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Thursday, 1 September 1921


Senator GUTHRIE (VICTORIA) . - I rise to oppose any increase of the duty of 35 per cent, on pianos agreed to by the House of Representatives. Senator Duncan in a very good speech argued that a duty of 35 per cent, is not a protective duty. I have the highest regard for Beale and Company and Wertheim and Company. I know that they employ a great number of persons, and treat their employees well. Senator Duncan told us that Beale and Company employ 560 persons, but I know of two firms importing pianos who employ 600 employees, so that the honorable senator's argument, based on the amount of employment given in this industry, can be set on one side. Senator Duncan informed us that the profits made by Beale and Company represent only about 4 per cent. That may be the profit on their factories; but it has to be remembered that whilst on, their balancesheets the factories might show no profit at all, the firm might still be making huge profits because the factories send the pianos into their shops, where they are sold to the public of Australia at" an exorbitant price. Everything that Senator Duncan has said about the low profits made by piano manufacturers is entirely disproved by a prospectus issued by Beale and Company, on the 30th July, 1920, when they were floating still another piano company to operate in Queensland. Although the excellent firms to which I have referred built up their huge establishments for the manufacture of pianos in Australia under Free Trade, I am still prepared to support the duty of 35 per cent, adopted in another place, which, taken in conjunction with the cost of freight on pianos, which amounts to £18 each, represents an enormous protection. In the prospectus issued by Beale and Company they say -

In order to meet every commercial demand for their products it has been decided to form a separate company, and a certificate of public accountants is appended to this prospectus, stating that the company is earning sufficient to pay steady and comfortable dividends, and that considerably more than 7£ per cent, can be paid on- the ordinary capital after paying 7£ per cent, on the preferred capital.

Senator Duncaninformed us that Beale and Company were making less than 4 per cent, profit : but, according to their own prospectus, they can make 1\ per cent, comfortably, and could easily make more. The prospectus continues' -

The Sydney company's annual earnings during nine and three-quarter years, to 3rd April last, have averaged considerably more than twice the amount necessary to cover the yearly dividend upon £100,000 preference shares.


Senator THOMAS (NEW SOUTH WALES) - Trying to float a company and trying to secure a duty are two very different things.


Senator GUTHRIE (VICTORIA) - I am showing that there is nothing in Senator Duncan's contention that the Beale Company are not making good profits. I have no objection to local makers of pianos making a good thing out of the business, but I do not desire that they should be allowed to build up a, monopoly. If we impose an exorbitant rate of duty the effect will be to build up two monopolies in this country to the detriment of every householder who desires to obtain even a cottage piano. I have every desire to encourage the manufacture of pianos, although personally I look upon them as instruments of torture.

I find that in 1914 a piano costing at the factory £20 paid a duty of 40 per cent., amounting to £8 16s. To-day the same piano costs at the factory £50, and a duty of 35 per cent, would amount to £19 5s. In addition to that, we have to remember that the freight amounts to £18 per piano, which is a great natural protection to the local manufacturers. Pianos to-day are sold at extraordinarily high prices. In 1903 the cheapest piano was sold at 45 guineas. I am referring to pianos manufactured by the splendid company to which Senator Duncan would like to give a monopoly. In 1911 the price was 55 guineas, in 1914 65 guineas, and to-day it is 120 guineas.


Senator Duncan - Costs of production have increased enormously, and other prices have gone up in the same way.


Senator GUTHRIE (VICTORIA) - Costs of production have not increased in anything like the ratio indicated by the figures I have quoted. I want to give honorable senators some idea of the protection now afforded to local manufacturers of pianos. In the case of a piano of the value of £32 18s. 4d., allowing for exchange, freight and other charges, plus the duty of 35 per cent, proposed by the Government, the actual protection afforded the local manufacturers is 130 per cent.


Senator Drake-Brockman - Against whom ?


Senator GUTHRIE (VICTORIA) - Against manufacturers of pianos in any other part of the world. In the case of piano players, which come under the same item, the duty, plus freight and charge, amounts to 99 per cent. I am not against theAustralian manufacturers, but I do not desire monopolies, which I regard as dangerous, to be created. The cost of a piano before the war was about one quarter of what it is to-day. The exorbitant price of 100 guineas for a comparatively inferior piano is not a fair thing. I have shown that importing firms actually employ more labour than is employed by the two factories manufacturing pianos in Australia. Allan and Company and Paling and Company employ over 600 hands.


Senator PRATTEN (NEW SOUTH WALES) - They do not sell pianos only.


Senator GUTHRIE (VICTORIA) - The local manufacturersdo not sell only their pianos. The factory balance-sheets do not show the profits on their pianos. It may be that they do not want to show a profit. The factories supply the shops carried on by the manufacturers, and in those shops the people are charged more than double what it costs to make the pianos. I have said that the industry was built up under Free Trade, and yet some honorable senators propose that the duty of 35 per cent, should be increased to 45 per cent. I have shown that Beale and Company, in their own prospectus, admit that they are making double the profit necessary to pay a good dividend of per cent. In the circumstances, I cannot see why we should be asked to increase this duty and give them a monopoly. Senator Duncan has said that we are going to be swamped with pianos from Germany. None of the importing firms want those pianos. As a matter of fact, most of the imported pianos are coming from America, and have been for some time.


Senator Duncan - Of course, because we were at war with Germany.


Senator GUTHRIE (VICTORIA) - I want honorable senators to remember that the industry here has a natural protection in freight alone of £18 per piano. Surely a duty of 35 per cent, in addition should give sufficient protection. These people are not philanthropists, and I draw attention to the fact that, not only are they making splendid profits here, but they are advertising their pianos for sale in America. I have a copy of a New York publication The Music Trader, dated 21st July, 1920, in which is a big advertisement offering Beale and Company's pianos for sale in that country.


Senator Vardon - Good luck to them !


Senator GUTHRIE (VICTORIA) - That is all right, but Senator Duncan tried to make out that their factories would have to close down if the duty was not increased.


Senator Duncan - Beale and Company are not selling their pianos in America.


Senator GUTHRIE (VICTORIA) - Then we are invited to believe that they are throwing away money upon advertisements in American newspapers. They are also advertising in Canada. Either they expect to sell their pianos in America and Canada or they are making such a lot of money here that they are in a position to throw some of it away and charge it to legitimate expenses for advertising. Why is the company advertising in New York and in Canada] Senator Duncan has never been in America, but I have, and I know that standing advertisements in American newspapers cost a small fortune. When Peale and Company advertise their pianos there either they can undersell American pianos in the American market, after paying £18 each in the way of freight, or their profits here are so good that they can afford to spend a lot of money in advertising their pianos in foreign countries. Many people might consider a piano a luxury, and apparently one cannot be bought in Australia under 100 guineas.


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







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