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Thursday, 11 June 1970

Dr J F Cairns (LALOR, VICTORIA) - It simply returns the position to what it was before the tariff report was made. It returns us to the status quo- to the position as it was before. The amendment I have moved if carried will prevent the Thirteenth Schedule from operating. It will prevent the reduction of the duties that the Tariff Board has recommended.

Firstly, I would like to thank the Minister for Customs and Excise (Mr Chipp) for his co-operation since he has become Minister and for the way in which this co-operation has been given. This has made my work much easier and I should have expressed my thanks when I first spoke. I would like to mention in passing one or two points that have arisen out of the second reading debate. I think I challenged speakers on the Government side of the House to defend both the Board and the Minister. I would say at this stage that I did not think the honourable member for Wakefield (Mr Kelly) put up a very effective defence of the Board or that the Minister put up a very effective defence of the Minister for Trade and Industry (Mr McEwen). I think the honourable member for Wakefield supports the Tariff Board right or wrong. He said that he could never vote against a recommendation of the Tariff Board. I think this is a very blind spot on the part of the honourable member.

No-one in this House, nor in this country suppose, wants high costs. We all want low costs. We want the lowest possible costs. It is very superficial thinking for the honourable member for Wakefield and others to think that because they stress low costs they are the only ones who want low costs. That appears to be the way in which they put it. No-one wants high tariffs. We want the lowest possible tariffs. I would say the same thing about tariffs as I said about costs. However, I would say that without effective tariffs we would have little secondary industry in this country and without effective subsidies we would have many thousand less farmers in Australia. As a matter of fact, we would have very few people. It is possible that we might have a better society if this were the situation. We would be a slightly larger New Zealand and we might have a better quality of life in such a society. But that is not our situation. Our situation is that we have an industrial structure and I think that in that industrial structure there must be change.

The only question is: How can this change be brought about? I think there is an alternative view in this Parliament and also outside it. The honourable member for Wakefield (Mr Kelly) mentioned the Vernon Committee, the Tariff Board and others, and also himself. I think they represent one point of view. As I understand it, their point of view is that of simplifying tariff to a bench mark type and, I must stress, of lowering tariffs. I do not know what the definition of free trade is. Is it no tariffs at all? If one stands for the lowering of tariffs, as the honourable member for Wakefield and all the other people he talks about do, one does not need much knowledge about the industry, in the way of facts. One can have an amateur Board, as I have been calling it. One can have an experimental situation. One can say: 'We will lower the tariffs in connection with this industry' - as you are doing in connection with schedule 13 - 'and see what happens.' I do not think the Tariff Board is saying much more than that. I will concede that it might work out all right, but if it does, it will be a result more of chance than of informed judgment. The approach that the honourable gentleman and others take is relatively a free trade approach; it does not need factual knowledge. This experimental way of making tariffs is quite appropriate for it. I do not think it is unfair to say that we have been using an experimental way of making tariffs.

There is another way of going about it. That is what we stand for on this side of the House, and I think it is what the Minister for Trade and Industry (Mr McEwen) has' stood for. But changes are taking place among the social and economic class of people who have previously stood behind the position of the Minister for Trade and Industry. The second , way of going about it is by recommendation based on the fullest possible knowledge of the facts. The Minister for Customs and Excise quoted the Minister for Trade and Industry as saying something like this: The Board provides the Government with adequate knowledge. My point of criticism is that the Board does not provide the Government With adequate knowledge. It is not possible for it to do so now. I think we need a larger advisory body. We need a manufacturing industries development commission. We need a body which understands that its job is to work out what is necessary for the development of the manufacturing industries.

Mr Chipp - Does the honourable gentleman mean that an increase is needed more in the number of personnel on the commission or in numbers of staff?

Dr J F Cairns (LALOR, VICTORIA) - 1 mean particularly in numbers of staff. There is much more work to do - an enormous amount, lt has to be continuously at work, continuously searching for facts and continually watching facts here and overseas in co-operation with industry and working closely with it. I oppose schedule 13 mainly because that condition does not exist. I oppose it more for that reason than for the risk involved in schedule 13 - the experiemental method, with the Board saying: We think it is safe - we cannot put it any stronger than that - to reduce these tariffs. We will give it a go and see what happens.' The Minister says that if something harmful happens, a special advisory authority will get to work to reduce the harmful effects, litis is an experimental method. It is one way of going about making tariffs, but it is not the way I want. It is not an informed way. Do not let us kid ourselves. This report is not worth having as a document. If could have been written without making any inquiries at all. This is not good enough for a country in 1970.

We all desire the lowest possible costs and the lowest possible tariffs, but we must have effective tariffs and these tariffs are going to be pretty general in Australia. They will cover practically all, if not all, of our secondary industry. In some cases they are going to be higher than they are now. In other cases there will be quantitative restrictions within the next few years. The nature of these tariffs and other forms of protection that will come from this kind of work is the type of system existing in West Germany and Japan. Already those 2 countries are more adequately and effectively and sensitively protected than Aus. tralia. To believe that Australia is in some way a more protected country than Japan or West Germany is to misunderstand completely the sophisticated nature of the protection existing in those countries, lt is time we woke up to this sort of thing and realise that those who blithely talk about Australia being over protected apparently talk about Australia being over protected in relation, to Japan or some other country. If this is so then they do not know what they are talking about. Japan knows more about protecting its industries than we in Australia have ever imagined and in Japan it is done much more effectively than we do it here.

The Opposition opposes the schedule because of the reduction of tariffs on the man made fibres industry. They are far below the bench mark before the reduction and they will be very much below it now - 10 to 20% or thereabouts. This is a very low tariff indeed. The Opposition opposes the schedule because we think there is a risk involved to an intricate, complicated, technically developed industry and we are not prepared to take that risk. Members on this side of the chamber oppose the schedule mainly because we do not have the necessary, equipped advisory board. I look forward to the appointment of a board or a commission capable of doing its job in the last quarter of the 20th century, lt is lime we came out of the first quarter of the 20th century, where we still are in our tariff making procedures. For those reasons the Opposition opposes the Thirteenth Schedule.

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