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Wednesday, 16 November 1938


Mr ROSEVEAR (Dalley) . - I support the motion for the adjournment of the House for the purpose of drawing attention to the position in regard to the proposal for the manufacture of motor car engines and chassis in Australia. The Minister for Trade and Customs (Mr. Perkins), in his reply, did not break any new ground, but tried to evade the question before the House. It is all very well to talk about the sound lines on which the Government is working. In my opinion, it is all sound and no work. The Government has been engaged on this business since the 22nd May, 1936, when the Minister in charge of negotiations for Trade Treaties, Sir Henry Gullett, proposed a duty of .7d. a lb. on imported motor chassis for the purpose of establishing a fund for the encouragement of the manufacture of engines and chassis in Australia. With the idea underlying the scheme I have no fault to find. I think it is economically and technically sound, if we desire to establish an industry in this country, to levy a duty on imported goods which would come into conflict with it. However, I expressed the opinion by way of interjection, when Sir Henry Gullett was making his proposal, that the policy of the Government in this regard was a colossal bluff, and nothing has been done by the Government since then to indicate that it was anything other than a colossal, political bluff designed to deceive the people.

This matter has been before the House in one way or another on three occasions. The honorable member for Henty who. incidentally, first introduced the scheme on behalf of the Government, moved the adjournment of the House, and complained that the fund of some hundreds of thousands of pounds raised by taxation on imported motor parts had been paid into Consolidated Revenue, while nothing had been done to establish the motor industry in Australia. He maintained that the money should at least have been paid into a separate fund, instead of into Consolidated. Revenue. When introducing the scheme in May, 1936, the honorable member for Henty, as Minister in Charge of negotiations for Trade Treaties, said -

In the opinion of the Government, reached after considerable investigation, there is room in the Commonwealth for the profitable working of at least three separate units of motor manufacture.

Now we are told that the Government does not propose to go on with the scheme, which is already nearly three years old, because it has not been investigated sufficiently. In the meantime, however, while the Government has been trying to make up its mind, no less than £877,000 has been extracted from the pockets of the people who use motor cars, and transferred to general revenue, but not one penny has been expended for the purposes for which the money was originally raised. The Minister continued -

Moreover, the question of the exact bounty required will be submitted at an early date to the Tariff Board.

It will be noticed that the matter of the bounty was the only one which, at that time, it was proposed to submit to the Tariff Board. Afterwards, however, the Tariff Board was allowed, not only to consider that question, but also to survey the whole gamut of motor car manufacture in Australia. The Minister went on -

The additional duties imposed to pay the bounty will serve as a further measure of encouragement of overseas manufacturers of chassis who enter into .production within the Commonwealth.

Thus, in the grandiose scheme as first submitted by that Minister, the additional tax on imported chassis was designed to establish a fund for the encouragement of manufacture in Australia, and also to provide inducement for overseas manufacturers to establish undertakings in this country.

Then, on the 7th December, 1937, over eighteen months after the scheme was launched, and after £700,000 had been raised by the special tax, the honorable member for Henty (Sir Henry Gullett), who had by then left the Cabinet, and joined the political wreckage on the back benches, moved the adjournment of the House to consider the position that had arisen as the result of the Government's misdirection of the revenue raised. On that occasion he said -

The tax was specific in that the proposal was submitted to the House and agreed to for the purpose of creating a fund to be used exclusively for the manufacture of motor engines in Australia. My statement on that occasion was a very definite one, the outcome of a long series of cabinet meetings.

Thus, the ex-Minister emphasized the point that his previous statement was a definite one made as the result of a long series of cabinet meetings. Now we are told by the Minister for Trade and Customs that the Government does not propose to go into this matter with its eyes shut, and that the proposal must be further investigated. The honorable member for Henty (Sir Henry Gullett) went on to sa.y -

There was not a detail in my speech in the way of fact that had not been agreed to by the Ministry.

He referred to his speech on the 22nd May, 1936-

Moreover, the whole of it had been submitted to the right honorable the Prime Minister, lt was in no sense a personal submission to the House.


Mr SPEAKER - It appears to the Chair that the honorable member is quoting from a speech made in this House during the present session. If that is so, he is not in order.


Mr ROSEVEAR - Further evidence that the Government, has no intention, and probably never had any intention, of going on with this scheme, is shown by the fact that, although the matter, was submitted to the Tariff Board in September, 1936, it was not until September, 1937, that the board ultimately presented its report. It is all very well to suggest that the Tariff Board is infallible ; I suggest that only one-sided evidence was placed before it. In my opinion, the only people competent to give evidence as to the economic possibilities of the manufacture of motor cars or motor car parts in Australia, were the experts employed by those firms which do not desire to see complete motor cars manufactured here. If these highly competent officials of the motor car importing interests in Australia had given any evidence which would have resulted in the Tariff Board recommending that motor cars or parts should be manufactured in Australia, they would have prejudiced their positions in these importing firms. It cannot be claimed that both sides of this question were properly placed before the Tariff Board. On the contrary, evidence given before the board was naturally biased in favour of those motor car importing interests which were opposed to the establishment of the motor car industry in Australia. On the 8th June, 1938, the Deputy Leader of the Opposition again raised the question of government policy in respect of the manufacture of motor car engines in Australia, and on that occasion the then Acting Minister for Trade and Customs (Mr. Perkins) said that, although the Government was anxious to assist in the establishment of the industry, it did not wish to go on with the matter until it had all the available facts at its disposal. He used exactly the same arguments that have been used to-day, and I venture to say that if, in two years' time, this matter is raised again by way of adjournment of the House or by some other means, exactly the same arguments will be used by the responsible Minister. [Leave to continue given.] Although the honorable gentleman claimed that the Government could not be held responsible for any unnecessary delay, taking into consideration the statement of government policy when this scheme was first introduced, that definitely only one question would be submitted to the Tariff Board, that relating to the amount of the bounty, and that after exhaustive inquiry and a long series of Cabinet meetings the Government had considered every other aspect of the scheme and adopted it as government policy, I suggest that the Government cannot be absolved from blame for the delay that has taken place. When the matter was submitted by the Government to the Tariff Board, it was obliged to go over the whole gamut of the scheme which the Government had already considered to its own satisfaction. In this way, Ministers used the Tariff Board as a foil for criticism directed against them in connexion with the scheme. The ex-Minister for Trade and Customs (Mr. White) said "The Government still adheres to the policy." The whole evidence seems to point to the fact that the Government adheres only to the tax levied under the scheme and not to the promises made that it would establish the industry in Australia. After the report of the Tariff Board had been received, the ex-Minister for Trade and Customs said that the scheme generally was " hopeless economically." If he, as spokesman of the Government, admitted that, in his view, the scheme was hopeless economically, the Government had no right to proceed with the collection of taxes and misdirect them to general revenue. If a tax is collected, it should be expended in the direction originally intended. I go further, and say that, as the Government has broken faith with the people and apparently has no intention of implementing this scheme, of building motor engines in Australia, the money that has already been collected, amounting to £877,000, should be refunded to the motor car users of Australia. If that is found impossible, the decent thing for the Government to do is to cease collecting the tax until it has come to a definite conclusion in regard to the scheme. The successful establishment of the motor car industry in Aus-* tralia would be of inestimable benefit to this country. Extensive use could be made of Australian motor cars, not only for defence purposes, but also as a means of developing an important industry vital to bur welfare in case of national emergency. It would result in the recruitment of a great army of skilled workers, of which Australia stands in need to-day. The country has everything to gain from the implementation of this scheme. When it was originally introduced by the honorable member for Henty, the people had great hopes, but the Government which was then in office, and which is in office to-day, hopelessly let him down and now it has no intention whatever of putting into effect the scheme which was advocated so enthusiastically in this House in 1936.







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