ##### Mr Gregory: -Of a type. {: .speaker-K9C} ##### Mr GARDEN: -- I agree. It was then a new industry. {: .speaker-KFE} ##### Mr Gregory: -- We are to pay while they practice. {: .speaker-K9C} ##### Mr GARDEN: -- Sometimes we have to do that with farm produce. Every year we have to pay for scientific research to assist the farmer. This country pays and the farmer reaps the advantage. It is the same in the glass industry. Men engaged in it, were not accustomed to drawing out glass, and were not acquainted with the modern procedure until they received the advice of qualified men from overseas. There is no doubt that the quality of the Australian glass is equivalent to-day to the quality of glass which was formerly imported. In effect, the Tariff Board said : " We shall put this duty on for a year to give a chance to the Australian manufacturer to produce glass equal to the imported glass ". Now we find that the Government desires to revert to the former procedure of importing glass. The present duties do not help the industry, although the Tariff" Board, in its last report, recommended that, if the exchange rate be altered, the duties should be altered accordingly. That is not what the industry wants.. It wants the duty to be on. the 1929 basis. There would then be no complaint from the company. If the Australian firm had agreed to associate itself with the monopoly of Belgium and England, the price of glass in this country doubtless would have increased. Such a monopoly as was wanted would have amalgamated three forces, and the farmers would have been complaining of the increased price of glass. It is in the interests of the primary producers, therefore, that the manufacture of glass should be protected on the lines suggested by the Deputy Leader of the Opposition **(Mr. Forde).** Instead of the price being increased it was reduced. Surely that was of some advantage to our primary producers. We on this side object to any monopoly that takes advantage of the protective policy of the Commonwealth to charge unduly high prices for its product. When this industry became established, and when it was in a position to produce glass in the quantities and quality desired, it lowered its prices. In the discussion which took place on another item yesterday, it was stated that the company concerned was a monopoly which was returning a clear profit of 10 per cent. to its shareholders. We on this side do not stand for any monopoly that is carrying on its business in a way that is detrimental to the interests of the people. We contend that legislation should be enacted to hinder such concerns from deriving special benefits from the protection which they enjoy. It is our desire to protect this industry, in order that employment may be given to our own people. I hope that the Government will take heed of our representations. {: #subdebate-9-0-s4 .speaker-KZR} ##### Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP .- The honorable member for Melbourne Ports **(Mr. Holloway)** has asked for some explanation of certain of tho duties imposed under these sub-items, and as they *ato* being considered together, it is desirable that I should, at this stage, comply with his request. We have heard all that the honorable member for Cook **(Mr. Garden)** has said from his predecessor, **Mr. Riley,** who, when a member of this House, was an enthusiastic supporter of this industry. I have inspected the sheet glass works, and I admit that they are all that one might expect of the company. But there is a long story, which I do not intend to tell now, about the deferred duties, which were imposed by the Scullin Government. The industry not being, at the time, in a position to supply the Australian demand, those duties were inoperative. Subsequently They were levied, and later were taken off. Most honorable members know the story. {: .speaker-F4U} ##### Mr Forde: -- The Lyons Government retained that prohibition for some time. {: .speaker-KZR} ##### Mr WHITE: -- That is so, principally because of the provision with regard to import quotas. This is one of the most difficult items in the tariff. The honorable member for Swan **(Mr. Gregory)** has asked many questions about it. These items are the *hereditas damnosa* of a previous Administration. When Belgium threatened reprisals foi- the action of the Scullin Government in placing an embargo on the importation of glass, we had to move much more quickly than was intended, and introduce an innovation in the tariff on this item. We discovered that the quota system would best suit the position. *~No* one can deny that the industry has flourished since the making of the Belgium-Australian agreement. The local manufacturers have been given 60 per cent, of the Australian market, and 50 per cent, of the increased trade. During the quota year ended the 31st October, 1935, the quantity of glass permitted importation from Belgium aggregated only 2,177,000 square feet, or 18 per cent, of the total demand, and was valued for duty at less than £20,000. As a contra, Belgium granted Australia rates of duty not higher than those applying to the products of other countries. Some of the products which Australia exported to Belgium and their export value in Australian currency during 1934-35 were- Australia has had a favorable balance of trade with Belgium for many years. In 1934-35, the balance favoured us to the extent of £4,337,000 sterling. We have made a good bargain with Belgium, because in return for the £20,000 worth of glass imported from that country we have been able to retain our favorable balance of trade. I assure honorable members that, on the employment side, nothing is being done by the Tariff Board that will injure any section of the glass industry. In 1928-29, the industry gave employment to 2,622 persons; in 1930-31, to 1,503; and 'in 1932-33, to 2,169; and in 1933-34, when the agreement was made with Belgium, the number of employees increased to 2,6S5. These figures, I submit are an effective answer to all the criticisms that can be levelled against, the agreement. The honorable member for Melbourne Ports **(Mr. Holloway)** has evinced some concern about the condition of the bottle industry. The employment figures which I have just given to the committee should reassure him to some extent. This section of the industry is in the nature of a monopoly, and is nourishing. {: .speaker-KHL} ##### Mr Holloway: -- I presume that the Minister wishes to see it flourish? {: .speaker-KZR} ##### Mr WHITE: -- Of course I do, but the position of other industries should also have consideration. Docs the honorable member agree with me ? {: .speaker-KHL} ##### Mr Holloway: -- Yes. {: .speaker-KZR} ##### Mr WHITE: -- Then ho should support the duties imposed in this sub-item. In its report on this section of the industry, the Tariff Board states, on page 6- >The published balance-sheet and profit and loss account of Australian Glass Manufacturing Company Limited for the twelve months ended the 31st March, 1935, showed that the net profit earned by the company amounted to approximately 10 per cent. on the capital used inthe business and almost 16 per cent. on the subscribed capital. The Tariff Board has, however, closely examined the financial documents of the company to ascertain the profits earned in bottle-making. Of the capital used by the company over £750,000 is represented by investments and loans and is not used inbottle-making. Although £760,000 of the company's capital is employed elsewhere, it is still able to make a good profit out of the bottle section of the industry. Furthermore, the disclosed net profit is arrived at after heavily writing down the investments hold. The actual net profit on bottle-making as a percentage of the capital used in manufacturing is a very much higher figure than is disclosed by the accounts and is at a much higher rate than that being earned by public companies generally in Australia at present. It is, I think, admitted that the inquiry was belated. It should have been made some years ago. {: .speaker-KHL} ##### Mr HOLLOWAY:
MELBOURNE, VICTORIA · FLP; ALP from 1936 -- That report does not state definitely that the profit was made out of the bottle section of the industry. {: .speaker-KZR} ##### Mr WHITE: -- The report continuesThe company is able to take excess profit because of: - {: type="a" start="a"} 0. Customs duties on imported bottles; 1. Protective effect of adverse exchange which is estimated at not less than 20 per cent. ad valorem. At present the duty on empty plain bottles under the British preferential tariff is reduced by only 71/2 per cent. to offset exchange, while the duties on plain bottles containing fixed rate goods and fancy or ground bottles are not subject to any reduction for exchange adjustment; 2. High freight charges on overseas bottles, particularly of larger sizes. The effect of freight is illustrated by the fact thai the Australian company manufactures large bottles in all States except Tasmania and, in spite of the fact that in some States the plants are idle for a considerable portion of the year, it is found cheaper to maintain these plants than to pay freight to these States on bottles manufactured in some central factory. Surely it is obvious that if an industry, aided by prohibitive duties can avoid in ternal competition, it can make profits. {: .speaker-KFE} ##### Mr Gregory: -- That is what this company did. {: .speaker-KZR} ##### Mr WHITE: -- I am not making that allegation,but that is the position. The company was able to raise its prices, and by so doing, it penalized other industries. Surely this appeals to the common sense of honorable members opposite. They say that they will not support a monopoly which operates in such a way as to depress some other industry which depends upon its product. This being so, they should support these items, the effect of which will be to keep down prices without creating unemployment. The honorable member for Cook asked for some information about importations. They are infinitesimal. A quantity of glass not made in Australia is imported, also certain kinds of plate glass, glass bottles and glassware for laboratory purposes, of a total value of £276,000, whereas the Australian Glass Manufacturing Company produces over £1,000,000 worth of bottles and has 97 per cent. of the trade. {: .speaker-KHL} ##### Mr HOLLOWAY:
MELBOURNE, VICTORIA · FLP; ALP from 1936 -- The Minister is telling only one-half of the story. {: .speaker-KZR} ##### Mr WHITE: -- I am unaware of any aspect which I have left untouched. I assure the honorable member that I have no wish to mislead him or the committee. {: #subdebate-9-0-s5 .speaker-KHL} ##### Mr HOLLOWAY:
Melbourne Ports -- I admit that the Minister for Trade and Customs **(Mr. White)** appears to have a good case when he states that a monopoly exists in this industry, and that it is the desire of the Government to protect the purchasers of glass bottles. But this company cannot be charged with increasing its prices. I defy the board or any other authority to prove that it has. There has been no increase of the price of bottles during the last twenty years. I know that a bottle of Victorian beer may be purchased to-day in Darwin at the price ruling ten years ago. Is this industry to be crushed because of the allegation that it is a monopoly? {: .speaker-KZR} ##### Mr White: -- These duties will not do that. {: #subdebate-9-0-s6 .speaker-KHL} ##### Mr HOLLOWAY:
MELBOURNE, VICTORIA · FLP; ALP from 1936 -- Surely the public can be protected in some other way. The Minister knows as well as anybody else that in all countries there are what is known as key industries, and that it would be uneconomic to have in Australia a number of companies established at heavy individual capital expenditure to meet the requirements of this country. The machines used for turning out beer bottles are of such a character that one plant can supply the whole of the requirements of Australia. Small competitors cannot hope to compete in the trade, because the business is not sufficiently great, and they would not be able to obtain the necessary capital to install a plant. We help industries to develop; we desire them to be efficient and economic ; but is it necessary to risk the dismissal of employees in order that exploitation may be prevented? Surely the Government could adopt other measures, and thus obtain portion of the excess profits! This Government and all other governments have failed to do that because they cannot discriminate between one company and another. All kinds of businesses are making excess profits. If steeper tax gradations were applied to the larger incomes, those with whom the Government is friendly would be affected, and that is not desired. {: .speaker-KZR} ##### Mr White: -- Does the honorable member suggest a higher income tax? {: .speaker-KHL} ##### Mr HOLLOWAY:
MELBOURNE, VICTORIA · FLP; ALP from 1936 -- Yes, so as to take from these concerns the excess profits they are making, while keeping the industry in this country. The Minister has stated that this company has a capital of £2,000,000 or £3,000,000, only £750,000 of which is utilized in the glass bottle-making industry, and that certain profits are made. That is not a fair analysis. The honorable gentleman should show what profit is made purely out of glass bottle-making. The capital of the Colonial Sugar Refining Company is invested in all kinds of industries that are dissociated from the refining of sugar. This Government and many others have tried to trace to their source the profits made by that company. It cannot be shown that they are made in the refining of sugar. {: .speaker-KFE} ##### Mr Gregory: -- Originally they were made out of the sugar industry. {: .speaker-KHL} ##### Mr HOLLOWAY: -- The Colonial Sugar Refining Company originally made its profits out of the employment of cheap black labour, principally in Fiji. The millions of pounds which it made were recapitalized in other industries, from which profits running into millions of pounds are still being made. The Minis ter has not stated this case in the right way. It is true that only £750,000 of the capital of this company is used in connexion with the manufacture of glass bottles, but it is not true to say that the aggregate profits of the company are derived from that enterprise. The company could get a machine, but one has not yet been installed, because the number of bottles used in Australia is not sufficient to keep it operating. {: .speaker-KZR} ##### Mr White: -- The Tariff Board says that the profits of the company are higher than the accounts disclose. {: .speaker-KHL} ##### Mr HOLLOWAY: -- How can any one be induced to become a competitor in an industry in which one machine can supply more than Australia requires? The removal of the duty of 25 per cent. may result in the dismissal of the employees. {: .speaker-KZR} ##### Mr White: -- The present proposal has been operating since last December, and the work of the company is increasing. {: .speaker-KHL} ##### Mr HOLLOWAY: -- With a protection of 25 per cent., the companyhas made profits. It cannot be sure that the business will continue to be profitable without any duty. I am concerned not about the two or three members of the directorate, who probably have made sufficient to live on for the remainder of their lives, but about the thousand or more men who are employed in the industry. The Government should not run the risk of these men losing their employment, but should have the courage to take from the company by means of taxation whatever excess profits are made. Item agreed to. Item 250- >By omitting the whole of sub-item (b) and inserting in its stead the following sub-item: - " (b) 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. > >And in respect of sub-item (b) - > >For each£1 by which the equivalent in Australian currency of £100 sterling is less than £125 at the date of exportation - > >An additional duty of ad valorem, British, . 8 per cent.; intermediate, 8 per cent. ; general, . 8 per cent." {: #subdebate-9-0-s7 .speaker-KZR} ##### Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP -- I move - >That the item be amended by adding the following to sub-item (B) : - "And on and after 2nd April,1936 - > >Articlesof cut glass, including bottles, decanters, flasks and jars of cut glass empty or containing goods not subject to an ad valorem duty, and lumps and lamp wore 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. > >And in respect of sub-item (b) - > >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, . 3 per cent.; intermediate, 8 per cent. ; general, . 8 per cent." > >For the purposes of sub-item (b) the term " cut glass " is defined as covering glassware in which the cut patterns or designs have been subjected to any process designed to produce apolished finish. The only alteration effected by this amendment is the inclusion of a definition of cut glass. The Customs Department has experienced some difficulty in administering this item, due to the inability of certain importers to see eye-to-eye with its rulings as to tariff classification, although such rulings were based on the Government's intention, and were in accord with trade practice generally. The inclusion of a definition will overcome the difficulty. Amendment agreed to. By omitting the whole ofsub-item (c) and inserting in its stead the following sub-item: - {: type="a" start="c"} 0. Glassware, n.e.i.. per dozen pieces, intermediate.1s.: general.1s.; or ad valorem, British, 5 per cent. ; intermediate.40 per cent.; general, 50 per cent., And for each £1 by which the equivalent in Australian currency of £100 sterling is less than £125 at the date of exportation - An additional duty of, ad valorem. British, . 8 per cent.; intermediate. 8 per cent.; general, . 8 per cent., whichever rate returns the higher duty." {: #subdebate-9-0-s8 .speaker-KZR} ##### Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP -- I move - >That the item be further amended by adding the following to sub-item (c) : - > >And on and after 2nd April, 1936 - > >Glass ware, n.e.i.. per dozen pieces, general or ad valorem,British, 5 per cent. ; intermediate. 40 per cent.: general, 50 per cent.. > >And for each £1 by which the equivalent in Australian currency of £100 sterling is less than £125 at the date of exportation - > >An additional duty of, ad valorem, British, . 8 per cent. ; intermediate, 8 per cent.; general, . 8 per cent., whichever rate returns the higher duty." The amendment is for the deletion of the alternative fixed rate of1s. a dozen pieces under the intermediate tariff. When the Ottawa agreementwas signed, there was a preference margin of 1s. a dozen pieces under this item, and, although the local manufacturers agreed and the Tariff Board recommended that glassware, n.e.i., should be subject to ad valorem rates only, it was necessary pending consultation with the Government of the United Kingdom to retain the fixed rates under the intermediate and general tariffs. The Government of the United Kingdom has now advised that there is no objection to the removal of the alternative fixed rates. The fixed rate is, however, being retained under the general tariff for treaty purposes. Amendment agreed to. Item (with amendment of 20th March, 1936, incorporated), as amended, agreed to. [Quorum formed.] Items 252, 253, 254, and 255 agreed to. Item 259- >By omitting the whole item and inserting in its stead the following item: - " 259. Roofing slates, n.e.i., ad valorem. > >British, free; intermediate, 15 per cent.; general, 15 per cent. {: #subdebate-9-0-s9 .speaker-KZR} ##### Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP -- I move - >That that portion of the tariff resolution; introduced into the House of Representatives on 20th March. 1930, relating to item 259 be incorporated in the present proposals as on and from the 2lst March, 1936, in lieu of item 259 of the tariff resolution introduced into the House of Representatives on the 28th November, 1935. {: .speaker-F4U} ##### Mr Forde: -- What effect has the amendment on the duties shown in the schedule ? {: .speaker-KZR} ##### Mr WHITE: -- As the honorable member will see in the memorandum, there has been an alteration of the duty. The reason is that this industry has discontinued the commercial production of slates. Amendment agreed to. Item, as amended, agreed to. Division 9. - Drugs and Chemicals Items 266, 269, 270, 271 and 274 agreed to. Item 278- >By omitting the whole of sub-item (c) and inserting in its stead the following sub-item: - " (c) (1) Sulphur chloride, ad valorem, British, 25 per cent.; intermediate, 45 per cent.; general, 45 per cent. ; > >Carbon tetrachloride, ad. valorem, British, free; intermediate, 20 per cent. : general, 20 per cent." {: #subdebate-9-0-s10 .speaker-KCM} ##### Mr DRAKEFORD:
Maribyrnong .- The 1935 tariff reduced the rates on this sub-item from 25 per cent. British preferential, and 45 per cent. general, to free British preferential, and 20 per cent. general tariff. The protective duties had been in operation since 1921, and under them a valuable industry had been efficiently developed, and had been supplying 50 per cent. of Australia's requirements of this commodity. This industry is in danger of destruction owing to the sudden drastic curtailment of its protection. The manufacturers desire that the rates of 25 per cent. British preferential and 45 per cent. general tariff be restored. Carbon tetrachloride is a colourless, volatile and non-inflammable liquid, the chief uses of which are: as a component part of drenches for sheep in the treatment of fluke; for use in certain fire extinguishers; for the dry cleaning of clothes; and in certain electrical work. Commonwealth Fertilizers and Chemicals Limited operates a plant at Yarraville, Victoria, for the manufacture of carbon tetrachloride, the raw materials for which are produced in their own factories. This plant is one of a group which is run in conjunction with their chlorine and caustic soda plant, the only one of its kind in Australia. The product; conforms to the British Pharmacopoeia 1932 specification, which is a very rigid one. Operating under the duties in force up to December, 1934, the sales of the company had gradually risen, and 50 tons were sold for the year 1934-35. Since the new duties have been in force, imported carbon tetrachloride has been sold at a price at which this company is unable to compete, and for the current financial year the indications are that sales will not be in excess of 30 tons. The plant installed at Yarraville is of local manufacture, and at present has a capacity of 100 tons per annum. Its capacity could easily be increased to supply the whole of Australia's present requirements, which now amount to 200 tons per annum. This company is prepared to sell carbon tetrachloride of British Pharmacopoeia quality at a price of about £60 a ton, c.i.f. main Australian ports, whereas to-day German materia] is being quoted landed into store with all charges paid at a price of less than £50 a ton. The British home-consumption price, as stated in leading technical journals, is about £44 a ton, including the cost of packages. As there is no duty on British materia], the price landed in Australia should be in the neighbourhood of £60 a ton. The discrepancy in the price landed in Australia between British and German material, which pays an import duty of 20 per cent., would make it appear that German carbon tetrachloride is being supplied to Australia at a price below the home-consumption price in Germany. If this is so it reflects a rather serious state of affairs which really amounts to dumping, although the quantity involved is not great. Present indications are that under the existing duty the company will be able to manufacture and sell carbon tetrachloride only at a serious loss. One aspect of the subject that must be considered is that the chlorine caustic soda industry is of the utmost importance to Australia for defence purposes. Interference with the output of any of the subsidiary plants which go to make up this group of industries must react against the industry as a whole and, in the case of war, would make Australia more dependent on outside sources for the supply of this essential material than would otherwise be the case. I do not wish to stress defence considerations unduly, but it is obvious that the organization which this company has built up at Yarraville would be a valuable nucleus for rapid expansion in a time of emergency. As the last report of the Tariff Board on this subject is dated the 4th of May, 1934, and some experience has been accumulated under the rates of duty in operation during that period, and as this product is manufactured by only one company, I ask the Minister to refer the item back to the board for reconsideration. It has been shown conclusively that the output of the factory has dropped seriously since the reduced duties became operative. Apparently German manufacturers are prepared to sell their product at a price below the cost of production in Great Britain and other places. In the circumstances, it is not unreasonable to request the Tariff Board to make another investigation. {: #subdebate-9-0-s11 .speaker-KZR} ##### Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP -- The manufacture of carbon tetrachloride is practically a side line of a big company which markets other products. The Tariff Board has made two inquiries into this item and on each occasion has come to the same conclusion. The fact of the matter is that the process of manufacture at Yarraville is quite uneconomic. It is true that carbon tetrachloride is of some use for defence purposes, but. its main use is undoubtedly for pastoral purposes. The reason given by the board for recommending the alteration of duty are, in the opinion of the Government, quite sound. {: .speaker-KLL} ##### Mr Makin: -- Will not this reduction of duty adversely affect the new industry which it is proposed to establish in South Australia ? {: .speaker-KZR} ##### Mr WHITE: -- I do not think so. In any case, the South Australian organization is now in operation and may be able to produce carbon tetrachloride by a more economic process than that used by the company at Yarraville. The honorable member for Maribyrnong **(Mr. Drakeford)** mentioned the likelihood of dumping. In consequence of the procedure adopted by the Hitler Government to assist exporting industries, it is difficult to trace German production costs, but production costs in France would suggest that no dumping is being done. The cost of producing carbon tetrachloride overseas is, however, very much below that in Australia. In view of the value that carbon tetrachloride is. to the primary producing industries, it is desirable that it should be made available at as low a cost as possible. Item agreed to. Items 279, 280 and 281 agreed to. Item 283- >By omitting the whole item and inserting in its stead the following item : - "283. Sulphate of Copper, per ton: British, £1 10s.: intermediate, £8 103.; general, £8 10s. > >And for each £1 by which the equivalentin Australian currency of £100 sterling is less than £125 at the date of exportation - > >An additional duty of, per ton: British,1s. 7d. ; intermediate,1s. 7d. ; general,1s. 7d." {: #subdebate-9-0-s12 .speaker-KZR} ##### Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP -- I move - >That the item be amended by adding the following: - "Andon and after 2nd April, 1936 - 283. Sulphate of Copper, per ton : British, £1 10s.; intermediate, £5; general, £8 10s. > >And for each £1 by which the equivalent in Australian currency of £100 sterling is less than £125 at the date of exportation - > >An additional duty of, per ton: British,1s. 7d. ; intermediate,1s. 7d.; general,1s. 7d." The Tariff Board is of the opinion that a preferential margin of £3 10s. a ton is reasonable and adequate, and it considers that the margin of £7 a ton is not necessary. The Government, of the United Kingdom has agreed to the reduction of the preferential margin to conform to the finding of the Tariff Board, and the amended intermediate tariff rate will give effect to the board's recommendations. Amendment agreed to. Item, as amended, agreed to. Item 285 (Pharmaceutical preparations). {: #subdebate-9-0-s13 .speaker-KFE} ##### Mr GREGORY:
Swan .- I direct the attention of the Minister for Trade and Customs **(Mr. White)** to the very heavy cost of pharmaceutical preparations in Australia. Practically all medicines and their constituent drugs and other ingredients are very much more expensive in Australia than in most other countries.I ask the Minister to request the Tariff Board to make an inquiry into this item to see whether something cannot be done to bring about a reduction of the cost of these preparations to the general public. Only the other day a doctor's prescription which was made up for me involved me in a charge of 8s. 6d., and the bottle of medicine I received was very small. I trust the Minister will approve of the request that I have made. {: #subdebate-9-0-s14 .speaker-KZR} ##### Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP . Considerable attention has been, and is still being, given to this item. Very many drugs are admitted duty free under departmental by-law, and the long list of these is continually being increased. Item agreed to. Item 290 agreed to. Division 10. - Wood, Wicker, and Cane Items 291 and 305 agreed to. Division 11. - Jewellery and Fancy Goods Item 310 agreed to. *Sitting suspended from6.14 to8 p.m.* Item 318 (Wristlet watches n.e.i.). {: #subdebate-9-0-s15 .speaker-F4U} ##### Mr FORDE:
Capricornia .- In the absence of the honorable member for Bendigo **(Mr. E. F. Harrison)** who intended to speak on this item, I ask the Minister to give further consideration to the request of the Australian Swiss Manufacturing Company Limited of Bendigo, that the duty on complete wristlet watches of nickel, nickel alloy, chromium plated, and steel be increased from 2s. 101/2d. to 5s. 6d. or 30 per cent. ad valorem. Formerly, under Tariff Item 318 a 4 *a* 1 nickel alloy, chromium plated, steel wristlet watches and cases were charged a flat rate duty of 7s. 6d. or 30 per cent. ad valorem, whichever gave the higher return, but in December, 1934, the duty was reduced to 2s. 101/2d. or 30 per cent. ad valorem for nickel alloy and chromium watches. Since that reduction was made the Bendigo company has suffered a large decrease of orders for the wholesale trade on account of the heavy importation of complete watches. Not only have importations increased to an alarming extent, hut also the wholesalers are charging 2s. to 3s. morefor imported watches than if they imported the movements only and placed them into Australian-made cases in respect of which there is keen competition. It is very difficut for any retailer to know the correct prices of watches on account of the large number of factories required to produce watch movements, consequently wholesalers) can demand their own price for imported watches, and the protection of 2s. 101/2d. is insufficient for theAustralian makers of nickel cases. The wholesalers prefer to import rather than buy from Australian manufacturers as the former course permits them to exploit the market much more easily. The Australian factories, however, act as a brake in that many manufacturers are selling direct to retailers and dispensing with the services of wholesale merchants. It has been definitely proved that the reduction of duty from 7s. 6d. to 2s. 101/2d. has actually increased the cost to retail purchasers. The Bendigo company regards this as a particularly strong argument in favour of increased protection. That company has received from a London firm of agents representing one of the leading Swiss manufacturers a letter dated the 30th September, 1935, which, in referring to its trade with Australia, contains the following paragraph - >Further, for your information, we would just add that on his last trip to Australia, our representative sold over l50 gross of ladies' and gentlemen's watches. Thus, the sales of one overseas firm alone resulted in a loss to the Australian casemakers of 21,600 cases. According to the import statistics the value of nickel plated, nickel alloy, chromium plated, and steel watches, imported under the present existing duty of 2s. 101/2d. or 30 per cent. ad valorem for the six months ended the 31st December, 1935, amounted to £36,355, representing approximately 72,000 watches. In other words 72,000 metal cases were lost to the Australian makers, in addition to the loss to the industries which supply the raw materials such as nickel silver, polishing and chromium compositions, glasses, and straps. Straps attached to watches are dutiable under Tariff Item 318 a 4 a 1 at 2s. 101/2d. or 30 per cent. ad valorem, plus 10 per cent. primage, whereas if they were imported separately they would be dutiable at 50 per cent. plus 10 per cent. primage. As 75 per cent. of the output of the Bendigo factory is of the nickel cases, this loss of trade is very serious and I contend calls for prompt reconsideration of the duties by the Minister. It is necessary to have a constant flow of movements coming in to keep the Australian factories operating, as watch movements are really their raw material. According to figures compiled by the Department of Trade and Customs the value of complete watehesof gold, rolled gold, silver, metal and steel imported into Australia in the last three years has been : - For the six months ended the 31st December, 1935, nickel plated, nickel alloy, chromium plated and steel watches alone imported into Australia were valued at £36,355. Honorable members will therefore see that the present duty of 2s. 101/2d. or 30 per cent. ad valorem is not sufficient protection for the Australian casemaker. {: .speaker-KZR} ##### Mr White: -- Is not the honorable member including all watch movements that are admitted free? {: .speaker-F4U} ##### Mr FORDE: -- It is contended by the Australian watchmakers that the reduction of the duty from 7s. 6d. to 2s. 101/2d. has made it extremely difficult for them to carry on. The Bendigo branch of the Swiss company was established in Australia as the result of the high duty of 7s. 6d. or 30 per cent. ad valorem imposed by the Scullin Government. I ask the Minister to reconsider this matter and, if possible, to refer the item back to the Tariff Board for further investigation and report. The watchcase manufacturing industry is not established in any capital city of the Commonwealth, but is a very promising industry in Bendigo. The company is greatly concerned at the prospect of the loss of the Australian market. Certainly as a result of the new duties the demand for Australian-made watch cases is decreasing. I appeal to the Minister to give this matter favorable consideration. {: #subdebate-9-0-s16 .speaker-KZR} ##### Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP -- The honorable member for Bendigo **(Mr. E. F. Harrison),** during the general debate, referred to this item. The facts are that the Labour Government imposed a duty of 7s. 6d. on each watchcase imported into Australia, or about two or three times the value of the case itself. That action had a most disruptive effect on the industry; supplies were cut off, and there was complete upset in the industry generally. The case-making industry is established in Bendigo and other places. Thecomplaints of the Bendigo company have been investigated by the department and myself, and the decision has been arrived at that they are unjustified. That company does not make the very cheapest type of watchcase which is imported from overseas. One firm manufacturing gold and silver cases says that, so far from having been hurt by the present duties, it is now employing 232 people. The following figures indicate the steadily increasing employment provided by that firm alone: - With the duty of 2s. 101/2d., which exceeds the overseas cost of equivalent cases, with the added protection of freight and exchange, and the advantage of free admission of watch movements, the Bendigo company should be able to carry on successfully. Item agreed to. Item 319- >By omitting the whole of sub-item (a) (twice occurring) and inserting in its stead the following sub-item : - " (a) (1) Records for Gramophones, Phono graphs and other talking machines, viz. : - > >For use in conjunction with films admissible under Item 320 (c) (2) (b) (1) British, free; intermediate, free; general, free. {: #subdebate-9-0-s17 .speaker-KZR} ##### Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP -- I move - >That the item be amended by adding the following to sub-paragraph *(a)* of paragraph ( 1 ) of sub-item (a):- - " And on and after 2nd April, 1936 - > >For use in conjunction with films admissible under Item 320 (c) (2) (b), British, free; intermediate, free; general, free." Provision is made under the present proposals for the free admission of gramophone records accompanying educational films for which a certificate has been issued by the International Educational Cinematographic Institute, which is recognized throughout the world and by the League of Nations. The amendment carries the concession a step further by providing also for the admission free of duty of records for use in conjunction with other educational firms - Item 320 c 2 *b* 2 - which may be outside the scope of the International Educational Cinematographic Institute. Amendment agreed to. Item, as amended, agreed to. Item 320 agreed to. Division 12. - Hides, Leather and Rubber. Item 324 (Leather). {: #subdebate-9-0-s18 .speaker-F4U} ##### Mr FORDE:
Capricornia .- As the Tariff Board's report on which the present duty was based is dated the 4th April. 1934, I ask the Minister to refer the item back to the Tariff Board for further investigation and report. Prior to the 7th December, 1934, the duty on chamois leather was 40 per cent. British, and 60 per cent. general tariff; the present rates are 10 per cent. British, and 311/4 per cent. general tariff. I admit that the reduction of the duties was brought about as the result of a public inquiry held by the Tariff Board in November, 1933 ; but as the report is over two years' old, and the industry feels that more protection is necessary to enable it to carry on, I ask the Minister to give consideration to my request. Originally chamois leather, as the name implies, was manufactured from the skin of the chamois, but the article of to-day which is marketed under the same name is made from the skins of various animals. Australian manufacturers use the fleshy side of the skins of sheep and lambs, chiefly lambs, and claim that their pro duct is equal to the best in the world. However, owing to a strong prejudice which exists in favour of the English article, Australian manufacturers are compelled to sell their product at a much lower price. {: .speaker-KZR} ##### Mr White: -- Does not that suggest that they do not require higher protection? {: .speaker-F4U} ##### Mr FORDE: -- They claim that the whole of the Australian market would be theirs if the duty were increased. In dealing with this industry, the Tariff Board stated - >In view of the generally satisfactory quality of the Australian chamois leathers and the reasonableness of the selling prices, the board is of the opinion that the industry should be protected against the possible importation of large quantities of second-grade skins which, if allowed, might seriously interfere with sales of first-quality Australian. The industry is not a very large one; only about 70 persons are directly employed in the manufacture and distribution of chamois leather in Australia, and wages paid annually amount to approximately £9,000. The plant at present in operation is capable of supplying considerably more than the Australian requirements of chamois leather. The duty of 10 per cent. recommended by the Tariff Board is regarded by the industry as being merely in the nature of a. revenue duty, and not sufficiently protective. Since the duty has been reduced, imports have increased from 13,149 square feet, valued at £710 in 1933-34, to 23,097 square feet, valued at £1,290, in 1934-35 - an advance of more than 75 per cent. {: #subdebate-9-0-s19 .speaker-KZR} ##### Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP .- There is no necessity to refer this item back to the Tariff Board. As an indication of the general approval by the industry of theGovernment's proposed duties, I direct the attention of the committee to the following resolution of the Federated Master Tanners and Leather Manufacturers' Association at its fourteenth interstate conference on the 25th November last: - >That this conference place on record the fact that the tanning industry of Australia has received great benefits from the Ottawa agreement. It further affirms that the ideal of inter-imperial trade should be fostered in all ways possible. Item agreed to. Item 325 agreed to. Item 328 (Goloshes, rubber sand boots and shoes and plimsolls). {: #subdebate-9-0-s20 .speaker-KZX} ##### Mr GEORGE LAWSON:
BRISBANE, QUEENSLAND · FLP; ALP from 1936 -- This industry is of great importance to this country and, in my opinion, is entitled to all the protection that this Parliament can give to it. In the manufacture of the articles covered by this item many thousands of Australian workers are employed, their wages totalling a large sum each year. The Government proposes to reduce the duty from1s. 6d. a pair to1s. 2d. a pair British, and from 2s. 6d. to 2s. 4d. general tariff. In order to give this industry a chance to meet foreign competition, particularly that of Eastern countries, the duty should be left as it was previously. In its report on this item the Tariff Board said - >The specific duty has undoubtedly saved the local industry from heavy imports from the East, similar to those which have taken place in New Zealand, where the market has been flooded with sand shoes from Japan and Singapore. > >In the United Kingdom the growing volume of imports of Japanese rubber shoes upset the home industry to such an extent that specific duties were imposed for its protection. If the Tariff Board's proposal be accepted, the same thing will happen in Australia; goods will be imported from other countries to the detriment of the Australian industry. The Tariff Board pointed out that Australian manufacturers of these goods have not taken advantage of the protection given to them. Although it advocated a slight reduction of the present duties, the board stated that not one overseas firm or Australian company appeared before it to ask for a reduction of duty. Its report continued - >Analysis of production costs and selling prices shows that the latter are reasonable. The basis of sale is generally f.o.b. or f.o.r capital cities, and is the same in all States. Such data as are available indicate that the local prices compare favorably with the prices of similar footwear in the United Kingdom. That statement shows the need for protection. The report went on to say - >The case was characterized by the fact that no representations were made on behalf of any United Kingdom manufacturer to establish the necessity for reduction in duty under the British preferential tariff, in terms of the > >United Kingdom and Australia trade agreement, nor was any request received from any Australian source for reduction in duty. Since no witnesses appeared before the board to ask for a reduction of the duty, the Government should not interfere with the existing tariff. Another paragraph in the board's report stated - >The board is satisfied that the local manufacturers are not taking full advantage of the duties to maintain high prices, but are supplying a satisfactory article in a wide range at a reasonable price to the consuming public. No good purpose would be served by drastic reductions in the existing duties. If the duty is reduced, goods manufactured in Eastern countries will flood the market to the detriment of the Australian industry. Item agreed to. Item 329- >By omitting the whole item and inserting in its stead the following item: - " 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, 55 per cent.; general,60 per cent. > >And for each £1 by which the equivalent in Australian currency of £100 sterling is less than £125 at the date of exportation - > >An additional duty of - ad valorem, British, . 4 per cent.; intermediate, 4 per cent.; general, . 4 per cent." {: #subdebate-9-0-s21 .speaker-KZR} ##### Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP -- I move - >That the item be amended by adding the following: - "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. > >And for each £1 by which the equivalent in Australian curreny of £100 sterling is less than £1.25 at the date of exportation - > >An additional duty of ad valorem, British, 4 per cent.; intermediate, . 4 per cent.; general, . 4 per cent." The amendment relates only to the proposed intermediate tariff rate in the November, 1935 tariff proposals, and its purpose is to reduce that proposed rate by 10 per cent. to 45 per cent. No alteration is proposed in respect of the British preferential and general rates shown in the November resolution. {: #subdebate-9-0-s22 .speaker-F4U} ##### Mr FORDE:
Capricornia .- I should like some explanation of the proposed reduction of the duties on this item. In 1933-34, Australia imported 141,450 pairs of boots and shoes, valued at £27,900. The local industry gives employment to . 15,690 Australians, but so great is the unemployment in the industry that in Victoria, where approximately 60 per cent. of the Australian production is manufactured, the Government has amended its legislation to prevent the working of overtime. Any proposal to reduce the duties, and thereby divert the trade to overseas manufacturers, is socially and economically unsound. Although at the present time the volume of imports is not large, those engaged in the industry are apprehensive as to its future. The activities of the Czechoslovakian firm ofBata, which has recently opened a large factory in London, is giving grave concern to Australian manufacturers. Samples of that firm's footwear have recently been seen in Melbourne, where, notwithstanding the existing tariff and the exchange position, they have been offered for sale at prices against which local manufacturers cannot hope to compete. When the products of this firm's English factory are available in large quantities for export, the reduced duty payable thereon as British products, will make such lines highly competitive with Australian footwear. I cite the following quotation from the English trade journal *Footwear Organizer,* in support of my contention- >One aspect of **Mr. Bata's** plans, and one of the most important, appears to be completely overlooked. By establishing a factory in this country he canbring his productions inside any tariff which may be imposed on foreign shoes entering Great Britain. In addition, his shoes made here will enjoy the benefits of British preferential duties in the dominions and colonies, and most favoured nation treatment elsewhere. Boot manufacturers are greatly concerned about the competition which they will have to meet when this firm gets firmly established in its London factory. There is so much unemployment in the industry in Australia that there is no justification for reducing the duty. Local competition has been so keen that a large number of manufacturers have been forced out of business. A number of chain boot stores which previously manufactured their own boots, now find it more profitable to buy from other manufacturers who have reduced prices to below the cost of production. The whole of the Australian market should be preserved to the local manufacturers. {: #subdebate-9-0-s23 .speaker-KZR} ##### Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP .- The Tariff Board stated that Bata's venture in the United Kingdom can only be successful because of superior efficiency, and it would not be unreasonable to suppose that, following the practice of the past, the local manufacturers will not fail to take advantage of all possible improvements and developments to combat successfully this prospective competition. The local industry which is efficiently conducted, already commands 99 per cent. of the Australian market, and evidently is sufficiently protected. At one time there was too much internal competition and that is the reason for the unemployment which exists. The fact that it can hold 99 per cent. of the Australian trade, and that imports are negligible, shows that the slight reduction of the British duty will not be so harmful as some honorable members fear. **Mr. HOLLOWAY** (Melbourne Ports; [8.26]. - On many other items the Minister has advanced the argument that there is not sufficient internal competition; but in regard to this item he says that there has been too much competition between Australian manufacturers of boots and shoes. He cannot have it both ways. The making of boots and shoes is one of Australia's oldest secondary industries. The quality of the local product has been such that Australian manufacturers have been able to hold their own against international competition. The Minister says that the Australian industry controls 99 per cent. of the local market. Unless it is exploiting the users of its product, there is no reason why it should not have the whole of that market. The Minister has not attempted to show that Australian manufacturers are fleecing the public. All he said was that the internal competition is so keen that it is well to allow further competition. {: .speaker-KZR} ##### Mr White: -- The duties should be reasonable instead of prohibitive. {: #subdebate-9-0-s24 .speaker-KHL} ##### Mr HOLLOWAY: -- Why alter the rates if the consumers are satisfied? The industry is conducted efficiently, and there is already sufficient internal competition. Big city emporiums, such as Myer's, in Melbourne, and Anthony Hordern's, in Sydney, have their special departments for the display and sale of fancy footwear. Some time ago, when an embargo was placed on the importation of such goods, those firms called in representatives of the local manufacturers, and asked them to manufacture footwear similar to that which they had previously imported. The local manufacturers successfully copied the imported samples, but now they are being called upon to meet the competition of a foreign manufacturer who will receive the advantage of the British preferential duties. The only reason given by the Minister for the reduced duties is that there has been too much internal competition. {: .speaker-KZR} ##### Mr White: -- Does the honorable member know of any firm which is dissatisfied ? {: .speaker-KHL} ##### Mr HOLLOWAY: -- On Eight Hours5 Day, last week, when I marched with the boot employees, officers of the union asked me to watch this item when it came before Parliament. This industry, because of the quality of its product has been successful, but now a lot of footwear, including children's fancy shoes and slippers is coming in from other countries. Why should any boots be imported into Australia? I am in possession of some facts concerning the Bata enterprise. It owns practically the whole of one of the suburbs of Prague, the capital of Czechoslovakia. In its ramifications, this enterprise resembles those big companies to which honorable members referred this afternoon; it is so immense that profits cannot he traced, because its interests arc spread over subsidiary branches of business. It controls banks, cinemas, recreation grounds, and all kinds of business undertakings, and the profits from these subsidiary concerns enable it to forgo a reasonable profit on the manufacture of boots and shoes in order to undersell foreign-made footwear. Even the old-established manufacturers of Leeds, Northampton and other hoot centres of England, who have been making footwear for very many years, cannot hold their own against this firm. I am aware that it manufactures three parts of its article in Czechoslovakia, and then ships the unfinished footwear to Birmingham for completion. The finished boots aru then shipped to Australia, and are admitted under the British preferential tariff, a practice which, I submit, is robbing the people of the Commonwealth. The intention behind the decision of this company to establish itself in Great Britain is connected with this practice. In the circumstances, therefore, surely 1. am justified in asking the Minister to say whether or not the Australian manufacturers should not obtain the remaining 2 or 3 per cent, of the market which is now enjoyed by overseas manufacturers? The employees of the industry are expert tradesmen, not labourers, and they cannot obtain anything like full-time work throughout the year. The working week in this industry is at present 44 hours; negotiations have been entered into to reduce it to 40 hours. The employees are entitled to this concession, because they never work full-time for any great length of time during the year, and especially because of the extent of modern mechanization in the industry. The only period when the boot industry worked full time was during the war, when boots were manufactured for the soldiers. More factories were built, employment was increased, many apprentices were taken into the industry, and adult workers were taught other portions of the trade. Now the manufacturers , are endeavouring to employ more men than the trade can carry. I appeal to the Minister to consent to the deletion of the item which cuts into the Australian boot industry. If it could be shown that there was no competition in the trade to keep prices within a reasonable limit, that would be an argument in favour of the reduction of duty, even if the Australian manufacturers lost 15 per cent, of the business. But to take away a portion of the trade now enjoyed by Australian manufacturers because they have captured about 99 per cent, of the market, is not logical. In my opinion; a government that stands for Australian industry - and I believe that this Government does- {: .speaker-KHL} ##### Mr HOLLOWAY: -- I consider that all governments are desirous of expanding Australian industry. Their policy might not be 100 per cent. pro-Australian, as is the policy of the Labour party, but the" always make a point of telling the public that they support the extension of local industries. I believe that the Minister for Trade and Customs is an advocate of this policy. That the boot industry is doing well, however, is not a reason why wo should interfere with it; it is not exploiting the public by increasing prices, and it is not a monopoly. I served my time in the boot industry ; I knew it when it was a bad industry: 1 know that to-day it is a much better industry, so far as working conditions are concerned. I have visited footwear factories in various parts of the world, and I wore Australian boots at the Geneva Conference. Every delegate to that conference examined and admired the clothes which I wore; they had been made in Australia. I repeat, why should the Government deprive this industry of a portion of its business *imply because it has done so well? It is a new reasoning which I am sure the Minister cannot sincerely endorse. I ask him, therefore, to withdraw this item, and examine the possible effects that the proposed reduction of the duties will have. {: .speaker-KZR} ##### Mr White: -- The duties are quite adequate for the protection of the industry. If there are excessive importations, the position will be reconsidered. {: .speaker-KHL} ##### Mr HOLLOWAY: -- Again I ask the Minister, what reason has he for interfering with an industry against which there has been no complaint? What does it matter if the duty is too high, provided that Australian manufacturers are given the business, and no fault can be found with the manner in which the industry is carried on? I fail to understand why the Minister should be prepared to reduce the duty and so endanger the industry, if there is no complaint in respect of its conduct. {: .speaker-KZR} ##### Mr White: -- There are many reasons, [f the duties are too high, they should be reduced. {: .speaker-KHL} ##### Mr HOLLOWAY: -- What does the Minister mean by " too high " ? {: .speaker-KZR} ##### Mr White: -- Hitherto they were prohibitive; now they are at a reasonable level. {: .speaker-KHL} ##### Mr HOLLOWAY: -- Then I withdraw my statement that the Minister believes in supporting Australian industry. {: #subdebate-9-0-s25 .speaker-JPN} ##### Mr BLACKBURN:
Bourke .- I reiterate the question asked by the honorable member for Melbourne Ports **(Mr. Holloway)** ; what rate of duty does the Minister consider to be too high ? Earlier in the discussion of this schedule, wc were told that certain duties were too high because the industries concerned were making considerable profits. In this industry, however, very small profits are made; in fact a number of the businesses are showing no profits at all, prices having been cut to the bone. In my opinion there is no reason for reducing the protection afforded to this industry, which is supplying t«he requirements of the people at the lowest price that can reasonably be paid by the purchaser. It is not paying high wages, because of the extra ordinary internal competition, which arises from causes almost peculiar to the boat industry. The British United Shoe Machinery Company, a child of a British company which is itself a child of an American company, supplies any person who desires to commence operations in the boot trade with machinery. It does not actually sell him the machines; it leases them to him on terms that leave him always its debtor. I emphasize that always the promoter of the new enterprise owes a considerable amount of money to the company. If he fails in the business, a.3 very often he does, the company steps in, repossesses the machinery and proves for this debt against his estate. Competition is always prevalent because any foreman who believes that he can secure capital in order to start a factory is able to obtain the requisite machinery from this firm. In those circumstances there is not the slightest fear of a monopoly developing in the trade. The history of the 'boot trade in Australia is of considerable interest. Before the war it was carried on in a normal way. With the outbreak of war a large number of industries was paralyzed and unemployment became rife, but the boot trade escaped this fate owing to the exceptional demand for boots for the troops. If the boot operatives had been selfish they would have said : " We are going to keep this industry a preserve for our own union; we shall not admit anybody to the trade until all our own members are employed ". The union realized, however, that a vast number of skilled men in other trades - painters, house decorators and the like - had lost their employment and these persons entered the boot trade and speedily learned to use the machines. While the war was in progress the industry was in a flourishing state. It sold extensively to New Zealand and to the Malay States, and established a satisfactory market in South Africa. After the war, South Africa developed its own industry, and New Zealand gave preference to British boots, although refusing it to the Australian product. Consequently, this industry began to suffer considerably. The causes which I have narrated have kent the number of people manufacturing boots always at a maximum, which makes for keen competition in the trade. In fact, it is impossible to keep down the competition; it is also impossible to imagine any co-operation or combination between the manufacturers of boots for the reason that the British United Shoe Machinery Company is ever ready to start others in the business, knowing that its interests are secured if a new manufacturer becomes insolvent. The experience of the boot industry has proved that protection is not a panacea for the ills of the wage-earner; protection alone does not provide employment. I admit that; but I contend that, to remove protection from this industry will 'be to endanger its existence. In my opinion the trade is already in grave danger, not only in Australia but also in other parts of the world ; even in Great Britain it is in a precarious condition. After the Great War, the manufacturers of footwear were called upon to meet competition from Czechoslovakia; and a boot industry sprang into being in Switzerland where, hitherto, it had not been established. The industry in Australia could quite easily be wiped out of existence by injudicious reductions of the tariff, and I urge that it is not desirable to experiment with an estab- lished industry in which no abuses are known to exist and which supplies the public at reasonable prices. {: #subdebate-9-0-s26 .speaker-JTY} ##### Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954 -- I am becoming rather accustomed to hearing honorable members of the Opposition, when speaking on tariff items, commisserating with certain companies because they are not earning big profits, and on other occasions attacking other companies because they are making big profits. I believe that if there is one industry which is natural to this country and which should be able to carry on without any substantial measure of protection, it is the boot industry. Boots, I remind honorable members, are worn by every person in the community; moreover, the industry has practically a monopoly of the market. It has not been centralized in one or two cities, but is fairly well distributed throughout the Commonwealth. It obtains ail its raw materials within Australia. I ask honorable members to consider the difference between the price which hides and skin3 realize and the price after they have been converted into leather; and, further, the difference between the prices of leather to the community before and after it has been manufactured into boots. There is any amount of room for inquiry by the Tariff Board into that aspect of manufacture. The honorable member for Melbourne Ports **(Mr. Holloway)** stated that he believed that the public was fairly well satisfied with the present position. Representing a large body of people, who are not generally considered to be affluent in the usual application of the term, I know that the cost of boots in Australia is one of the big subjects of complaint, having regard to the fact that all of the raw material needed is produced in our own country. {: .speaker-F4U} ##### Mr Forde: -- Does the honorable member favour the abolition of the duty? {: .speaker-JTY} ##### Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954 -- I consider that this industry should be capable of carrying on without the protection afforded by this duty. I have no doubt that there is a wide gulf between the attitudes of honorable members of -the Opposition and of myself on this matter, but I consider that the Government is following the right course in reducing the duty to a reasonable limit. The protection granted to it has been too high and every increase of duty on imports of the ordinary, every-day things of life tends to put up the cost of living and the cost of production. The committee would be well advised to endeavour to reduce the duty to the lowest limit possible without endangering the industry. Question - That the amendment be agreed to - put. The committee divided. (Chairman - Mr. Prowse.) AYES: 33 NOES: 24 Majority . . 11 AYES NOES Question so resolved in the affirmative. Amendment agreed to. Item, as amended, agreed to. Items 331 and 332 (with amendments of 20th March, 1936, incorporated) agreed to. Item 333 agreed to. Division 13. - Paper and Stationery Item 334 (Wrapping, greaseproof and cellulose paper). **Mr.** HOLLOWAY (Melbourne Ports) paper is not made in Australia, and must, therefore, be imported. Until recently, all the printed cellulose wrapping paper was also imported, but recently a firm in my electorate installed a modern and very expensive machine with which it can print paper of this kind in three separate colours simultaneously. Transparent cellulose paper is used for the wrapping of confectionery, various types of foodstuffs, cigarettes, &c, and is in great demand because of its clean and attractive appearance. It is used chiefly in connexion with luxury items of one kind and another, and, therefore, the protection of an industry associated with its preparation in Australia should cause no uneasiness to the representatives of the primary producers. The nearest approach to it that can be produced in Australia is mica, which, of course, is much dearer. The Melbourne firm which I have mentioned has recently supplied printed wrappers to the manufacturers of " Craven A " cigarettes, and the fact that the orders have been repeated is proof of the quality of its products. It has also prepared and printed Easter egg wrapping, &c, for articles now on sale in Melbourne. However, the Japanese have already copied the designs prepared by this firm, and are now sending out to Australia cellulose paper wrappers printed in Japan in exactly the same designs. It seems to me that the Customs Department has made a mistake in including designprinted cellulose paper in the same sub-item as plain cellulose paper. While it is right and proper that the plain paper, which is not manufactured here, should be admitted free, or at a low rate of duty, it is not right that printed paper should he admitted on the same terms, when the printing can be done in this country. The Melbourne firm employs a number of artists, block makers, engineers, chemists, and male and female operatives. The total number may not be great at the present time, but if foreign competition were eliminated, or substantially reduced, probably ten times as many people could be employed. This is the kind of industry that should be encouraged, because it provides employment for those who are unable to do hard, manual work. One of the tragedies of the economic depression is that men unaccustomed to manual work have beer thrown out of their ordinary employment, and are unable to do the ordinary relief work offering. I urge the Minister to strike out sub-item 334 c as it appears now in the schedule, and divide it into two parts, so that plain cellulose paper and printed paper of that kind, may be dealt with separately. In the case of other kinds of wrapping paper, the plain and printed varieties are, in fact, kept separate. This firm has not been treated so well as other firms which import plain, printed and fancy papers for wrappers. I should like the Minister to review the position and temporarily to withdraw the item so that the firm concerned may he able to carry on. lt will not be able to continue unless he does so. It paid a large duty on the machine it imported, and that it can do first-class work is proved by the repeat orders. The company -will be able to provide employment of an artistic nature for men unfitted for the work to which many of them have been forced by the existing economic conditions. Cellulose wrapping is new but its use will grow because of its appeal to the public. Medical men have recommended it because it is transparent, tough, and does not hold dust. It has the added advantages of being unusual, and of being admirably suited for the packing of all kinds of foods, and for the wrapping of gifts. Some of it is stamped " Christmas " and " Easter ". {: #subdebate-9-0-s27 .speaker-KHL} ##### Mr HOLLOWAY: -- That is the case the firm is making. It knows that the raw material must be admitted free from the United Kingdom; the paper is imported in large sizes or in small pieces ready for use a3 wrappers. The company has a machine which can cut the paper into any sizes, but it is not objecting to the admission of cut paper. But having a three-colour printing plant, and qualified artists, chemists and blockmakers capable of producing design printed wrappers, it asks that the sub-item be divided so as to separate the fancy papers from the plain. {: .speaker-KK7} ##### Mr Jennings: -- Is this paper used for all classes of wrappers? {: .speaker-KHL} ##### Mr HOLLOWAY: -- The company says that it will be. For some time it has been in general use in America, where it is popularly known as cellophane. It can be used for fancy goods, gifts, cigarette packets, Easter eggs, confectionery, lining, &c. It is so hygienic that it is bound to be used for wrapping all kinds of foods. The legal advisers of the South Melbourne company are of opinion that some mistake has been made in the wording of the item. The company was sure that the designing and the colouring part of the business would be protected ; otherwise- it would never have imported a special and up-to-date printing machine at great cost. {: #subdebate-9-0-s28 .speaker-KK7} ##### Mr JENNINGS:
Watson .- I think the honorable member has made out a very good case for a young Australian industry. Although still in its infancy, if given encouragement it will develop. If the material referred to by the honorable member is what I have in mind there will be a large demand for it for wrapping purposes. {: .speaker-KZR} ##### Mr White: -- The company is not making the material; it is merely printing it. {: .speaker-KK7} ##### Mr JENNINGS: -- Yes, but if the industry is developed in the way that is said to be possible, it may assume large dimensions. This paper makes an attractive wrapping for many classes of fancy goods, as well as foods and cigarettes. {: #subdebate-9-0-s29 .speaker-KZR} ##### Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP -- The position is that this firm is engaged in a process of printing. It is entitled to get its machine in free of duty if no similar machine is made in Australia. If the firm has not already made application for a remission of duty, I have no doubt it intends to do so. The cellulose paper is admitted duty free from Britain, and at 15 per cent., the minimum allowed under the Ottawa agreement, from foreign countries. If there is any printing on if, it comes in at the higher rates, namely, British preferential, ls. per lb., or ad valorem., 45 per cent., and intermediate and general, ls. 6d. per lb., or ad valorem, 65 per cent. {: .speaker-KHL} ##### Mr Holloway: -- Then can the Minister explain what is meant by the item " cellulose transparent wrapping paper, plain, coloured or design printed"? {: .speaker-KZR} ##### Mr WHITE: -- Design printed cellophane comes in free from Britain, but if it bears any wording in print it is subject to a much higher rate. It is a matter of classification. I assure the honorable member that this industry will be watched. The output at present is small in comparison with the importations. If, at any time, the output is considerable, and it is not going to hurt other industries such as cigarettes and confectionery, which use this wrapping, its claims for higher protection will be considered. {: #subdebate-9-0-s30 .speaker-KHL} ##### Mr HOLLOWAY:
Melbourne Ports -- I am glad to hear the Minister's assurance. If he is making a mistake, I am sure he will rectify it. This firm has" had courage in starting the industry, and, so far, has had little return on its investment. If the Minister defers action for a few months, while he watches the progress of the enterprise, the delay may prove fatal. The firm asks that designprinted paper be protected. {: .speaker-KZR} ##### Mr White: -- The firm is apparently asking that it be classified as printed paper. The samples produced by the honorable member bear a design, but there is no lettering on them. Item agreed to. Item 338- >By addinga new sub-item (e) as follows: - " (e) Posters advertising films admissible under item 320(c) (2) (a ) (1 ) - British, free; intermediate, free; general, free." {: #subdebate-9-0-s31 .speaker-KZR} ##### Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP -- I move - >That the item be amended by adding the following to sub-item (e) : - "And on and after 2ndApril,1936 - {: type="a" start="e"} 0. Posters advertising films admissible under item 320(c) (2) (b)- British, free: intermediate, free; general, free." Provision is made under the proposals at present before the committee for the admission free of duty of posters advertising educational films admitted under item 320 c 2 *b* 1, for which a certificate has been issued by the International Educational Cinematographic Institute, which body is recognized under the League of Nations Film Convention. It is now desired that duty-free admission be extended to posters advertising other approved educational films which are admitted under item 320 c 2 *b* of the Customs Tariffs 1933. That is the purport of the amendment. Amendment agreed to. Item, as amended, agreed to. Item 340 agreed to. Division 14 - Vehicles. Items 352, 355 and 357 agreed to. Item 359 - >By omitting the whole of sub-item (e) and inserting in its stead the following sub-item: - "(e)Parts of bodies enumerated in para graphs (1), (2) and (3) of sub-item (d), viz. : - > >Pressed metal panels, other - > >For single-seated bodies - per lb., British, 9d. Per complete set - intermediate, £20; general, £20. > >And in respect of sub-paragraph > >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. per lb.- British, . 06d." {: #subdebate-9-0-s32 .speaker-KIX} ##### Mr HUTCHINSON:
Indi .- I move - >That the item be amended by inserting the. following in sub-paragraph (a) paragraph (2) of sub-item (e) : - "And on and after 2nd April, 1936 - > >For single-seated bodies, per lb., British, free;per complete set, intermediate, £20; general, £20." If this amendment be carried, I intend to move that the other articles in the sub-item be admitted free from the United Kingdom, retaining the existing intermediate and general rates. Here is an opportunity for us to do something that will be of real value to Imperial trade, something that will lead to the production of cheaper cars in Australia, give greater individuality to motor bodies, and have a tendency to spread motor body-building instead of having it concentrated in one State. Properly handled, the suggested free entry for British panels will ultimately lead to the establishment in this country of British companies for the manufacture of motor bodies. I shall deal with that point in more detail later. For many years I have regarded the high duties on motor bodies and panels as one of the scandals of the Australian tariff. I have no hesitation in saying that hundreds of thousands of pounds have been paid by Australian motor-users over and above what they should have paid. That that should happen in a country that needs, above all else, cheap transport, is beyond my comprehension. Under the tariff British cars have always fared worst. Speaking generally, the smaller or cheaper car has been the most penalized, because, until recently, the duty on panels has been prohibitive, and that od bodies so high that the impost has been relatively more on a smaller car with a cheaper body than on a larger car with a dearer body. The accusation was hurled across this chamber, in an earlier debate, that Britain was not manufacturing cars suitable to Australian conditions. If that remark had been made some years ago, I should have been more or less in agreement with it. Of the smaller runabout cars for city use, Britain has been making suitable types for a number of years, but in respect of cars for the highways and byways of Australia, it had not., until recently, challenged in this market. To-day we are on the verge of a new era in the manufacture of motor cars. When abroad last year, I noticed that a really serious attempt was being made by two or three firms to build a car definitely and eminently suitable for Australian conditions - a car suitable not only for the paved highways, but also for the back country, with sufficient power, and with acceleration comparable to that of the popular American cars. I say, without fear of contradiction, that already a number of British cars is available to challenge seriously the American cars in this market; nevertheless hardly one of them has appeared on the roads, because of the delay occasioned by difficulties with regard to motor bodies and panels caused to a large extent by the duties adopted by the Commonwealth Government. Production was under way at the Morris, Wolsley and Humber factories, in Great Britain, in the latter part of last year, so that cars would be in Australia in time for release early this year. Morris chassis were landed in Australia before the end of last year. Tenders for bodies had been let as early as the 6th September, 1935, for delivery commencing at the latter end of December; but the first body was not delivered until the 20th March. The company which distributes these cars had fixed its selling policy in anticipation that the new model would be available before the 1936 competitive American cars were on the market, so the delay caused serious inconvenience and financial loss. {: .speaker-F4U} ##### Mr Forde: -- Did the Morris distributors approach General MotorsHoldens Limited for bodies? {: .speaker-KIX} ##### Mr HUTCHINSON: -- They accepted tho tender of Ruskin Motor Bodies Limited, Melbourne. I assume that its tender was the lowest of a number received. There are four principal motor body-building firms in Australia - General Motors-Holdens Limited, Ford, T. J. Richards and Sons, Adelaide, and Ruskin Motor Bodies Limited. Martin and King, of Melbourne, also build a good class of body, and there are, in addition, a number of small " back-yard " body-builders in the various States. General Motors-Holdens Limited, as the name denotes, is predominantly an Australian offshoot of an American concern. It builds for the trade, but primarily manufactures bodies which are distributed by General Motors. Therefore, it is only reasonable to assume that it would fulfil its own requirements before accepting orders from competitive firms. {: .speaker-F4U} ##### Mr Forde: -- The evidence before the Tariff Board indicates that it is only working at 60 per cent, of its capacity. {: .speaker-KIX} ##### Mr HUTCHINSON: -- The managing director of General Motors-Holdens Limited,, in his evidence before the Tariff Board, stated - {: type="i" start="1"} 0. . if a tender waa being called for Plymouth bodies we would not be prepared to quote some body-builder in Brisbane, say. who might want to compete with *us* in the building of bodies. You could not expect us to. We are body-builders - not panel-makers. On this analogy commonsense suggests that it would not manufacture car bodies for the distributors of Morris or Wolseley cars until it had supplied its own requirements. {: .speaker-KZR} ##### Mr White: -- That is merely an assumption. {: .speaker-JOM} ##### Mr Beasley: -- The honorable member has no evidence in support of that statement. {: .speaker-KIX} ##### Mr HUTCHINSON: -- The Ford Company of Australia confines its attention to the manufacture of Ford bodies, so it calls for no further comment. T. J. Richards and Sons, Adelaide, are linked with the Chrysler Corporation Limited. The fact that one of its directors in Adelaide has been nominated to the .board of Chrysler Motors is further evidence of American intrusion through this organization. Ruskin Motor Bodies Limited, the fourth of the principal motor bodybuilding firms, is on the verge of financial collapse. Its shares are heavily depressed on the stock exchange, and it will have extreme difficulty in carrying on. {: .speaker-KZR} ##### Mr White: -- That is not a fair statement to make. {: .speaker-KIX} ##### Mr HUTCHINSON: -- The Minister knows that what I say is true. {: .speaker-JSC} ##### Mr Brennan: -- The honorable member should have hesitated before making a statement of that kind in the committee. {: .speaker-KIX} ##### Mr HUTCHINSON: -- It is generally known that the company is in a difficult financial position. As I have explained, the Morris distributors had to wait until the 20th March before obtaining delivery of the first body although delivery was promised on the 28 th December. They had ordered 500 bodies for delivery within twelve months, but nearly three months of the selling season was over before the first body was delivered and it is doubtful if the distributors will be able to dispose of the full number within the remaining nine months of the year. Because of the delay, they were not in a position to fulfil orders, and were obliged to lend cars to people who had contracted to purchase Morris cars. The unsatisfactory condition of the motor body-building industry in Australia affects seriously the trading position of Australian firms handling British cars at prices competitive with American products. Other instances of delay have been brought to my notice. One firm which distributes English cars has advised me that although the 1936 model was on sale in Great Britain on the 26th .September, 1935, it; does not anticipate delivery of Australian bodies far these chassis until August or September of this year. The Tariff Board stated definitely that the manufacture of motor bodies in Australia, whether for American or English cars, is uneconomic. " This industry ", the board stated, " is an outstanding ex ample of uneconomic production in Australia". The board's view is borne out by a statement of comparative prices. For example, a 10 horse-power car body in England costs about £36 ; in Australia the cost last year was £97 2s. 6d., and this year it is £120 10s. The price of the chassis in England is only £74, or on the lowest price stated for bodies, approximately £23 below the price of the car body in Australia. {: .speaker-KZR} ##### Mr White: -- Those prices are in different currencies. {: .speaker-KIX} ##### Mr HUTCHINSON: -- Expressed in the currencies of Great Britain or Australia, the position is equally unsatisfactory. {: .speaker-JOM} ##### Mr Beasley: -- What wages are paid by the manufacturers in Great Britain? {: .speaker-KIX} ##### Mr HUTCHINSON: -- According to the Tariff Board, wages in England are approximately the same as are paid at the Ford Company's works at Geelong, Victoria. In Great Britain a 21 horse-power saloon body costs £59 5s. ; in Australia the price is £137 lis. For a slightly heavier car the English price is £91, and for a similar body an Australian builder quoted £231 and £264 for the years 1935 and 1936, respectively. The higher prices for car bodies prevailing in Australia make i1; extremely difficult for distributors of British cars to meet American competition. The Tariff Board in its review of the industry made two decisions. It recommended a duty of 6d. per lb. on panels not fabricated, and 9d. per lb. on panels fabricated. It was believed that this reduction would be of some assistance to British manufacturers, but apparently it has not, because it has been found practically impossible to import panels. Only one company has made an attempt to do so, and it has been obliged to import fabricated panels. The question has been asked: If these particular companies cannot obtain bodies from Ruskin, and thus are unable to place their cars on the market in the best selling months of the year, why do they not endeavour to obtain them from some other manufacturer? I presume one reason is the acceptance of a tender which binds them but the English distributor in Australia cannot pick and choose. If he obtains his bodies from any of the smaller firms he must pay a higher price for them, with the result that his car cannot compete with the American product in the same price class and he is therefore excluded from that sales field. {: .speaker-JOM} ##### Mr Beasley: -- He could fix a term in the tender. {: .speaker-KIX} ##### Mr HUTCHINSON: -- The tenderer for bodies for the Morris car, to whom I have referred, practically gave an undertaking that the bodies would be available on a certain date. He was at great pains to explain that, although he had not lived up to similar promises made previously, that would not occur again. Unfortunately, however, it did. A further question asked is: Why do not these English manufacturers establish plants in Australia? Any one who reads the report of the Tariff Board will find the answer in that document. The board stated quite definitely that, owing to the high cost of dies, the manufacture of bodies is uneconomical unless the cost of making the dies can be distributed over a large volume of work. At page 12 the board gave interesting statistics in regard to the number of bodies needed. The figures for 1934 were - Roughly 26 per cent. have a demand of under 300, and 38.3 per cent. a demand of between 300 and 1,000. Honorable members must realize that without mass production it is uneconomic to engage in this enterprise. It is said that General Motors has seen fit to establish a plant in Australia. That concern was assured of volume of production before it spent one penny in this country. Although it suffered losses during the years of the depression, now that times have improved it is making fine profits. With the existing volume of business for any competitive English car, would any person in Australia invest one penny in the production of bodies? The Minister, himself, would not do so. Yet these English firms are expected to lose money by engaging in the enterprise before volume of production is assured. Such an argument is not only unconvinc ing,but is almost fatuous. Honorable members may ask whether the amendment, if agreed to, would be of real value to English manufacturers. The argument is advanced that, as only a few pounds on each body are involved, it would not matter whether the amendment were carried or not. I cannot agree with that. On a small ten horse-power car the difference would amount to about £13. On a body weighing 450 lb. - the bigger class which is now being built for all Australian conditions - the difference would be about £17. Honorable members know that a distributor fixes his margin of profit on the cost of the chassis, duty paid, plus the cost of the body. A reduction of the price of the complete car would mean a corresponding reduction of the margin allowed by the distributor for his profit. {: .speaker-JOM} ##### Mr Beasley: -- What guarantee have we of that? {: .speaker-KIX} ##### Mr HUTCHINSON: -- The necessity to fix the price of the car at such a figure as will allow of competition with American cars. The Government has laid upon it by the Ottawa agreement the obligation to remove primage from motor-car bodies. {: .speaker-KZR} ##### Mr White: -- Bodies are not specified. The duties throughout the protective range have been cut in half. {: .speaker-KIX} ##### Mr HUTCHINSON: -- Bodies are not specifically stated, hut they come under the heading of British goods, from which the removal of primage was promised. The removal of primage from motor-car bodies, in conjunction with the other reductions I have mentioned, would make a substantial difference in the selling price of such a car in Australia. The closer British manufacturers approach to the American car in the competitive price field, the more will sales be facilitated. I have expressed the belief that British cars will become competitive with American cars. If the distributors are able to obtain bodies they will place the cars on the market in the best selling months of the year. {: #subdebate-9-0-s33 .speaker-K0D} ##### The TEMPORARY CHAIRMAN (Mr Collins:
HUME, NEW SOUTH WALES -- The honorable member's time has expired. {: #subdebate-9-0-s34 .speaker-F4U} ##### Mr FORDE:
Capricornia .- The Opposition cannot support the amendment. I am astonished that the honorable member for Indi **(Mr. Hutchinson)** should move it, because he invariably accepts the recommendation of the Tariff Board, and the duties in the schedule are those which have been recommended by the board. He supported its recommendation in regard to the duties on tobacco, which amount to 250 per cent. Having given full consideration to the points raised by the honorable member, the board commented as follows at page 15 of its report: - >The industry of panel making has been consistently protected by prohibitive rates. This has directly encouraged concentration of large capital expenditure in a few factories, with an extraordinary concentration in South Australia, despite the small consumption of car bodies in that State. To make a change from a prohibitive duty to exemption from duty on British panels would be too drastic a reversal of the policy of the past seventeen years. The honorable member for Indi did not read that finding. It does not suit him and other honorable members opposite, because they want certain imports to come in free, to the detriment of Australian industries. {: .speaker-JOM} ##### Mr Beasley: -- What is behind this advocacy of Morris cars? {: .speaker-F4U} ##### Mr FORDE: -- I do not know why there should be this grave anxiety on behalf of Morris and other English cars. We would welcome the establishment in Australia of a factory for the manufacture of bodies for British cars, similar to the enterprises established by the Ford Company and General Motors. The history of the duties on motor bodies dates back many years. In 1917, the Government of the day proposed to prohibit, under the War Precautions Act, the importation of motor cars in order to conserve shipping space. The destruction of shipping during the war necessitated that action. The motor distributors strongly protested, on the ground that it would mean the closing down of their businesses. The Government eventually agreed to the suggestion that the importers shouldbe allowed to import one complete car to every two chassis, thereby economizing in freight space. Thus began in Australia the body-building industry, and its growth has been an industrial romance. It now gives employment to 10,000 persons. The Government's acceptance of the proposal involved the motor-body builders in an undertaking to equip themselves with plant, machinery, and sufficient capital to cope with any business entrusted to them. The affairs of the firms concerned were investigated by the Government which, being satisfied with the results, promised that the industry would have continuing protection, provided there was no exploitation. No matter what Government has been in office, it has been satisfied, from time to time, that exploitation has not been practised. The traders accepted the Government's conditions in view of the protection extended to their businesses. Following upon an investigation after the war, increased duties on motor bodies were imposed on and from the 20th March, 1920. To prevent the importation of bodies in an unassembled condition, panels were made subject to duty at the following rates, from the same date : - Since that date the duties on panels were not altered until the reduction was made which forms the subject of this debate. That reduction represents a drop of 75 per cent. compared with the duties previously imposed. The Minister has received some complaints concerning delay in the supply of bodies for English cars. I understand that an officer of his department made an investigation of this matter. Has the Minister yet received the report of his officer and, if so, will he make it available to honorable members ? {: .speaker-KZR} ##### Mr White: -- It was a departmental report, and it completely exonerated the company. {: .speaker-F4U} ##### Mr FORDE: -- The honorable member for Indi tried to make us believe that General Motors-Holdens Limited were so busy turning out bodies for American chassis that they could not build bodies for English chassis; but the fact is that the works are only operating at 60 per cent. of their capacity. No difficulty would he experienced by this organization in supplying bodies for all the English chassis for which they are needed. Although only four large body-building organizations are operating in Australia, about 40 smaller factories are scattered throughout the Commonwealth. It is said, sometimes, that no ill-effect would follow the granting of permission to import bodies for, say, 100 English motor cars annually, but our view is that this would be the thin edge of the wedge. If importations of 100 bodies a year were allowed it would soon be found that requests would be made for a much larger number of bodies to be imported each year. The representatives of English motor manufacturers tell us that the importation of English car bodies would not make any difference to the Australian motor body-builders; but that is not the case. Every English motor body imported would mean that that much less work would be available in an Australian factory. Certain honorable members who belong to the corner party, and some honorable gentlemen who sit opposite, seem to take a delight in putting the Australian manufacturers on the gridiron, and compelling them to justify every atom of protection granted to their various industries; but English manufacturers, it would appear, are not to be criticized in any respect. They are sacrosanct in the eyes of the Government. No criticism is offered of the wages and conditions that prevail in English factories, but Australian manufacturers are said to he rapacious and unreasonable. At least we can control, in a measure, the factories operating in this country. We desire that Lord Nuffield should organize his industry in Australia. We should be very pleased to see him establish a factory here. As a party we would not offer any objection to the granting of primage concessions in respect of chassis imported from Great Britain. The duty of 6d. per lb. provided in this schedule represents only from £4 to £8 on a motor car body. It must be remembered that English cars provide only 21.8 per cent. of Australia's motor car requirements. As a matter of fact, about 6,500 motor bodies a year would be sufficient for all the English motor chassis sold on the Australian market, and no difficulty would be experienced in manufacturing the whole of these with the present plant available here. General Motors-Holdens Limited are now making 50 per cent. of the bodies required for English chassis sold in Australia. In other words, they are manufacturing the bodies required for Vauxhall and Austin cars. In my opinion, it is time that the representatives of the English motor car manufacturers got down to business and managed their marketing properly. There is much room for improvement in the distribution of British cars in Australia. The fault, if there be any fault, does not lie with the Australian manufacturers. If panels were allowed free entry into Australia, the work available in the motor body industry in this country would be limited practically to unskilled labour. That is not in the interests of the youth of the Commonwealth, who are entitled to training in specialized engineering, drawing, die design, and die-making. Between 500 and 600 men are at present engaged in this class of work in Australia, but if panels were imported all these men would be put out of employment. Motor bodybuilding is not a monopoly. Some honorable gentlemen opposite would have us believe that this industry is in the grip of an American combine; but four large body-building organizations are operating within the Commonwealth, in addition to 40 smaller factories. If panels were imported free into Australia, large quantities of Australian raw material now used in this industry would not be required. Last year one of the largest motor body-building plants in the Commonwealth used the following quantities of material in the course of its operations - >Steel - 1,147 tons. > >Fabric and Hoarding - 390,600 yards. > >Leather - 1,677,400 square feet. > >Timber- 3,029,000 superficial feet. > >Duco - 212,700 gallons. > >Nails -511/2 tons. > >Screws - 298,000 gross. This company paid £1,080,000 for Australian materials, and £1,000,000 in wages to Australian workmen. I point out that Ruskins Limited, of Melbourne, make bodies for Morris and Hillman cars; and T. J. Richards & Sons, of Adelaide, make bodies for Rover cars. The Ford organization, of Geelong manufactures bodies exclusively for Ford cars. Any of the English motor manufacturing enterprises could, I believe. make a contract with General Motors-Holdens Limited to supply them with motor bodies. Of course, they could not get the same price per body for a contract for 100 bodies as they would get for a contract for, say, 3,000 bodies; but that would apply also to any overseas motor body manufacturing concern. Contracts for small quantities are always less satisfactory in price than contracts for large quantities. {: .speaker-KIX} ##### Mr Hutchinson: -- That is one of my arguments. {: .speaker-F4U} ##### Mr FORDE: -- The Australian *motor* body manufacturers should not be blamed for that state of affairs. {: .speaker-JOM} ##### Mr Beasley: -- The blame rests with the English motor car manufacturers, who have not, so far, produced a car so suitable for Australian conditions as some of the American cars. {: .speaker-F4U} ##### Mr FORDE: -- That is quite true. I believe that if any of the English motor car manufacturers offered a car suitable to Australian conditions, the market would quickly be captured by Great Britain-, for there is a strong sentiment in Australia in favour of British productions as against American productions. Lord Nuffield has had quite a lot to say on this subject - so much, in fact, that the idea might be abroad that his organization provides a substantial proportion of the motor cars purchased in Australia. The fact is that the Morris organization supplies only 2.5 per cent, of Australia's motor cars. Between 18 per cent, and 19 per cent, has been the English share of the local motor car market, except in the few years when the exchange rate favoured England. The main point for the Minister to consider is that if English panels were allowed free entry into Australia, discrimination would be shown against an important Australian industry, to "its great detriment. No doubt English manufacturers, under those conditions, would force their distributors here to use English panels, and once such a practice commenced it would be extremely difficult to prevent its continuance. We ask the Government to adhere to the recommendations of the Tariff Board on this item. I do not see how the board's recommendations can be justly rejected. The Labour party is quite prepared to accept the board's recommendations when it considers them to be reasonable; but it is not willing to support the board blindly, particularly when a blow is likely to be struck at a great Australian industry. The recommendation of the board provides for a 75 per cent, reduction of duty, but the Australian motor body-building industry is now established and we believe that under the rate of duty recommended by the board, the local producers will be able to retain most of the business they have won. I hope that the Minister will not allow himself to be cajoled into accepting any reduction of the rates recommended by the board. It must be borne in mind that tonnage is a big consideration in motor body building. Every 100 motor bodies imported into Australia must inevitably have the effect of increasing overhead costs in Australian factories. This, in turn, would make local bodies more expensive. At least 10,000 people are directly employed in the motor bodybuilding industry of Australia, and another 10,000 are directly employed in subsidiary industries. In all, about 100,000 persons are dependent upon this Australian industry. The Government, therefore, should not do anything to jeopardize the continuance of the industry. Australian material to the value of more than £1,000,000 was bought by one motor body-building organization last year. Even the honorable member for Indi must admit that a duty of 6d. per lb. would be of some assistance to importers who require relatively few bodies every year. The Right Honorable J. H. Thomas, in addressing the Empire Marketing Board in Great Britain recently, declared that preference should be given to the products of British factories first, and to those of dominion factories second. We believe that that is a good slogan for the Australian people. Let us support our own factories first and British factories second. If the British motor manufacturers would build a car as suitable as the American cars for Australian requirements and Australian road conditions, they would quickly capture the Australian market, for our people have no desire to give preference to the American manufacturers. Let the British motor car manufacturers pull the mote from their own eye, before they behold the beam in the eye of the American manufacturers ! {: .speaker-JOM} ##### Mr Beasley: -- The British cars are not suitable for Australian conditions. {: .speaker-F4U} ##### Mr FORDE: -- That is so. The springing system and the power are less satisfactory in Australia than are those of the American cars. I am quite sure that for sentimental reasons an overwhelming preference will be shown for British cars as soon as vehicles of the right type are placed on the market in Australia. The Labour party is totally opposed to the withdrawal, of the duties on panels. 1 am amazed that any honorable member opposite should have had the audacity to move an amendment with this object, and particularly that the honorable member for Indi should have done so, for only last night he was urging that the recommendations of the Tariff Board should be adhered to by the Government. {: #subdebate-9-0-s35 .speaker-KZR} ##### Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP 9.5S". - It is strange indeed to hear the Deputy Leader of the Opposition **(Mr. Forde)** exhort the Government to adhere to the recommendations of the Tariff Board. {: .speaker-F4U} ##### Mr Forde: -- The Tariff Board is not always wrong. {: .speaker-KZR} ##### Mr WHITE: -- We have often heard the honorable gentleman speak in an entirely different strain. It is strange also that for once I find myself in agreement with much of what was said by the Deputy Leader of the Opposition. But of course, the Government believes in giving effect to the recommendations of the board. {: .speaker-KMZ} ##### Mr Martens: -- -Has the Minister never rejected a recommendation of the board? {: .speaker-KZR} ##### Mr WHITE: -- Not in regard to a proposed British duty. The honorable member for Indi **(Mr. Hutchinson)** has not made out a case for his amendment. {: .speaker-JOM} ##### Mr Beasley: -- He himself drives an American cnr. {: .speaker-KIX} ##### Mr Hutchinson: -- It is difficult to get en English ear. {: .speaker-KZR} ##### Mr WHITE: -- The honorable gentleman has made a plea for the free admission of British panels into Australia, and has alleged that it is difficult for British motor car manufacturers to obtain Australianmade bodies to place on their chassis. He referred specifically to one manufacturer {: .speaker-KIX} ##### Mr Hutchinson: -- I gave the name of one company as an instance. {: .speaker-KZR} ##### Mr WHITE: -- The honorable member said some unkind things about that company which I shall not repeat, because they might do it an injury. In its defence, I might say that as it employs 900 nien, it is of some value to Australia as an employment factor. The honorable member should not endeavour to destroy the company by arguments such as he used, because one firm has not been able to obtain deliveries of a certain type of car. In reply to the allegations which have been made, the company admits that difficulty was experienced in making delivery of one particular style of car, and pointed out that it had difficulty in obtaining skilled labour, which is testimony to the efficacy of the Government's commercial policy. It contends that the importing company to which the honorable member referred in particular has given great trouble in not taking deliveries when they were rapid; that although deliveries were slow in this particular style of car for several reasons, it would not take delivery of other body styles, of which the motor body-builders have had a supply on hand. The honorable member did not say anything about that. Other honorable members know the facts, however, because I have discussed them with them. That importing firm accepts the lowest tender of a motor bodybuilding firm whose efficiency is criticized,, but it does not go to the biggest concern in Australia for a quote. That is the whole reason for the complaint. The amount of propaganda and pressure which is brought to bear by the representatives in Australia of the British motor industry exceeds that in respect of any of the other tariff items that have been discussed. The Government is aware of the difficulties that arise. It definitely stands for a preferential tariff policy in favour of British. manufacturers. Australia has extended preferential treatment to Great Britain for 27 years. British chassis are admitted free of duty. {: .speaker-JVR} ##### Mr Nairn: -- Only skeleton chassis. {: .speaker-KZR} ##### Mr WHITE: -- Nevertheless, they come in free, and foreign chassis - American, French, German and Italian - have to pay a duty of 321/2 per cent. Britishassembled chassis are dutiable at 5 per cent., and foreign at 43 per cent. The Canadian rate is 15 per cent. {: .speaker-KOQ} ##### Mr McCall: -Any additional parts are Australian made. {: .speaker-KZR} ##### Mr WHITE: -- Quite so. Primage is also charged, and in the case of the British chassis, primage is higher because generally the British manufacturers charge more for their chassis. {: .speaker-KNX} ##### Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- Has the department any knowledge of chassis made in the United Slates of America coming here through Canada? {: .speaker-KZR} ##### Mr WHITE: -- That charge has been made by British importers, but I challenge it. I have asked the officers of the Customs Department stationed in the United States of America to try to find out if anything of the sort was being done, but no single case has been brought to light. These allegations are often made, but no details are supplied. {: .speaker-KEM} ##### Mr Fairbairn: -- How many officers are employed in the office in New York? {: .speaker-KZR} ##### Mr WHITE: -- Two or three officers are employed there, and they are quite capable of coping with the work. They are our own officers. {: .speaker-KEM} ##### Mr Fairbairn: -- They are in a position to comb the country for information? {: .speaker-KZR} ##### Mr WHITE: -- I do not know how the honorable member thinks they can do their work if they go snooping round the motor car factories; they inquire into definite complaints. If any honorable member can bring forward a single complaint, I undertake to have it investigated. The motor body industry has grown up over a number of years ; in Adelaide alone there are at least 12,000 men directly or indirectly engaged in it. Does any honorable member say that the Australian industry is not making efficient motor bodies? In a former tariff debate in 1933, there were several critics of Aus tralian bodies, but I do not think that any complaint can bo made now. At present difficulty is experienced only in connexion with deliveries. {: .speaker-KIX} ##### Mr Hutchinson: -- And cost. {: .speaker-KZR} ##### Mr WHITE: -- But that applies to most commodities. None of us can buy as cheaply as we would wish. With increasing importations, the difficulty of obtaining supplies may be overcome. In the past, for instance, there has been difficulty in obtaining supplies of galvanized iron, and during the last eighteen months I have admitted free of duty over £250,000 worth of galvanized iron. {: .speaker-KK7} ##### Mr Jennings: -- Can motor cars be admitted duty free? {: .speaker-KZR} ##### Mr WHITE: -- There is no provision for the admission of motor cars duty free. Admission under by-law is permitted in respect of articles essential to primary or secondary industries, but not manufactured in Australia. If the honorable member wanted a particular machine, not manufactured in Australia, he would be permitted to import it duty free. But does any honorable member suggest that a motor car is in the same category? During the eight months of this financial year importations of motor cars have increased enormously. The honorable member for Flinders, quoting an answer which was supplied to a question asked in another place, said that the percentage of British cars to the total number imported into Australia was very low. It is essential to know that the number of British cars imported into Australia is now nearly 50 per cent. more than when that answer was given. During the eight months of the last financial year, 6,591 British cars were imported into Australia, whereas during a similar period in the present financial year, 9,797 were imported, an increase of nearly 50 per cent. The importation of American cars increased from 14,393 to 18,081, an increase of 33 per cent. ; but during the same period the importation of Canadian cars rose from 10,475 to 21,752, or practically doubled. Are not the products of the Canadian manufacturers Empire cars as well? {: .speaker-KOQ} ##### Mr McCall: -- The Minister referred to American cars; what proportion of those cars was manuf actured in America ? {: .speaker-KZR} ##### Mr WHITE: -- I am referring to chassis. Most of the chassis are imported into Australia, and thebodies, accessories, tyres and tubes, storage batteries, shock absorbers, bumper bars, sparking plugs and springs, are made in Australia. In fact, at least80 per cent. of the complete American car, is Australian made. The honorable member for Indi **(Mr. Hutchinson)** says that the motor body industry in Australia is definitely uneconomic. The reduction of the duty on panels was made by a sympathetic government which desired to extend every consideration to the British manufacturers. It was thought that the Tariff Board inquiry on panels would help the British motor car manufacturers, as there had been complaints that deliveries could not be obtained. The principal factory in Australia is working at only 80 per cent. of its full capacity. The firm of James Flood Proprietary Limited, which caters exclusively for British cars, writes as follows : - >We confirm the information supplied to your officer that we are at present interested solely in bodies for English car distributors, and that we are supplying to the orders of Western Australian distributors, and, furthermore, we are right up with delivery dates. Another firm of motor body builders and designers, Martin and King Proprietary Limited, which manufactures bodies almost exclusively for quality English cars, such as the Daimler, Lanchester and Rolls Royce, writes as follows: - >We bog to point out that insofar as highgrade body production for English chasses is concerned, we have been able to give our usual six to eight weeks' delivery on all orders placed with us over the last twelve months, and can still offer this service for present orders. This is the only class of business for which we cater. At the moment, we have building extensions in hand which will accommodate a further 40 hands, and have in the last month spent £1,000 in new plant. With these additional facilities we anticipate no difficulty in keeping well abreast of requirements. The difficulty in making deliveries experienced by one body-building company in Melbourne, which has expanded rapidly lately, has been used to an inordinate degree to bolster up a case for further concessions to British manufacturers. I have no desire to criticize harshly the British manufacturers; we want to work with them, and, as far as possible, to divert as much trade as we can to Great Britain; but is it not true that, because British manufacturers do not supply as many cars of a type suitable for Australian requirements they do not get more trade? In the press and elsewhere the Government is attacked for not having done more for the British motor car industry. But it is not the makers who complain; these attacks are inspired by a few local importers as propaganda for their own benefit. {: #subdebate-9-0-s36 .speaker-KLL} ##### Mr MAKIN:
Hindmarsh .- I listened patiently to the speech of the honorable member for Indi **(Mr. Hutchinson),** and I respectfully submit to him that he did not make one substantial point which would justify this committee in taking action that would jeopardize the interests of a very important industry which has greatly assisted Australia's recovery from the depression. To do as the honorable member desires would be to impair the successful continuance of that industry in Australia. The honorable member's attitude is not very commendable, particularly when he endeavours to impress upon honorable members that he has a broad Australian outlook. When some honorable members went overseas recently as members of the Australian delegation, they found that the first consideration of those directing the policy of the United Kingdom was the protection of their own industries. Their desire was to maintain, so far as possible, avenues for the employment of their own workmen. We have just as much right to recognize that principle in this country. {: .speaker-KIX} ##### Mr Hutchinson: -- This amendment will not affect General Motors-Holdens Limited. {: .speaker-KLL} ##### Mr MAKIN: -- The honorable member must realize that every motor car body permitted to enter this country deprives Australian citizens of work. No arguments which the honorable member may advance will dispose of the logic of that. {: .speaker-KIX} ##### Mr Hutchinson: -- I ask the honorable member to read page 12 of the Tariff Board's report. {: .speaker-KLL} ##### Mr MAKIN: -- I suggest to the honorable member that he should read the recommendations of the board and act upon them. I am sure that if he would read the board'3 recommendations he would bc more consistent in his attitude towards other sections of the report. No substantial reasons have been put forward during this deba'te why the duties should be altered. I think that the Government has been all too generous to the British industry in the concessions already made. In order to meet outside competition the industry must be efficient. As one who knows something of the value of this industry to Australia, particularly to South Australia, I shall oppose any suggestion to allow motor body panels to enter this country free of duty. {: #subdebate-9-0-s37 .speaker-KOQ} ##### Mr MCCALL:
Martin .- I rise to oppose the amendment of the honorable member for Indi **(Mr. Hutchinson).** Motor body building is a national industry which is so widely spread throughout Australia that I find it pleasing to support the Government's attitude in regard to it. But before dealing with the statements of the honorable member for Indi, I desire to make one or two general observations. Referring tq the establishment of the industry in Australia, the Deputy Leader of the Opposition **(Mr. Forde)** said that its real growth began during the war, and that we should remember its importance in a national emergency. Motor body building calls for skilled artisans who would be well fitted for the manufacture of munitions in the event of war. Moreover, the large buildings which have been erected for the manufacture of body panels could, almost overnight, be converted for the manufacture of war equipment. From the point of view of the country's defence, this industry, above almost all others, is of great national importance, and for that reason alone should be given every consideration. An isolated country like Australia, with only a weak defence system., should not do anything to impair the progress of an industry which would be of value in an emergency. When we consider the employment that it gives, the capital invested in it, and the taxation paid by it, we must conclude that it is one of the greatest industries in Australia to-day. I was interested in the remark of the Minister directing negotiations for trade treaties **(Sir Henry Gullett),** that there is every prospect of Australia being able to manufacture complete cars on an economical basis in the near future. The large companies now engaged in motor body building, in Australia took a considerable risk when they invested their capital here. They are to be commended for their courage, and congratulated on their success. In 1929, the then Prime Minister **(Mr. Bruce)** said - >We cannot at the present time build engines and chassis for our motor cars, but we can supply a tremendous number of things that are used in their construction. Manufacturers should lay down a programme ahead and carry it into effect, until in a few years they will reach a point where they will be able to produce a motor car from one end to the other. Let us consider for a moment to what extent that prediction has been fulfilled. By interjection just now, I asked the Minister what percentage of an average American motor car was now manufactured in Australia. The figures which I shall present to the committee are illuminating. Of the price of the " Chevrolet " sedan, 78.5 per cent, represents Australian, 9.35 per cent. Canadian, and 12.15 per cent, foreign manufacture. The suggestion that the Canadian content should be raised from 50 to 75 per cent, could easily be given effect, but only at the expense of the Australian industry. The percentage of foreign manufacture is higher in the " Buick " than in any other car sold in Australia; yet 77.16 per cent, of a Buick "40" sedan is made in Australia; 1.62 per cent, is Canadian and 21.22 per cent, is foreign. Those figures show to what extent the Australian content of American cars has increased. In my opinion, it will not be long before complete cars will be made in this country. *[Quorum formed.]* About ten years ago two large American manufacturers of motor cars, realizing that the Australian duties on motor body panels had come to stay, established factories in this country thereby getting inside the tariff wall. Unlike some British manufacturers, they did not stand outside the tariff barriers and clamour for lower duties. The committee has already had before it figures supplied by the Minister for Trade and Customs **(Mr. White)** and the Deputy Leader of the Opposition. I shall now present some additional facts in relation to the Ford Motor Company. The chairman of the company stated recently that it had invested more than £2,500,000 in Australia. As the Australian capital of General Motors-Holden's Limited, is over £3,000,000, it will be seen that those two companies alone have invested in Australia nearly £6,000,000. An industry of such magnitude is deserving of our most serious consideration when it is suggested that duties recommended by the Tariff Board should be removed. I do not say that the removal of the duty on British panels would destroy the Australian industry, but I submit that its removal would cause the industry serious embarrassment. {: .speaker-KK7} ##### Mr Jennings: -- How many employees are there in the industry in Australia? {: .speaker-KOQ} ##### Mr McCALL: -- The Australian motor body building industry employs 13,000 workers directly, and possibly a further 20,000 indirectly. "What the honorable member for Indi said about British companies establishing factories in Australia may be true. He told us that they have only a small percentage of the Australian market and that it would not pay them to set up establishments in Australia as the Ford Company and General MotorsHolden's Limited have dene. I agree that the present is not the best time for them to embark on such an enterprise. The time for them to have done so was in 1927, when the percentage of " Morris " cars to the total English cars in Australia was 26.5 per cent. To-day the proportion has fallen to 10.7 per cent. The Morris Company, with its enormous capital and huge profits, should have established its own works here in 1927, and thereby given employment to Australian workers, and paid taxation to Australian governments. The Vauxhall motor car is 79.5 per cent. Australian and 20.5 per cent. English manufacture. It is a completely British car, although manufactured by an American company. The vendors of the Vauxhall car have invested a large amount of capital in Australia; they paid £1,250,000 in taxes in 1935, and invest all their profits in Australia. In 1931, the proportion of " Vauxhall " cars to the total cars in Australia was .8 per cent; to-day it is 7.1 per cent. The respective figures for " Morris " cars are 4.1 per cent and 2 per cent. The reason for the failing off in the percentage of " Morris " cars in Australia is that that company was not prepared to get inside the tariff barrier. Many honorable members regard a profit of 10 per cent, or 15 per cent, as exorbitant, but what would they say of the Austin Company, which makes a profit of 100 per cent.? Yet **Sir Herbert** Austin has been one of the loudest among those who have clamoured for a reduction of the duty on British motor body panels. In discussing the amendment of the honorable member for Indi no honorable member who has spoken has mentioned the trade balance. We have been told that although at the moment the position in regard to the trade balance is not serious, embarrassment is likely to be caused if imports are allowed to increase. That statement is supported by the recent action of the Commonwealth Bank in taking steps to restrict credit in Australia, because it feels that if the volume of imports continues at the present rate, our London funds will be seriously depleted. If the amendment is carried, the trade balance will be affected by increased importations of British cars. The honorable member for Indi spoke of the difficulty of importers of British cars in obtaining deliveries. Other considerations have been traversed by the Minister for Trade and Customs and the Deputy Leader of the Opposition. I propose to deal with the matter of blue prints, which are forwarded by British manufacturers to local builders giving directions as to how to make both panels and bodies. The following is a statement made by one of the biggest motor body builders in Australia about the time which the British manufacturers give the Australian body builders to enable them to compete with their American rivals : - >With regard to the time taken to produce, this is not tho fault of the Australian body builder. For a period of years we have been able to induce the American manufacturers to send their blue prints out to Australia at the same time as they are developing their bodies in America- That is to say, when the American manufacturer is developing his model, he for- wards the requisite blue prints to Australia - mi lh at, we have us long as live to six months in which to develop and complete the first bodies so that they will be available at the time of the arrival of the chassis, but in regard to English manufacturers their methods nf manufacture arc so far behind time, and the liaison between themselves and their agents is so unsatisfactory that on occasions the blue prints from which to build the bodies do not arrive in Australia more than a week or two ahead nf the chassis. It must be quite obvious to honorable members that if the British manufacturers are not prepared to send out their blue prints, as the American manufacturers are accustomed to do, they cannot possibly lie in a position to compete. The figures which I have quoted in regard to the production of the Vauxhall, which is a General Motors-Holdens, Limited product, proves my contention. General Motors, by establishing their organization inside the tariff wall, have been able to outsell the British cars put on the Australian market. I possess a Vauxhall, and I know its standard of efficiency. The number of British cars now shipped to Australia constitutes a very small percentage of the total sales in Australia. The reason for this is in the fact that the British manufacturer is not " delivering the goods ". A few years ago I owned a Morris car, and, in my opinion, it is not comparable with the Vauxhall. In the long run the best judges of a car are the general public, who run them. If the Ford Motor Company and General Motors were not delivering the goods, they would not be able to sell the number of cars they do. The contentions in support of the Government's action in not accepting the report of the Tariff Board in regard to the general item are unanswerable. This is one case in which the Government in its wisdom has seen fit not. to accept the majority report of the Tariff Board in regard to the general item. But it has accepted the majority report in. regard to British panels, and I do not consider that any honorable member can reasonably disagree with that decision. If the amendment were carried it would give further encouragement to British companies to remain outside the tariff wall and to ship panels duty-free in increasing quantities ti) Australia, thus com pelling distributors to purchase practically the whole of their requirements of panels from British manufacturers. I oppose the amendment because I consider that it would do considerable harm to a great, national industry. {: #subdebate-9-0-s38 .speaker-JVR} ##### Mr NAIRN:
Perth .- When the Tariff Board inquired into this matter towards the end of 1934, it made a bona fide attempt to assist the British motor industry, by recommending a lower duty on British motor panels. That change, which it was thought would be so beneficial to the British industry, hat rather miscarried in its effect. In the first place the 6d. per lb. duty was in respect of untrimmed panels; but importers discovered that the expense of having them trimmed in Australia was not less than 3d. - therefore trimmed panels paying the duty of 9d. per lb. were extensively used. Trouble, however, did not begin there; it arose when the British manufacturers endeavoured to arrange for the bodies of their cars to be made in Australia. The British manufacturer has for a long while encountered this difficulty, but it is greatly accentuated *it* the present time. The outstanding instance is that of the Morris company which, some months ago, in anticipation of the introduction of the new 25 horsepower Morris, due in December last, gave an order for 1,140 motor bodies, and was unable to secure any deliveries, as a consequence of which the market was lost. That was the experience of the largest British manufacturing company. Smaller companies can, it, is true, get a few bodies manufactured, but at a price which puts the cars out of competition with the big American lines It must be admitted that, in the production of motor vehicles, the Americans art, definitely in advance of the British; therefore, I feel that it is part of our duty to extend some assistance to the, British manufacturers, and endeavour to put them on a competitive footing. It is said that in America the massproduction factories of three concerns - the Ford company, General Motors and the Chrysler company - have acquired 92 per cent, of the total output of motor bodies. *[Quorum formed.']* In Australia, the Ford company has established its works at Geelong, while General ; Motors-Holdens Limited manufactures its own requirements, and although, it is open to receive orders from British companies, such a practice would entail the British manufacturers submitting in advance their blue prints and designs to their competitors. Furthermore, when an occasion of an increased demand such as we have known in the last few months arises, it is only natural that General Motors-Holdens Limited should fulfil its own orders before dealing with those of a competitive British company. Indeed, it would be too much to expect of General Motors-Holdens Limited to ask it to devote the same consideration to the orders of a competitor as it would to its own requirements. The Chrysler company has its bodies made by Richards and Company, of Adelaide, a very efficient firm. There is in Australia one other large manufacturer of motor bodies, tho Ruskin Company, which operates in Melbourne, and British manufacturers have been looking to this firm to supply their requirements. They have been most unfortunate in their experience, however, for, although no blame attaches to the Ruskin Company for any want of good faith, this enterprise has not been in the position to carry out its engagements. As the result, the British manufacturers have not been able to obtain bodies for their chassis. A number pf small manufacturers of motor bodies are possibly still in existence; in the past they flourished in all the capitals, but that was in the days prior to the introduction of the coupe car and the all-steel body. Present-day cars are produced by mass-production methods that have completely put the smaller manufacturers of motor bodies out of the running. Also, it is quite impracticable to ask any British manufacturer to compete against an American company with panels beaten out by hand. The ideal would be to induce the British manufacturers to take shelter inside the tariff wall by manufacturing cars in Australia. I would not advocate any action detrimental to the valuable industry of motorbody building in Australia, nor would I encourage British ' manufacturers to continue to remain outside the tariff wall ; but a proposal should be made, particularly to the more powerful con- cerns, such as the Morris company and the Austin company, that they should take advantage of the protective tariff of the Commonwealth, and manufacture their cars in Australia. In the meantime, however, it is necessary to offer them some encouragement. If they arts neglected now, they will rapidly lose the market which they gained through the advantage of the tariff two years ago. Already it is falling away from them. I urge the Minister to give them consideration apart from the proposal to admit their motorbody panels free of duty. In my opinion, he would be well advised to approach this matter, not so much from the viewpoint of defending American interests established in Australia, but rather with sympathy for the British industry. Some form of substantial assistance should be granted to it for a limited period, perhaps twelve or eighteen months, whichever is agreed upon, with a definite intimation to the British manufacturers that, unless they have established their works by the expiration of that time, protection will no longer be afforded them. The existence of motor bodymanufacturing plants may be very necessary for the defence of Australia, and we may be called upon to defend ourselves, perhaps within the experience of most of us here. If that occasion should arise, we should look to Britain for assistance. We must admit that, in the manufacture of motor bodies in this country, the British interests have not progressed as rapidly as have the American. It is our duty to render what assistance we can to the British trade, and I suggest that the Minister confer with the Tariff Board with a view to arranging for the free admission for a fixed but limited period of Britishmade panels, and for the remission of primage, &c. A number of concessions might be given to British manufacturers without damaging the Australian industry. At the present time, most British cars brought into Australia are fitted with imported bodies, so that the Australian workers receive no benefit from their importation. If the British manufacturers established their factories in this country, more employment would be provided! here. We should encourage British manufacturers to spend at least £2,000,000 upon the equipment of bodybuilding works in Australia. Mr.E. J. HARRISON (Wentworth) £10.48]. - The honorable member for Indi **(Mr. Hutchinson)** was severely castigated by the Deputy Leader of the Opposition **(Mr. Forde),** and by the Minister for Trade and Customs **(Mr. White),** because of the opinions he advanced; but I believe that there is every justification for division of opinion upon this important subject. In fact, the Tariff Board itself was divided on the matter, this being one of the very few items in respect of which both a majority and a minority report have been presented. If the board has been unable to come to a unanimous decision after hearing and weighing the evidence, honorablemembers of this committee cannot be blamed for failing to agree with the majority report presented by the board. The Deputy Leader of the Opposition selected one point made by the Tariff Board, in reviewing the minority report, and challenged the honorable member for Indi to refute the argument. However, if the honorable member had read a little further, he would have come upon the following sentence at page 15 of the majority report: - >The peculiar circumstances and difficulties surrounding this industry justify ahigher duty against British panels than would otherwisebe considered reasonable. Those peculiar circumstances are enlarged upon at page 9 of the report, which states - >Although the board is satisfied that the local manufacturers of panels are efficient, and have honestly attempted to meet all requirements at reasonable prices, the inquiry shows this industry to be an outstanding example of the development of uneconomic conditions in Australia as a result of having duty rates at practically a prohibitive level. It is interesting to study the conclusions reached by the gentleman who presented the minority report. He says - >After analysis of car body demand in terms of makes and types, I am confident that quite an appreciable proportion of panels for bodies for English cars would he manufactured in Australia even though panels were made duty-free United Kingdom, and that, if a rate of 6d. per lb. or less were imposed, it would not appreciably alter the proportion made in Australia, and hence would have little protective value. > >I, therefore, recommend that the tariff item as worded in the board's report be adopted, but that provision be made for duty-free admission from Great Britain, under tariff item 359 (e) (1). Yet the honorable member for Martin **(Mr. McCall),** who was admittedly pleading for General Motors-Holden's Limited, stated that that firm would suffer serious injury if the amendment were agreed to. He dealt not with the industry generally, but only with one section of it. Then, after making out a case which was ostensibly fool-proof, he confessed that the admission of panels from Great Britain duty free would not have a devastating effect on the industry. The reason, of course, is that the firm of Holdens is manufacturing for the General Motors interests, and has the backing of that powerful corporation. No other firm could carry on successfully without such backing. The path of this industry is strewn with the wrecks of firms which have endeavoured to meet the demand for body types in this country, and their efforts have demonstrated that it is impossible to compete against the powerful interests already established. The Minister for Trade and Customs knows that perfectly well, as also does the honorable member for Martin and the Deputy Leader of the Opposition. It is of no use asking why the British manufacturers do not establish works in this country; it would be impossible for such works to meet the demand for all the various kinds of bodies required by the Australian trade. One Sydney firm, which tried to meet that demand, lost £500,000, and other manufacturers have also failed. I hold no brief for the English car manufacturers who, in the past, failed to take the necessary steps to obtain a proper share of the Australian market. They are now suffering for their negligence, but if we are to encourage inter-Empire trade, as we should, then we must do something to assist the British motor trade to compete on better terms with its American rivals in this country. The Deputy Leader of the Opposition said that General MotorsHoldens Limited was at present using only 60 per cent. of its plant; the Minister for Trade and Customs placed the figure at 80 per cent., and asked why the distributors of British cars did not place orders for bodies with Holdens. Surely honorable members must know that to do so would be the height of commercial stupidity. {: .speaker-L08} ##### Mr Rosevear: -- Why? {: #subdebate-9-0-s39 .speaker-KNX} ##### Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- Because it would place in the hands of their chief competitor vital information regarding designs, and the number of sales which it was anticipated would be made. Tuc honorable member for Indi mentioned the firm of Buskins Limited, which had failed to keep ite agreement to supply tins full number of bodies of a certain type for which it had contracted. The Minister replied that the firm concerned had a stock of bodies on hand which the distributors would not accept. That is true, but the type of body in stock is not, that which is required, and the reason for the stock being left on hand is that this firm has only one press at the present time, and naturally, as it desires to keep costs down as much as possible, it must press as many panels as possible while a particular die is on the press. Obviously, this does not make for early delivery of the variety that competition demands. It is desirable that members of the committee should know the procedure leading up to the placing of orders. Thu distributors and importers meet in conference once a year to discuss body policy. Then tenders are called, and blue prints, photographs, &c, are supplied to the tenderers. The manufacturers are faced with the problem of estimating the cost of dies, jigs, tools, &c. They must hi careful not to over-estimate or underestimate the cost, the tendency being to over-estimate so as to protect themselves against possible loss, and in this regard «ind in rebuttal of the statements made by the Minister that this British industry should start here, let me again quote the Tariff Board's report in regard to the cost of tools and dies. It says - >Taking both those influences into consideration one local manufacturer submitted to the board a statement showing that the die cost per unit for body and cowl panels for one particular model increased from £2 5s. with an output of 2.500 sets to £11 14s. 2d. with an output, of 200 sets, i.e.. an increase of 420 per cent. At the same time direct labour increased by 131 per cent. It will therefore be seen how uneconomic is the production in Australia of small quantities of pressed panels for any one car as compared with the production overseas of large quantities of the large panels. Even taking one of the most popular cars in Australia the die cost in the Australian compositebody is more than three times the die cost in an " all steel " body for the same car manufactured in America. That ought to give the committee someidea of the disabilities associated with a small industry starting here. {: .speaker-KZR} ##### Mr White: -- I suggest that they could all get together. {: .speaker-KNX} ##### Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- The Minister who knows of the conservatism of English manufacturers, and of the difficulty of getting them to co-operate in regard to any of their products, says that because of this conservatism we snail penalize them, and give them no encouragement. On page 6 of the Tariff Board report we find this - >Die costs in Australia for the production cf an average sedan body would be from £4,000- to £0,000. This initial expenditure is not justified as it cannot be written off in a sufficiently large number of bodies. My desire is to direct attention to the excessive costs of manufacture and production of dies, jigs, tools, &c, necessary for the stamping of body panels; yet in spite of the evidence of excessive costs the Minister says "Let these people come out here and start this industry ". I refer honorable members to the example of Smith and Waddingtons Limited, a progressive firm in New South Wales, which lost about £500,000 of publicmoney as the result of its bankruptcy. The assistant general manager revealed this evidence at the inquiry held by the Tariff Board- >As already pointed out. Messrs. Smith an.:! Waddington Limited lost' £500,000 of public' money, and in the year 1029 alone wrote off £2(i,588 in dies, equipment, &c, irrespective of amounts provided for normal depreciation of machinery. in two years alone - 1927-28 and 1928-29 - Smith and Waddington Limited spent a total of £:i3,7!)(i in preparing tools for the production of bodies covering twelve different models, and in very few instances were sufficient bodies sold tn totally recoup expenditure. Let us turn to the evidence on behalf of Holden-General Motors Limited and see what the representative of that firm says about the high costs of tools and dies - > **Mr. E.** W. Holden has also given in evidence that for the year 1931 the three major body plants on whose behalf he was giving evidence wrote off more than £100,000 of unliquidated dic costs. These are the economics of the industry which the Minister says can be started here with a small market and a variety of models and multiplicity of styles. These facts in themselves should be sufficient to give any man who understands business principles at all the rudest shock if it were suggested that he should endeavour to establish such an uneconomic industry in this country. Nevertheless, such an industry has been started - as the Tariff Board states - under peculiar circumstances, its success being founded on the support given to it by General Motors Limited. It is giving employment to Australian workmen, and I should hesitate to interfere with the big factories in Adelaide which build these panels. But to allow panels to come in from overseas would not injure General Motors one iota. On the contrary it would encourage the British car manufacturer to re-enter the Australian market. The bargaining between the bodybuilder and the distributor and importer is necessarily keen. They all must cover costs. The importer or distributor must see that he guts his goods on a ready market. He does not know how a model will be taken by the public. He is not prepared to open his hand wide to the manufacturer, nor is the manufacturer willing to open his hand wide to the distributor or importer. Each is endeavouring to do his own business and both cover themselves in *every* way possible. The statement made by the honorable member for Martin **(Mr. McCall)** with regard to delay in getting blue prints from overseas is justified. There is no doubt about it. We have to deal with a conservative group of people in Great Britain. The honorable member for Indi said there was a complaint that bodies would not fit chassis. That is understandable, and it is a problem which this industry has to face. Before a model comes on to the market, many alterations take place in the original design. The result is that panels previously made to fit the original chassis do not fit the altered chassis which ultimately reaches Australia. That, in itself, is surely an argument in favour of the importation of panels. Panels would be brought to Australia to fit the chassis, and then it would only be a matter of welding and fitting panels. To say that this would interfere with workers in Australia is futile. At present, a big per centage of complete bodies is coming into Australia, which means that an everincreasing quantity of body work is lost to Australian workmen. But if the tariff were lowered on British panels the importers could bring out chassis and panels, and within a few months the public would have British cars running on the streets in opposition to those turned out by General Motors-Holdens Limited. That is why General Motors-Holdens Limited is in opposition to the proposal of the honorable member for Indi. {: .speaker-KOQ} ##### Mr McCall: -- There is no opposition from that firm. {: .speaker-KNX} ##### Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- The honorable member's pleading for General Motors-Holden's Limited proves to me the source of his brief. The main argument of the honorable member for Indi was the fact that smaller body manufacturers in Australia cannot compete successfully for the dozens of models on the marker. A letter I have received from the Society of Motor Manufacturers and Traders Limited states - >The most glaring instance of the breakdown in the Australian body-building industry is in connexion with an order accepted by the Ruskin works in Melbourne on 5th September, 1935, for 500 bodies for the new Morris 18 horse-power and 25 horse-power chassis. The same body fits both chassis. Delivery was definitely promised to begin on 28th December, and to continue thereafter at the rate of 30 bodies per month. Up to date, only one body has actually been delivered. This is a shocking instance of how a particularly suitable type of British car intended for sale here at a moderate price has been kept off the market for three of the heft selling months in the year. Honorable members will realize that the order was accepted on the 5th September and the best selling months for this type of car have gone. The whole of the money put into the organization for advertising and for sales has tobe wiped off, because one of the body manufacturers having accepted the tender, could not deliver at the time it promised. It has definitely broken a contract, but cannot be proceeded against, because there is no penalty clause in the agreement. In fact, the company refused to allow a penalty clause against deliveries to be inserted. It did insert a penalty clause in regard to cancellations. Suck is the power it has over the importing industry ! The importers have to sit down under the terms it imposes, and hope for delivery within six months from the date of the order being placed. Given encouragement to compete with the American makes of cars, the British manufacturers will come out to Australia to make their goods. The case made out by the honorable member for Indi is well worthy of the fair and unbiased consideration of the committee. The facts I have stated surely will prove that it is definitely uneconomic to start motor bodybuilding in Australia. {: .speaker-KOQ} ##### Mr McCall: -- Why should that be? {: .speaker-KNX} ##### Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- Smith and Waddington's failure is the answer to that. 1 commend the honorable member for Indi and suggest that the committee should give very serious consideration before voting against his amendment. {: #subdebate-9-0-s40 .speaker-KIX} ##### Mr HUTCHINSON:
Indi .- There seems to be some little ambiguity as to exactly what I have moved. My amendment refers to item 359 e 2, and not to item 359 b 1. The amendment I have moved refers only to the British preferential rate of duty and does not disturb the tariff against foreign motor body panels, and therefore the contentions brought before this committee to the effect that the Australian motor body-building industry is going to be smashed are absurd. After the speech delivered by the honorable member for Martin **(Mr. McCall)** as to the benefit of this industry from the defence point of view, and as to the capital invested in it, I can only form the opinion that he believed that something was going to be aimed at the Australian industry that would deal it a blow at least definitely adverse. Yet later in an interjection he said what to some extent was true - that General MotorsHoldens Limited are not worried about this at all. General Motors-Holdens Limited are not making their living by what might be termed the "chicken feed " of the motor body-building industry. They have a huge turnover, but their volume of business comes from the fact that the bodies they make for General Motors are standardized for different types of cars. For instance, the body of a Pontiac fits the smaller Buick 8 and the Oldsmobile also. The same applies to Richards of Adelaide in relation to bodies for Dodge, Plymouth and Chrysler cars. To say that this is a death blow to any large motor bodybuilding industry in Australia is wrong. Any one who argues that this would be the effect of the amendment, is ignorant of the facts. The Deputy Leader of the Opposition **(Mr. Forde)** has suggested that whilst I am not willing to accept the Tariff Board's finding, I have read extracts from the board's report. I point out that when the board made its recommendation it evidently anticipated that its adoption would confer some benefit on the British manufacturer; but events have proved otherwise. Only one firm has attempted to import fabricated panels and it discovered that the cost of the assembled body this year was more than the cost last year of a body of the same model made wholly in Australia, the respective cost figures being £97 2s. 6d. and £120 10s. This is one of the reasons for my amendment. It has been objected that I am making a special plea for Morris motors. I thought I had made it perfectly clear that my reference to the position of Morris distributors was merely for the purpose of showing as an example what is happening in connexion with a number of English cars on the Australian market. Those who contend that the new model English cars are not competitive, as to performance and price, with American cars, are not informed of the real position. The Minister for Trade and Customs **(Mr. White)** commented on the fact that British manufacturers had neglected their opportunities in not establishing factories in Australia, and the Minister for Trade and Customs said that if the larger motor body-building firms in Australia were not disposed to tender for the building of bodies for English cars, such firms as Martin and King and a number of others, would be glad to do so. {: .speaker-KZR} ##### Mr White: -- And James Flood and Company. {: .speaker-KIX} ##### Mr HUTCHINSON: -- Volume of production is an important factor, since it affects the price level at which English cars can be distributed in Australia. Martin and King are high-class bodybuilders and, as onewould expect, their prices are high. I am informed that their charge for a Humber Snipe body this year was £264 - a figure which, I suggest, would make English cars fitted with such bodies, non-competitive in the Australian market in certain price fields. Mr.Nock. -What would be the higher cost due to 6d. per lb. on imported panels. {: .speaker-KIX} ##### Mr HUTCHINSON: -- The British duty is 9d. per lb., and on a 25 horse power car the additional cost would be between £16 and £17 which, on a mediumpriced car would affect its sale because all selling prices are plus sales tax and primage. The honorable member for Wentworth **(Mr. E. J. Harrison)** fully sustained his argument that unless there was volume of production it would be futile for English firms to attempt to establish body-building plants in Australia. As the honorable member said, that section of the motor trade is strewn with the wrecks of firms that have attempted to manufacture bodies in Australia under existing conditions. I have already mentioned the financial difficulties confronting Buskin Motor Bodies Limited, a firm which has a fairly large order for bodies for Terraplane-Hudson. It was ridiculous for the Minister to suggest that English firms should come to Australia before there was any guarantee of volume of production. If they did that, they would certainly lose money. The Minister also contends that the carrying of my amendment would seriously affect the employment situation. {: .speaker-KHL} ##### Mr Holloway: -- It must; otherwise what is the reason for it? {: .speaker-KIX} ##### Mr HUTCHINSON: -- The honorable member for Martin has stated definitely that General Motors-Holdens Limited would not worry about this section of the business, because it would not affect the American position. The Tariff Board made a careful investigation of this aspect of the industry. There would be no loss of employment. On the contrary, any employment lost in the manufacture of panels would be more than offset by increased body-building and production of raw materials. The board's recommendation deals with the British and general tariff; my amendment would affect only the British duty, and I repeat that its adoption would mean an increase of employment because of the tendency for prices to become competitive. This would stimulate sales and encourage the development of what are known as backyard body-building firms. {: .speaker-KZR} ##### Mr White: -Read this telegram which I have received from Flood and Company. {: .speaker-KIX} ##### Mr HUTCHINSON: -- The telegram from James Flood Proprietary Limited, which the Minister has handed to me, reads as follows : - >Absolutely refute statement by deputation re motor bodies at Canberra. Receiving postponement of contract due to over supply of bodies. Unless further work obtained in near future men will be stood down. Owing to the high cost of equipment builders like Flood and Company are not in a position to compete in price with the larger firms, and so do not command the same volume of orders. I contend that my amendment would enable Flood and Company, and other small manufacturers, to get into production and thus increase employment. My sole purpose is to enable British manufacturers to get on the Australian market with volume production. When this has been accomplished honorable members will have more justification for contending that British firms should establish plants in this country. We shall then have American and British firms side by side catering for the requirements of Australia, and eventually manufacturing cars entirely in this country. To insist upon the establishment of works before there is volume of production would be absolutely ridiculous. {: .speaker-KOQ} ##### Mr McCall: -- In view of the case which the honorable member has made out on behalf of English cars, will he sell his American car and buy one of English make? {: .speaker-KIX} ##### Mr HUTCHINSON: -- My position is that of hundreds of Australian people - what I can buy is governed by what I can afford to spend. English cars must be brought down to a competitive basis, so that the purchase of them will he within the means of the majority of the people of Australia. The price of a car is definitely affected by the cost of the body. A reduction of prices would lead to an increase of sales. If ever an opportunity was presented for the promotion of Imperial trade, it is in connexion with this item. Yet the Minister is ignoring it. {: .speaker-KZR} ##### Mr White: -- There are other ways in which the industry may be assisted. {: .speaker-KIX} ##### Mr HUTCHINSON: -- There may be other ways; but, even if the duties on some other items are reduced, bodies will still have to be provided for English cars in time to enable them to compete in the best selling months of the year. The acceptance of the amendment would lead to cheaper motoring in Australia, greater individuality in bodies, and the spread of motor body-building throughout Australia instead of being confined to one or two firms. Small firms would be given a chance to progress, and ultimately British capital would be invested in this country. That is what we all desire. I urgethe Minister to accept the amendment. Amendment negatived. {: #subdebate-9-0-s41 .speaker-F4U} ##### Mr FORDE:
Capricornia .- The industry covered by paragraph 3 of sub-itemf is suffering as the result of the reduction of the duty. Its history, particularly that of one of the largest firms manufacturing gears in Sydney, a firm which is supplying utility lines - described by the Tariff Board as "economic lines " - especially to the automobile manufacturer, is a veritable romance. It has grown from a small beginning until to-day it is a very important engineering industry. It was founded by a man who served his time as a marine engineer, and established the first factory at the age of 52 years. It has now reached a high standard of excellence. Fault cannot be found with either the prices which are charged, or the quality of the product. The Minister for Trade and Customs **(Mr. White)** has inspected the factory. I ask him to allow the old rates of duty to apply until the subject has been re-investigated by the Tariff Board. He will probably promise to refer the matter back to the hoard; hut, meanwhile, the reduced ad valorem rate of 30 per cent. will apply, instead of the old rate of 3s. per lb., or 333/4 per cent. ad valorem. The Tariff Board held an inquiry into the industry in September and October, 1934, and recommended that the duties upon gears for motor vehicles other than railway and tramway vehicles, namely, crown wheels and pinions, transmission gears, differential gears, worms and worm wheels, internal tooth gears, jack-shaft pinions, and fly wheel starter bands, be reduced from British 3s. per lb. or 45 per cent. ad valorem and general 4s. per lb. or 65 per cent. ad valorem to British 30 per cent. ad valorem and general 30 per cent. ad valorem and1s. 6d. per lb. The new duties came into operation on the 28th November, 1935. Since that date, employment and production in the two leading gear manufacturing establishments of the Commonwealth have fallen off until to-day, six months after the reduction of the duty, their monthly production has fallen to 53 per cent. of what it was immediately prior to the reduction, while employment has fallen to 77 per cent. of what it was in the month before the reduction. Actually the employment position is worse than I have stated it to be, because both factories, in the hope of an improvement of trade, are retaining in employment a number of highly-trained workers who would he difficult to replace if they were to take up other occupations. The imports of gears, looking back over a number of years, have increased as follows: - It will be noted that the imports for 1935-36 bid fair to be double those of 1934-35. {: .speaker-KZR} ##### Mr White: -- So are the imports of chassis; more cars are being used. {: .speaker-F4U} ##### Mr FORDE: -- Orders for these gears are being supplied by importers although there is plant and machinery in Australia capable of producing all local requirements. It may be suggested that the increased imports are due to the revival of prosperity in the motor industry. That might have been the case up to September or October last. Since then, however, imports have increased while local production lias declined. If the increased imports had been due to revival in the motor industry, there would have been an increase of local production; but that trade has been lost to the importing agent, who does not invest in a factory in Australia or employ Australian worknen, but has merely a typist to send cables overseas for the products of factories outside Australia. I am advocating the adequate protection of the Australian industry so that this work may bc kept in this country. The fact disclosed by the employment and production figures of the local industry is that the increased imports since the duties were reduced have been made at the expense of local manufacture. As a matter of fact, several firms withheld their CUtomary orders from local factories in anticipation of lower duties being recommended by the Tariff Board. Some firms, it is believed, actually placed orders abroad in anticipation of lower duties being applied. A number of firms which still purchase locally-made gears, notwithstanding the lower cost of imports, are being forced by competition to swing over to the imported articles, and every week the local manufacturers are losing orders to the importers. That is not the policy for which this Parliament stands. I believe that the majority of honorable members, irrespective of party, are pledged to the policy of protecting Australian industries. Diminution of the output of these factories has had very serious effects upon local costs of production. Both of the Sydney firms to which I have referred have the latest machinery available. It cannot be said that their plant is obsolete. Some of the individual machines cost up to £2,500 each, and many others cost from £1,000 upwards. Unless these machines are fully occupied, they represent a very heavy overhead charge on all production. Every diminution of output increases the costs of the local industry and reduces its ability to compete against imports. Importers are making rapid headway among the former customers of these local factories. Each gain by the importer is at the expense of the local manufacturer and the local workman. If the present position h allowed to continue, the local factories will soon be working at about 25 per cant. of their capacity. Does any honorable member stand for that? The Minister kas promised several times that where it could be shown that any industry had suffered or was suffering damage as the result of the adoption of a recommendation of the Tariff Board, he would refer the matter back to the board for further inquiry. I have no doubt that he will refer this item back to the board. I ask him not to upset the *status quo,* but to allow the old rate of duty to apply until ibc report of the board is received. This branch of the legislature - is about to adjourn for a month. When we return there will be other matters to occupy our attention. The Tariff Board has awaiting its consideration over 100 requests. The Minister has no power to direct the board to give immediate consideration to this matter. Since this schedule has been under consideration, quite a number of items have been referred back to the board. What order of priority will bc observed *1* Are they to be pushed aside io enable the board to undertake this inquiry, or will the further investigation of this item be shelved until the other subjects have been reported upon? Frequently, delays of six months occur in the making of inquiries by the board. Is this industry to remain in the doldrums for six months? Speaking in this chamber on the 16th November, 1932, on Tariff Board recommendations, the present Minister for Defence **(Mr. Parkhill)** made some interesting remarks. I cite the following passage from the *Hansard* report : - >Commonwealth Governments generally have accepted the recommendations of the Tariff Board, but it has to be remembered that the Parliament is paramount in tariff matters. Honorable members opposite speak as though these matters were to be settled by some foreign body outside of this House altogether, whereas what they overlook, or never stress, is the outstanding fact that this Parliament has the final decision in respect of any duties imposed. The meaning of article 12 of the Ottawa agreement is not that efficient Australian industries are to be exposed to unfair competition from overseas, but that the tariff will be established on a competitive, and not a prohibitive, basis. Although honorable members have been told that the Ottawa agreement has been infringed by certain decisions made during our consideration of this schedule, we were assured, when that agreement was being considered by this Parliament, that the Government would not be obliged to accept every recommendation of the board, willy nilly. The trouble is that members of the Government have spoken with many voices on this subject. The Prime Minister, in the course of a speech in this House on the 3rd November, 1932, said- >The only objections raised by the Leader of the Opposition are those to which I have referred. One was the alleged limitation that will in future be placed upon Parliament by the board. There is no justification for that insinuation. Another was that some injury will be done to Australian industries. So long as those industries arc efficient and economical, they have nothing to fear from the Ottawa agreement. The **CHAIRMAN (Mr. Prowse).The** honorable member will not be in order in proceeding along those lines. {: .speaker-F4U} ##### Mr FORDE: -- I merely wish to indicate the views which members of the Government have expressed in the past in connexion with the power of the Tariff Board and the Government's attitude towards its recommendations. This industry merits the fullest measure of protection from this Parliament. The local manufacture of gears caused a substantial reduction of the price of imported gears. General Motors-Holdens Limited have stated that the quality of Australian-made gears is equal to that of the best gears produced in America. The Australian industry is still in the course of development. It did not reach anything like full activity until after 1930-31, when the Scullin Government provided adequate protection for it. The reduction of duty, for which this Government has been responsible, has already caused serious damage to the industry, and the ill-effects of the reduced duty will bo accentuated the longer corrective action is delayed. I ask the Minister, therefore, to agree to the deletion of this item, and to refer the subject back to the board for further inquiry. If he will not make a definite promise to adopt that course, honorable members of the Opposition will vote against the item. If a majority favour the deletion of the item from the schedule, the former rates of duty of 3s. per lb., or 331/3 per cent. ad valorem will become operative. I remind honorable members that 1931 was a very bad year for the motoring industries as a whole, for the number of vehicles on the road throughout the Commonwealth declined by some 50,000, and dealers in parts and accessories worked on stocks, and placed no new orders. In 1931-32 the number of cars on the road declined by another 35,000, but the stocks of parts and accessories had by that time been so largely depleted that dealers commenced to place new orders. The Australian gear cutters were then able to supply the demand for gears, and ruling prices were lower than those previously charged for imported gears. By supplying requirements locally the gear-cutting industry assisted to reduce the volume of Australian imports. This was highly necessary at that time. Our London balances are again depleted, for imports have risen to a level which the Commonwealth cannot afford. The time has thus again come for the elimination of all unnecessary imports. Motor gears fall within that category. The industry is thoroughly efficient and is, in fact, a key industry for defence purposes. With the increased defence commitments of the Government it would be folly to allow this industry to be damaged by oversea competition. I therefore appeal to the Minister to allow the former duties to become operative again. The Tariff Board, on page 6 of its report on gears for motor vehicles, testifies to the efficiency of this industry. The report reads - >The industry of gear cutting is largely precision work, and is valuable for the training it affords in engineering. The plant established locally is efficient and is as comprehensive as is justified by the existing demand. I refuse to be bluffed by the suggestion of the Minister that the subject may again be referred to the Board. I request that the higher duties in operation before this schedule was tabled be restored. {: #subdebate-9-0-s42 .speaker-KZR} ##### Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP .- The Tariff Board recommendation on this item is that the ad valorem duty be reduced by 33/4 per cent. and that the specific rate of duty be removed. That means that in respect to the lower priced British product which formerly was subject to the specific rate of duty the reduction is substantial. The gear-cutting industry was established in Australia under a very high protective duty. In this connexion the Tariff Board stated, on page 6 of its report, that - >The protection of the high duties, which represent up to 300 per cent. on many lines and exceed 500 per cent. on a few lines, coupled with exchange and primage, has proved so attractive that other local manufacturers have been induced to establish factories to bid for the trade. It was alleged by the gear manufacturers in New South Wales as recently as the 10th March, that a diminution of employment hadbeen occasioned in this industry by the reduction of duties, and a request was made that the subject should be referred back to the Tariff Board for further inquiry. The information furnished disclosed that the decrease of employment had commenced some appreciable time before the new duties came into operation, and no evidence was furnished which would indicate that imported gears were being landed, under the reduced tariff rates, at prices with which the local manufacturers were unable to compete. The applicants were accordingly informed that if it could be shown that gears were being imported at prices with which the local manufacturers could not compete the matter would be further considered. No evidence has yet been presented on this point. The subject was verbally discussed at a later date when further particulars in connexion with the industry were sought. The information requested was only received on 30th March and, on analysis, it was considered that the case presented was not sufficiently conclusive to warrant reference to the board at this stage. Inquiries are now being made to ascertain the landed duty-paid cost of imported gears compared with the selling price of the locally-made gears. If, on completion of these inquiries, it is evident that imported gears are being landed at prices below the selling price of comparable Australian-made gears I assure honorable members that the subject will be at once referred to the Tariff Board for further inquiry. {: #subdebate-9-0-s43 .speaker-JOM} ##### Mr BEASLEY:
West Sydney . -The Minister for Trade and Customs **(Mr. White)** has simply said baldly that an analysis of the submissions made by the local gear manufacturers does not substantiate the claim that the new duties have reduced employment in the industry, but he has not submitted any evidence in support of that contention. I should like to know who examined the submissions of the gear manufacturers. A good deal would depend on that factor. As the Deputy Leader of the Opposition **(Mr. F orde)** furnished us with specific evidence to support his contentions, it appears that there is a glaring inconsistency somewhere. In the circumstances we are entitled to rely upon the evidence furnished by the Deputy Leader of the Opposition. It is not sufficient for the Minister merely to say that this industry was established under highly protective duties. Are we now to be expected to consent to the destruction of the industry? I am not chiefly concerned about those who have invested their money in the industry, although they merit consideration. I am deeply concerned about the welfare of the people who have been trained to do this exacting and precise work, for they are specialists, and if the protection formerly accorded to the industry is withdrawn these men will undoubtedly lose their means of livelihood. The circumstances under which we are considering this item are somewhat similar to those which enveloped an item that was under consideration yesterday, for doubt has arisen as to whether the new duties adequately protect the industry. If the lower duties remain in operation until after the Tariff Board has made a further investigation it may be too late to repair the damage that will have been done. In any case the Minister has not given us an unequivocal undertaking that the board will be asked to make another investigation. {: .speaker-KZR} ##### Mr White: -- I am prepared to allow the honorable member to examine the evidence that was furnished to me in support of the application for a further inquiry. *Sitting suspended from12 midnight till 12.30 a.m. (Thursday).* *Thursday, 2 April 1936* Item agreed to. Division 16. - Miscellaneous. Item 373 agreed to. Item 376 (Bags, hand and purse; purses, wallets). {: #subdebate-9-0-s44 .speaker-F4U} ##### Mr FORDE:
Capricornia -- The manufacturers of these articles have expressed apprehension as to the effect which the reduction of the British preferential duty will have on the industry. The following is an extract from a statement made by one of the leading manufacturers in Melbourne-- The **CHAIRMAN (Mr. Prowse).Order** ! I remind the honorable member that itiscontrary to Standing Order 256 for an honorable member to read his speech. During the discussion of tariff items that rule has not been enforced. The Chair, however, must object to the reading of speeches delivered by persons outside this Parliament. {: .speaker-F4U} ##### Mr FORDE: -- I am not quoting from a speech made inside or outside of this House, but from a letter written by one of the leading manufacturers in Melbourne - >It is with apprehension of the future of the ladies' handbag industry in Australia that we are addressing this letter to you in the hope that you maybe able to bring before the right authorities the seriousness of the position in which we will undoubtedly be placed on account of the enormous reduction that the Customs authorities have made on English bags. I ask the Minister to give careful consideration to this matter and to ascertain whether there is cause for complaint. I am not in possession of all the details regarding this industry, but as the Minister has stated that he will refer any item back to the Tariff Board if there is cause for complaint or if an industry feels that as a result of the imposition of the new duties it is losing its grip on the Australian market, I ask him to give an assurance that he will do so in this case. {: #subdebate-9-0-s45 .speaker-KZR} ##### Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP -- Quite a lot could be said in regard to this matter if time permitted. The new duties were imposed after investigation and report by the Tariff Board. The following is an extract from an article which appeared in the *Australian Leather Journal: -* >Factories in most branches of the leather goodsindustry are active at present. The travel goods section is particularly brisk as the overseas tourist season is at its height. Manufacturers of the heavier type of travel goods report production as being in excess of the corresponding month last year. Prospects look exceedingly good, as manufacturers are already looking forward to the Coronation of King > >Edward VIII. early next year, when record business is anticipated. It is estimated that 35,000 Australians will go to London for the Coronation. In passage money alone they will spend a few million pounds, while luggage to the tune of many thousand pounds will be bought. That is good evidence that the industry isflourishing. In fact the local manufacturers are securing 85 per cent. of the trade in goods that can be made in Australia. {: #subdebate-9-0-s46 .speaker-F4U} ##### Mr FORDE:
Capricornia -- A definite communication from the industry draws attention to the fact that opening orders for the coming season are from. 10 per cent. to 15 per cent. below orders for the corresponding period of last year. This in itself does not look a very serious falling off, but we must bear in mind that all other lines are up from 25 per cent. to 30 per cent. on account of the improved condition of trade, and that it is early yet for the manufacturers to feel the pinch as the shops are only beginning to take advantage of the concession that the Government has seen fit to grant to English manufacturers at the expense of the Australian workers. Seeing that the Australian manufacturers have already felt the competition of these imports, I claim that the Minister's contention is not quite right. After considering the effect of this reduction, the manufacturers draw attention to the fact that opening orders for ladies' handbags are showing a considerable decrease from last year's figures whereas a reasonable increase might have been expected. In their opinion that is due to retailers taking advantage of the lower duties that now operate. This would appear to be borne out by the fact that more buyers of this class of article are now overseas, and the retailers have allocated more money for purchases abroad. As a result of the lower duties the production of this industry for February showed a decrease of 20 per cent. and the figures for March are very much below those for the corresponding month of last year. This is a very serious thing for the Australian manufacturers and their employees, and for the suppliers of raw materials used in manufacture. I ask the Minister if something can be done to remedy this disastrous state of affairs. Item agreed to. Item 380- >By omitting the whole of paragraph (2) of sub-item (a) and inserting in its stead the following paragraph : - " (2) Carpet sweepers, ad valorem: British, 10 per cent.; intermediate, 35 per cent.; general, 35 per cent. > >And in respect of paragraph (2) - > >For each £1 by which the equivalent in Australian currency of £100 sterling is less than £125 at the date of exportation - > >An additional duty of, ad valorem: British, . 8 per cent.; intermediate, . 8 per cent.; general, . 8 per cent." {: #subdebate-9-0-s47 .speaker-KHL} ##### Mr HOLLOWAY:
MELBOURNE, VICTORIA · FLP; ALP from 1936 -- A few years ago the firm of Kennett Brothers, of South Melbourne, commenced the manufacture of carpetsweepers, and brought about a reduction of the price of these articles. This firm approached the Tariff Board for protection against the competition of imported machines. Although 22,000 machines are purchased in Australia each year, it was successful in securing orders for only 1,200, or roughly one-twentieth of the total number sold. As a result of representations submitted to it by Kennett Brothers, the board recommended that a duty of 10 per cent. British and 30 per cent. foreign should be imposed on imported machines. The Australian firm now contends that this protection is insufficient. Although there are only seven persons directly engaged in the Australian industry, if it were possible for it to secure the balance of the trade, at least ten times as many men would be employed. The industry provides indirect employment for those engaged in cutting the timber used in the manufacture of the machines, and for those engaged in the manufacture of parts. Carpet-sweeper parts are protected by a duty of 25 per cent.; but the firm of Kennett Brothers uses all Australian goods in the manufacture of its machine. The manufacturers contend that they should be granted the same protection in respect of the finished article as is already granted in respect of parts. The Tariff Board agreed that the Australian firm had been responsible for bringing about a reduction of the price of imported machines, and recommended that the industry be protected. The manufacturers now ask for a British preferential duty of 30 per cent.; but I am sure that a protection of 25 per cent. would be accepted as a fair compromise. Kennett Brothers have exhibited a great deal of courage in pioneering the manufacture of carpet-sweepers in Australia, and their product is as good as the imported article. As a result of the operations of this firm between £5,000 and £6,000 annually has been saved to purchasers of carpet-sweepers in Australia. The manufacturers should be granted sufficient protection to enable them to secure a better quota in the local market. If the overhead costs are spread over a larger number of units, it should be possible for each unit to be sold more cheaply. That is the way all industries should work out if the people are not exploited - manufacturers do not increase their profits by charging more for each unit, but rather by increasing the total number of units produced. To test the feeling of the committee on this item, I move - >That the item be postponed. If it is carried, the amendment will be " an indication to the Government that the committee is of opinion that the duties should be British 25 per cent., and general 45 per cent." {: #subdebate-9-0-s48 .speaker-KZR} ##### Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP -- As the honorable member for Melbourne Ports **(Mr. Holloway)** has said, this is a small industry. The firm of Kennett Brothers was not the pioneer of the manufacture of carpet-sweepers in Australia; other companies had tried it before, but without success. The views of the firm were represented to the Tariff Board, and the industry was granted protection considered sufficient to enable it to carry on. Previously carpet-sweepers were admitted - British free; foreign 35 per cent. The honorable member for Melbourne Ports can hardly expect that the Australian manufacturers can increase their sales by 20,000 machines immediately following the grant of protection. I have heard of no serious complaint in regard to this industry. **Mr. Kennett** may have written a letter to the department; but my impression was that the firm was quite pleased when the present rate of duty was imposed. When the duty has operated for a time we shall he able to judge its effect. Should the rate of exchange drop to par the protection will increase to 30 per cent. {: #subdebate-9-0-s49 .speaker-F4U} ##### Mr FORDE:
Capricornia -- I support the remarks of the honorable member for Melbourne Ports **(Mr. Holloway),** whose request, I think, is quite reasonable. Although the industry is small, if it succeeds in securing the major portion of the Australian market it will develop rapidly. Kennett Brothers manufacture not only carpet-sweepers, but also other lines, and the firm has shown great enterprise and courage in risking capital in this industry. All the manufacturers ask is that the protectionist policy, for which the Australian people stand, be put into operation. {: .speaker-KZR} ##### Mr White: -- That has already been done. {: .speaker-F4U} ##### Mr FORDE: -- I do not think the Minister can be serious in making that statement. What protection is granted to the parts used by this industry? Brushware is protected to the extent of 25 per cent. British and 521/2 per cent. foreign ; rubber manufactures, 25 per cent. and 50 per cent.; screws, 271/2 per cent. and 60 per cent.; and transfers 30 per cent. and 50 per cent. respectively. We were told that 10 per cent. protection for the finished article was reasonable. Surely the Minister is joking! When the Australian business was established, the importers reduced their prices, and the public was saved between ?5,000 and ?6,000 per annum. If the local industry be destroyed, prices will again rise, as has happened in other cases. The Tariff Board always seems to have in mind the Ottawa agreement and the right of the British manufacturer to compete in the Australian market. The board does not question the efficiency of the industry or the quality of its product, for on page 5 of its report it states - >Difficulties were met with at the outset of manufacture in Australia and some criticisms of quality were given in evidence. The recent productions have shown definite improvement, and from an examination of machines, also from the perusal of twenty testimonials submitted by **Mr. Kennett,** the board is convinced that the present-day product is satisfactory, and that, therefore, it is justifiable to impose a duty, particularly in view of the fact that the raw materials if imported are dutiable. {: .speaker-KZR} ##### Mr White: -- The honorable member should read the next four lines. {: .speaker-F4U} ##### Mr FORDE: -- The industry asks that the same protection be given to the finished article as is given to its parts. Question - That the amendment (Mr. Holloway's) be agreed to - put. The committee divided. (Chairman - Mr. Prowse.) AYES: 22 NOES: 32 Majority . . 10 AYES NOES Question so resolved in the negative. Amendment negatived. Item agreed to. Item 381 agreed to. Item 389 - >By omitting the whole item and inserting in its stead the following item: - "389. (a) Fishing and rabbit nets and netting therefor; floats for fishing nets, ad valorem. British, free; intermediate, 10 per cent. ; general, 10 per cent. ; > >Fish-hooks, ad . valorem,British, free; intermediate, 15 per. cent. ; general,15 per cent." . Amendment (by **Mr. White),** agreed to- >That that portion of the tariff resolution introduced into the House of Representatives on 20th March, 1936, relating . to item 389 be incorporated in the present proposals as on and from the 21st March, 1936, in lieu of item 389 of the tariff resolution introduced into the House of Representatives on the 28th November, 1935. Item, as amended, agreed to. Item 390 agreed to. Item 392 (Cotton yarns). {: #subdebate-9-0-s50 .speaker-F4U} ##### Mr FORDE:
Capricornia -- It has been represented to me that Japanese cotton yarn dyed sulphur black, for manufacture info cotton tweeds, is being landed in Australia for 9d. per lb. The imports of this yarn into New South Wales for January and February of this year were - It will be noted that the local spinners are meeting this competition from Great Britain and Japan, and, therefore, I hope that the Minister will agree to have the item reconsidered. The present duty of 71/2d. per lb. is totally inadequate, in view of the fact that the landed cost of the Japanese article is 9d. per lb. If the Australian manufacturer is to withstand this competition, the foreign duty must he increased to at least1s. per lb., or he will have to use Japanese yarn, as, indeed, many Australian manufacturers are doing. If the latter course is followed, an important primary industry will be seriously affected. No increase of the duty against British goods isasked for. In connexion with item 392 a 4 - yarns for cordage and twines - it will be seen that the manufacturers of ropes and twines from yarn receive a duty of 3d. per lb. and ad valorem; 45 per cent, which is equivalent to about. 100 per cent., less the exchange adjustment, on the finished product. The Australian spinners receive a duty of 3d. per lb., or 30 per cent. ad valorem, whichever returns the higher duty. That represents about 20 per cent. after the exchange adjustment. For the months of January and February, 1936, theimportations for . Victoria and New South Wales amounted to 167,795 lb. As that was for two months only, the amount for a year would be approximately 1,006,770 lb. These figures are astounding. The price of this yarn is - This yarn, therefore, lands in the works of the rope and twine manufacturer for 12.37d., and they are unable to obtain the business because of the inadequate protection. In view of this, item 392 a 4 should be made to read, " 3d. per lb. and. ad valorem 30 per cent.". If this were done there would be. an outlet for 1,000,000 lb. of cotton for the growers and 1,000,000 lb. of yarn for the spinners. Australian cotton spinners have very heavy stocks of cotton yarn, and have had to curtail employment during the last few months. One large factory in Melbourne was employing 1,015 operatives in October last, but is now employing only 910. The spinners have not been able to place any orders for lint this year with the Queensland Cotton Board because they are unable to gauge their requirements, as the duties have been reduced from 6d. to 41/2d. per lb. I trust that the Minister will look into this matter with a view to ensuring that the industry is adequately protected. {: #subdebate-9-0-s51 .speaker-KZR} ##### Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP -- There is no fear of undue Japanese competition in regard to this industry. Under the comprehensive scheme of protection laid down by the Government, the production of local spinners increased from 4,825,000 lb. in 1932-33 to 8,111,000 lb. in 1933-34. Importations from Japan' have fallen from 1,700,000 lb. of cotton' tweed yarns to' 130,000 lb. The local spinners are supplying 96 per cent. of the market's requirements. Item agreed to. Items 393, 394 and 418 agreed to. Item 419 (X-ray apparatus and accessories). {: #subdebate-9-0-s52 .speaker-JTY} ##### Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954 -- I desire to draw attention to the fact that a duty of 25 per cent, has been imposed upon imported X-ray transformers. It is significant that in connexion with this item, a minority report has been presented by the Tariff Board. I suggest that, having regard to the high costs which will be imposed upon hospitals and medical practitioners who wish to purchase apparatus of this kind, and in view of the increasing demand for such plant in the treatment of various complaints, the Minister might refer the item back to the board for further consideration. {: #subdebate-9-0-s53 .speaker-KHL} ##### Mr HOLLOWAY:
Melbourne Ports -- I do not think that the honorable member for Barker **(Mr. Archie Cameron)** is in possession of the facts in regard to this item. The Australian industry engaged in the manufacture of this plant is one of which we have every reason to be proud. It has been established in this country after a tremendous struggle in its early stages, and it should be adequately protected. There is no reason to fear that the hospitals will be penalized by the imposition of a duty on imported machines, because no Australian hospital authority would consider buying any plant other than one manufactured in Australia. Eminent radiologists not only in Australia, but also in New Zealand, London and the United States of America, have expressed opinions favorable to the Australian apparatus. At the present time, machines manufactured in Australia are in operation in St. Vincent's Hospital, Sydney, the Sydney Hospital, the Brisbane Hospital, the Adelaide General Hospital, the Perth Public Hospital, the Hobart Public Hospital, the Masonic Hospital, Sydney, the Mildura District Hospital, the Ararat District Hospital and the Launceston Public Hospital. They are also being used by **Dr. R.** D. Mcintosh, radiologist. Hobart; **Dr. G.** Maitland, Sydney: **Dr. H.** Frecker, Sydney; and **Dr. F.** N. Rodda, of Orange. The Australian manufacturers sent a machine to London, where it was installed in a hospital, and an outstanding London radiolo gist, after using the machine, has expressed himself as being very pleased with the results obtained. I myself saw one of the machines in operation in Central Australia, where it had been taken by Professor Hackett, of Adelaide, for the purpose of investigating the disease known as " boomerang shin " among the aborigines. A very fine set of pictures was taken, and afterwards Professor Hackett asked me where I thought the machine had been made. I replied that it had probably been made in Sweden or Italy, where there were firms which have specialized in the manufacture of such plant. I was astonished when he told me that it had been made in Australia. I have been informed that the experts who examined the work of the machine in London were also unable to believe that it had been made in Australia. The factory in Melbourne, in which the machines are made, provides constant employment for more than 40 persons, all of whom are experts at their work. Australian timber and metals are used in the process of manufacture. The right honorable member for Yarra **(Mr. Scullin)** accompanied me when I inspected the factory, and while we were there we were placed in front of one of the machines so that the other persons in the room were able to see our hearts beating. In another test a lady's handbag was placed before the machine, and its contents immediately became visible. It is reassuring to know that it is possible to manufacture in this country technical machinery of this type, which should be exceedingly useful for defence and other purposes, and it is only right that the manufacturers should have adequate protection. I suggest that the Minister give further consideration to this industry. It is not my intention to move an amendment. I think that the board realizes that this is a worth-while industry, and, accordingly, it has recommended that it be given some protection. I ask the Minister to keep his eye on it, and if, as a result of the small protection given to the industry, its position is likely to be endangered, to review the duty. Motion (by **Mr. White)** agreed to - >That that portion of the tariff resolution introduced into the House of Representatives on 20th March, 1930, relating to sub-item (d) of item 419 be incorporated in the present proposals as on and from the 21st March, 1936, in lieu of sub-item (d) of item 419 of the tariff resolution introduced into the House of Representatives on the 28th November, 1935. {: #subdebate-9-0-s54 .speaker-KZR} ##### Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP -- I move - That the item be further amended by adding the following to sub-item (e) : - And on and after 2nd April, 1936 - {: type="A" start="E"} 0. (1) X-ray apparatus and accessories (imported separately or otherwise), viz.: - Electrically operated timers; tube shields: meters; bucky fluoroscopic grids ; fluorescent screens; intensifying screens; sheet lead glass; eye localizers; X-ray spectacles; fluoroscopic spectacles; condensers; dosimeters and fittings and accessories therefor ; X-ray tube holders of the shock-proof type for use in deep therapy units, ad valorem, British, free; intermediate, 20 per cent.; general, 20 per cent. {: type="1" start="2"} 0. X-ray transformers (imported separately or incorporated in or forming part of any goods), to be dutiable at the rates specified in item 179 ( d ) (2). 1. X-ray apparatus and accessories (including X-ray control stands and X-ray examining tables) n.e.i., ad valorem, British, 25 per cent.; intermediate, 35 per cent.; general, 421/2 per cent. And in respect of paragraph (3) - 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, . 6 per cent.; intermediate, 6 per cent.; general, . 6 per cent." This amendment concerns only the wording to paragraph (3) of sub-item (e). The wording has been varied by including the word " X-ray " before " Control Stands " to define more clearly the class of apparatus concerned, and by the addition of the words " X-ray Examining Tables " to provide specifically that these articles he made subject to the same protective rates of duty as apply to other X-ray apparatus and accessories, n.e.i. This gives effect to the recommendation of the Tariff Board. I endorse what the honorable member for Melbourne Ports **(Mr. Holloway)** has said with regard to this industry. It has been entirely reclassified and, although the British duty is now 25 per cent., the industry is not in a vulnerable position. Other classes of X-ray appa ratus are admitted under departmental by-law, and the Australian industry can hold its own in competition with overseas manufacturers. Amendment agreed to. {: #subdebate-9-0-s55 .speaker-KOQ} ##### Mr McCALL:
Martin .I direct attention to item 419 d dealing with the duty on dental chairs. Since evidence was given before the board the condition of the industry has considerably improved and the manufacturers have now an unanswerable case for protection. Those in opposition to the duty stated that, owing to the limited requirements of the Australian market, the local industry could never expect to become established on an economic basis. Apparently the board was convinced of the correctness of their statement, because in its comments it stated - It is unlikely, that for some time to come, the Australian demand for dental chairs will exceed 50 per annum. Since then one firm alone has had an order for approximately 150 chairs, and I contend that it is reasonable to assume that for the next twelve months approximately 250 dental chairs will be manufacturered in Australia. Evidently, the board based its findings on false premises. It stated - It is estimated that even if the local manufacturer secured 50 per cent. of the local market the expenditure in wages would not exceed £400 per annum. We now find, however, that owing to the increased orders the industry will pay annually approximately £6,000 in wages. It is true that at the present time the industry is not a large one ; but this may be said of all industries in their initial stages and there is no justification whatever for the assumption that the prospects of this industry are not favorable. The board admits that the industry is being efficiently managed. It states - The board is satisfied that the local manufacturerhas considerably improved his methods of production, and appreciates the fact that every effort has been made to supply the local demand. The board has no complaint as to the quality of the product. In the circumstances the elimination of the British duty is unreasonable and not in keeping with the protectionist policy of this country. I ask the Minister, in view of the further evidence concerning the possibilities of this industry to expand, to keep an eye on it, and if later conditions suggest the need for more effective protection to give the matter his careful consideration. {: #subdebate-9-0-s56 .speaker-KZR} ##### Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP .- The Tariff Board reported that in view of the limited Australian market the Australian industry could never hope to produce economically. I can assure the honorable member that the position will be watched carefully. The honorable member mentioned the additional orders given to this Australian firm. That was for a complete hospital equipment. Such an order is not likely to recur. The Govern- has increased the general tariff in order to safeguard this Australian industry, the duty being now £25 less 25 per cent. {: #subdebate-9-0-s57 .speaker-KCM} ##### Mr DRAKEFORD:
Maribyrnong -- I support the remarks of the honorable member, for Melbourne Ports **(Mr. Holloway)** regarding the manufacture of X-ray apparatus.I accompanied the honorable gentleman on his visit to the Victorian factory, and I endorse all that he has said about the desirability ofgiving the firm every encouragement. Itis manufacturing an article that is not being produced in any otherpart of Australia,and of a quality unexcelled in the world. It, therefore, deserves thesympathetic consideration of the Government. {: .speaker-KZR} ##### Mr White: -- The board has recommended the classification ofthe whole industry. . {: .speaker-KCM} ##### Mr DRAKEFORD: -- I wasgladto hear the Minister saythat its position had been safeguarded, and I feel sure, from what lie has, said, that theindustry will have his sympathetic attention. Item(with amendment of 20th March, 1936, incorporated), as amended, agreed to. Item 439 agreed to. Division 6.-Metals and Ma chin ery Item 157- >By omitting the whole item and inserting in its stead the following item:-' 157. Barbed wire - per ton, British, free; intermediate,160s. general,160s. > >And for each £1 by which the equivalent in Australian currency of £100 sterling is less than £125 at the date of exporta- tion- > >An additional duty of- per ton, British,2s. {: #subdebate-9-0-s58 .speaker-KZR} ##### Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP .- The effect of the proposed duties is to reduce the British preferential tariff rate by 51s. a ton, after deduction for exchange adjustment, for present exchange conditions, and by18s. a tonif exchange returns to par. The general tariff rate is reduced by 20s. a ton under all exchange conditions. Barbed wire is manufactured in every mainland State of the Commonwealth, and practically the whole of the Australian requirements are supplied by the local industry. The Tariff Board has reported that, at the time of its inquiry, locally-made barbed wire was selling at £2 7s. 6d. a ton less than the landed cost of British barbed wire on a duty free basis, which clearly indicated that, under existing exchange conditions, the imposition of a duty on the British product was not necessary. Since the date of the board's report, the principal local manufacturers have reduced the price by 7s. 6d. a ton, and. thus the margin between local selling prices' and the landed duty free cost of the British product has been further increased. Barbed wire of Canadian origin isat present entitled to the benefit of the . British preferential tariff rate. The Tariff Board has reported that Canadian prices are lower than British. Thus, while the removal of duty from the British product would have no detrimental effect, the duty free admission of Canadian barbed wirewould seriously affect the local industry. The Tariff Board has accordingly recommended that a protective duty be imposed upon Canadianbarbed wire, and Customs Tariff (Canadian Preference) Proposals No. 3 have been introduced to give effect to this recommendation. Honorable members will therefore have the opportunity to discuss the Canadianduties at a later stage.Thedutiesnow proposed should not have any adverse effect upon the local industry. {: #subdebate-9-0-s59 .speaker-F4U} ##### Mr FORDE:
Capricornia -- The duty has been removed from barbed wire fromGreat Britain. The reportof theTariffBoardon the matter was. placed before honor able members only to-day, and I have nothad an opportunity tostudy it. The industrydraws its supplies ofraw material, in the form of steel rods,from the Australian' steel works . It is efficiently conducted, and has reduced prices. At the old rate of duty it was able to capture practically thewhole of the Australian market. I fear that it may now be made vulnerable to imports from other countries. As it pays higher wages than are paid overseas, I do not think that it can carry On with no duty against Great Britain. If a duty of £8a ton is necessary to protect it against importsfromEurope, surely some reasonable protection shouldbe given against impor ts from the United Kingdom. If there is evidence of substantial imports,I trustthat the Minister will have the necessary duties' imposed when this chamber re-assembles. {: #subdebate-9-0-s60 .speaker-K4X} ##### Mr NOCK:
Riverina -- I support the proposal ofthe Minister. sometime pressurehadbeen applied forthe submission of barbed wire tothe Tariff Board, because this isone industry which didnotreduceprices inconformity with the general reduction ofcosts; indeed prices were raised.The Tariff Board has reported that a dutyis not necessary againstGreat Britain. Even though it would appearfrom the figures supplied to the board that, from the drawn-wire stageto thefinished article,the cost of production is reasonable,no indication has been given regarding thereasonablenessof the price charged for the drawn wire supplied tothemanufacturers.Asthisproduct ismanufactured by the Broken Hill Proprietary CompanyLimited,which isable tocompete againsttheimportsof other lines without a duty against GreatBritain, therecommend ation oftheTariff Board for free admission fromthe United Kingdom might well be accepted. Itemagreedto. division7.-oils,paintsand varnishes Postponeditem234- >Byomittingthewholeofsub-item(a)and insertinginitssteadthefollowingsub-item:- "(a) Portland Cement, per cwt.: British, free; intermediate,1s.;general.1s.41/2d. > >And in respect of sub-item (a) - > >Foreach £1bywhich the equivalent in Australian currencyof£100 sterlingis less than£125 atthe date of exportation- An additional duty of, per cwt.: >British,36d.; intermediate, 36d.;general,36d." {: #subdebate-9-0-s61 .speaker-KZR} ##### Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP -- I move- >Thattheitem be amendedby adding the following to sub-item (a) : - "And on and after 2nd April, 1936 - (a)portland Cement, per cwt. ; British, 6d. ; intermediate,1s. 3d.; general, 1s.6d." The amendment giveseffect to the direction implied in the committee's postponement of the item some days ago. It is with regret that I move this amendmentinfaceofthe recommendationoftheTariffBoardonPortland cement, but as it is thewish of the committee thatthe amended ratesbe imposed, Ihavenooption in the matter. Amendmentagreedto. Item, as amended, agreedto. Preliminaryparagraphs (1) to (7) agreed to. {: #subdebate-9-0-s62 .speaker-KZR} ##### Mr WHITE:
Minister forTrade and Customs · Balaclava · UAP -- I move- >That thefollowing be added to the preliminary paragraphs:- " ( 8 ) That, notwithstanding anything containedintheforegoingparagraphsofthis resolution,dutiesofcustomscollectedin accordance with theseproposals as introduced into the House of Representativesonthe twenty-eighthday ofNovember, One thousand ninehundredandthirty-five,inrespectof goods the rate ofdutyonwhich,asspecified in.theproposals as so introduced, isdisagreed with bytheHouse of Representatives, shall, where the duty iscollectedprior to thefirst dayofApril,Onethousandninehundredand thirty-six,atnineo'clockintheforenoon, reckonedaccordingtostandardtimeinthe territoryfortheSeatofGovernment,bedeemed tohavebeenthedutieslawfullyimposedin respectofthosegoodsasatthetimeofcollectionandsuchdutiesshallbedeemedtohave beenlawfullyimposedandcollected". Honorablememberswillrecollectthat earthernware,wasdeletedfromthetariff proposalsastheresultofthedecisionof thecommitteeyesterday.Theitem isdeletedasfromthedateof operationoftheproposals,namely,the 29thNovember,1935.Asthelower duties under the tariff proposals were in operationpriortothedeletionoftheitem, itwillbenecessary,unlessthismotion beagreedto,todemandthehigherduty, under the law, from importers. This wouldundulyhampertrade,inthatim- porters could scarcely be said to be in a positiontorecoverthedutyongoods which had been sold. I feel sure, therefore, that the committee will agree to validate the collections at the lower rates. Question resolved in the affirmative. Prefatory note 12 agreed to. Postponed matter with reference to the explanatory note to the heading of Division 6, agreed to. Resolution reported. Standing Orders suspended;resolution adopted. *Ordered -* >That **Mr. White** and **Mr. Archdale** Parkhill do prepare and bring in a bill to carry out the foregoing resolution. {: .page-start } page 814 {:#debate-10} ### CUSTOMS TARIFF BILL 1936 Bill brought up by **Mr. White,** and passed through all its stages without amendment or debate. {: .page-start } page 814 {:#debate-11} ### HOUR OF MEETING Motion (by **Mr. Archdale** Parkhill) agreed to - >That the House, at its rising, adjourn until 10.30 a.m. this day. > >House adjourned at 1.35 a.m. (Thursday). {: .page-start } page 814 {:#debate-12} ### ANSWERS TO QUESTIONS *The following answers to questions were circulated: -* {:#subdebate-12-0} #### Imports from the United States of America {: #subdebate-12-0-s0 .speaker-KFE} ##### Mr Gregory: y asked the Minister for Trade and Customs, *upon notice -* {: type="1" start="1"} 0. What has been the value of imports from the United States of America of motor cars, chassis and motor bodies or motor parts during the past three years? 1. What has been the value of imports of agricultural machinery from the United States of America during the same period? {: #subdebate-12-0-s1 .speaker-KZR} ##### Mr White:
UAP -- The answers to the honorable member's questions are as follows : - {:#subdebate-12-1} #### Citrus Fruits : Entry to New Zealand {: #subdebate-12-1-s0 .speaker-F4U} ##### Mr Forde: e asked the Acting Minister for Commerce, *upon notice -* {: type="1" start="1"} 0. In view of the approach of the 1936 citrus season, will he indicate what progress has been made in the negotiations with the New Zealand Government with a view to the lifting of the embargo on Australian citrus fruits entering that dominion? 1. Is it afact that there was recently an acute shortage of oranges in New Zealand, and that a complaint was made by the superintendent of the Wellington Hospital Board in regard to the extreme difficulty in securing supplies of oranges for the patients, at a time when Australia is deprived of a market for citrus fruits worth £200,000 per annum? {: #subdebate-12-1-s1 .speaker-KWC} ##### Mr Thorby:
CP -- The answers to the honorable member's questions are as follows : - {: type="1" start="1"} 0. The Commonwealth Government has not to date been able to induce the New Zealand Government to lift the embargo on Australian citrus fruits entering that country. The Commonwealth Government's efforts have not, however, been relaxed, and further representations are now being made. 1. The Government has no information regarding such a complaint. {:#subdebate-12-2} #### Stokes Hill: Excavations {: #subdebate-12-2-s0 .speaker-KOQ} ##### Mr McCall: l asked the Minister for the Interior, *upon notice -* {: type="1" start="1"} 0. During the heavy excavations recently made at Stokes Hill for the purpose of making room for naval oil fuel tanks, is it a fact that the excavated material was dumped into the harbour ? 1. Is it probable that this material is silting up the berth, which now requires immediate dredging ? 2. Could the material which has now to be dredged have 'been more profitably used to reclaim some of the foreshores? {: #subdebate-12-2-s1 .speaker-KXT} ##### Mr Paterson:
Minister for the Interior · GIPPSLAND, VICTORIA · CP -- The answers to the honorable member's questions are as follows : - {: type="1" start="1"} 0. . The excavated material was used to reclaim portion of the foreshore, where the reclaimed land would bo most useful, i.e., between the tanks and the water front. 1. No. Silting up was noticed some considerable time before the excavations were commenced. The reclaimed land is faced with stone up to above high-water mark for the purpose of preventing the soil from being washed away. 2. Sec answer to No. 1. {:#subdebate-12-3} #### Ottawa Agreement: Review {: #subdebate-12-3-s0 .speaker-JOM} ##### Mr Beasley: y asked the Minister for Trade and Customs, *upon notice -* >When the Ottawa agreement comes up for review next year will he undertake that a request will be made for an alteration in the agreement to provide that British manufacturers approaching the Tariff Board for a reduction in duties must make the same submissions to it as are made by Australian manufacturers? {: #subdebate-12-3-s1 .speaker-KZR} ##### Mr White:
UAP -- All aspects of the Ottawa agreement, including the one covered by the honorable member's question, will be carefullyexamined by the Government before any review takes place. {:#subdebate-12-4} #### Export of Bullion and Specie {: #subdebate-12-4-s0 .speaker-JOM} ##### Mr Beasley: y asked the Treasurer, *upon notice -* {: type="1" start="1"} 0. Can he explain why exports of bullion and specie have increased from £5,832,000 for the eight months ended 28th February,1 935, to £7,268,000 for the period ended 29th February, 1936? 1. What portion of the £7,268,000 was gold? 2. What is the reason for the export of such a large amount of bullion and specie? {: #subdebate-12-4-s1 .speaker-JWE} ##### Mr Casey:
Treasurer · CORIO, VICTORIA · UAP -- The answers to the honorable member's questions are as follows : - {: type="1" start="1"} 0. The increase is due largely to increased activity in gold and silver mining in Australia, the estimated value of newly-mined gold and silver increasing from £4,433,320 sterling for July-February, 1934-35, to £5,512,644 sterling for July-February, 1935-30, an increase of over £1,000,000 sterling. 1. From July-February, 1935-36, gold exports amounted to £6,672,657 sterling, of which approximately £4,017,000 sterling was newly-mined gold. For the same period imports of gold totalled £1,078,000 sterling. 2. There is nothing unduly large in the export of bullion and specie; the bulk of the exports not accounted for by current production are offset by imports of bullion and specie. New Guinea: Execution of Natives. {: #subdebate-12-4-s2 .speaker-F4O} ##### Mr Lyons:
UAP s. - On the 27th March, the honorable member for Bass **(Mr. Barnard)** asked the following question, *upon notice: -* >What is the total number of natives executed in the Mandated Territory of New Guinea each yearsince it came under the control of the Commonwealth Government, and of what crimes were such natives convicted? I then supplied the honorable member with information in relation to the period 1st January, 1925, to date, and intimated that particulars for the period 9th May, 1921, to the 31st December, 1924, were being obtained. I am now ina position to advise the honorable member that the records disclose that two natives were executed during the period mentioned - both in the year 1923. {:#subdebate-12-5} #### Migration :fairbridge Farm School {: #subdebate-12-5-s0 .speaker-F4O} ##### Mr Lyons:
UAP s. - On the 26th March the honorable member for Maribyrnong **(Mr. Drakeford)** asked me the following questions, *upon notice -* {: type="1" start="1"} 0. . What amount of money has been expended by the Commonwealth Government in connexion with the Fairbridge (Western Australia) scheme of child migration? 1. How much money has been expended by the Commonwealth Government, in the aggregate, on migration generally? I am now in a position to furnish the following replies : - {: type="1" start="1"} 0. £35,450. 1. The amount expended by the Commonwealth in the aggregate on assisted migration generally, from and including the financial year 1920-21, is £2,279,185. Annual Reports of Territories. {: #subdebate-12-5-s1 .speaker-JWE} ##### Mr Casey:
UAP y. - On the 27th March the honorable member for Richmond **(Mr. R. Green)** referred to the annual reports of the Commonwealth territories, and particularly to the reports in relation to the Territory of Papua and the Mandated Territory of New Guinea, and asked whether action could be taken to ensure that such reports are presented to Parliament within a reasonable time after the close of the financial year in respect of which the reports are made. I informed the honorable member that I would have the matter looked into, and am now able to advise him that steps have been taken with a view to annual reports of the Territory of Papua being presented to Parliament as early as possible after the close of each year. The annual report on the Mandated Territory of New Guinea is made to the Council of the League of Nations, and copies of the report cannot he made available until the report is received and considered by the Permanent Mandates Commission. It is the practice for the Permanent Mandates Commission to consider the annual report of New Guinea at a session of the commission held at Geneva about June of the year following the financial year in respect of which the report is made. It is not therefore possible for the reports on that territory to be presented to Parliament before that time.

Cite as: Australia, House of Representatives, Debates, 1 April 1936, viewed 22 October 2017, <http://historichansard.net/hofreps/1936/19360401_reps_14_149/>.

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