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Thursday, 19 August 1920


Mr BRUCE - I assure you, sir, I shall not in any way touch on any question that can come before the Courts, but refer only to such a question that Parliament may discuss. I have spoken on the subject before, and do not wish to weary honorable members ; but I may remind them of the present basis on which the calculations are made by the Customs authorities in determining the duty to be paid on any article. The present procedure is that, where any goods are invoiced in a foreign currency - to take an easy example, that of France - the Customs authorities take the numbers of francs which the goods have cost, and turn them into pounds on the par or gold basis of exchange, namely, 25 francs to the £1.


Dr MALONEY (MELBOURNE, VICTORIA) - The pre-war basis?


Mr BRUCE - Yes.


Mr GREENE (RICHMOND, NEW SOUTH WALES) (Minister for Trade and Customs) - It is the mintage rate of exchange.


Mr BRUCE - It is so called ; but that is not the term generally used in popular discussion. The goods may have been bought for 5,000 francs, and when the account is settled for the goods the rate of exchange is taken at 50 francs, and £100 is paid. But when the goods arrive in Australia, the Customs authorities do not credit the statement that they have cost £100, but say that they cost £200, and proceed to levy duty upon the £200 at the rate Parliament has fixed. That naturally leads to goods imported from a country with a depreciated exchange costing a very large amount in comparison with the amount actually paid by the purchaser. The other side of the case is that some other countries, such as America, have an appreciated exchange, and the result is that such countries pay less in duty on goods imported to Australia than the rate Parliament has authorized to be collected. For instance, if the American rate of exchange is $4 to the £1 and goods are bought on that basis, $400 will buy only £100 worth of goods. When the goods arrive here, the Customs authorities refuse to accept them as having cost £100; but say that the cost was only £80, because the rate of exchange is $4.85 to the £1. Thus, on goods from countries which have a depreciated exchange duties are paid in excess of the rates fixed byParliament, whilst on goods from countries which have an appreciated exchange, the duty paid is less than the Department is entitled to collect. Never before in the history of the world have we had fluctuations of any magnitude in exchange. During the period of the war all nations took steps to keep up their own exchange. As honorable members know, Great Britain sold millions of pounds worth of foreign securities owned in Britain in order to keep the exchange stabilized. Other countries took similar steps. I have here the rates of exchange, high and low, of various countries, during the war period, on the date of the armistice, and at three subsequent dates, which prove my statement that during the war period there were no fluctuations of any magnitude in the exchanges of any of the great trading countries of the world -

 

The following figures show the world's rates of exchange in June of this year as against the par value : -

Foreign Exchanges, Times, 15th June.

Business was much quieter in. the foreign exchange market. New York again fell slightly, closing at 3.93¾. Francs depreciated further, Paris closing at 52f. 05c, and Brussels at 49f. 32c, but the lira was rather steadier at71lr. 62½. Marks were offered, closing at 157½ ; and Austrian kronen again weakened, to 575. The following rates were current yesterday : -

 

Since the war economic conditions have been allowed to operate again, andex- changes have fluctuated in an extraordinary way; to-day France and Italy have a hopelessly depreciated currency. I should like to give the House certain con crete instances of the effect upon Customs duties of the fluctuating exchanges -

 

I draw attention to the fact that our policy of preference to Great Britain is set at naught by the present system, for whilst Japan pays on £100 worth of goods, at 45 per cent., £37 6s. l1d., Great Britain pays, at 35 per cent., £38 10s. An extraordinary fact is that the Australian Association of British Manufacturers recently attended a deputation to the Minister for Trade and Customs, and protested against any alteration in the system of calculating the exchange. I had not the good fortune to be present at the deputation, but, perhaps, the Minister can tell the House the arguments put before him. It seems remarkable to me that the British manufacturer should make such a protest when he is being penalized in comparison with America and Japan, who are the greatest competitors in Australia of the United Kingdom ; the imports from Prance and Italy are almost negligible. I know a great number of British manufacturers, and I am inclined to think that their representatives would get rather a cold reception from their principals on the other side of the world on account of what they have done, because there is no true basis for a protest by Great Britain. There may be ground for a protest by Japan and America against the action I am urging the Government to take, but Great Britain will be benefited thereby, and lifted out of her present disadvantageous position. In the Argus of the 13th July the President of the Australian Association of British Manufac turers (Mr.W. C. Guthrie) is reported as having said to the Minister -

While the Association recognised that the development of Australian industries must have first consideration, it welcomed evidence that increased preference to British goods was next in importance. Recent Imperial legislation indicated clearly that Britain had taken protective measures against the present unsatisfactory condition of foreign exchanges. An Act was in force requiring the payment of licence-fees equivalent to the difference in exchange on all goods imported to Great Britain from Europe, a much more severe impost than that which arose from the Commonwealth methods of levying duty.

I should like the Minister to inform me whether that speech is correctly reported.

Mr.Greene. - Yes, because I replied that I was not aware of the facts which Mr. Guthrie stated. I have since ascertained that the Bill to which he referred has been introduced.







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