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Thursday, 19 August 1920

Mr GREGORY - Considerably more.

Mr BRUCE - Do not let us overstate the point. The case is quite strong enough without doing so. Here are some extraordinarily significant figures for the year 1918-19, the last available from Mr. Knibbs with regard to Customs returns -


In that year we had nearly £36,000,000 worth of goods from countries on which we are losing money on Customs collections, and imported ab.out £2,200,000 worth of goods from countries where we get a small gain on Customs collections. The figures for 1919-20 are not available, but I should say that there is still a large balance of trade from America and Japan. I feel confident that the balance is at least £10,000,000 in favour of those two countries, and the loss of revenue in this way is startling. It must be remembered that the figures represent the declared value of the goods on which Customs duty was paid, and not the actual amount paid to America for the goods. Something must be added in respect to the fact that during the year the average value of the dollar was about 5s. sterling, whereas our Customs Department , accepted the basis as $4.86 to the-1 sterling. Similarly with the other countries the imports are overstated, because they are taken on the basis on which the Customs Department collected duty. In some figures which I shall give. I have endeavoured to make a suggestion as to the amount of revenue we have probably lost through adopting the system followed here. We are aided by the figures for 1917-18, In that period the total value of merchandise entered for consumption in Australia was £59,S96,190, on which £9,633,507 was collected as duty, or 16.0S per cent. Taking 16 per cent, as a fair average basis on th© figures for 19i8-19 - I saw a calculation the other day based on the average of 50 per cent., but 1 do not think there is any justification for such an estimate- I have prepared the following table: -


In the case of Japan, the same thing happened. The 'Customs basis of imports was £8,000,000, and we probably paid about £10,000,000 for them. The duty collected was £1,280,000 instead of £1,600,000, which ought to have been collected, so that we lost revenue to the extent of £320,000. In the case of Italy, the position is reversed. The Customs basis of imports was £508,100, whereas we probably paid for them only £290,000. The duty collected was £93,000, whereas it should have been £46,500, so that in that case we gained revenue to the extent of £46,500. Coming to the position in regard to France, we find that the Customs basis of imports was £1,600,000 and that we should have paid about £1,000,000. The duty collected was £256,000, whereas it should have been only £160,000, so that in this instance also we had a gain of revenue which amounted to £96,000. The totals of these figures show that in the case of America and Japan we suffered a loss of revenue amounting to £1,280,000. If we had collected the duties on the basis of what the people in this country had paid for the goods, and in accordance with the rates that Parliament had authorized, we should have received an additional £1,280,000 by way of Customs revenue.

Against that we gained £142,500 in respect of duties collected on imports from Italy and France, so that the net loss of revenue amounted to £1,137,500. I do not suggest that these figures can he absolutely accurate, but I urge that they are on a fair basis. I have only taken the same rates of duties upon imports that are shown in the official figures for the preceding year, while the rates of exchange are open to all to see. I have taken what I think is the fair average rate, and the figures probably represent very closely the actual loss that Australia experienced.

Mr Fenton - Does the honorable member place the same value on goods coming from several countries?

Mr BRUCE - I have taken the exact figures shown in the return. I do not appreciate the point of the honorable member's question.

Mr Fenton - Our imports from the United States greatly exceed those from France and Italy.

Mr BRUCE - I have given the actual figures.

The only other point to which I desire to refer relates to the basis on which duties have to be paid. Duties have to be paid, as honorable members are doubtless aware, on the home consumption value of the goods. The argument has been , used that if an article costs 50 francs in France, regard should be had only to the franc, and that the cost anywhere else is immaterial. It seems to me that there is one consideration which proves that argument to be absolutely wrong. For reasons which I shall give, we cannot consider the franc alone, and what it represents in France. For instance, a woollen article purchased in France is composed of wool .bought from Australia, and for which France has had to pay Australia in francs on the adverse basis of exchange to France. That being so, the wool costs the French manufacturers more, and when it comes here again in manufactured form surely they are entitled to be considered on the basis of what the. value of the wool is in the currency of the country where it was originally bought.

Sir Robert Best - Take silk, for instance.

Mr BRUCE - We might illustrate the position by referring to silk and many other materials. Whether the article has come from outside or has been manufactured entirely in France, its cost has been increased by things used in its manufacture and imported from other countries where the exchange is against France. Coal, for instance, has to be imported by France, and is one of the things in respect of which she has to pay on the adverse basis of exchange. The money that has been paid for that commodity is represented in the goods in the manufacture of which it has been used, and which are coming out of France. It is grossly unfair to say that France shall pay - as she is required to do - for the things she imports on the adverse basis of exchange, and that when those materials come out here in manufactured form we should collect Customs duty on a basis which once more tells against the French manufacturer, and practically makes it impossible for him to trade.

Mr Mathews - Australia loses both ways.

Mr BRUCE - That is so. I have endeavoured to clearly set out the position. The question is one of great importance since it is impossible for us to continue to keep up an artificial barrier which every day is preventing trade from flowing into its natural channels, and at the same time help to regularize the general exchange conditions of the world.

Extension of time granted.

Mr BRUCE - The exchanges can never be regularized if we are going to create these artificial barriers. We can regulate them only by allowing trade to run along its natural channels - by allowing it to go to the countries which can handle it, and giving them the opportunity to regulate their own exchanges by the exports which are coming from those countries. Having spoken to people in nearly every trade in Australia, I can tell the House with confidence that it is impossible for Australia to place orders in Italy, France, or Belgiumwhile the exchange position is as at present, and while our Customs duties are levied on the existing basis. This means the driving of more trade to America and Japan, and - ignoring every other consideration - if carried far enough will merely add to the loss of Customs revenue which is taking place to-day. We wantmore revenue; but what is still more important, we desire to make an effort to do the fair thing. I cannot conceive of the present basis being regarded as equitable. This is a matter to which the House should give its very serious consideration. The House should insist on something being done. I understand that the Minister alone has the power to take action. Section 157 of the Customs Act of 1901 provides that -

Where the genuine invoice shows the value of the goods in any currency other than British currency, the equivalent value of the goods in British currency shall be ascertained according to a fair rate of exchange to bc declared in case of doubt by the Minister.

I venture to say that we are not giving to-day the equivalent value of the goods in British currency. In many cases when we start to collect our Customs duties we are giving something like double or treble the value.

One other point which has been stressed and should be answered is that all these different countries have different values for goods. Because an article costs, say, so many francs in France it is suggested that that value is higher than the value of the same article somewhere else. Every day it is becoming more and more evident that the world is beginning to trade on the basis of what you can give in the equivalent exchange. A man who wishes to purchase certain goods asks whether he can buy them in. France with her exchange or in America ? Prices the world over are beginning to regulate themselves on that basis, and will be so regulated more and more as the demand for goods of which there is a shortage the world over is met, and ordinary trading .competition comes about again in individual countries among their own merchants, and internationally, between countries. This is a matter that requires very careful consideration if we are going to do the best for Australian consumers, and are to fulfil an obligation which I feel rests on us to give fair and equitable treatment to all nations; but, above all, to give such treatment to those nations which rendered us the greatest assistance during the war.

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