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Tuesday, 26 June 1906

Mr SPEAKER - I am sorry to have to call attention to the numerous conversations now proceeding; but there are five or six groups of honorable members conversing in somewhat loud' tones, so that it is not surprising that the honorable member for Grampians finds it difficult to make himself heard, and that it is almost impossible for me to follow what he is saying. I ask the House, in courtesy to him, and to the 22,000 or 23,000 electors whom he represents, to listen to his speech in silence.

Mr SKENE - The general impression seems to be that this Bill is intended to protect certain industries against evils which have not been shown to exist. I was pleased to notice that in the GovernorGeneral's speech, Ministers did not put into His Excellency's mouth words which they so frequently use themselves - the "alleged " tobacco monopoly was spoken of. I have looked into the evidence in regard to the supposed monopoly, and I have heard a great deal with reference to the combine associated with it. So far as I have been able to gather the facts, there is no absolute proof that a monopoly exists, or that the combine has been other than a beneficent, one. The tobacco manufacturers have joined forces with the view of lessening the cost of distribution, and not with the object of increasing the price to the consumer or reducing the price to the grower of the leaf. That is the position in which the matter stands at present. We have heard a great deal with regard to the harvester trust, which has been indicted on the evidence of interested persons. Some time ago a combination was entered into between the importers of harvesters and the local manufacturers. That was not what I would call a beneficent combine, because so far from having been entered upon for the purpose of. reducing the cost of putting the harvesters upon the market, it aimed at keeping up the price. So long ' as that combination existed the local manufacturers made no complaint, but when it came to an end they made loud complaints with regard to the injury that was being done by the sale of imported harvesters at low prices. It was stated by the local manufacturers last year that some 1,800 machines were on their way to the Commonwealth, but we now know that only about 1,300 harvesters have been imported. The honorable and learned member for Angas told us that between 5,000 and 6,000 harvesters were sold to farmers last year, and in view of the fact that only 1,300 harvesters were imported - we have no evidence as to how many, were sold - and that over 400 were exported, our manufacturers appear to have been doing remarkably well.

Mr Page - This Bill will put an end to any dumping.

Mr SKENE - The local manufacturers can scarcely complain of clumping as affecting them, when only 1,300 harvesters are imported as against the 5,000 or 6,000 sold to farmers. We have had no proof that dumping has taken place. The Minister was challenged by the honorable and learned member for Corinella to mention cases in point, but he deferred his reply until some other time. When the Minister was questioned on the subject, I remembered that I had heard that boots were dumped upon this market, and it occurred to me that the cry against dumping might have been raised by interested persons with a view to their own advantage. Upon one occasion a lady of my acquaintance went to a bootmaker, who made footwear for her, and told him that she was wearing a pair of American boots. He looked at the boots and said that they had never been out of Melbourne. Then, again, when I was in Sydney recently, I was told by a gentleman well known to the Minister of Trade and Customs, and of the same political persuasion as himself, that a boot manufacturer there noticed in a shop window a pair of boots marked " Best Parisian make, 32s. 6d." He entered the shop, and said, "Isn't this coming it a little too strong? You bought those boots from me for 8s. 6d." The shopkeeper replied, "That is perfectly true, but if I were to .offer them as Australian-made boots for 12s. 6d. a pair, I should not be able to find a purchaser, whereas I can sell them readily as Parisian boots at a much higher price." There is the greatest difficulty in distinguishing between dumping and dishonest trading. No doubt the prejudice on the part of the public is largely responsible for the deceptions that are practised. A traveller in the boot trade told me recently that the local manufacturers were doing very fairly under the present Tariff. The honorable member for Moira spoke of the indebtedness of the farmers to Australian inventors. I admit that the farmers have been, to a considerable extent, indebted to local inventors, but, on the other hand, the American manufacturers have some claim to our consideration. I do not know whether the honorable member is old enough to remember, as I do, the English implements that were in use before American tools and implements came to this country. I can remember when we discarded the old No. 2 British axe in favour of the American axe, and also when we did away with the British pitchfork, with a great clumsy handle, and enough steel to make four American tools. In the same way the American hay rake was a great improvement upon the English tool.

Mr Kennedy - But of what use would be the hay rake or the fork to the farmer who had no crop to harvest?

Mr SKENE - The use of an English pitchfork would not insure to the farmer a bigger harvest.

Mr Kennedy - No. but my point is that the ploughs and the cultivators came before the forks and the hay rakes.

Mr SKENE - I admit that many improvements have been made in agricultural implements owing to the opportunities which our manufacturers have had to study the necessities of the farmers. I am sure that if our local manufacturers were to rely more upon their own pluck and skill and good workmanship, instead of squealing out that they are being killed by the importer, they would stand a much better prospect of securing the market. I was glad to hear the honorable member for Moira state that he would not apply the proposed restrictions against dumping to importations from any portions of the British Empire. I would point out, however, that the greater part of the alleged dumping takes place in connexion with goods manufactured in the Empire. The Massey-Harris Company are the strongest competitors of our local manufacturers in regard to agricultural implements. If our manufacturers would combine to cheapen the cost of putting their articles upon the market they would act very wisely. Some time ago I interviewed the managers of both the Sunshine Harvester Company and the Massey-Harris Company, and they made no secret of the fact that they had entered into a combine with a view to maintaining a certain price for their harvesters. Mr. McKay told me that if every one would do as I had done, and buy direct from the manufacturers instead of' putting them to the expense of sending travellers round the country, they would be able to sell their machines much more cheaply. A combination among the manufacturers, or even between importers, and manufacturers, with a view to lessening the cost of distribution, would be beneficial to the farmers. I think that we might try to get 'along with some measures less drastic than those proposed in the Bill. The Minister claims that he has succeeded in breaking up the harvester combine. I presume that he means that he has succeeded in restricting their operations by increasing the valuation of the machines for the purpose of assessing the amount of duty. If he can succeed in breaking down outside competition in this way, he can still more easily regulate local combines. He admitted that protection in Australia would have the effect of producing rings, trusts, and combines. High duties are bound to produce undue competition, and w'hen that takes place, either profits must be reduced, wages decreased, or increased prices be charged to the consumer. The manufacturers are hardly likely to submit to a reduction in their profits. There is a much greater chance of their reducing the wages of their employes, or increasing the price to the consumer. A very sensible protectionist friend of mine who is engaged in the metal trade, was asked, some time ago, whether he wanted' a higher duty to be imposed on the goods he manufactured - the duties had been reduced under the Tariff as compared with those prevailing under the Victorian Tariff. He said that he did not require any higher duties, because he was doing fairly well, and he realized that a higher duty would result in. more competition. He said that he would prefer to go on as at present, rather than run the risk of any change in the direction indicated. There can be no question that in a limited market, such as we have, an industry, which requires more than a reasonable degree of protection is likely to become the subject of undue competition. I think that the Minister is on the right track so far as local combines are concerned, but if reasonable protection were granted there would be no necessity for a Bill of this kind. If the local combines engaged in any practice to the detriment of the public we could then allow the influences of free-trade to operate more freely. If the Minister contends that he will' be able to break down a foreign combine in, the way he has mentioned he may, with a great deal more reason, believe that he will be in a position to destroy any internal combine. But if the Tariff is to be made the governor of the industrial machine, one thing is necessary, namely, that its revision should be taken wholly out of the fighting line of party politics: No fiscal truce will suffice. It must be made a business, and not a political question. Prior to Federation, the States had arrived at some sort of settled policy in regard to this matter. New South .Wales had adopted a policy of free-trade, whereas the electors of Victoria Had supported a system of protection. Having arrived at some settled view upon this particular question, the States were afforded an opportunity for development, which the country will not have, so long as we continue quarrelling over it. Unless the Commonwealth arrives at some settled policy in this connexion. I believe that our progress will be retarded. Although I hope for much from the Tariff Commission's reports, I think that the recommendations of that body will, probably touch only the fringe of the subject. I well remember that Sir William McMillan, speaking in this very Chamber, pointed out the inequality of the incidence of taxation in respect of cotton goods. The right honorable member for Balaclava also referred to certain other disabilities in regard to this matter. If the Tariff is to be made a means of governing the industrial machine, I hold that the fiscal question should be taken entirely out of the fighting-line of politics, and some other method of dealing with it should be devised.

Mr Fowler - Will the honorable member agree to the taking of a referendum upon the subject?

Mr SKENE - I am not prepared to do that. What is in my mind is something in the nature of a Board of Trade, a permanent body which would report to this House upon any anomalies that may exist in the Tariff, upon any evidence of dumping that may be discovered, and upon the existence of combines, &c. That step, however, can never be taken if we are to make the Tariff a political question, and if its revision can only be effected by a fight between the two fiscal parties. Whilst I regard the Tariff Commission as a body which has done exceedingly useful work, and whilst I entertain great hope of good results from its reports, still, some other method of Tariff adjustment requires to be adopted. The right honorable member for Balaclava, in speaking upon this matter, said -

Every one admits Lhat there should be an inquiry into the working of the Tariff, and if it is to be conducted on right lines, no industry, whether it be small or large, should be shut out..... My experience teaches me that the moment a Tariff Commission touches one line, it is impossible to say where its labours will terminate. Take, for example, the item of " Woollens," which is subject to an import duty of 15 per cent., and in respect of which it may be urged that a duty of 25 per cent, should be imposed. If that duty were so increased, it would necessarily follow that an additional duty of io per cent, must be imposed on article's made up from the raw material, otherwise we should handicap those who are making up the raw material in Australia.

In that connexion I feel that there is some necessity for dealing with this matter in a totally different way from that in which it has hitherto been dealt with. It is necessary that it should! be taken altogether from the arena of party politics.

Mr Hutchison - It is impossible to do that.

Sir William Lyne - Take what out of the arena of party politics?

Mr SKENE - The question of the revision of the Tariff.

Sir William Lyne - Nonsense.

Mr SKENE - I know that such a step would not suit the Minister, and I am not in the least surprised at his attitude towards my suggestion.

Sir William Lyne - The honorable member had better take every question out of the arena of party politics if he would take the Tariff out of it.

Mr SKENE - In Australia the control of the railways has been taken out of the arena of party politics, and in Victoria that system has proved of very great advantage to ourselves, seeing that we have converted a deficiency of ,£300,000 or £400,000 into a surplus of ,£200,000.

Mr Hutchison - By "squeezing" the workers.

Mr SKENE - Not wholly.

Mr Tudor - The greater portion of the railway surplus has been made up in that way - by violating the eight hours' system.

Mr Hutchison - And by employing women as stationmasters.

Mr SKENE - I do not know what truth there may be in the honorable member's statement. But there are various reasons why the conditions in this State, so far as the railways are concerned, have improved very much. We all know that when the present Commissioners took office things had already been cut almost to the bone, and consequently I hold that the Commissioners have done exceedingly well.

Mr Tudor - Deficits occurred in the Railway Department under the management of Commissioners.

Mr SKENE - But those Commissioners had not the same staff as have the present Commissioners.

Mr Hutchison - We have enjoyed good seasons since the appointment of the present Commissioners.

M.r. SKENE. - I do not attribute the railway surplus in Victoria entirely to the present management of the lines, but certainly their management would not have been better had it been liable to be upset by political interests. In this connexion the leader of the Labour Party trotted out his universal cure of nationalization. I need scarcely say that I am very strongly opposed to that system, and I should like to advance a few reasons why his plan would not work. The honorable member affirmed that nationalization was not Socialism. I am quite prepared to admit that it is not.

I think that we may call it State control, and wherever State control occurs political influence inevitably creeps in.

Mr Kennedy - The honorable member has just quoted a splendid illustration tothe contrary.

Mr SKENE - I say that I am wholly in favour of the present system of running, our railways. All those Who spoke upon this Bill the other day showed how different things might have 'been in the United States had the railways there been Stateowned. I am quite sure that the system of State-ownership of railways is much, cheaper for the community than is the system of private ownership. The railways of the United States are owned by persons- in all parts of the world - shares are held in places like Edinburgh and Glasgow - and I remember seeing it stated that the sum of £600,000,000 had been lost there by reason of the cut- throat competition which existed between the various railway companies. I do not for a moment question that there may ba cases in which State control of particular undertakings, is beneficial. I think that one may have a small fire to warm him and a big fire to burn him. Personally, I merely want the small fire to warm me. The leader of the Labour Party in speaking upon the Manufactures Encouragement Bill, with a certain amount of prescience, declared that if he thought the nationalization of the industry would lead to the exercise of political influence, he would prefer that it should be left to private enterprise. I hold that State control can only be used within strict limitations. Whilst it might be extented to certain undertakings, the very greatest amount of caution would require to be exercised, because, with its extension, the risk of the introduction of political influence would be increased. We have experienced some trouble in eliminating political influence from the control of our railways. If I may be permitted to make one reference to the speech delivered by the Premier of Victoria on Saturday night, I would say that I am verv glad he has been able to revert to the old condition of things in that connexion.

Mr Hutchison - Politicians have always been a bad lot.

Mr SKENE - I do not know whether it is the fault of politicians that they are a little too much amenable to the interests of their friends at times. We may all be tarred with the same brush in that respect.

But if we adopt a system of regimentation in all departments, those departments will be as sure to quarrel as will individuals, and there is one department only which can eventually come out on top. At present, it is known as the Defence Department, but it may assume a very different form.. In history, the only cure for democracy run mad has been the use of a military force.

Mr Fowler - We have never had an educated democracy in the history of the world un511 the present time.

Mr SKENE - Education, I think, is a relative term. We may not proceed to the extremes of the Pretorian Guards, who put an Empire up to auction, but as certain as we institute a system of regimentation within departments, there will be a big cataclysm, arid a reversal to some other system - probably to a system of military despotism.

Mr SPEAKER - Does the honorable member think that) his remarks have any relevance to tha Bill under consideration ?

Mr SKENE - I am replying to the observations of the leader of the Labour Party, in which he contended that nationalization would be a cure for any of the evils of unfair competition, &c. I am endeavouring to show where such a system would land us. However, I do not wish to pursue the subject further. I merely desire to say that 'this Bill goes a long way beyond the question of the State control of industries. It introduces what may well be called a system of State interference or meddling. If we should avoid one thing more than another, it is a meddler, especially a political meddler. It does not initiate any system of general control, but it is apparently intended to enable an inquiry to be made into people's business. It is inquisitorial in its character, and covers ground which, as British subjects, we have hitherto regarded as sacred.

Mr Hutchison - Every law necessarily implies meddling by the State.

Mr SKENE - I do not think so.

Mr Kennedy - They say that of the income tax.

Mr SKENE - The statement is perfectly true in regard to the income tax.

Mr Tudor - Whether a law is meddling or not depends upon whom it hits.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - Even the simple matter of taxation has ruined nations before to-day.

Mr SKENE - I have always been surprised that the income tax should be productive of such a small revenue. I hope that the Government will regard this discussion in the light of a preliminary canter, so far as the Bill is concerned. I agree with those who urge that we ought to wait until the Tariff Commission's report in regard to machinery is available before we proceed further with it. I believe that the report of that body on machinery and metals is now ready for presentation, and it is only a matter of a few. days when" it can be placed before us. The Government ought to recognise from the tone of the debate that if in the future it is shown that there is really some evil to combat, it will be easy to pass this measure. I do not exactly know whether - if we agree to its second reading - we shall be prevented from coercing or inducing the Government to bring f forward the Tariff Commission's report. At the present moment my position is that I should like to see the second reading of the Bill passed, with a view to its provisions being threshed out in Committee in the light of the information that we are able to obtain from honorable members generally, even if it were then dropped. The adoption of that course would have the effect of putting upon record very useful information for future reference. When the time arrives, if evils are really shown to exist, I feel sure that the Government of the day will have no trouble whatever in persuading Parliament to adopt measures to combat them.

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