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Wednesday, 29 April 1936

Senator E B JOHNSTON (WESTERN AUSTRALIA) - Yes, this is an additional factor operating against Western Australian producers. Purchasers of, say, Sunshine harvesters in the eastern States can obtain them at a cheaper price than that at which they can be purchased in Western Australia.

Senator Sampson - What is the remedy ?

Senator E B JOHNSTON - One remedy would be the adoption of the recommendation of the Tariff Board for the reduction of duties on agricultural machinery under the general tariff. If the Government accepts the recommendation of the board in respect of plant required in secondary industries, why does it not do so in the case of agricultural machinery?

Senator Sampson - The honorable senator wishes us to be wood and water joeys.

Senator E B JOHNSTON - No. I want the agriculturalist to get his tools of trade at the lowest possible price, as he has to sell his products in the open markets of the world. The principal costs involved in the manufacture of agricultural machinery are wages and materials. The Tariff Board, in its most recent report, dated the 5th December, 1934, stated that the labour costs in the agricultural implement industry in Australia are lower than they are in Canada or the United Stated of America. In this most important factor - cost of labour - the Australian manufacturer enjoys an advantage over his competitors. In respect of material costs, the board stated that, at the time of the inquiry, the Australian industry suffered little or no disadvantage in the prices it was paying for its principal raw materials. In respect of steel, it gave the following information : -


These prices show that, in the nine years mentioned, there was an increase by 111/2 per cent. in Chicago and a decrease by 271/2 per cent. in Melbourne of the price of steel used for the same purposes. Of all the materials employed in the manufacture of agricultural machinery, steel sheets are the only one for which the price being paid by Australian manufacturers is out of line with the prices ruling in other countries. The matter of steel sheets was the subject of a Tariff Board inquiry in 1934, when the board recommended the introduction of lower duties ; this has led to price reductions. At this inquiry, the board found that the Broken Hill Proprietary Company Limited was charging Lysaght Limited a higher price for sheet bars for steel sheets than it waa charging for sheet bars for galvanized iron. As the costs of manufacture were identical in both cases, the board was at a loss to understand the reason for the difference in price - a difference which was passed on to the user of this agricultural machinery. Incidentally, this demonstrates that the protection on such material as sheet bars is not effective unless accompanied by protection for the industry which uses them as raw material ; further, it is one instance of how protective duties generally cannot be measured until they have accumulated as they pass through the hands of the various manufacturers. One of the main reasons why the cost of agricultural implements made in Australia is so disproportionate to that in the United States of America and Canada lies in the number of factories engaged in the manufacture of machinery of this type. According to the report of the Tariff Board, no fewer than 142 of them were in operation in the Commonwealth on the 30th June, 1933. It is quite clear that this large number for the comparatively small output, valued at £1,700,000, must have a very serious effect in increasing overhead » charges. Although it is not contended that the Australian industry is taking full advantage of the existing duties,' that is by no means the end of the matter. In this respect, the Tariff Board states -

The community cannot afford to be satisfied that the present prices are not higher than the prices of duty-free imported goods, when it is considered that f freight, insurance, exchange and lauding charges on the latter amount to abour 05 per cent. The time is at hand when Australian manufacturers should bc exporting on a large scale instead of defending the need for protection on the home markets.

I wish that Australian manufacturers would heed that opinion, and realize that, on the comparative prices which they quoted, they have an excellent market for agricultural machinery in New Zealand and elsewhere. The opportunity to take advantage of it awaits them.

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