Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Wednesday, 14 October 1931

Mr FORDE (Capricornia) (Minister for Trade and Customs) . - A special duty schedule was brought down on the Srd April, 1930, and an amendment was moved on the 23rd of July last in relation to porter and stout, and the sale of Tasmanian hops. Immediately this special schedule is passed a bill founded on it will be submitted to the committee, and when the primage and excise schedules have been dealt with, measures founded on them will also be .brought down. The special imposts now under consideration are commonly known as the 50 per pent, surcharge duties. The Prime Minister, when explaining the

Government's policy, and the reasons for the introduction of the special duties, stated that these proposals were not in any way associated with the Government's protectionist policy, hut were put into operation as part of a plan having for its object the correction of our adverse balance of trade.

Mr Gabb - They have an added protectionist effect, also.

Mr FORDE - Yes. It is illuminating to peruse a statement that has been circulated showing the effect of the 50 per cent, duty on imports into Australia. It will bo found that the value of the imports affected by this duty amounted to £10,905,673 in 1929-30, and to £3,124,063 in 1930-31, a reduction of about £7,000,000. A comparative statement of the imports during 1929-30 and 1930-31 of goods, the importation of which was restricted by the proclamation of the 4th April, 1930, shows that the value pf these goods was £5,495,355 in 1929-30. and £1,34S,232 in 1930-31. The Prime Minister further stated that in selecting the items upon which special duties were being imposed, it was recognized that the action being taken would have a beneficial effect on the Australian industries that were manufacturing the commodities concerned. It is true that in addition to restricting imports and enabling us to rectify our adverse trade balance, the action taken has had an additional protective effect.

I propose, briefly, to give the reasons which prompted the Government in taking these special emergency measures. In the first place, it is necessary to review the Commonwealth's external trade balance over the past eight or nine years. From 1923 to 1929, that is, during the regime of the Bruce-Page Government, our total adverse trade balance amounted to £7S,000,000, excluding bullion and specie. In addition to having to meet the deficit occasioned by these adverse trade balances, interest had to be found on both Commonwealth and State oversea loans.

Mr Archdale Parkhill - Was there an adverse trade balance each year from 1923 to 1929?

Mr FORDE - No, there were certain favorable balances; but, in the aggregate, the adverse balances far exceeded them.

The annual amount of interest that accrued in the period mentioned was a gradually decreasing one, but the total interest which had to be paid overseas during the regime of the BrucePago Government was, approximately, £175,000,000, which, added to the £78,000,000 excess of imports, gave a total of £253,000,000. Now the greater part of this amount was converted into loans, and a small proportion remained as part of the floating debt. At the present time, our overseas annual commitments for interest alone amount to approximately £29,000,000 exclusive of exchange, or, roughly, £4 10s. per head of the population. The enormous task confronting the people of the Commonwealth in meeting this interest bill may best be judged by a comparison with the indemnities which Germany has been required to pay. Under the Dawes plan, assessed on its capacity to pay, Germany was called upon to find approximately £125,000,000, or £2 per head of its population. Later, under the Young plan, this amount was reduced to £85,000,000, or less than 30s. per head of population. As against this figure, Australia has an amount of £4 10s. per head to meet- in overseas interest annually, which is almost a superhuman task, and, if this commitment is to be met in full, it is essential that imports bc kept at a minimum. If imports are not' restricted, the Commonwealth and the States will be unable to pay their overseas interest bill.

When the present Government assumed office, remedial action, which had been long delayed, was essential. This could be effected by an increase of exports, a reduction of imports, or a combination of both. As regards the proposal to increase our exports, any one who has studied the problem knows the great difficulties confronting a country which sets out to increase its exports to a considerable extent in a short period. In the first place, production must bc increased, and, secondly, overseas markets must be found.

Mr Gregory - Were the unemployment figures taken into account in determining these increases in duty?

Mr FORDE - If I were to give all such statistics I should-be going beyond the scope of the schedule, and prolonging this debate, lt is true that the whole world is economically sick, and Australia is affected by that position, being faced with widespread unemployment, and remarkably low prices for products that have to be sold overseas. Usually, sales in overseas markets can be increased only by displacing the products of competing countries. These countries will not allow trade to be lost to them without making special efforts to retain it, and it is usual for them, in- the last resort, to reduce the prices of their products. Thus the endeavour to increase exports may lead to lower total returns by reason of the reduced prices obtained. This is well exemplified in Russia's effort to capture a larger share of the world's wheat market. Although Russia has recently been exporting more than previously, her returns have been cut by nearly half, and it is quite impossible for her to maintain the large volume of imports that she formerly brought in when she was paying for them by obtaining phenomenal prices for her products, and borrowing approximately £40,000,000 a year abroad.

In view of the great difficulties on the export side, the Government had, perforce, to concentrate its attention on imports, in order to obtain immediate results. It was most unfortunate that the prices of our principal exports should have fallen so tragically. Had they remained at the same level as that obtaining at the beginning of 1930, the need for these measures would not be felt today. As it is, however, the effectiveness of the Government's plan may be judged from a comparison of our imports and exports for the last two years. In 1929- 30, the excess of imports over export's amounted to £32,000,000. From the 1st July, 1930, the Government's plan began to operate, and for the year 1930-31, exports exceeded imports by £28,500,000. This represents a change- over of about £60,000,000, and it is a feat of which any government might well be proud. We had to run the gauntlet of severe criticism for having taken, such drastic steps to restrict imports. I was discussing this matter with a leading banker recently, and he declared that Australia would make a great mistake if she removed her tariff-restrictions at the present time, because we have not yet fully rectified our adverse trade balance. The figures that I have quoted relate to merchandise only, and do not include gold or bullion.

It will be noted that the excess of exports over imports for the last financial year is not quite sufficient to meet our overseas annual interest charges, but for the forthcoming year the excess of exports should enable all interest payments to be met, and, in addition, I hope that such excess will permit of a substantial reduction being made in the overseas floating debt. The need for these measures will disappear when the annual excess of exports pays our overseas interest bill, and also enables our overseas floating debt to be liquidated. Honorable members must realize that the importing habit must not be allowed to impair our ability to meet our overseas obligations, and if they are not prepared to support the Government's plan, they must accept responsibility for the default to overseas creditors which must follow the non adoption of this and other allied measures that were decided upon after mature consideration, and on the advice of financial authorities.

Suggest corrections