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Thursday, 1 December 1938


Mr SPEAKER - Order! The honorable member must confine his remarks to this bill.


Mr FORDE - I shall endeavour to do so strictly, but the bill isso interwoven with the question of the development of Australian secondary industries that I find it extremely difficult to refrain from pointing to some of the inconsistencies of those who oppose every progressive step towards the development of those industries.


Mr SPEAKER - The honorable member must restrain his desire to direct attention to the attitude of honorable members to proposals other than the one now before the House.


Mr FORDE - Well, I agree with what the spokesman of the Government said in regard to the manufacture of motor car engines and chassis. The Prime Minister (Mr. Lyons) was so enthusiastic that he sat on the front bench and applauded with "Hear, hear!" the remarks made by the honorable member for Henty when he made a pronouncement of the Government's policy to encourage the establishment of the car industry in this country. The Prime Minister attended the manufacturer's function in Sydney two years ago and said -

The arguments used against the manufacture in Australia of engines applied with equal force to the manufacture of bodies and many accessories manufactured here. They also applied with equal force to every other established Australian manufacturing industry. . .. There is good reason to believe that the Australian market for cars is as satisfactory for engine production as for body production.

I say that, just as this industry to manufacture radiators will be a success, so would the manufacture of motor-car engines and chassis be a success. The considered opinion of the Prime Minister was right. My regret is that he has gone back on his attitude. I also regret that the Government has departed radically from the policy which was enunciated by the honorable member for Henty, who said that there would be 5,000 engines manufactured in Australia in 1938. 15,000 in 1939, 30,000 in 1940, and 40,000 in 1941. Of course he had in mind not only engines and chassis, but also radiators, which are now being treated separately. The honorable gentleman outlined the bounty scheme under which £30 was to be paid in respect of each engine and chassis manufactured. He said that the cost in 1938 would be £50,000, and that the amount would diminish in accordance with the increase of the quantity of the output up to and including 1941. I know from the utterances of the honorable member for Balaclava (Mr. White) that he backed up the proposals of the honorable member for Henty.

The purpose of my amendment is to indicate tothe Government that it will have no peace until it takes the bold step and establishes an industry in Australia to manufacture the complete car. We have the necessary engineering skill and sufficient trained artisans to undertake the work. The people would be ready to put money into this great epoch-making undertaking, which would be a definite move forward in the industrial development of the country if the Government would only stand up to the definite promises that it made in this House. It could not have been made in clearer or more definite language than was contained in the speech made by the honorable member for Henty (Sir Henry

Gullett) oil the 22nd May, 1936, when introducing the scheme he 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.

Not one, but three separate units! He went on to point out the experience of Great Britain where enormous factories manufacturing from 10,000 to 20,000 units a year were being conducted at a profit. Now we are told that the Government does not propose to go on with the scheme. I believe that if the truth were known the then Minister for Trade and Customs (Mr. White) salvaged from the wreckage the assurance that proposals would be considered up to the 31st March from enterprises interested in the manufacture of complete motor cars in Australia. Now that he has left the Cabinet there is one vote less for any definite proposal in this direction. The honorable member for Henty who, it will be admitted, makes his statements clearly and definitely and in such a manner that they cannot be misunderstood, must have felt that he had the backing of the Government, and of the Prime Minister in particular, when he said in his place in this House -

There was not a detail in my speech in the way of fact that had not been agreed to by the Ministry. The whole of it had been submitted to and approved by the Prime Minister.

Nothing could be more definite than that. He said that the proposal to refer the matter "to the Tariff Board was " a sham and a delusion ". It was something that had been forced upon him. By whom was it forced? By the dominating influence of the Minister for Commerce who crashes through to the Cabinet room with his freetrade proposals. As recently as the 16th November last the honorable member for Henty said -

If the Government will not establish this industry, then there is some sinister and mysterious influence stopping it, and it is well for one to speak plainly on the subject. Nobody expects that any manufacturer in this country will respond to the so-called invitation by the Government to enter into an arrangement before the 31st March to manufacture cars. That was a sham offer, and the Government know it.

Here is one of :the strong men of the Government party, a man who was picked out by the Prime Minister as soon as his party was returned with a majority and given the important position of Minister for Trade and Customs in the new Government, a man who shortly afterwards had to resign on account of ill health, but who, after his recovery, was reintroduced into the Cabinet and given the important position of Minister directing negotiations for trade . treaties. I feel sure that if the truth were known it was he who evolved this scheme, but who afterwards, because of the pressure exerted by the freetrade interest in the Cabinet, was forced to fall into line with the other members of the Cabinet and agree to this iniquitous proposal or get out, the pressure being exerted by that very section which condemned the United Australia party during the 1934 election campaign but which subsequently crashed its way through to the Cabinet room and used its influence to wreck the scheme.


Mr Holloway - It is opposed to the establishment of new secondary industries.


Mr FORDE - That is so, yet it wants 300 per cent, protection on certain lines while at the same time wanting to buy everything that the farmer needs on a freetrade basis. What would become of all those sections depending on the local market if that policy were continued to its logical conclusion? There is no room for half-way measures in regard to this question. The Government already has the money. It imposed a duty of .7d. per ]b. on imported chassis for this purpose. When that proposal was introduced, some opposition was levelled against it, but honorable members were appeased by the statement that the proceeds of the duty would he applied to the specific purpose of establishing a great enterprise in Australia that would provide very considerable additional employment. That duty, unpopular as it was, criticized as it was by some of the Government's own supporters, has yielded to the Consolidated Revenue Fund approximately £1,000,000. It cannot be said that the money has not been raised. The money is there, the engineering skill is there, and trained artisans can be found. Boys leaving school are looking for employment, seeking to become apprenticed to various trades. The establishment of this high precision factory for the manufacture of complete motor cars in Australia would provide the opportunity for the absorption of a great many of them. The former Minister for Trade and Customs, in a very fine speech at the manufacturers' dinner in Sydney, was right when he said -

I believe that if we can make iron and steel efficiently, there is nothing to stop us from making motor cars.

That statement was made whilst he was still a member of the Cabinet and showed very definitely that he was completely in favour of the proposal. I believe that the present Minister for Trade and Customs (Mr. Perkins), in his own heart, wants to see the complete manufacture of motor cars in Australia.


Mr Menzies - Hear, hear !


Mr FORDE - He, however, is not a member of the inner Cabinet dictatorship. I appeal to him and to his colleague, the Attorney-General (Mr. Menzies), not to allow the dominating influence of the Minister for Commerce to grow. I can assure them that hd is mistrusted and loathed by the great protectionist section of the people of Australia, by whom he is -regarded as the great " pooh-bah " in politics to-day, who gets his way by presenting a political pistol at the head of the Government. What have other countries done to establish the motor car manufacturing industry ? What did Italy do ? It decided to go right ahead and produce 42,000 motor-car engines last year. Australia has a market for far more than 42,000 units ; we have a market for 87,000 units. The Italian market is completely closed to foreign motor cars. The Italian Government said that it would develop this industry and that it would provide adequate and effective protection to the local industry in order to keep foreign motor cars out of the country. If we in Australia took that definite stand would the Ford Motor Company of Canada be able to continue to send to Australia motor car engines manufactured in Canada? Would General Motors continue to manufacture its engines and radiators in the United States of America and dump them on the Australian market? Can it be said that the branches of these firms in Australia cannot secure the necessary engineering skill and the necessary capital to establish the industry in Australia ? What happened in Japan, that very progressive nation, which is bounding forward in its manufactures.

Whilst in 1935, Japan produced only 3,000 units, in 1936 it produced 6,200 units, and in 1937, 15,000 units. Within twelve months it will be producing 60,000 units per annum. The Japanese Government, in order to encourage the purchase of locally -manufactured motor cars, decided to limit the number of foreign motor cars imported from overseas. The Japanese Government was not timid ; it was not afraid to take this drastic step in order to encourage its own manufacturers and free them from outside competition. The Japanese Government was not pulled one way by the freetrade interests ; it did not permit itself to be influenced by a company such as the great Ford Motor Company of Geelong, which, no doubt, sought the assistance of its representative in this Parliament, the honorable member for Corio (Mr. Casey), to have shelved a proposal which, if given effect, would give it a lot of inconvenience and trouble, and would necessitate its outlay of a very substantial sum of money in Australia for the manufacture of motor cars exactly identical with those which it now imports from overseas. What has been done for the establishment of the motor car manufacturing industry in Italy, Japan, Russia and Germany could be done in Australia if only we had a government that for six months ahead could say exactly where it stands in respect of its protectionist policy. The German Government has ordered that all motor cars for use in Germany must be manufactured in German factories. That Government did not hesitate; it was not pulled hither and thither ; it knew where it was going. I fear that when these proposals, which the Government now says it will receive up to the 31st March next, come forward, the absence of the former Minister for Trade and Customs (Mr. White) and the honorable member for Henty (Sir Henry Gullett) from the Ministry will result in further postponements being agreed to. With great respect to the present Minister for Trade and Customs, I fear that he and the United Australia party members who support the Governmentwill not be able to stand up to the Minister for Commerce and his cohorts, who threaten to resign from the Cabinet if they do not get their way. How true are the words of Sir Stanley Argyle, that nothing good can come out of a composite government; it is a mongrel government. I appeal to the Government, before it shelves indefinitely the proposed manufacture of motor car engines in Australia, to take into consideration -

(a)   The necessity for an early further expansion of secondary industries in Australia in order to open up fresh opportunities for tradesmen, apprentices and labourers.

(b)   The desirability of reconsidering the political morality of its action in committing a grave breach of faith in an important matter of government policy, particularly after having made searching investigations and having satisfied itself that its facts were right.

(c)   The necessity for due consideration being given to this important question from a defence and employment point of view.

(d)   The aid this proposed new industry would be in rectifying the adverse tradebalance which is giving the Treasurer so much concern to-day, and to which the CommonwealthBank drew particular attention in its annual report.

(e)   The desirability of taking into consideration the moral claim on the Government for the proper utilization of the proceeds of a tax imposed for a specific purpose, a tax which has yielded nearly £1,000,000, and which has increased the price of every motor car sold in the last two and a half years by approximately £5.

Purchasers of new motor cars have been forced to pay that imposition, and they have done so believing that they were contributing towards a fund which would be utilized to encourage the manufacture of engines in Australia. There is no doubt that if the Government took the bull by the horns and had the courage to push this matter, the result would be increased employmentin the Commonwealth, including the employment of much skilled labour. The establishment of radiator manufacture in Australia will give employment to only a few hundred men whereas the establishment of the entire motor car industry would absorb 10,000 Australian workers. There are other aspects of the bill to which I shall refer during the committee stages.

I draw the attention of the AttorneyGeneral to the fact that the Minister for Trade and Customs has not included in this measure theusual clauses providing that employment in the industry shall be given under award conditions. Such provisions have been included in similar measures, for instance, the Iron and Steel Products Bounty Act 1919, the Iron and Steel Bounty Act 1922, the Wine Export Bounty Act 1934, and the Raw Cotton Bounty Act 1934. The last two measures to which I have referred were introduced by the Lyons Government when the present Chief Justice, Sir John Latham, was Attorney-General. In all of these acts it is provided that the bounty may be withheld if in the opinion of the Minister Arbitration Court awards and wages are not being observed in the industry concerned. The Minister is even empowered, if need be, to set up a special tribunal composed of representatives of employers and employees, and a chairman appointed by the Minister. Under these powers I, as Minister for Trade and Customs, was able, during the term of office of the Scullin Government, to set up a tribunal to fix the wages for cotton pickers in Queensland. At that time the Nationalist State Government of Queensland excluded all rural workers from the ambit of the State Arbitration Court, and industrial trouble appeared likely. A special tribunal, consisting of representatives of employers and employees, with a Commonwealth Conciliation Commissioner as chairman, was set up, the trouble was overcome; an award for cotton pickers was made and the industry operated satisfactorily. When a Labour government was returned to power in Queensland the rural workers wereonce more brought under the jurisdiction of the State Arbitration Court.


Mr Menzies - That must have saved a court the trouble of declaring the tribunal illegal.


Mr FORDE - If any of the recipients of bounties seek to have the provisions of the bounty legislation declared invalid by the High Court, this Parliament has power to deal with them. There would be a public outcry against these people. I will not be deterred by threats or warnings from the Attorney-General regarding the possibility of the legislation being contested in the High Court. Public opinion would be so overwhelming that the big corporations receiving bounties would not dare to take the matter to the High Court.


Mr Menzies - The honorable member surely does not suggest that there are not in existence tribunals which can fix the wages of employees.


Mr FORDE - I do not suggest that, but there are many avaricious employers who have way3 of evading the decisions of these tribunals. I believe that Parliament should insert a clause in this bill empowering the Minister to withhold the bounty if, in his opinion, award rates and conditions are not being observed in the industry. It may be that a swing of political opinion would place in control of a State Parliament a government which would decide to remove certain workers in this industry from the jurisdiction of the Arbitration Court. That is what happened when the Scullin Government was in office and the Nationalist party was returned to the treasury benches in Queensland. A bounty was then being paid to an industry, which was not covered by arbitration awards. A satisfactory solution was arrived at when I, as Commonwealth Minister for Trade and Customs, appointed a special tribunal to deal with the situation.

I repeat that the bill in its present form is puny and anaemic and reflects the strength, of protectionists amongst the members of the present Government. It falls far short of what we expected from the bold policy which the Government enunciated two years ago. This legislation will be in operation for two years only, during which period it will cost the nation a very substantial sum of money. At the end of two years, the scheme will be reviewed. Indeed that board has recommended that at the end of two years, the bounty should be replaced by a duty.

Radiators for replacement purposes have been manufactured in Australia for some years, but I am assured that the process of manufacture of radiators for original equipment differs widely from the methods adopted for the manufacture of radiators for replacement purposes. Mass-production methods are necessary to produce original equipment radiators at a price approximating the present costa operating under the system adopted for the manufacture of replacement radiators.

I shall support the bill because I think it is a step in the right direction, but at the same time I am very dissatisfied with it. The step taken is only a hesitating, infantile one. The Government is running away from the problem because of the opposition offered by a section of Cabinet. As the bill is merely a shadow of the Government's original proposal, I am disappointed with it: I believe that it covers only the fringe of the policy enunciated by the honorable member for Henty in 193C. Further, it is tangible evidence of the Government's inability to adopt progressive measures, because of its embarrassing alliance with freetrade interests which do not stand for the development of secondary industries. It is also evidence of the sympathetic ear which the Government gives to the representatives of overseas manufacturers, and of the growing influence of the arch enemy of secondary industries, the Minister for Commerce.

Sitting suspended from 6.10 to 8 p.m.







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