Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Tuesday, 16 August 1921

Senator DRAKE-BROCKMAN (Western Australia) . - As I understand the position, pig iron is the raw material for the manufacture of all other forms of iron and steel products. Therefore, it seems to me to be very desirable that we should get the raw material as cheaply as possible. Senator Duncan, however, wants to increase the cost of pig iron to the manufacturer by increasing the duty on pig iron from 20 s. to 25s. per ton. I have a different idea altogether. I would like to see the duty decreased. Under the old Tariff, pig iron came in free from Great Britain, and under the general Tariff ' the duty was 10 per .cent, ad valorem. The Broken Hill Proprietary Company and Hoskins flourished under those conditions. If, now, we increase the cost of manufacturing the other forms of iron and steel for which pig iron is the raw material, we shall have to face increases all along the line. It is very desirable, and perhaps necessary, that the iron and steel industry should flourish in Australia at some time or other, but whether that time has arrived is quite another matter. No one would have said that the first settlers in Australia should have set about establishing iron and steel works. And no one would suggest that, when there were 100,000 people in Australia, the time had arrived for the establishment of these secondary industries, but possibly a few would have urged that when we had 1,000,000 inhabitants, we were in a position to do so. We are still a handful of people, and I submit that we should examine the position most carefully before we commit ourselves to the proposition to increase the duty on pig iron. Honorable senators should look at the proposal, not from the point of view of New South Wales, where these industries are established, but from an Australian stand-point, and ask themselves, whether the time has arrived when we can afford to establish these secondary industries, and, in a measure, sacrifice our primary industries. Our primary producers should be able to obtain their implements at the cheapest possible price. If a duty of 20s. per ton is going to increase the cost of the raw material to our iron and steel manufacturers, we should hesitate before we agree to it. It is much more important that we should have the remote areas of the Commonwealth peopled and developed than have an iron and steel industry flourishing in New South Wales. We want to see the vacant spaces filled. This Australian sentiment should appeal strongly to all honorable senators. We cannot expect to hold Australia against the teeming millions of Asia unless we get it peopled. If we make the conditions more difficult for our primary producers, we shall fall short of our duty. From a defence stand-point, it is essential that we should populate and develop this continent. Therefore, I urge honorable senators not _ to support Senator Duncan's requested amendment. If the Committee rejects it, I shall ask for a further reduction in the 20s. per ton duty now asked by the Government. Seeing that the established industries got along very well under the old conditions, when pig iron from Great Britain was free, there can be no adequate reason for a .duty of 20s. per ton now.

Senator PRATTEN (NEW SOUTH WALES) - Were not the conditions then very different from the conditions of to-day?

Senator DRAKE-BROCKMAN - The conditions enabled the Broken Hill Proprietary Company, on an initial capital of £400.000. to pay a dividend of 11 per cent, on a capital of £2,000,000, and I am informed that this £2,000,000 does not re- present new capital, but bonuses made out of the business. If I am properly informed, this most wonderful concern has made a tremendous amount of money; but, even assuming that I am wrong, it is still paying a dividend of 11 per cent.

Senator PRATTEN (NEW SOUTH WALES) - It is earning 11 per cent.

Senator DRAKE-BROCKMAN - 1 accept the honorable senator's correction; but in- any case these, people are increase ing their capital all the time, as they have done in the past. For a company not to pay out all its profits in the way of dividends, but to put by a reserve, is very business-like; but I do not think that a concern capable of increasing, its capital' out of profits, as this company has been doing, according to my information, should be given any further protection than it already has.

Senator PRATTEN (NEW SOUTH WALES) - I think the honorable senator is wrong in what he has stated.

Senator DRAKE-BROCKMAN - I am not making a definite assertion in regard to the matter. I have said that I have been informed that' this is the case, and I have not had- the opportunity df. discovering the exact facts. I understand that if this duty is increased it will necessitate a. re-casting and reconsideration of the whole of the duties on iron and steel which follow, and that a decrease in the duty will not necessitate this. Therefore, if we decrease the duty on the raw material for the iron and steel industry, not only will it not affect, from a Customs House point of view, or from a Government point of view, the duties proposed in regard to all the other items which follow in this division of the Tariff, but if will also assist to a certain extent in securing a reduction of the duties on many items affecting the interests of primary producers, who are so essential for the development of the Commonwealth.

Suggest corrections