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Tuesday, 9 August 1921

Senator LYNCH (Western Australia) . - This is another instance of the theoretical formula for the imposition of Customs duties, or for the increase of them, being stretched to an extraordinary degree.

SenatorRussell. - Is. the honorable senator not overlooking the price of freight during the war ? '

Senator LYNCH - I am not overlooking anything; I am approaching this question from a purely communal point of view, always bearing in mindthe necessity to give adequate protection, but no more, to those engaged in these enterprises, and, at the same time, give a " fair crack of the whip " to the consumers.

Senator Crawford - Is the honorable senator not aware that fiscalism is now an exact science.

Senator LYNCH - I can understand Senator Crawford keeping in mind the possibility of this industry being carried on in Queensland in the near future; and he is so infatuated with the idea of imposing duties for all conceivable purposes, that he thinks it is only necessary to do so in order to make everything flourish like the "green bay tree." Indeed, he has Customs duties so much on the brain that if he were to wake up in the night and. find his house on fire, I believe the first step that, would suggest itself to him would be the imposition of a duty I Sena- tor Crawford has told us, in effect, that nothing will grow im Queensland unless there i3 a duty at the root of it; but when I was there years ago it was possible to. grow anything without any such aid. However, it is now proposed to increase these milk duties by 50 per cent, and 100 per cent. - a very respectable jump at one time. So far as we can gather from the daily press, the manufacture of this most necessary article for inland life is gradually drifting into the hands of one company.

Senator Russell - There are four companies in Victoria alone!-

Senator LYNCH - The Minister had better wait until I have furnished the f facts, from which he may then draw -hia own deduction. In the Argus of 1st July last the public were informed -

A limited company was registered on 30th June in Sydney, under the name of the Nestle's and Anglo-Swiss Condensed Milk Company (Australasia) Limited, with a capital of £4,000,000, the first directors being Messrs. A. C. Hargrove (Sydney), chairman and managing director; S. E.. Levy,. F. A. Waller, G. Aguet (London), A. Roussy (Vevey), F. Page (Cham.), A. Liotard-Vogt (Paris). It is understood that the Australasian; company has arranged to acquire the Australasian interests of the Nestle and Anglo-Swiss Condensed Milk Company, and also those of the Bacchus Marsh Concentrated Milk Company Proprietary Limited,, the Standard Dairy Company Limited, and the Australian Milk Products Limited. Some time ago steps were taken by the shareholders of the Bacchus Marsh. Company to authorize the directors to carry through an alteration in- the constitution of tha company to enable the Nestle's interests to acquire the business.

The- Age on the following day contained this- -

The parent Nestle and Anglo-Swiss Company, which was formed' in Switzerland in 186$ at few weeks ago issued 2,000,000 £1 8 per cent, cumulative preference shares at par, and these were fully taken up. Its manufacturing business in Victoria and other parts of the Commonwealth is already large, and it carries, on extensive undertakings on the- Continent, in England, Canada,, and the United States.. Profits for 1920 have not yet been notified', but for- the preceding seven years they averaged £839,903', and for the fourteen years' to 31st December, 1919,. dividend was never below 15 per cent. At the latter date the value of the assets was. £7,071,250..

It ia quite clear that this is not a totter^ ing industry so far as the Commonwealth is concerned; on the contrary, this one company is stretching out im all directions and acquiring the interests* of other existing companies. Yet the Government propose to give this growing company increases of duty represented by 50 and 100 per cent., although, so far as I can learn, these increases have not been- asked for. The figures I have given are sufficient, without any comment, to warrant the Senate in rejecting the proposal for the increased duties. According to1 the Minister's own figures, imports have dwindled almost to an invisible point'; indeed, as I said by way of interjection, they could all be carried on one spring, dray. But the exports- of which the Minister told us nothing, have increased in the five years' .period, as I previouslyquoted, from something in the neighbourhood of 70,000 lbs. in 1016 to 1,500,000 lbs. last year. Is it not time we called a halt in this mad career? Is it not time we stopped giving unnecessary protection to an industry -which is not only firmly established, but is holding its own in the markets of the world. T move -

That the House of Representatives, be requested to make the duty, sub-item (a), general, 2d.

SenatorRUSSELL (Victoria- Vice*President: of the Executive Council) [3.38J. - Senator Lynch complained about my not giving information, and I now wish to place before the Committee a point which that honorable senator hasgrievously overlooked. During the warperiod Australian supplies of condensed milk from overseas failed.- Amongst other difficulties were the high freights, which: reached as much as £12 per ton, with an enormous demand for this commodity in other parts of the world. The- then duty, plus the high freights, was much higher than the duty now proposed. No duty was desired then, but men took the. risk of entering into the industry, and now they have to meet conditions that are ap,proaching the normal. I have no hesitation in saying that cargo that then cost £12 per ton could now be carried at £5- per ton; this, of course, means that the protection afforded by high freights, together with other war difficulties, has disappeared. It was not an Australian duty which established this industry and changed Australia from an importing into an exporting country. I believe that during the war the manufacturers -of this commodity made undue profits, not locally, but. overseas. The ^prices locally were fixed after full investigation, but the world's demand enabled exporters to obtain practically any price they liked during the war period. If Nestles were to send their milk from Switzerland, the price would be fixed in that country, and the Commonwealth Government would have no control. The industry being established in Australia, however, there is power o/ control. The Government can prevent the exploitation of the public by any Australian industry. J wish to quote now some illuminating particulars concerning one class of milk. In August, 1916, the net price for No. 1 size was 12s. 2d. For No. 2 size tin, the price was 22s. 8d., and, for the 57-lb. tin, hospital size, the price was 90s. To-day, the quotations are respectively, 17s., 29s., and 129s. lOd. I eai! particular attention to the lastmentioned figure, comparing it with the quotation of 90s. in 1916. The local prices to-day, however, are 15s. 4d., 25s. 7d., and 117s. 9d. respectively. Thi3 comparison shows considerably in favour of the Australian manufacturers. Naturally they have been anxious to build up successful connexions.. They have realized that there was a strong bias against the Australian product. Very many people considered it somewhat .inferior to imported lines, but analysis has proved that the Australian article is actually superior ; and, in addition, local milks are much fresher, since they can be placed on the market several months before imported lines". Surely, in a country like Australia, it is ridiculous that we should be importing hundreds of thousands of pounds worth of milk products.

Senator Duncan - But we are actually exporting now.

Senator RUSSELL - These are normal times, or times approaching the normal; and "freights are coming down. Goods are now being imported after .a period of practical cessation during the war years. Australian manufacturers are meeting with more and more competition. The Government are pledged to practically encourage and assist those new industries which helped Australia during the war to carry on. Now that matters are daily growing more settled, the -Government and Parliament cannot go back upon their promises.

Senator Duncan - The Australian manufacturers have been carrying on for years under the old duty.

Senator RUSSELL - They have expanded under the protection of increased duties. .It is of .no use for honorable senators to talk .of the .natural protection afforded by freight rates. Freights are falling to the old quotations. Numbers of manufacturers pluckily established themselves during the war. They would not have done so, but .for the knowledge, in the first place, that*, the Government had pledged themselves to safeguard their interests, and, secondly, if it had not been for the natural protection afforded 'hy high freights and the like.

Senator Payne - They did not anticipate retaining the protection of "high freights.

Senator RUSSELL -Certainl.y not; but they looked forward to establishing themselves firmly by the help of .such protection. With respect to the profits made by certain Australian firms, I am bound to admit that there have been reasons for complaint, and grounds for the -control of prices. I remember how, on one occasion, the representatives of a -certain firm bluffed their way into the Customs 'offices at a time when they knew that -the prices o-f their commodities were under consideration. As they failed to act with ordinary courtesy, they were summarily ordered out. Inside of about ten minutes, one of the most noted King's Counsels in the land - their counsel - returned to apologize to Mr. Whitton. The latter official asked for my advice concerning 'his course of action, and I advised that the' King's Counsel also should be requested to depart forthwith. The Government were determined that there should 'be no interference with their policy of controlling prices of Australian manufactures - 'thus protecting the Australian public. No such action could have 6een taken, however, in respect of the -conduct of, or the prices fixed by, an overseas company.

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