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Wednesday, 2 December 1936

Senator DUNCAN-HUGHES (SOUTH AUSTRALIA) - HUGHES.- I understand the honorable gentleman to contend that we should adhere strongly to Great Britain regardless of statistics.

Senator Hardy - I said that Great Britain was our best customer.

Senator DUNCAN-HUGHES - Why did we attempt to distinguish unduly between two good customers? There is no earthly reason why a fight should be waged on such a subject. Why should cotton piece-goods and rayon be selected? It was foolish to embark upon such a policy.

I oppose this schedule for three main reasons, the least of which is the effect that it is likely to have on the wool industry of Australia. I have said on other occasions that our great wool industry is entitled to some consideration because it brings into this country a larger amount of money than any other industry; but I do not really expect it to get much consideration. Senator Johnston has asked in the course of this debate why the Australian wool-growers should be made to suffer almost exclusively through the adoption of this portion of the trade diversion policy. The question is pertinent. I suppose Senator Hardy would call the loss hypothetical, but it is none the less serious to the man who suffers it. It is, in fact, no more hypothetical than losses sustained by our producers of butter and dried fruits. We have already discussed those industries at some length when dealing with other bills. It is, at least, arguable whether the wool industry of Australia should be required to bear the whole cost of this trade diversion policy. In my opinion any loss should be spread over the whole community.

However, I regard the effect of this policy on our wool industry as the least objectionable of its ill effects. The reactions of the policy on the whole economic life of Australia must be serious. If our wool-growers are hit hard, the whole community must suffer for it. The third, and, perhaps, most serious consequence of this policy will be its effect on Pacific relations generally. It is strange, though perhaps accidental, that this policy should hit our three main neighbouring countries in the Pacific. I do not propose to discuss this aspect of the subject in detail, but, after all Australia is in the Pacific, and I ask whether it is desirable for us to wield the shillelagh in the face of our greatest neighbours. Certainly such action cannot improve Pacific relations and is not likely to make a happy background for goodwill missions from Australia to Japan or from Japan to Australia. The adoption of this policy must inevitably encourage the use of substitutes for wool. This may also involve a hypothetical loss, but the loss will become less hypothetical if it results in a permanent reduction of the demand for woollen goods in the future. It has been suggested on several occasions that the Government has adopted this policy in consequence of pressure from the British Government. I do not believe that that is so, especially when I read what Lord Hartington stated in the following paragraph, which appeared in the Melbourne Argus on the 3rd July, 1936 : -

The Parliamentary Under-Secretary for the Dominions (the Marquis of Hartington), in an address at a meeting of Conservatives at Retford, expressed regret that the recent Australian tariff measures had not met with greater gratitude.

He said, " The Australians knew that the British textile trade was experiencing anxiety and Lancashire was still despondent. Australia, of her own accord, and without solicitation, imposed almost prohibitiveduties on American and Japanese goods in order to help Lancashire. " It was a generous and free gift. At least £1,500,000 worth of goods will be imported in the first year from Lancashire in excess of previous years. " It is wonderful that a government1 2,000 miles away should ask its people to undergo considerable risks and losses to help a distressed section of the Old Country."

That statement makes it perfectly clear that pressure was not applied to Australia by the British Government.

Senator Sir George Pearce - The Prime Minister made a similar statement.

Senator DUNCAN-HUGHES - No such pronouncement was made in the early stages of the negotiations. It was brought under my notice that as there did not .appear to be any valid reason for these proposals they must have been the result of pressure on the part of the British Government.

Senator Collings - The honorable senator has not forgotten the Lancashire deputation, and the arrival in Australia of Sir Geoffrey Whiskard.

Senator DUNCAN-HUGHES - The opinions expressed by the members of the Lancashire deputation do not represent the views of the British Government. Doubtless the members of the Lancashire delegation visited Australia with the object of obtaining further business for British manufacturers.

Senator Hardy - On the Sth July, the Prime Minister denied that pressure had been applied by the British Government.

Senator DUNCAN-HUGHES - The speech I have quoted was delivered by Lord Hartington on the 2nd July, or some considerable time after the Government's trade diversion policy became operative.

Senator Sir George Pearce - Whenever the suggestion was made, it was denied by the Government.

Senator DUNCAN-HUGHES - Senator Hardysaid that the suggestion was denied by the Prime Minister on the Sth July, but I have shown that it was denied in a speech delivered by Lord Hartington on the 2nd July. I should be glad if any honorable senator can cite an instance in which it was publicly denied by any Minister prior to that date. I have heard it suggested that the British Government applied pressure, although I do not think I have seen anything to that effect in the newspapers. Some people have gone to the extent of saying that those who consider the Government has made a grievous mistake in submitting these proposals are disloyal and anti -British in the attitude which they have adopted. Some have said that Japan is bluffing and trying to interfere with our internal arrangements, but that is not a good way to negotiate with a foreign country. Japan has been one of the good-customer countries to which reference has been made, and it is lamentable that the initial blowshould have been struck by Australia. I am glad to join with other honorable senators in expressing the hope that wiser counsels have gradually prevailed, and in noting that there appears to be some reasonable prospect that an ,amicable decision may yet be reached. I trust that the experience in this instance will be a lesson to governments in the future, and that methods of this kind - I am not speaking of any foreign country in particular - will not be adopted in connexion with future trade negotiations. It is an unwise policy adopt particularly when our chief exportable products are involved. Those who have been affected in this instance will probably be more alert in the future ; but they can do very little. It is unnecessary for me to say more at this stage, but there are other features of the Government's proposals which I shall discuss in committee. This branch of the subject appears to me 'to be the most important, and I have therefore devoted more attention to it than to other aspects of the Government's trade diversion policy.

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