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Thursday, 17 November 1938

Mr PERKINS (Eden) (Monaro- Minis ter for Trade and Customs) . - I move -

That thebill be now read a second time.

This bill is intended to establish the newsprinting paper industry in Australia. Several attempts have been made within the last fourteen years to manufacture newsprint in Australia, but none of them reached maturity. About the year 1929, plans for the establishment of a full-sized mill were in hand when the depression intervened and the scheme was set aside. During the depression several of the newspapers joined forces and a further unsuccessful attempt was made to inaugurate the industry. The next step taken was an investigation of the possibilities of establishing the industry on behalf of Australian newspaper publishers in general. The basis of this co-operative scheme was that all metropolitan news papers would participate in the provision of capital, and would purchase the output of the mill in quantities proportional to their normal consumption of newsprint. After many points of agreement had been reached the co-operative scheme broke down, but there emerged a scheme sponsored by a group of newspapers which uses Australian newsprint in respect of two-thirds of its requirements.

A company knownas Australian Newsprint Mills Proprietary Limited, was formed with a capital of £1,300,000 issued in £1 shares, consisting of 250,000 cumulative preference shares issued to the Tasmanian Government and 1,050,000 ordinaryshares. Of the ordinary shares 800,000 have been taken up by the newspapers concerned, while 250,000 are to be issued for the assets of the two companies which carried out the early experiments and acquired the freehold properties and concessional rights now taken over by Australian Newsprint Mills Proprietary Limited.

At the present time newsprint is manufactured in other parts of the world, principally from softwoods. However, honorable members will have gathered from the Tariff Board's report that the sponsors of this industry, after considerable and protracted experimentation and careful surveys of available forest areas, are confident of the successful manufacture of newsprint from hardwoods. Australian Newsprint Mills Proprietary Limited is not alone in the use of hardwoods for paper manufacture. Early this year a mill commenced the manufacture in northern Tasmania of writing paper and fine printing paper, while a pulp mill is in course of erection in Gippsland, Victoria, for the production of hardwood pulp suitable for the manufacture of kraft paper and paper boards. Australian Newsprint Mills Proprietary Limited proposes to erect a factory on the Derwent River in southern Tasmania, and to utilize local timbers, principally swamp gum, known botanically as Eucalyptus Regnans, in conjunction with a certain proportion of imported chemical pulp in the first stage of manufacture.

The manufacture of newsprint will proceed in three stages. The first stage will involve the erection of a mill with one machine capable of producing 27,000 tons of newsprint annually and a mechanical pulp mill capable of ultimately supplying 75 per cent, of the pulp required. The remainder of the pulp used in the first stage will comprise imported chemical pulp. In the second stage, a second paper-making machine capable of an additional annual output of 45,000 tons will be installed, together with a chemical pulp mill, while additions will be made to the mechanical pulp mill. In the third stage, another paper-making machine with a capacity of 45,000 tons annually will be added, and suitable additions will be made to the pulp mills and auxiliary services. Employment, .principally in the bush and at the mill, is expected to be given to 266 hands in the first stage of production, while at the final stage it is estimated that 850 hands will be employed.

The bill now before the House covers only the first stage of production, during which approximately 27,000 tons of newsprint will be manufactured annually. The Tariff Board recommended that the industry be assisted in the first stage by a bounty, the funds for which should be provided by a duty, and that both bounty and duty should vary as the imported cost of newsprint varies, with the condition that the bounty should not exceed £4 a ton. The Government proposes to grant to the new industry the measure of assistance recommended by the board, but has decided to give this assistance by means of bounty without duty unless the price of newsprint falls substantially below present-day levels. No additional duty to that in "force at the present time will be imposed unless the c.i.f. and e. price of imported newsprint, plus primage, is less than £15 a ton. The bulk of the newsprint being supplied to Australia under 1939 contracts cannot be landed at less than £16 6s. a ton, inclusive of primage duty. Under the Government's plan of assistance to the new industry, the cost of imported newsprint will not be increased beyond the present-day level by reason of that assistance. The amount of bounty which will be paid when the imported cost is £16 6s. a ton will be approximately £1 14s. a ton. The bill provides that the bounty shall be on a sliding scale. No bounty will be paid when the imported cost is £18 lis. 3d. a ton or greater. The bounty will increase as the imported cost falls, and a bounty of £4 a ton will be paid when the imported cost of newsprint falls to £12 lis. 3d. The bounty will in no circumstances exceed £4 a ton.

In the event of a material fall of the cost of imported newsprinting paper to a level below £15 a ton, the Government proposes to apply a duty at rates substantially lower than those recommended by the Tariff Board; The rates of duty will be - 5s. a ton when imported cost is below £15 a ton; 7s. 6d. a ton when imported cost is below £14 a ton; and 10s. a ton when imported cost is below £13 a ton. Whenever the duty is applied the rate of bounty will be reduced by an amount corresponding to the amount of the duty.

The bill will not operate until production of newsprint commences, and will continue for a period of four years. So far as can be seen at the moment, production will not commence until the end of 1939 or early in 1940. The question of what assistance, if any, is to be granted after the expiration of the fouryear period will be. determined only after further investigation by the Tariff Board. The Government feels that this industry will provide a welcome addition to the industrial fabric of this country. It will be established in one of the less industrialized States of the Commonwealth, and should thus meet with the approval of those honorable members who have, on various occasions, expressed a desire for the greater decentralization of industry within the Commonwealth. The establishment of the industry should eventually help to control the price of imported newsprint, and should create a supply at a reasonable price should the landed cost of newsprint rise to extreme heights as it did during and immediately after the Great War, when newsprint prices rose as high as £S0 a ton, and supplies were difficult to obtain. Finally, the industry will, when fully established, mean the investment of several million pounds of capital and the provision for a considerable amount of employment. I commend the bill to the House.

Debate (on motion by Mr. Forde) adjourned.

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