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Thursday, 25 October 1956


Mr CLEAVER (Swan) .- lt is pleasing to find that the honorable member for Wilmot (Mr. Duthie) supports this bill I am not always in agreement with him. and even this evening 1 agree with him with reservations. I suggest thai he and some other honorable members have noi correctly interpreted this measure. I am particularly interested in it, and am at least consistent in my views on the tractor bounty, as it was my pleasure to speak with some emphasis when the Tractor Bounty Bill 1956 was under consideration during the last sessional period.

This bill does not go far enough. To me and to the company which will benefit from the bounty it is most disappointing. J want to emphasize that the Tractor Bounty Act was passed to encourage and protect the Australian tractor manufacturing industry. It was recognized that Australia, as £ young, developing country, needed mam more such industries. This is a heavy machinery industry which is vital to out development. Therefore, it comes within the category of those industries which, as we have seen over the years, should receive definite encouragement, particularly in their early stages.

It so happens that the only company that receives direct benefit from the tractor bounty is Chamberlain Industries Proprietary Limited, of Welshpool, in Western Australia. This company's factory, which employs some 800 or 900 workers, is situated in my electorate. J am closely associated with its operations, and I am naturally vitally interested in its future. I remind honorable members that the basic principle underlying the Tractor Bounty Act is that the bounty paid should help the company concerned to make a profit on its operations after years of struggling to become established. I am sure it is not necessary for me to-night to go over the ground that I traversed some months ago when I pointed out how desperate was the company's situation in its early months of operation. As the years have passed it has, understandably, accumulated an overdraft, which is so great that the Western Australian Government has had to come into the picture and support the company's operations in order to save it from collapse. The object of the act, as far as I can interpret it, is that the company should receive the bounty for every tractor it produces. I suggest that this is the logical interpretation. For what other purpose is the bounty paid except to ensure that a margin of profit shall be enjoyed by the company?

Chamberlain Industries Proprietary Limited is a progressive company. I have previously referred to its struggle to become established. As I have said before, it will enjoy a slight profit margin if the bounty is continued for the next, three years as has been arranged. Without the bounty it would have no margin of profit. Not only has this company made progress in its operations, but it is offering to primary producers and to any one who requires a tractor a most acceptable machine. The name of " Chamberlain " is known across Australia to-day, and honorable members who represent country electorates will agree that it has become recognized as the mark of a machine of excellent quality. The demand for Chamberlain tractors has naturally been most outstanding in Western Australia, but in Queensland, the State which is farthest removed from the Chamberlain factory, there is a growing demand for the various tractors produced by this company, which, as other companies have done, has once again proved the capabilities of Australian enterprise.

Since its establishment the company has been conducted not as a government concern but as a private undertaking. There is now clear evidence of its success and of the high quality of its products. I emphasize that the Chamberlain company has naturally undertaken market research so that its production programme may be based on a clear understanding of the demand for tractors in Australia. This programme has been adjusted with the passage of the years. In the last twelve months or so the company has made every possible endeavour to reduce costs. Precision machinery has been installed for this express purpose and to enable it to produce tractors of even better quality. I should like to take the opportunity to tell the House something of the company's production programme, and what it expects to be able to do in the current financial year if it receives for every tractor produced a bounty of between £200 and £240. It expects, if the demand continues at the present level, to be able to produce during the next twelve months between 1,200 and 1,500 Champion model tractors of 48 maximum belt-pulley horse-power; approximately 200 55 D.A. model tractors of 55 maximum belt-pulley horse-power; and 120 70 D.A. heavy model tractors which exceed 70 maximum belt-pulley horse-power.

The Tractor Bounty Act was renewed during the last sessional period for three years subsequent to the submission by the Tariff Board of its report of 14th October last year. The board had been requested to undertake its tenth investigation into the tractor industry in Australia, and to report to the present Attorney-General (Senator O'sullivan), who was then Minister for Trade and Customs, whether the Tractor Bounty Act should be renewed for another three years. In its conclusions at page 8 of the report the board stated - the Board is satisfied that the industry has not remained static. The evidence shows that the industry has already introduced, and plans further introduction of, new models: by incorporating diesel power units in its locally produced tractors it has kept abreast of the present tendency on the part of tractor buyers to favour diesel tractors. The local industry has been forced by competition to meet the demand that, it is claimed, exists for high-powered tractors of this type.

When the Tractor Bounty Bill 1956 was under consideration in this Parliament I found that a careful examination of its provisions in conjunction with the Tariff Board's report clearly showed to any one who was interested in the matter and who could intelligently read the report that that om introduced two anomalies. I realize, of course, that the Tariff Board is a select committee of men entrusted with very great responsibility in their various investigations and reports in connexion with Australian industries, and they were most deliberate, in the report from which 1 have quoted, in two respects. Their views on these two aspects of the matter have not been supported by the bill that the Government has introduced. One of the board's recommendations was as follows: -

That the Tractor Bounty Act 1939-1953 be amended to provide for payment of bounty on tractors exceeding 55 m.b.p.h.p., when fitted with an imported engine, of £200 per tractor.

In its explanation to support that recommendation, the board said -

No provision is made in the Tractor Bounty Act 1939-1953 for the payment of bounty on the production in Australia of wheel-type tractors of over 55 m.b.p.h.p. As the present tendency is towards high-powered tractors the board considers thai a bounty should be paid on wheel-type tractors coming within this category. The volume of sales in the over 55 m.b.p.h.p. classification is relatively low by comparison with the sales volume in the other five classifications and the board is of the opinion that it would bc uneconomic to manufacture in Australia the large high horse-power multicylinder diesel engines used as the power unit of these tractors. For this reason the bounty should be extended to cover such tractors when manufactured in Australia and incorporating imported engines. At the present time Australian tractor manufacturers using diesel engines imported from \merica have to pay a duty of 10 per cent, a valorem on the engine, whereas a competitive tractor of United Kingdom origin is free of duty. Hie board suggests that the rate of bounty on tractors exceeding 55 m.b.p.h.p., incorporating imported engines, should be £200 per unit. The cost of the engine would need to be excluded from calculations determining the percentage o' Australian content. \nother point of view expressed in the board's report, and which I believed was anomalous when not incorporated in the

Jill, was that the Tariff Board felt that a protective tariff was entirely warranted in order to protect the Australian tractor manufacturing industry. When these two points, which I recognized as anomalies, were not covered by the bill, and it was recognized that the bill would merely enable he continuance of the subsidy payment on tractors below 55 horse-power, and that there would be no tariff protection, I made subsequent representations to the Minister. 3nd I expected that the amendment that is now before the House would be so drafted that at least one of those two anomalies would be adjusted. If any misunderstanding occurred in my contacts with the Minister and the discussions that I have had, 1 must claim that at least I understood that the larger tractor would be covered by subsidy when the amending bill was brought down.


Mr Calwell - The honorable member was dumped.


Mr CLEAVER - My representations then were primarily aimed at obtaining bounty payment on tractors over 55 horsepower, and in my correspondence and my discussions I used the wording used by the Tariff Board in its report. Nowhere in this Tariff Board report is there any reference to a ceiling of 70 horse-power, and 1 was most surprised, on examining the bill, to find that the schedule of the bill is to be altered by replacing the figure 55. with the figure 70. I suggest, therefore, that the amending bill before the House, as it stands, will accomplish very little indeed. I might well ask the question: What will this bill accomplish? In very succinct terms, I suggest that this is what the bill really does: In the first place, it removes the necessity to fit a governor to reduce the horse-power of the larger tractor produced by the Chamberlain company. The company found it necessary, under existing legislation, to fit a governor on these tractors, in order to reduce their horse-power below 55 and allow them to qualify for subsidy payment. This bill removes the necessity to fit such a governor.


Mr Osborne - And that is all that we claim the bill does.


Mr CLEAVER - In the second place, the bill confers, possibly, a slight benefit on the company because it will be able, in its advertisements, to offer a 60 horse-power tractor instead of only a 55 horse-power machine.


Mr Calwell - And " slight " is the operative word.


Mr CLEAVER - This would, in my opinion, represent only a minor benefit because if the company's marketing programme shows any improvement, it will be only because some farmers may prefer to buy a tractor of 60 horse-power rather than one, the engine of which is governed back to 55 horse-power. As a third result of this bill, the setting of a ceiling limit of 70 horsepower for the payment of subsidy robs the Chamberlain company of approximately £24,000 in subsidy for the current year, as it is expected that the company will produce up to 120 tractors of more than 70 horsepower.


Mr Calwell - The honorable member used the word " robs ". Is that right?


Mr CLEAVER - What should be done? What is it possible for me to do in this set of circumstances? I want to urge the Government most strongly to review the Tractor Bounty Act once again, and to provide for the following two matters - first, the removal of the limit of 70 horse-power in the table of bounty rates, and a provision that tractors of more than 40 horse-power should qualify for the bounty of £240; secondly, because of that recommendation of the Tariff Board which is material in regard to the larger tractors, I strongly recommend the exclusion of the cost of imported engines used in Australianproduced tractors when determining the percentages of Australian content for the purpose of qualification for subsidy. In other words, the cost of the imported engines should be excluded, so that the company may legitimately claim the subsidy on each of the heavy tractors that it produces.

In conclusion, I may say that T am disappointed in the bill as it stands.


Mr Calwell - You can say that again!


Mr CLEAVER - The honorable member for Melbourne (Mr. Calwell), who has been interjecting, needs to be reminded that his colleague, the honorable member for Wilmot (Mr. Duthie), said that he felt that the bill as it stands is exactly as the Opposition would like it.


Mr Calwell - He did not say that.


Mr CLEAVER - I repeat that I believe, as does the company which receives assistance under the act by way of bounty, that this bill is barely a move in the right direction. However, while it does not provide for the logical encouragement that I had expected, it has at least the merit that it removes the necessity for the installation of governors on tractors to reduce their horsepower below 55. In the interests of the tractor industry and of the particular company that this bill affects, and also of the hundreds of employees associated with the company, which is situated in my electorate of Swan, I shall vigorously press for the adoption of the Tariff Board's recommendations, which I have endeavoured to bring strongly before the notice of honorable members to-night.







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