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Thursday, 4 May 1961

Mr DAVIES (Braddon) .- I join with my friend and colleague, the honorable member for Bass (Mr. Barnard) in saying how much we in Tasmania deplore the recent action of the Government in refusing to grant tariff protection to the timber industry in Tasmania. I know that the same dismay and disappointment that we felt in Tasmania has been felt throughout Australia. The timber industry is not only a very great industry but it is also of major importance to Australia. The industry's output is worth £125,000,000 a year to Australia. Almost all the materials used in sawmills, amounting in value to about £69,750,000 annually, are provided from Australian sources. That includes maintenance. The industry is highly decentralized and is most important as an employer of labour and a means of opening up the outback. Yet despite its national importance, the Government is crippling , me tim ber industry by its policy. It has recently refused to give adequate tariff protection. Its economic credit squeeze policy has severely affected the timber industry and by removing import restrictions, the Government has permitted the influx of excessive quantities of imported timber from lowwage countries over the past twelve months.

The Australian Broadcasting Commission, a government instrumentality, conducted a survey on 24th April which showed that the situation in the timber industry is very grave and is worsening daily. This survey revealed that in Queensland, New South Wales and Victoria alone, 103 timber mills have been closed and more than 2,300 workers have been dismissed. In Tasmania, where my electorate is situated, forest products form by far the most valuable and important industry. The annual output of the industry in that State is valued at about £30,000,000, of which sawn timber accounts for about £10,000,000. Yet this Government apparently could not care less about the industry or the men employed in it. In the past six weeks - and these figures are for Tasmania alone - the number of men dismissed in the timber industry has risen from 483 to 700. The number of men working a short week or rostered one week on and one off has risen from 482 to 800. These men are mostly married men and they are taking home about £8 a week. They have hire-purchase commitments and are in a difficult position. In addition, there could be as many as 2,000 other persons affected because many smaller mills are not covered in the latest survey that was conducted by the Tasmanian Timber Association.

Mr Cope - flow would this affect the retail trade?

Mr DAVIES - It affects the whole community because the sawmills are the centre of many of these communities. The port of Stanley is an example. Last year, a ship took regular weekly shipments of timber to Melbourne. An immediate repercussion of the recession in the industry was that we do not send timber away now in sufficient quantities to justify the weekly run of the E class ships. The waterside workers are affected as are also small shopkeepers, taxi drivers, hotelkeepers and indeed the whole community. The revenue of the

Circular Head Marine Board is reduced also. A large number of mills throughout Tasmania have been closed or placed on reduced production. Most processing plants and particularly those in northern Tasmania are operating at reduced rates.

Let us look briefly at the three actions of the Government which have forced this industry gradually to close down. First, there was the refusal of the Government to give the industry adequate tariff protection. The present tariff on imported timber could be described in the words of the president of the Tasmanian Timber Association as " mere peppercorn ". These rates have applied since pre-war days and with presentday prices of timber are no impediments to imports. The rate of duty on the most common of imported timber is 12s. per 100 super, feet. It was fixed when the f.o.b. prices were about 40s. per 100 super, feet. To-day f.o.b. prices range from 120s. to 140s. per 100 super, feet. The equivalent rate to-day, therefore, would be 36s. to 40s. instead of 12s. Yet the Government refuses to face up to this problem and denies adequate tariff protection for our product.

The second factor causing the recession in the industry is the credit squeeze imposed by the Government. Melbourne is the traditional market for our timber, but lack of finance for home building has resulted in a disastrous decline in home building. The number of approvals for building in Melbourne and the metropolitan area in Victoria fell by 51 per cent, in January of this year compared with January of last year; by 46 per cent, in February of this year compared with February of last year; and by 60 per cent, in March of this year compared with March of last year. What is the Government doing to assist? On 1 1th April, the Treasurer (Mr. Harold Holt) announced that funds for home building were to be increased, but only one week later, on 18th April, the Governor of the Reserve Bank, Dr. Coombs, said there was to be no change in the current restrictive policy. This week, the Treasurer said that some stimulus would be given. We hear this mass of words, but no action has been taken, and the ball has been kicked back to the feet of Dr. Coombs.

While all this goes on, we cannot sell our timber and our stocks accumulate. The seasoning stocks in the timber racks in Tasmania, over and above the normal demand, rose by 7,000,000 super, feet in the September quarter of last year, by 6,000,000 super, feet in the December quarter and by 2,000,000 super, feet in the March quarter of this year. In addition, over 3,000,000 super, feet above normal requirements are being held in Melbourne. In all, we have a total of 1 8,000,000 super, feet over and above the normal demand for our timber. We must bear in mind that other States are in exactly the same position. The accumulated stocks and the large holdings of imported timbers must be sold before our mills can attempt to rehabilitate themselves.

What a shocking indictment of any government it is that this great industry has in the past ten years experienced four years of buoyant trading and six years of depressed activity, either in or slowly emerging from slumps. The years 1951-52, 1957-58 and this year have been three periods of great depression in the industry in the past ten years. All of these periods of depression have been man-made and all have been caused by this Government. Any government worthy of the name would have avoided causing these adverse conditions for the industry.

In the time remaining, let me turn to the third factor causing our troubles. This is the question of unrestricted imports, which was dealt with so well by my colleague, the honorable member for Bass. In normal years, Australian producers supply about 80 per cent, of the timber sold in Australia, and we import about 20 per cent. If by its actions the Government cuts production by 60 per cent., as we have shown, then it is reasonable to ask that it cut imports by the same amount. But the Government refuses to do this. We imported 20,000,000 square feet of plywood in the first six months of this financial year and imports from Japan rose by the astronomical amount of 400 per cent, a month. Yet in Australia we can manufacture all the plywood we require. The position with sawn timber is the same.

Let me give one instance, apart from the competition angle, to show how this affects us in Tasmania. An increase by as much as 5 per cent, in the proportion of imports to the apparent demand represents about 85,000,000 super, feet, which is more than we export from the island in any one year. We agree that imports have fallen, but they have fallen only because holding yards have reached saturation point. In his statement refusing protection, the Minister for Trade (Mr. McEwen), expressed the opinion that in view of the fall in the rate of imports, the industry should not be suffering from import competition now. This is not the true picture. At present there are huge stocks of imports unsold in Melbourne, Sydney and Adelaide.

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