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Wednesday, 29 April 1936

Senator FOLL (Queensland) .- 1 agree with the remarks of Senator Leckie about the need of adequate protection of Australian industries, and I feel sure that our kinsmen overseas recognize that, in order to keep our people employed, it is necessary to establish in Australia large secondary industries. But I disagree with the honorable senator's observations with reference to the effect of the Ottawa agreement on Australian industries. Those of us who have watched closely world events since 1931 will recall that the Imperial Conference, which was attended by the then Prime Minister (Mr. Scullin), Mr. Parker Moloney and Mr. Brennan, dispersed without having marie any plans for the orderly marketing of Empire products in Great Britain. At that time there was an alarming glut of primary products on the London market, and prices declined to such an extent as gravely to endanger the position of primary producers in the Mother Country. As a way out of the trouble, the then Premier of Canada (Mr. Bennett), convened the Ottawa Conference for the discussion of marketing problems common to the Mother Country and all the dominions, and I claim, contrary to the views expressed by Senator Leckie, that but for the Ottawa agreement the primary producers of Australia would to-day be in a very serious position. Senator Leckie emphasized the recent increase of importations from Great Britain as compared with importations in -1931. The improved trade is due entirely to internal recovery in Australia, and it should be noted that the increased importations include machinery and other classes of goods required for expanding secondary industries in this country. Were it not for the preference given to Australia by Britain, this country could not dispose of its exportable surplus of sugar, except at greater loss than is now incurred. That preference makes it possible for 97 per cent, of Australia's surplus sugar production to be disposed of in the United Kingdom. With the exception of wheat and wool our primary products have practically only one overseas market; and until additional markets are secured, we shall have to nurse that market very carefully.

Senator Collings - Every country is seeking additional markets.

Senator FOLL - That is so. The high quality of Australian primary products is appreciated by the people of Britain, and that fact ensures for them a share of the British market.

I do not agree that the rejection pf an item in this tariff schedule is likely to cause other parts of the British Empire to cease to buy Australian primary products. Such a suggestion is ridiculous, if only for the reason that Australia owes Britain a considerable debt, which can be paid only by Britain accepting large quantities of our primary products. On the 5th July last, the British Minister for Agriculture, Major Elliott, addressing a conference in Westminster Hall,

London, said that it was necessary for Great Britain to trade with those countries which were in its debt. As a member of that conference, I asked -

I would like to ask whether, when the beef agreement was entered into between Great Britain and the Argentine, such considerations as the payment of interest due on money that had been lent by Britain to the Argentine were taken into account as part and parcel of the agreement between Britain and the Argentine, whereas when the restriction was placed on our own Dominion of Australia the British Government knew that Australia would never default and none of those interest payments or things of that sort were taken into consideration at all?

The Minister for Agriculture replied -

No, that is not accurate. We were simply governed by the old maxim, which has several times been reiterated here in ovir discussion, that unless wc accepted the beef we could not expect payment, and that unless we accepted it we should force default upon our debtor. It was exactly the same in the case of Australia and in the case of the Argentine.

Public men in Great Britain realize that that country must accept large quantities of dominion products if the dominions are to meet their obligations to the old country. In our desire to dispose of our exportable surplus, however, we should be careful not to do anything to injure our chances of securing a larger share of the British market. When in England a few months ago, I found that the people there recognized that Australia could not confine itself to primary production, but must make a proportion of its requirements of manufactured goods. The suggestion that by rejecting one item in this schedule we endanger our export trade with Britain is ridiculous.

During , the last few weeks statements by the Prime Minister (Mr. Lyons) and other members of the Cabinet, that it may be necessary to place restrictions on imports from the United States of America, have been given prominence in the press. Art. the. present time it is" essential that the closest and most friendly relations should exist between the English-speaking nations of the world, and, therefore, I should be sorry to see any action taken which might cause ill feeling between this country and the United States of America. I am aware of the serious nature of our trade relations with that country, and admit that for twelve or fifteen years Aus- tralia's trade balance with the United States of America has become increasingly alarming; but, after all, not many of the goods which are imported from there enter into competition with Australian manufactures. Moreover, most of the things of which Australia has an exportable surplus are grown, or manufactured in the United States of America.

Senator Hardy - 'What about Australian wines?

Senator FOLL - I have always favoured the establishment of trade agencies in other countries. Foi- many years Australia has had a trade agency in the United States of' America ; but I have been greatly disappointed that more success has not attended its activities. An analysis of Australia's imports from the United States of America shows that the greater part of them consists of motor cars, oils, petrol and motion picture films. The people of Australia have the remedy in their own hands. They could, for instance, buy more motor cars made in Britain and fewer of those made in the United States of America. Unfortunately, however, the percentage of motor cars imported from Great Britain is decreasing rather than increasing. British petrol and oils are available to the Australian public so that in regard to those items also, there is no need to purchase American products. Nevertheless, 1. repeat that, at this juncture, we should encourage the closest possible relations with other English-speaking countries, and not indulge in threats of tariff action against them.

I draw the attention of the 'Senate to a circular recently issued by the Joint Committee for Tariff Revision, situated in Sydney, because I believe it to be the filthiest piece of political propaganda it has been my lot to see.

Senator Gibson - Why mention it?

Senator FOLL - I mention it because people who stoop to this kind of propaganda and attempt to intimidate members of Parliament should be exposed in the Parliaments of this country. When the duties on cement were under discussion in the House of Representatives, certain Ministers - I think unwisely - accused some members of the United Australia party of having been influenced by lebbyists. I say nothing against lobbying if properly conducted, because, in my opinion, every section of the community has a right to interview members of Parliament, in Parliament House or elsewhere, and present its case. We are here, as representatives of all sections of tho community, and if the electors so desire they should be free to present their case to members without being accused of a criminal action.

Senator Duncan-Hughes - Would it not be better for them to make their representations by letter?

Senator FOLL - I do not think that the method of approach matters much, so long as the representations are made properly. Until the circular to which I have referred came under my notice, I had regarded the Joint Committee for Tariff Revision as a body of men desirous of bringing about tariff reform in the proper way. I pass over the first portion of the circular, which deals with the Tariff Board's report on portland cement, to draw attention to the following paragraph, to which I take the strongest possible exception -

The decision of the Government to give effect to the recommendation of the Tariff Board was defeated, tho following United Australia party members, amongst others, voting or pairing with the Labour party in favor of the motion for the postponement of the item as an instruction to the Government to increase the tariff: -

At that time the possible infringement of the Ottawa agreement had not been mentioned. The circular continued -

Messrs. J. T. Jennings, (Watson); John N. Lawson, (Macquarie); A. Lane, (Barton); Honorable J. A. Perkins, (Eden-Monaro) ; W. V. McCall, (Martin) ; Honorable Sir Charles Marr, (Parkes).

Honorable senators will observe that reference is made to certain government supporters "voting or pairing" with the Labour party. The inference is that they acted in collusion with another political body. I remind the Senate that time after time the Prime Minister has said that the tariff is not a party matter, and that members of the United Australia party may vote on any item as they think fit.

Senator Collings - The whip has been cracked since then.

Senator Arkins - How could they pair with members of the Labour party if they were voting together against the Government ?

Senator FOLL - That, of course, was impossible. The circular stated further -

Each one of these members not only took up the attitude that they knew more about the position than the Tariff Board after its exhaustive inquiry, but they also had no hesitation in recording a vote which, in the opinion of the Government, forced a violation of the terms of the Ottawa agreement.

We suggest to you that it is a matter for your consideration whether the interests of a very small minority are to be placed before the welfare of the rest of the community. If you feel that your member has taken a course of action which is not in the best interests of the major industries concerned (such as building and road-making) and of Australia as a whole, wo feel sure you will know how to voice your disapproval1 in a way that, your federal representative will understand.

So far as my committee is concerned, it has no " axe to grind ", and in dealing with tariff' matters is seeking only what is fair and reasonable to all sections interested, and before any reduction in duty is advocated by us, it must, in our opinion, be in the best interests of Australia as a whole.

This circular was printed by the thousand by the Joint Committee for Tariff Revision, in order to do as much harm as possible politically to those members of the United Australia party who on this item voted with the Opposition in the House of Representatives. It was sent to every member of local government bodies in each electorate represented by these members. Obviously this action was an attempt to intimidate them. As the circular has not been distributed in my State, I am not affected by it, but I deprecate such tactics ; they are not likely to help the activities of this body, which, apparently, expects to earn the support of the decent section of the community. I have given publicity to this circular in order to reveal the despicable nature of the propaganda which is being used against my colleagues in the House of Representatives, because of the attitude they adopted on this matter.

As to my own attitude, I shall not vote in favour of increasing duties on cement or any other article if such action is likely to clash with the provisions of the Ottawa agreement. It is imperative that Australia to-day should hold its share of the British market, and, if possible, extend it, because it is due to the preference which we enjoy on that market that we are able to sell so much of our primary products at a favorable price, as we are doing to-day. I believe that if propaganda of this type had not been indulged in, following a vote against the Government in the other chamber on what was comparatively a small item, no more would have been heard about the matter. Like Senator Leckie, I know sufficient of the duties of British Cabinet Ministers to realize that they would not have bothered themselves about an item so insignificant unless representations had been made to them by the producers of cement in Great Britain itself. .Furthermore, it is probable that but for the propaganda to which interested parties have resorted the decision of the House of Representatives would have been accepted as a matter of course, and nothing further would have been heard about it. This is too trivial a matter to be allowed to affect the Ottawa agreement. However, having regard to the negotiations now being conducted in Great Britain by the Minister for Commerce (Dr. Earle Page) and the Attorney-General (Mr. Menzies), and in view of the visit of the Prime Minister (Mr. Lyons) and other Ministers to England next year to undertake further negotiations for long-term agreements in respect of meat and butter, it would be very dangerous to bandy about the Ottawa agreement in this chamber, as has been done during the last few weeks. Therefore, I shall record my vote in support of the Government on the cement item.

Senator Collings - Wait till von return home !

Senator FOLL - I am quite prepared when T return to Queensland to justify any vote I cast in this chamber, or elsewhere, which will prevent injury from being done to the great primary industries of this country. I say frankly that I am firmly of the opinion that had propaganda of the nature which I have mentioned not been disseminated, the protest against the cement duty as a breach of the Ottawa agreement would not have been raised. However, it has been raised, and consequently the matter has now become serious. I shall not cast my vote in favour of any proposal which would, because of its bearing on that agreement, threaten injury to the primary producers of Australia.

Senator DEIN(New South Wales) [4.26 j.- But for the claim that the acceptance of certain duties in this schedule would infringe the Ottawa agreement, I would not have spoken on the second reading of this bill. It has been contended that if Parliament accepts the rate of duty on cement specified in the schedule, a principle of the Ottawa agreement will be violated. There is a difference of opinion on this matter, but the majority of eminent counsel who have been consulted hold the view that no principle of the Ottawa agreement will be infringed if Parliament refuses to accept the recommendation of the Tariff Board in relation to the duty on cement. I did not read the opinions of counsel, because after studying the relevant articles in the agreement, I formed the opinion that any honorable senator could come to a commonsense decision on this matter for himself. The Minister for Trade and Customs stated definitely that the increase of the duty on cement could constitute a violation of article 12 of the agreement. The Canberra Times does not rely on article 12 to support a similar view, but bases its arguments on articles 10 and 11. Evidently those who contend! that a provision of the Ottawa agreement will be infringed if Parliament does not agree to the Tariff Board's recommendation on this matter, do not agree among themselves. If article 12 applies, as the Minister contends it does, Parliament has no alternative but to accept every recommendation of the Tariff Board, but when the Ottawa agreement was before the House of Representatives, of which I was at that time a member, we were distinctly told that that would not be its effect. Article 12, upon which the Government relies, deals specifically with the increasing of existing duties; it says nothing whatever about reducing existing duties. It reads -

His Majesty's Government in the Commonwealth of Australia undertakes that no new protective duty shall be imposed and no existing duty shall be increased on United Kingdom goods to an amount in excess of the recommendation of the Tariff Board.

Had the amendment carried in the other chamber effected an increase of the exist- ing duty on cement, say to 21s. a ton, such a decision certainly would have violated the Ottawa agreement, hut as an existing duty was decreased, article 12 does not apply. If the Government's contention is correct, is it not logical to assume that at least one article of the agreement would have read something like this: "His Majesty's Government in the Commonwealth of Australia undertakes not to impose any duties beyond those recommended to the Tariff Board "?

Senator A J McLACHLAN (SOUTH AUSTRALIA) - Such a provision would have conflicted with the Government's policy.

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