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Thursday, 10 November 1938

Mr PATERSON (Gippsland) . - On principle I am entirely opposed to this amendment. At the outset, I desire to make it clear that I have the most friendly feelings towards those insurance companies established in this country, and I should like to see them, if possible, obtain the business. I even go so far as to say that the board would be well advised to give, say, a 5 per cent, preference to local companies, rather than to give the business even to British companies overseas. Having said that, however, I register my emphatic opposition to putting in the bill anything of the character proposed in the amendment. It is entirely wrong in principle. Indeed, I regard it as an export tax, and to impose any levy upon a primary commodity, which is obliged to face world competition, is not only unwise and unjust, hut is an economic crime. It. is recognized by honorable members generally that everything possible should be done to avoid placing unnecessary burdens on our export industries. On this point I refer to the practice adopted in respect of packing cases. A duty is imposed on shooks imported for the purpose of making butter boxes or packing cases for dried fruits, but that duty is invariably remitted when those cases are used in the export of those products. That practice is simply a recognition by Parliament of the principle that we must not place any burden, even if it would operate to the benefit of other local industries, on our export trade. The expenses borne by the apple and pear industry in respect of freights, marine insurance, packing, and numerous other incidental costs are larger in proportion to the return than is the case in respect of the products of any other of our primary industries. Some years ago I took the trouble to investigate these costs, and found that, in some cases, they were as high as 6s. and 7s. a case, sometimes being more than the actual return.

Mr Holt - What is the cost of insurance?

Mr PATERSON - I cannot say, but on" 4,800,000 cases at, say, Id. a case, it would work out at £20,000. An increase of id. a case would mean a total extra cost to the industry of £5,000, which is probably more than sufficient to meet the annual expenses of the board.

Mr Holt - The honorable member is not suggesting that open competition for this insurance business would save the growers as much as one farthing a case?

Mr PATERSON - That estimate, with competition stifled, is not unreasonable. Apart from other considerations, however, it would be foolish to insert a provision in this bill which would treat ungenerously so great a purchaser of our apples and pears as is Great Britain. Great Britain is undoubtedly our best customer, not only for apples and pears, but also for almost all of our export products which we find most difficult to sell. We have a world market for wool, and a very shrinking world market for wheat, but for fruit, lamb, butter, cheese, honey, eggs, and frozen pork, and many other products, Great Britain is almost our only market. At the same time, however, that market is not capable of indefinite expansion; indeed, there are signs that its absorptive capacity has already been stretched to the utmost. We are now at our wits end to find profitable markets for many of our products. I point out that one of the objects of this bill is to enable the imposition of quotas on all of the States because sufficient markets may not be available to consume all of the products of this industry. In view of that fact, is it businesslike to slap our best customer in the face, as it were, a customer who gives us a substantial preference, by preventing British insurance companies from competing on even terms with our own insurance companies? I remind honorable members that hundreds of thousands of cases of our fruit actually become the property of the overseas buyers before they leave our wharfs, the buying being done, in many cases, at this end. Should we say to those people who have bought our products at this end, that British companies shall not be allowed to insure these goods?

Mr Holt - My amendment does not affect British insurance companies.

Mr PATERSON - It would affect them in the event of the board deciding, as it has the power to do, to make a contract to cover freight and insurance rates for the whole of the fruit exported. Whilst I emphasize that I have the most friendly feelings towards Australian insurance companies, and, indeed, suggest that the board might go so far a3 to enable them to get a small preference in this business, I still believe that it i3 absolutely wrong to prevent the board from exercising discretion in this matter. It should not be made mandatory for the board to discriminate against so valuable a customer as Great Britain. If the proposal embodied in the amendment be adopted, I suggest that we should be obliged to insert a similar provision in all of our other legislation of this character. If we agree to this amendment we simply should not have a leg to stand on in opposing similar amendments of legislation dealing with five other important exportable primary products. It would be perfectly safe to give discretion in this matter to some Ministers, but I could imagine a Minister being in charge of this legislation who would be such an extremist in his belief that every preference should be given to Australian concerns that overseas competition would simply become non-existent. It would be a good thing for our local insurance companies if the door were allowed to remain open just sufficiently to enable a degree of competition to be maintained in the interests of our exporting industries. For the reasons I have stated, I oppose the amendment.

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