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Thursday, 25 October 1956

Mr OSBORNE (Evans) (Minister for Air) . - in reply - When I introduced this bill, on 23rd October, I referred to it as a simple bill intended to raise the existing maximum limit of horse-power of tractors on which bounty is payable under the Tractor Bounty Act. I would not have believed that such a simple bill could have provoked a debate which would range so wide or produce so many interesting and varying viewpoints. I do not want to be taken as agreeing entirely and completely with everything that has been said by my friends, the honorable member for Mallee (Mr. Turnbull) and the honorable member for Moore (Mr. Leslie). They have put their hands on the essence of the criticism raised by the Opposition, and, indeed, raised by my friend, the honorable member for Swan (Mr. Cleaver), who objected to the Government's failure to adopt the recommendation of the Tariff Board that a customs duty should be imposed on imported tractors. The two members of the Australian Country party who have spoken have pointed out the inevitable effect of the imposition of a customs duty on tractors in increasing the costs of primary production in Australia, because, whether the honorable member for Melbourne (Mr. Calwell), who is the Deputy Leader of the Opposition, likes it or not, the fact is that most Australian primary producers are dependent on imported tractors, and any imposition of customs duty on. imported tractors would inevitably raise the cost of primary production in Australia. As this Government knows very well, and as I believe the whole House knows, though some Opposition members are occasionally reluctant to admit it, a prime function of government to-day is to do all that it can in keeping down the costs of primary production.

The Deputy Leader of the Opposition, in an amusing speech, criticized the Government for not adopting the Tariff Board's report, and he ranged wide, in his imaginative manner, over the whole field of the Australian economy. I never listen to the Deputy Leader of the Opposition, particularly when he speaks about an economic measure, without being profoundly thankful for the fact that we live in a democracy which enables the people, by their votes, to prevent him from applying his economic theories, because I think that if the theories he advanced to-night were ever applied they would have some very curious and strange effects on the Australian economy. I might also be permitted to say that I never listen to him speaking on these measures without feeling somewhat envious of a member of the Opposition who can speak without any responsibility for what he says. He does not care what he says, because he knows that his policies will not be put into operation. He wound up, oddly enough, by supporting the bill, having spent most of his time criticizing it. The essence of his criticism seemed to be that we, in this country, had passed the time when any industry should be supported by a bounty, and that all industries should be supported by customs duties, which, to my mind, is an extraordinary proposition. The whole purpose of the adoption of bounty assistance is to support a single industry in its establishment stages without causing a rise in the whole scale of Australian costs through the imposition of a customs duty over a wide range of manufactures.

He used, in his criticism of the Government, the fact that in this bill we have not followed entirely, or indeed even substantially, the advice of the Tariff Board contained in its report on tractors made on 14th October last year. He admitted that the Tariff Board is not always right, and then he criticized the Government severely for not always adopting its recommendations. I should have thought that his own experience in office would have reminded him that the Tariff Board has one function, which is to advise the Government within limited issue, but that the Government holds the whole responsibility for the effects of its legislation and its administrative acts, and that it is obliged to examine critically the recommendations of the Tariff Board in each report which comes to it, and would be irresponsible if it did not do so. The final responsibility lies with the Government. It cannot escape that responsibility, and it must exercise its own judgment on the reports of the board. The fact is that the Government, in the vast majority of cases, accepts the recommendations of the Board, in which it has the greatest confidence, but in this case it did not feel able to do so, and for very good reasons.

A more serious approach to this bill, not only in relation to what the bill proposes to do but also in relation to what the Government has not done in this matter, was made by the honorable member for Swan. I hope that he will not feel unkindly towards me if I say that I think his judgment has been affected by his concentration on the importance to the area he represents in the Parliament of the one manufacturer who is most concerned in this matter. I think that it might be said of the criticisms that he offered that in his zeal for the representation of his own electorate perhaps he did not give full consideration to the effect of the measures which he would have preferred the Government to adopt. In fact, the Chamberlain company is the only company which receives any benefit under the Tractor Bounty Bill. The company manufactures three different types of tractors, one large tractor and two smaller ones.

Mr Curtin - What is the difference?

Mr OSBORNE - A difference of size. The last amendment of the Tractor Bounty Bill provided, in effect, that a bounty was payable on all of the smaller tractors which the Chamberlain company produce. The bill was so drawn as to limit the payment of the bounty to tractors which had an engine with a capacity of between 40 and 55 horse-power. It was pointed out to the Government that the company was in fact using in these two smaller tractors an engine which was capable of developing more than 55 horse-power, and that it was embodying in the engine a governor to ensure that it did not develop more than 55 horsepower. The Government immediately recognized that the existing provision imposed a needless restraint on the company. lt seemed unnecessary to require the company to embody a governor in the tractor to prevent the engine from developing its maximum horse-power, and so preventing the buyers of the tractors from enjoying their full capacity. So the act is to be amended to ensure that the bounty on the two smaller types of tractor which the company produces shall be payable, even though they develop their full engine power. That is all that this bill purports to do.

The honorable member for Swan said that he was disappointed that the bill did not go further and, in fact, provide a subsidy for the larger tractor produced by Chamberlain Industries Proprietary Limited. The Government has considered that matter very carefully and has decided not to subsidize the larger tractor. I should like to tell the House the principal reasons for that decision. First, the company at the present time produces only about 100 of the larger tractors a year and the bounty involved would be approximately £20,000. Chamberlain Industries Proprietary Limited has been doing comparatively well in recent times, lt has been getting nearer to a commercial profit-making standard and, in fact, is making a small profit. It is progressing satisfactorily with the three types of tractors it is making, and the Government does not believe that it is necessary to subsidize the larger tractor to keep the company afoot.

The next point is this: In the larger tractor, which the honorable member for Swan hoped would be subsidized but which has not been, the company has been using an engine imported from America, on which it pays duty. That was one of the points mentioned at the Tariff Board inquiry, lt proposes very soon to change to an English-made engine, on which it will not pay any duty. The saving that will arise from the change to a duty-free engine from an engine on which duty was paid will be greater for each unit than the amount of bounty which would be paid.

Dr Evatt - Now repeat what you had to say about the Deputy Leader of the Opposition.

Mr OSBORNE - He can read it tomorrow. It lies within the power of the company - and we understand that it will very shortly so arrange - to make a saving greater than the bounty which the honorable member for Swan would like us to pay by using the English-made engine.

The next point is that if the Government amended the Tractor Bounty Act in the way suggested to cover the tractors with target horse-power, the products not only of Chamberlain Industries Proprietary Limited but also of other manufacturers, who are manufacturing quite successfully without any bounty or duty, would become subject to bounty. The cost to the taxpayers would be enormous.

Mr Cleaver - The other company has never made such a tractor.

Mr OSBORNE - If, as the honorable member for Swan suggested, we had raised the limit on horse-power to enable these tractors to qualify for bounty, tractors manufactured by other companies in Australia would qualify for bounty, and those companies do not need that bounty.

The final argument that a customs duty should have been imposed has been effectively answered by my friends from the Country party, the honorable member for Mallee and the honorable member for Moore, who spoke earlier. The Government does not believe that the costs of primary production should be increased by the imposition of a duty on tractors in order to assist one company producing, at the present time, 100 of those tractors a year. Another reason is this: The honorable member for Swan referred to the somewhat peculiar capital structure of the company in question. It is, in fact, supported very substantially by the Western Australian Government through its agencies. If it comes to a question of receiving government support, the company is already receiving considerable support by its favorable capital structure and is assisted by the Western Australian Government.

I hope I have indicated to the House, even if honorable members do not agree with them, sufficient arguments to show that the Government has seriously considered this problem and, in deciding to go only as far as it has in adopting the recommendations of the Tariff Board, it has at least made a considered judgment and, I feel, the only reasonable judgment to which it could come. I commend the bill to the House.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

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