Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Tuesday, 19 July 1921

Senator DE LARGIE (Western Australia) . - It will probably result in a saving of time when we come to consider the schedule to this Bill if, upon the motion for its second reading, honorable senators outline in a general way the particular items in which they are interested, and thus afford the VicePresident of the Executive Council (Senator Russell) an opportunity of examining their representations before those items are dealt with in Committee. It will be accepted as a general principle, I think, by Free Traders and Protectionists alike that big and important industries, which are employing a large number of persons and which are receiving no aid from the Tariff, ought not to be unduly hampered by any attempt upon our part to foster very much smaller industries. In seeking to build up an industry which employs, say, a hundred men, we shall not be justified in burdening a bigger industry which employs, perhaps, five times that number of hands.

Senator Duncan - It will entirely depend upon the possibilities of both industries.

Senator DE LARGIE - I am speaking of an established industry which does not require protection. We should not unduly burden a big industry in order to foster a small one.

Senator Russell - That is the general principle which underlies the Bill. We have to study how duties imposed for the purpose of protecting one industry may affect other industries.

Senator DE LARGIE - There are two classes of industries in Australia. The first class requires to be protected, and it may possibly be able to pass on any duties thus imposed to quite a number of other industries. But there are some industries which cannot possibly pass on any duties which may be levied upon them. Take, for example, most of our primary industries. Neither the wheat industry nor the gold-mining industry can pass on any burdens which may be levied upon them. Upon the other hand, any duty imposed upon the timber industry, which practically finds the whole of its market within our own borders, can be successfully passed on. No Tariff . burden levied upon the wheat or the gold- mining industry can be transferred elsewhere, for the simple reason that they have to sell their products in the markets of the world. They come into competition with the cheap labour of other countries.

Senator Duncan - Then, I take it that the honorable senator will be opposed to any duties upon agricultural implements?

Senator DE LARGIE - Not necessarily. We know that the removal of duties from agricultural implements in some countries has not resulted in making those implements cheaper to the farmers. Some years ago tho Harvester Commission, under the chairmanship of Mr. Poynton, inquired into this question, and its investigations showed that in the Argentine, where there was no duty upon agricultural implements, the farmers were obliged to pay more for those implements than our own farmers were able to purchase them at in Australia, where a high duty was operative.

Senator Vardon - Does that position obtain to-day?

Senator DE LARGIE - I cannot speak of the position in the Argentine to-day, but I have definite knowledge of the position which obtains in New Zealand, with which we are in closer communication.

Senator Bakhap - The manufacturers of Australian harvesters can still successfully compete in the Argentine.

Senator DE LARGIE - There is no great credit due to them on that account, because the Commission of which I have spoken conclusively proved that in the Argentine there is a combination of sellers who maintain fixed prices for agricultural implements, so that the farmers of that country cannot purchase for less than those prices.

Senator Duncan - That is a complete answer to the argument which the honorable senator used just now.

Senator DE LARGIE - I cannot follow the reasoning of Senator Duncan. In New Zealand, where there is no duty operative upon certain agricultural implements, the farmer has to pay more for those implements than our own farmers are required to pay for them in Australia.

Senator Rowell - Then there is no necessity for anti-dumping laws.Why not dump goods there?

Senator DE LARGIE - That is another matter. In regard to anti-dump ing legislation, I shall have something to say at a later stage. I repeat that it does not necessarily follow that I favour the abolition of duties upon agricultural machinery in order to relieve our agriculturists of a burden. Those duties may or may not affect that particular industry. I look for assistance for this particular industry in another direction, and hope I shall not be disappointed. We have great industries in this country carrying very great burdens, and we have to consider whether it is for the welfare of Australia that we should foster them or not. If we come to the conclusion that it is for the welfare of Australia that they should be eased in every way possible, then, I think, a very good case can be made out so far as the wheat industry is concerned. I mentioned some industries that could pass on duties or burdensthat are placed on them. For instance, the clothing trade, the machinery trade, and the boot trade all sell their products within Australia, and, being protected, are in quite a different position from the agricultural industry or the mining industry. We must remember that the secondary industries, to which I am referring, do very little to pay our way in Australia. The amount of wealth, that comes into tho country because of their efforts is verysmall indeed. It is the gold, the wheat, the wool, and other big industries concerned with our primary products that we have to depend on to square the ledger. They supply the wherewithal to carry on the affairs of State.

Senator Duncan - The manufacturing industries (provide the primary industries with a very big market.

Senator DE LARGIE - It is not a very big market. So far as wheat is concerned, the home market takes only a very small proportion of the whole production.If the wheat producers of Australia relied wholly on the home market, it would be a very poor industry indeed, and I might say the same regarding meat, wool, and gold. If our export trade in wheat is allowed to decline in the way it has been declining, I am afraid that Australia will get into a very parlous position indeed. I have figures here which show that the position of the gold industry is far from satisfactory. In 1901 it was a most important industry to Australia, and over 70,000 persons were engaged in it. Today it has fallen off so much that one can scarcely believe the figures. According to Knibbs' latestYear-Book, in 1914 2,000,000 ounces of fine gold were produced in Australia; in 1915 the production was 1,900,000 ounces; in 1916 it was 1,600,000 ounces; in 1917 it was 1,400,000 ounces, and for the last year for which he gives figures it was only 1,200,000 ounces. Therefore, there has been a decline of about 200,000 ounces every year, in the output of the gold industry.

Senator Crawford - Does that not make it all the more necessary to build up secondary industries to take the place of the gold industry ?

Senator DE LARGIE - I will consider later how far that is possible. I dare say that, on general principles, the honorable senator is right, if it is possible, but I shall show that in some ways it is impossible. The number of persons employed in the gold indtistry in Australia was 70,000 in 1901, bub five years ago it had fallen to 29,000, four years ago to 26,000, three years ago to 20,000, two years ago to 18,000, and in the last year quoted by Knibbs it was only 15,000. There, again, has been a tremendous decline. Honorable senators can easily settle for themselves whether we can place much of a burden upon the fast-dying industry of gold production, which may almost be said to be suffering from galloping consumption. It will be well for us to see what we can do to encourage the industry, rather than to put 'any burden on it.

Senator Vardon - To what is the decline due?

Senator DE LARGIE - Various causes. There has not been the same amount of prospecting going on in Australia in recent years as formerly.

Senator Vardon - Has not the wages question something to do with it?

Senator DE LARGIE - That may be so, especially where wages have gone up, but if there is any industry in Australia where good wages shouldbe paid, it is in mining of all kinds. No men work so hard, or risk their health to such an extent or' take so much risk of accident, as do those who undertake goldmining, coal-mining, and other forms of mining. It is an industry in which, if we can possibly afford it, the very best wages should obtain. When we examine the wheat industry, we find the same story of a steady decline, year after year. I quote again from the 13th edition of Knibbs' Y ear-Book. I am not taking the year 1914, because, in that year, a most disastrous drought was experienced in all the States. The figures I shall quote are to be found at pages 354 and 355 of the Year-Book. Five years ago the number of acres under cultivation for wheat, in Australia, was 12,000,000; in the year following it was only 11,000,000; in the year after that it wasonly 9,000,000; in the year following it was 7,000,000; and in the last year for which figures are given it had fallen to only 6,000,000. That is a tremendous falling off.

Senator Wilson - That was during the war period.

Senator DE LARGIE - Certainly.

Senator Wilson - But the honorable senator must remember that during the war period many thousands of our rural workers were away fighting.

Senator DE LARGIE - I do not think that that had any appreciable effect on the area under cultivation.

Senator Wilson - It did.

Senator DE LARGIE - Not to the extent some may imagine, because the labour difficulty has always been great in rural areas.

Senator Wilson - In many instances farmers, whose sons wereabroad, merely carried on operations in a quiet way until they returned.

Senator DE LARGIE - That may be so, but in many parts of Australia wheat is now being produced where it was not grown prior to the war. 5n Western Australia, for instance, there is a larger area under cultivation than was the case in 1914.

Senator Wilson - The honorable senator's figures do not prove that.

Senator DE LARGIE - I am quoting the figures for the Commonwealth.

Senator Wilson - Then Western Australia must have increased her area, whilst the other States have decreased their areas.

Senator DE LARGIE - Last year Western Australia had a larger area under wheat than was the case in 1914. For the information of honorable senators, I shall quote the yields in round numbers, apart from last year, which, of course, was a record. The figures werei - In 1915, . 179,000,000 bushels; 1916, 152,000,000; 1917, 114,000,000; 1918, 75,000,000; and 1919, 45,000,000 bushels. These figures show that there has been a remarkable decline in wheat production in Australia.

Senator Fairbairn - What is the estimate for this year?

Senator DE LARGIE - It will- be more; but it will not nearly approximate the figures for 1916 and 1917. The yield for last year is not given byKnibbs, but honorable senators will agree that it was abnormal, because of the price ruling and the weather conditions which prevailed. Notwithstandingthe high price for wheat, which reached 9s. per bushel, the wheat farmers are finding it difficult to make ends meet, and one wonders how they are to continue on the land when prices come down, which will inevitably be the case. There has been an alarming decline in production in a most important Australian industry, and we shall have to consider whether by placing additional burdens on this industry to foster smaller industries we will not be instrumental in still further reducing the area under cultivation. Are we justified in jeopardizing the interests of the wheat-grower in order to protect the implement manufacturer? If the wheat producer is unduly handicapped there will not be a great demand for the product of the implement manufacturer.

Senator Duncan - In what way is the wheat-producing industry handicapped ?

Senator DE LARGIE - In comparison with other wheat producers the Australian wheat farmer has to pay excessive freights to market his product.

Senator Duncan - But the honorable senator is speaking from a Tariff point of view.

Senator Wilson - The wheat farmer has also to pay high railway freights.

Senator DE LARGIE - I was coming to that point. Our railway workers are well paid, as also are those who handle the product of the wharfs when it reaches the sea-board. The rural worker engaged in producing wheat has to be satisfied with Is. per hour, whereas the railway worker receives 2s., and the wharf labourer 3s. per hour. The implement manufacturers' employees also receive high wages. . I admit that the farmer depends to a large extent upon the assistance of the labour I have mentioned in marketing his product, and the Vice-President of the Executive Council (Senator Russell), in moving the second reading of the Bill, mentioned that the farmer is assisted in the production of wheat by the use of uptodate machinery, which enables him to reduce his costs. The Minister, however, did not lay particular stress on the fact that the man on the land is sweated, and that the return from his product is not equally distributed amongst those who handle it. It is monstrous that the man who toils in our wheat fields should get the smallest share of the product of labour, whilst others who carry the produce to market should work shorter hours and get higher wages and better conditions of labour in every way. This is neither fair nor square. There are many things quite beyond our power to rectify, but I trust the Senate will endeavour to afford relief wherever possible.

I have already pointed out that agricultural implements cost more in New Zealand than they do in Australia, notwithstanding the fact that they are admitted into the former country free of duty. New Zealand is no longer a< .wheat-producing country, although the fertility of her soil is undoubted, because when wheat was selling at a low price the New Zealand farmers devoted their attention to other activities which they found more profitable, particularly that of raising fat lambs. In these circumstances, the area under wheat in New Zealand has been considerably reduced, and that Dominion is not now able to supply even her own requirements, which are met by Australia. The cost of agricultural implements in New Zealand is, therefore, not of the importance that it is in Australia, There are, however, Protectionist countries, such as Canada, in direct competition with Australia. Canada is a great wheat-producing country, but agricultural machinery there is only about one-half the price that it is in Australia, because implements which cost £100 in Australia can be purchased in Canada for £60. That is a point that requires to be looked into in order that our farmers may be able to get their agricultural machinery at the same price as is charged in countries with which they have to compete. Our producers are at a sufficient disadvantage already in the matter of ocean freights without being required to pay twice as much for their agricultural implements as, say, the Canadian farmers. Therefore, I cannot understand advocates of Protection in Victoria, particularly that great apostle of Protection, the Melbourne Age, continually howling for cheap wheat and protesting against the pooling system, under which the price of last season's wheat was 9s. These advocates mislead people by making it appear that .the Australian consumer has been paying more for his" wheat than is charged in other countries of the world.

Senator Duncan - The Age is not in favour of cheap newspapers, apparently.

Senator DE LARGIE - Ear from it. This reference to the Age reminds me that in a leading article which I read yesterday there was a comparison of Lon? don and Melbourne quotations for a number of commodities, the purpose being to demonstrate that prices were lower in London than in Melbourne. The Age did not quote the price of the great daily papers in London, which are sold at a. penny, whilst, it is still selling at the profiteeringprice of two pence.

Senator Russell - .The Age did not quote wheat. Australian wheat is sold to London millers at 9s. 6d. per bushel, and in Australia it is 9s.

Senator DE LARGIE - That means 6d. in favour of the Australian miller. Taking the prices during and from the war period, wheat has been sold at lower rates in Australia than in any other country in the world. Last year when the price was fixed at 9s., world's parity was 10s. In the previous year the overseas . price all through the season averaged about 12s. per bushel, whereas the Australian consumer got his wheat for 7s. 8d. The Age, notwithstanding that it harangues on "The Great Paradox" from day to day, recently laid special emphasis on the statement that the Australian consumers were unable to get cheap wheat, and so forth, but was careful to conceal the fact that thepeople -of other countries were paying itwice as much for their wheatas wascharged in Australia. The Age seized upon oneorder placed 'with Germany at7s.6d.per bushel; as against the Australian price i9s. 'That 'journal conveniently forgot that there -'were bther orders at other prices, and that if She whole. of the transactions were -averaged the overseas parity would hajve been nearer >10a. than 9s. pel- bushel. 1 desire to say a few words -concerning a matter that so far has not received, very much attention at the hands of honorable senators during this debate. I refer to the question of trade reciprocity, Which, was a prominent feature of the first ^Tariff debate in this Parliament. On that occasion -much was made of the benefits that were to accrue to this country from a policy of reciprocal trade with Great Britain. We were told that if we gaye the manufacturers of the Mother Country preference in our markets we would receive preferential treatment in the British market.. We have had reciprocity for twenty years, 'but so far have 'received uio '-special benefit from it. I take it that a -Tariff is a business proposition, designed , to increase -wealth production, and that in this matter of reciprocity the advantage should 'be mutual. If we, for sentimental reasons, give Free Trade Britain certain advantages in, our markets, we might very well say that, as one -of the oversea Dominions, we expect similar advantages in the markets of the Mother Country. We ^ 'have a just claim for sympathetic consideration, more especially as at the present moment Britain is considering her own position in this matter. There are signs that should not be ignored by us that the Old Country is at last changing its fiscal views. Great - Britain . now , has , an . antidumping, law, quite opposed in its principles to all preconceived Free . Trade ideas, that the best . policy far a country is to buy in the cheapest market.

Senator Fairbairn - I do nob think that Bill was passed.

Senator DE LARGIE - I have evidence that it was enacted, for in the Hoard of Tradt Journal oj 12th May, 1921, there appear certain resolutions tinder the,"heading " The Safeguarding of industries Act1" which come very close up to 'Protection. This is part of -one !of 'the resolutioas: -

Thai; for a -period of five years . 'from the passing of an Act for giving effect to 'this resolution -there ishall be charged on any

The "quotation then enumerates the various articles referred to. This shows that the anti-dumping 'law is actually in operation in the Old Country. I have quoted frorn'tiho Board' of Trade Journal of I2th May, 19,21. .

Senator Fairbairn -Lt speaks of what is to take place " from the passing of ah "Act," but I do. not think that the Act was passed, though Icinay be wrong.

Senator DE LARGIE - I am not quite positive on the subject, but I cannot understand the Board of Trade Journal printing such matter as I have quoted if the Act was hot^ passed.

Senator Bakhap - It was seriously in contemplation, if it was not actually passed.

Suggest corrections