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Tuesday, 8 March 1932

Mr LYONS (Wilmot) (Prime Minister and Treasurer) . - The Minister for Trade and Customs (Mr. Gullett) has dealt extensively with the merits of the Government's tariff proposal affecting tobacco, and I do not intend to repeat what lie has said. I shall deal with this proposal from the stand-point of its general effect upon the finances and the provision of adequate encouragement to the tobacco-growing industry. The Deputy Leader of the Opposition (Mr. Forde). who moved the first amendment to the motion before the House, entertained us with a certain amount of comparatively ancient history in connexion with the Australian tobaccogrowing industry and the tariffs of past governments. He read a few quotations in the hope that they might be politically useful to his party in the near future, perhaps in Queensland. He endeavoured to show that the Deputy Leader of the Government (Mr. Latham) and myself had pledged ourselves to maintain the amount of tariff protection that was previously in existence, but he failed to substantiate that. In fact, no declaration that I have ever made can be read in such a way. I have promised adequate protection to this industry, and I am carrying out my pledge under the proposals submitted by the Minister for Trade and Customs.

Mr Thompson - That is not so.

Mr LYONS - - The Attorney-General, when making a public announcement on this subject, promised adequate protection to the industry, and said that there would be no sudden changes except after investi gation and report by the Tariff Board. Never at any time did he make any statement that did not include those words, because those words were essential, being part of the policy speech that I delivered on behalf of my party. The AttorneyGeneral knew and I knew that that was a vital part of our policy, and that neither of us could depart from it. On this occasion we are not departing from it. The Deputy Leader of the Opposition expressed his regret at the necessity for having to move an amendment to the motion. He showed apparent sincerity, but his case in the main rested upon quotations, a declaration of the policy of the party to which he belongs, and an appeal to the supporters of that party.

Mr Holloway - The Prime Minister should not lower the tone of the debate.

Mr LYONS - This debate was from the beginning placed definitely on a party plane. We are prepared to investigate every case put forward, and to obtain the fullest information on the subject. If any real case has been put forward, it is that made out by the Leader of the Country party (Dr. Earle Page). Yet surely it is extraordinary that the Leader of a low-tariff party should make out a case on behalf of a high-tariff party. The members of the Opposition proper, who will go to any length to ensure tariff protection, will be glad of the assistance of the right honorable member for Cowper in their efforts to give an absolute peak to the tariff policy of this country. . The Deputy Leader of the Opposition lias said that the growers understood from my statement that I was prepared to maintain the tariff on the basis that existed previously. I challenge anybody to read into my actual words the statement that I encouraged any section of the community to believe such a thing. I carefully refrained from doing that, and when asked directly to give such a promise, I knew that I could not give it.

No government or party could retain the Scullin tariff, and surely those who talk about maintaining the industry on its present basis are misleading the growers, either intentionally or otherwise. In view of the statements that have been made as to what different honorable members said on this subject during the election campaign, I feel justified in quoting some remarks which the Deputy Leader of the Opposition made in this House while he was Minister for Trade and Customs. His words, which were quoted by the Minister for Trade and Customs (Mr. Gullett) this afternoon, were as follow : -

I realize that the whole matter of duties on tobacco will have to be re-considered, as our industries develop : that as we change over to the Australian leaf, our import duties will decrease. That is realized by the growers themselves.

While the honorable member for Capricornia (Mr. Forde) was waving his hands and saying this, that, and the other thing about the tobacco industry, he was asked definitely whether he had uttered the words which I have just quoted; but he dodged every way in order to avoid making a direct reply. Still, his words are onrecord, and the responsibility for having used them cannot be avoided by him. The honorable gentleman made it quite clear when he was on this side of the chamber that as the consumption of Australian-grown tobacco leaf increased, the excise duty would have to be adjusted in order that the revenue might be safeguarded. If that is to be done, how on earth is the margin of preference to the total production to be maintained? The honorable gentleman's declaration is "the best reply that could be made to his own arguments. I leave it to honorable members generally to judge whether he or the Government has misled the tobaccogrowers.

It has been said that if the Government's policy is put into operation the tobacco-growers will be practically ruined.

Mr Thompson - So they will.

Mr LYONS - I am interested to hear that interjection from a member of the Country party, who, day in and day out, has fought high duties in this House. The honorable gentleman, in common with others who sit in his corner, has expressed the view, on more than one occasion, that an industry which requires protection to the extent of hundreds per cent. is not worth maintaining. There is soundness in such a declaration; but if it is to apply to one industry it must apply to others. When any primary or secondary industry requires protection of this extraordinary nature, it is necessary that stock should be taken of the whole position. If we had been protecting this industry in a small way, and had withdrawn the protection, there might be some justification for the protests that have been made; but we have granted the tobacco industry very high protection, and are still prepared to do so. Yet it is said that if we can only see our way clear to give it a miserable protection of from 300 per cent. to 400 per cent., we shall destroy it. Adverse criticism of the Government which rests upon argument that the degree of protection given to the tobacco industry is inadequate, will not bear investigation.

It has also been argued that this industry gives a large amount of employment, and that if anything is done to interfere with it, the volume of unemployment in Australia will be increased. My reply is that if we were to deal with the unemployment problem in the same way that we are dealing with the tobacco industry, the whole economic and financial structure of the nation would he destroyed. We might be able, temporarily, to cope with unemployment in this way, but in doing so we should bring the country to bankruptcy. I am sure that some honorable members do not realize what the tobacco industry is costing Australia. On the basis of a consumption of 6,000,000 lb., the Minister for Trade and Customs pointed out that in making possible the use of Australian leaf, instead of imported leaf, we were giving the industry assistance to the extent of £1,500,000 under the conditions of the Scullin tariff. This amount would be sufficient to make a grant of £150 per annum to 10,000 unemployed. And those unemployed would think themselves " made " ! Even on the basis upon which this Government is prepared to assist this industry, it will be spending enough money to provide £150 a year for 6,000 unemployed in this country! In these circumstances, can it honestly be said that we are not prepared to assist the industry? Any other primaryproducing industry in Australia would think itself on a wonderful footing if it could obtain government assistance to this extent.

When tlie Assistant Minister for Trade and Customs was at Wangaratta recently he inspected a number of tobacco properties. He visited one splendid property of 123 acres, and was told that 32 persons were employed on it. That seems a considerable number of people to be employed upon a comparatively small property. But on the basis of a production of 800 lb. per acre, the Government is actually subsidizing those 32 employees to the extent of £14,760 per annum. If we could spend that amount of money in some other direction we should be able to assist far more than 32 people. Looking at the difference between the costs of imported and Australiangrown tobacco leaf, our assistance to that property works out at £120 per acre. If we could deal with our unemployment problem along these lines we could soon solve it. It surely cannot be said, in the light of facts like these, that we are not prepared to encourage the tobacco industry.

It has been soundly contended that we should not attempt to establish the tobacco-growing industry upon an artificial or abnormal basis, for to do so would eventually bring disaster to the growers.

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