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Thursday, 11 October 1956

Mr CLARK (Darling) .- I wish to address myself to the section of the Estimates under the heading " Miscellaneous Services ". I desire to refer particularly to the Department of Trade and the peregrinations of the Minister for Trade (Mr. McEwen) without any effective results. Before he left in April of this year, the Minister announced that the purpose of his visit to Great Britain was to bring to a head Australia's acute dissatisfaction with the manner in which the Ottawa Agreement was adversely affecting Australian exports to Great Britain in relation to goods from competing countries. The point is that the Minister went abroad, taking with him a large assortment of public officials. I notice that the Estimates provide for the setting aside of £9,500 to cover this trip, and I understand from to-day's press that the Minister is to make a further trip abroad, which will involve very considerable expenditure indeed. The nation does not worry about expenditure by Ministers as long as we get some results from it. I have given an outline of what the Minister proposed to do when he last went abroad. On his return in August, 1956, a prominent journal which is circulated amongst many people reported -

Apparent failure of Mr. McEwen's mission will damage his prestige with the Government parties and with the Government's supporters outside Parliament. Mr. McEwen's visit abroad was undertaken wilh the express purpose of wringing considerable concessions from the British Government, which is enjoying an enormous trading advantage over Australia . . . The prevailing official feeling is that the long term benefits will be negligible.

A further report of similar character states -

Reports reaching Canberra suggest that few, if any, worthwhile results are likely to accrue from the current world tours of the Prime Minister, Mr. Menzies, and the Minister for Trade, Mr. McEwen. The only official announcements concerning their discussions have been innocuous statements saying that England and Australia fully understand each other's problems, and that certain matters are still being considered.

The Minister made a trip in an endeavour to obtain better markets in Britain for our products. He came back and acknowledged he could not do this. He is now going back to look again for markets in Britain and elsewhere. For far too long the British

Board of Trade has been running thi* country, and it is time that the Australian. Government woke up to the fact and took, proper control of Australian trade and commerce into its hands and away from the British Board of Trade. If the Minister isnot prepared to get tough with the British' Board of Trade on his next visit and if he does not achieve some results, the outlook, for Australia's future is very gloomy indeed.. The British Board of Trade is a dominant factor in the government of this country, For far too long Britain has looked upon) Australia as one of the colonies, as a wood! and water joey, prepared to supply the things which Britain needs, but if Britain can buy more cheaply elsewhere, it gives preference instead to other countries.

During the Chifley regime about £45,000,000 was donated in time of troubleto the British Government in the form of goods and commodities, and we should be entitled to expect a reasonable businessreturn, from that gesture by the Australian! Government, but what has been our reward?" The United Kingdom Government to-day, because it can buy in other markets and derive some advantage from the placating of other countries, neglects Australia's sources, of supply. The marketing of Australianwheat provides an outstanding example of this. The Ottawa Agreement is long overdue for reconsideration. We should scrap1 the agreement and enter into some other more satisfactory arrangement for our trade with Britain, because over a number of years the balance of trade between the United Kingdom and Australia hasbeen very adverse to us, whereasother European countries have been very substantial buyers pf Australia'scommodities, and we have not been buying from them in return. We cannot expect these other European countries to continue to buy Australian products if we do not buy from them. Therefore, if the United Kingdom is not prepared to bring about some equalization of trade with Australia, weshould look to other markets and withdraw some of the many concessions which the United Kingdom enjoys on the Australian market.

The " Sydney Morning Herald " recently reported -

The time is opportune for the Australian Government to review whether Australia can afford toretain the limitation placed on our choice of purchasing markets by the preference provisionsof the Ottawa Agreement.

I agree entirely with that statement. As a matter of fact, the Ottawa Agreement was made in 1932 to meet a set of circumstances which had arisen from the depression in 1930, when world trade, and particularly the trade of the British Commonwealth of Nations, was depressed. It was a hasty agreement, and I think that Australia came out of it with a very raw deal. Australia did the United Kingdom a very great favour by granting preference and providing markets for almost the whole of Britain's exports. The United Kingdom sought, and received, from Australia not only preference for its exports over those of foreign countries, but also protection against the establishment and undue support of Australian industries. In return, Great Britain gave to Australia a very limited benefit in the form of preference in the United Kingdom market. The main products which we export from this country, wheat and wool, are not now covered by the agreement, although wheat was originally included and was to receive a 10 per cent, preference. That concession has been withdrawn and, to-day, we have difficulty in selling wheat. The United Kingdom even buys wheat on the American market, having to pay for it in dollars, which are in short supply. The point I want to make is that we are receiving only limited preference from the United Kingdom Government, and unless the agreement is reviewed and wider trading benefits are given to Australia, including opportunities for our secondary industries to develop and a substantial increase in the market for our primary products, we cannot hope to progress. The population of Australia is increasing, and we should be increasing our primary production, because Australia is capable of very much greater primary production. If we are to expand production, we must find suitable markets. Under present circumstances, we are faring very poorly indeed.

A further point I want to make is that the agreement also operated adversely to Australia because, quite apart from the continuing percentage benefit received by Britain in respect of goods exported to Australia, in the form of exchange, we gave ad valorem benefits to the United Kingdom, based on the total value of British products imported into this country, but, in return for a small range of products such as wine, butter, eggs, tallow, and a few other items which we sent to the United Kingdom, we received not ad valorem benefit, but a specific benefit. As prices have substantially increased, that benefit in the way of trading advantage toAustralia has been substantially diminished. Whereas, under the agreement, the benefit to Britain has increased, the benefit to Australia has diminished. It is, therefore, time that the margins that were fixed should bereviewed for the benefit of all concerned. The British Board of Trade, too, has taken very unfair advantage of this trading agreement. It has been sending goods to Australia at a higher price than is being charged for them on the British domestic market and other markets where there is competition. As a matter of fact, the Australian Tariff Board, in its 1953 report, at page 15, said -

Apart from the factors of costs and efficiency that affect competitive ability, a special element has been introduced by certain United Kingdom manufacturers of plant and raw materials. Instances have come under the notice of the Board during the year where goods vital to Australian manufacturers have been available from United Kingdom sources only at prices higher than those charged to manufacturers in the United Kingdom. In one instance evidence was given that this pricedifferentiation was at the direction of United Kingdom Board of Trade.

That is why I say that the United Kingdom Board of Trade is the dominant factor in relation to Australian products. As a matter of fact, in respect of the system known as " by-law entry ", under which goods may be admitted into Australia duty free if it can be shown that no comparable goods are manufactured in the United Kingdom, instead of the Australian Government deciding whether or not the goods should be admitted free of duty, it refers such matters to the British Board of Trade. If that body says that it will not permit the goods to come into Australia free of duty, the Australian Government accepts the decision, so that the Australian Government, in effect, allows the Board of Trade to run this country. However, the decision of the Board of Trade has not been accepted on all occasions. In one instance, an Australian Prime Minister refused to accept the decision of the Board of Trade in relation, I think, to an electricity undertaking in Victoria and insisted that the goods be allowed in duty free. We should no longer permit the Board of Trade to dominate Australian trade, as it has done for far too long.

The report of the Tariff Board points out that, in 1947, an Australian manufacturer wished to buy a machine which was sold to United Kingdom manufacturers at £339 10s. The maker said that if the machine went to Australia, the price would bs £438 10s. Therefore, manufacturers in Australia have to pay more for machinery, at the door of the factory in the United Kingdom, than do English manufacturers, which, of course, adds' to the cost of Australian commodities. The same thing applies to the importation of goods for manufacture. A higher price is charged to the Australian manufacturer. Many British firms with subsidiaries in this country send goods to Australia at a price higher than the English price, and by doing so, not only do they add to the cost of commodities in this country and increase the inflationary tendency, but also, they avoid income tax in Australia by showing a loss, or only a very small profit, because of the high prices of the goods they send here. This matter is referred to in the report of the Tariff Board, which states -

It will be noted that during one period f.o.b. prices paid by Australian consumers were higher by £40 per ton or 30 per cent, than those paid by consumers in the United Kingdom . . . The Government's policy on this ... is that they like to see industry get as much for its exports as the traffic will bear.

The latter part of that quotation was taken from a document placed before the Tariff Board. The point is that the British Government is not supplying Australia with goods in competition with other countries at the lowest possible prices under the tariff arrangements, but is taking advantage of the high tariff on imports from other countries to exploit the manufacturers and people of this country. If British manufacturers are not prepared to send goods to Australia at the British domestic prices or to give us fair and reasonable prices under the Ottawa Agreement, then the new agreement should contain a clause providing that, unless the prices bear a reasonable relationship to the British prices, no preference shall be granted to British manufacturers. All preference should be denied unless we receive the benefit of fair prices.

The Minister for Trade (Mr. McEwen) will soon be going away again. No doubt he will spend a considerable amount of public money in an endeavour - we hope - to arrange a better trading agreement with the United Kingdom. For far too long, British manufacturers have taken the Government and people of this country for a ride. I hope that the Minister, on this occasion, will not come back and blame the Prime Minister (Mr. Menzies) for the failure of his mission as he did on the previous occasion. It will be remembered that the Minister said that if the Prime Minister had not been on the scene at the same time and had not interfered, the negotiations would have been more successful.

The CHAIRMAN (Mr. Adermann).Order! The honorable member's time ha> expired.

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