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Thursday, 11 August 1921

Senator GUTHRIE (VICTORIA) . - To continue my quotations from the report of the Inter-State Commission -

No application has been made to the Com- mission by the manufacturers for any increased duty on- woollen piece goods.

Why impose a duty of 45 per cent, if the local manufacturers do not want it ? Mr.

J.   £. Ashley, manager of the Ballarat Woollen and Worsted Company, who was nominated by the Australian Woollen Manufacturers Association, gave this evidence -

We manufacture from year's end to year's end men's tweeds, as there is nothing like the variety required. . . .' If. the piece goods not made here were admitted free, there is grave doubt as to the Customs Department being able to decide what is men's and what is women's. . . .

Mr. F.L. W. Ashby, secretary of the Australian Woollen Manufacturers' Association, asked that cotton tweeds, which are at present dutiable at 5 per cent., and free as cotton piece goods, should be rated at the same duty as that charged on woollen piece goods, which it was asserted they imitate and displace.

This is the summing up of the Commission -

The woollen mills, apart from flannels, blankets, &c, are only devoting their energies to making tweeds of simple .pattern, /or plain serges, for which there is a large demand. The limited population of the Commonwealth, and the local demand for small quantities of a great variety of patterns -in other lines, do not at present justify the general local manufacture of the latter. The duty, especially on the light material, which the local woollen mills do not intend at present to make, embarrasses the clothing industry in its competition with imported woollen apparel. Several of the women's clothing manufacturers said they were compelled to import a 11, i and others 90 per cent., of their raw material. The duties on the materials the woollen mills now make would seem ample to enable them to compete with imports and sell to the clothing manufacturers at a profit. It would, therefore, appear that no Protective policy is to be served by maintaining a heavy duty on the light woollens so 'largely imported and used by clothing .manufacturers.

It has been stated that to admit women's light material free, or at a reduction of duty would lead to difficulties of administration; but in the Canadian Tariff, " women's" and children's dress goods, &c., composed wholly or in part of wool, not exceeding in weight 6 ounces to the square yard," when imported in a certain condition, arc admitted at a lower rate of duty, and it should be easy to decide on a standard of minimum weight which would involve no disadvantage to the local woollen mills. The question of ^dealing with the importation of " end of season " goods is altogether another consideration. It must be remembered that, we make 80 per cent, of all the apparel consumed locally at present. The Australian manufacture is steadily growing, and the suggestion to remove, or substantially lower, the duty on women's light woollen dress material will add considerably to the output of the woollen branch of our clothing industry.

The Commission is strongly of the opinion that, to largely increase the clothing duties, as proposed by a few applicants out of several hundred manufacturers, would tend to imduly increase the cost of living, with little compensating advantage. Of the total consumption of apparel in Australia, it is estimated that not more than 4 per. cent, in value consists of what is termed " end of season " goods, imported at a low price. To place duties which may" range from 100 to 300 per cent, on many articles of apparel, 30 per cent, of the total of which is made in Australia under present rates (1008 to 1911) of 35 per cent, and 40 per cent., in order to particularly catch 4 per cent., would give the manufacturer opportunity to increase prices all round, for which there would appear to be no warrant. The principal manufacturers state that they prefer free raw material. If they had all their woollen piece goods free, they would have a manufacturing margin of 35 and 40 per cent. Their requests for additional heavy ad valorem and specific duties on the manufactured goods are disproportionately greater than their alternative proposal..

I find further that -

The Commission recommend that no increase in the duties on apparel is necessary.

They go on to say that they think there ought to be a reduction in the duty on women's dress goods. Those are the recommendations of a Commission directed by the Government to make a searching inquiry into this matter. Then the Bureau of Science and Industry has looked into this question in a very scientific manner.

Senator PRATTEN (NEW SOUTH WALES) - Mr. Stirling Taylor?

Senator GUTHRIE (VICTORIA) - Yes. He deals with the matter particularly well. He is of opinion that there should be a considerable extension of woollen factories in Australia. I claim myself that we should have them all over the country. "We should manufacture in Australia as much of our wool as we possibly can. That would give employment to our people, and would turn the wool into a more profitable article. At page 34 of Mr. Stirling Taylor's very excellent report, he says that an increased duty is not necessary, and that we possess so many advantages that we can make a fortune from our woollen manufactures. He suggests that we should put £14,000,000 into the business. This suggestion was made before the introduction of this Tariff. Mr. Stirling Taylor says -

Owing to the high standard of living which for many years has been adopted in this country, the Australian operative is not only the equal, but the superior, in intelligence, initiative, and efficiency of any other operative the world over.

I think that he is quite right in that. I was brought up in this trade. 1 had to work twelve hours a day at it at Bradford and elsewhere. I have worked also in Australia, and I say that the Australian operatives can hold their own with the rest of them.

Senator PRATTEN (NEW SOUTH WALES) - Would the honorable senator consider Mr. Stirling Taylor a seasoned business mau?

Senator GUTHRIE (VICTORIA) - I do not know whether he is or not. I have met him only once or twice. In this matter I am giving the Government the evidence they have provided themselves. Mr. Stirling Taylor asks a specific question on the subject, and his report continues -

The specific question, " Is there any reason known to you why the works cost of this country should not compare favourably with the works costs in any other country for the same manufactured cloth?" was put to the manager of one of our most efficient mills. After careful consideration, the answer was, " There is no reason whatever known to me." On further being asked, " Can you give any reason whatever why Australia should not manufacture woollen goods for export?" he replied, " There is no reason."

That is without this stupidly excessive protective duty. I say that without any heavy protective duty at all we can undersell the world. We have the wool here, and a wonderful natural- protection, as we have to pay no ocean freights on it going or coming. Mr. Stirling Taylor proceeds to show that it is possible to make a weave -of 56-in. width of tweed suiting, allow the manufacturer 20 per cent, profit, and sell the article at 6s. 6d. per yard. This estimate was made when wool was costing 2Sd. per lb., and to-day it is not half that price.

Senator Duncan - This is from a Government publication ?

Senator GUTHRIE (VICTORIA) - Yes ; I am giving the Government their own stuff, and I shall give the Aye its own stuff later. Mr. Stirling Taylor says that 6s. 6d. is the price, ex mill, for the highgrade tweed.

Senator Payne - Does he say that that can be done, or is being done?

Senator GUTHRIE (VICTORIA) - We know that it can be done. I know that, as a matter of fact, it is being made for 4s. 6d. per yard. I have mentioned that Mr. Stirling Taylor in the price he gives is adding 20 per cent, profit for tie manufacturer. He is speaking of the use of wool at an exceedingly high price, and sets out every detail of manufacture, including wages and everything else. Then, if it is desired to use the most fashionable high-priced merino wool of 70's quality, of which we do not produce more than from 20,000 to 30,000 bales out of a total production of 2,000,000 bales of wool in Australia, I can give you Mr. Stirling Taylor's price for that. He sets out with the supposition, first of all, that- we pay 2Sd. per lb. for greasy wool, when we could buy it at 14d. per lb. The top price in the market this week was round about 16d. per lb., and that for very light conditioned fleece. Mr. Stirling Taylor speaks of 28d. per lb. for wool in the grease, and during the whole operation of the appraisement scheme the record price paid during the war was 31.3d. per lb. Using the highgrade wool, and adding 20 per cent, manufacturer's profit, . Mr. Stirling Taylor claims that high-grade twill can be turned out for lis. 10 1/2 d. per yard. It is impossible to buy the biggest rubbish imported to-day in the Lane at that price. Why, then, is it contended that we. require this high Protective Tariff? Mr. Stirling Taylor says further in his report -

The best indication that the woollen manufacturing industry is a profitable one is the prosperity of the present mills and the fact that in every State, and even almost in every locality, proposals are before the public for the establishment of further mills.

This is an industry, so we are told by the Government, that wants increased protection. The report of the Bureau of Commerce and Industry proceeds -

On inquiry, we find that the Government had the output of twenty-two mills for the years 1015-1916 and up to the' end of April, 1917. The capital involved was £1,144,000, and the net profit was £1,197,000,

Thus the mills more than paid back the subscribed capital in under three years. And yet this industry, so the Government suggest, is a struggling one, and requires further assistance!

Senator Reid - What hours were those mills working?

Senator GUTHRIE (VICTORIA) - I have all the evidence here. But, after all, it does not matter what hours they were working -it

Senator Reid - Yes, it does.

Senator GUTHRIE (VICTORIA) - Well, assuming they were working the ordinary forty eight hours per week, I show the honorable senator that one company paid their shareholders dividends at the rate of 90 per cent, per annum.

Senator Reid - Some of the mills were working three shifts, remember.

Senator GUTHRIE (VICTORIA) - And so would I be prepared to work three shifts if I could see the prospect of making £1,197,000 in three years on a subscribed capital of £1,144,000.

The CHAIRMAN" (Senator Bakhap - The . honorable senator's time has expired.

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