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Wednesday, 23 November 1927

Mr GREGORY (Swan) .- I do not know whether any apology is due by me for the length of time that I occupied in speaking last night, but I hold that my action was justified because of my deep anxiety respecting the future of this country, and the dangerous position into which we are drifting. Last night I quoted from a statement by Sir David Gordon, who has just returned from the Economic Conference at Geneva, in which he pointed out the problems before us and the need to face them courageously. I quoted also from a policy speech that the right honorable member for North Sydney made when the full responsibility of Australia rested upon his shoulders. In it he pointed out that production could not be carried on at a loss, that no one would engage in enterprise unless there was a reasonable prospect of success, and that unless the workmen of Australia produced more, high wages could not be maintained. The right honorable gentleman also said that we cannot get from industry more than we put into it. I quoted from a statement by Mr. Swinburne, a gentleman who is highly respected in Australia, to the effect that in no other country in the world is the cost of production so high as it is in Australia, and he wondered why the primary producer had not received more consideration from this Parliament. I quoted the statement of the Manufacturers' Association that the only remedy that it could suggest for the present state of affairs was to place an absolute embargo on all goods coming to Australia except under licence granted by the Minister for Customs. I also quoted from a statement of the Leader of the Opposition himself, in which he spoke of the great amount of unemployment in Australia to-day. We must face the economic situation into which we have so unfortunately drifted. If we attempt to defy all economic considerations and if Parliament continues to pass laws which interfere with the proper development of this country, wo shall have to pay a penalty much greater than what we are paying to-day. The imposition of high duties increases the cost of living, and that, in turn, increases wages. If the cost of living is high and the value of money not so great as it. was before, it is our duty to see that those on the lower wages are to some extent protected. The' cost of living cannot increase without affecting the cost of production. We have instances of this day after day in respect of industries employing thousands of people. Many of our activities are closing down The mining industry is suffering severely, the timber industry is going to pieces, and all- sorts of demands are being made by those engaged in the dairying industry. The vicious circle is widening, and goodness knows how things will end unless

We change our policy.

Mr E RILEY (SOUTH SYDNEY, NEW SOUTH WALES) - What policy would the honorable member suggest ?

Mr GREGORY - I shall tell the honorable member. As the Prime Minister has properly said, when honorable members complain about the Government's financial proposals, it is their responsibility to suggest some effective remedies. We need some drastic reforms in Australia, and I hold that the Government is on its trial before the people. I. do not think that the honorable member for South Sydney will agree with me when I give my opinions as to what ' is needed. In the first place, economy in government is essential. I halve no wish to traverse the figures th:at have been placed before honorable members, but from them it is evident that there is great need for economy. If the Government will only set an example to the people, they will, I am convinced, effect economies in their turn. We should place a limitation upon borrowing. The United States of America has reduced its war debt by £1,500,000,000, Great Britain by £190,000,000, and Canada by £13,000,000, while Australia since the war has increased its public debt by £309,000,000. Undoubtedly we have borrowed too extensively since the war, and some limitation on borrowing should be imposed. We should reduce duties, especially those that are oppressive on both workers and primary producers. The effect of the increase in the cost of living in- Australia has been to build up huge monopolies. No one can deny that agreements have been entered into between manufacturers and traders. Unfortunately, the great majority of honorable members have become used to the practice of wholesale and retail merchants passing on the additional cost of the tariff to the customers. Enterprise in the cities, because of arbitration awards, is able to pass on any increase in the cost of commodities. But that is not possible in the case of the primary producer. It is unfair to favour one section of the community at the expense of another. High duties tend to destroy efficiency and competition, whereas we should give every incentive to" efficiency in production. There is no doubt that we have to a great" extent destroyed efficiency by the hot-house methods we have adopted to promote industries. As I pointed out last night, any advantages that may have been gained during the last 10 or 15 years because of the construction out of loan moneys of magnificent works, such as railways, harbours, power and other schemes,has been nullified by the decrease in production, which to-day is less than it was in 1911. I have taken from the statistical records some figures relating to the boot industry, which has been protected, in Victoria at any rate, for over 14 years.

Mr Jackson - Australia makes the best boots in the world.

Mr GREGORY - Yet we cannot sell them outside Australia. In 1910, 13,810 employees turned out on the average 844 pairs of boots per man. In 1925, when I should imagine far better machinery was in use, 21,220 employees turned out 687 pairs of boots per man, this being 157 pairs less perman than in 1910; yet the value of the output in 1910 was £3,400,000 and in 1925 £9,800,000. Take soap and candle-making, highly protected industries, in regard to which I could obtain figures for only 1910 and 1920. Their employees, in 1910, numbered 1,600, and in 1920, 2,008. The output of soap in 1910 was 617,000 cwt., and in 1920, 602,000 cwt. Therefore, in 1920, with over 400 additional employees, the output was slightly less. The output of candles in 1910, 'was 16,000,000 lb., and in 1920 only 9,750,000 lb. The value of the output in 1919 was £1,420,000, and in 1920, £2,940,000, or an increase of £1,520,000 for less output. Although I admit that the candle industry has to some extent been affected by the extensive use of electricity, these figures show loss of efficiency, and are a fair exposition of the facility offered by the tariff of passing on the cost and enabling the manufacturer to exploit the public. In view of those figures how canwe expect to export secondary products from Australia? It cannot be submitted that those two secondary industries have been of any great advantage to Australia. We must reduce duties because the cost of production is becoming too high for primary production to bear.

It is also essential that the Navigation Act should be amended. An appeal was made to the Prime Minister the other day for a partial amendment of the act, but it must be amended sufficiently to get rid of its coastal provisions. Western Australia purchases from the Eastern States from £8,000,000 to £9,000,000 worth of goods annually. It was stated by a judge of the Arbitration Court recently that freight from Melbourne toFremantle was more than from Melbourne to London. Western Australia has to contend, not only with high freights, but also with high costs of manufacture, clue to increased duties. How can that State prosper under such conditions? I hope that on private members' day honorable members will be compelled to decide, by vote, whether the coastal clauses of the act are to continue. Our arbitration laws should be amended. The Scottish Commission, when it visited Australia, said that in no other country in the world was there such antagonism between employer and employee as there was in Australia, and that undoubtedly is due to the arbitration laws. It is absolute stupidity to ask a judge, no matter how able he may be, to fix the rates and conditions for employees in our railway services. This country will never prosper under a high tariff, restrictions on navigation and present industrial conditions.

Mr Jackson - Will the honorable member explain why the importers have increased the price of iron?

Mr GREGORY - The honorable member should explain why the Minister for Trade and Customs increased the duty on binder twine. This Parliament should be supreme. Binder twine is, according to the tariff, to enter this country at 6s. a cwt., but the Minister for Trade and Customs (Mr. Pratten) has decided that Belfast binder twine is not binder twine and cannot be allowed to enter at that rate. It is not binder twine because some people have had the impudence to sew up some bags with it! The result is that the duty on all first-class binder twine coming into the country has been increased by nearly ten-fold. Referring to our industrial laws, I desire to see the Canadian method of conciliation, substituted for our Australian arbitration system of dealing with industrial disputes. We are not justified in continuing our costly and cumbersome arbitration machinery for any longer than can be helped. In my opinion it is immoral to retain upon the statute-book a law which is enforceable against one section of the community but not against the other. It is very well known that a number of industrial organizations are to-day taking control of our industries. In defiance of arbitration court awards and wages board determinations they disregard the laws of the country.

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