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Thursday, 20 May 1926

Senator CRAWFORD - As the Tariff Board has made hundreds of inquiries, the honorable senator is asking me to do more than is possible this afternoon. Most of the board's reports are available for his perusal should he so desire. The increases of duty proposed are of a strictly protective character; no attempt has been made to obtain increased revenue through the Customs. On the other hand, many reductions have been made, and additional articles placed on the free list, which in a full year will involve a reduction in Customs collections to the amount of £750,000. For a time the increased duties may provide additional revenue, but that condition will gradually disappear as local production overtakes consumption. Any increase in the cost of commodities due to the new duties will probably be more than set off by the reductions included in the schedule. Reductions of duty are proposed in respect of 45 items. The goods to which these reductions apply cover a wide range of commodities. A few of the more important examples may be quoted. Cream separators, which are practically all of foreign origin and the annual imports of which amount in value to £167,000, are made free, irrespective of the country of origin, thus abolishing the 10 per cent. duty hitherto paid on the foreign article.

Senator Findley - Are not cream separators made here?

Senator CRAWFORD - No. True vegetable parchment, largely used in wrapping butter, and practically all of foreign origin, will come in free, irrespective of the country of origin, the 10 per cent. rate hitherto appearing under the general tariff being removed. Australian importations of this article are valued at £58,000 per annum.

Senator Findley - That can and ought to be made here.

Senator CRAWFORD - As soon at it is demonstrated that it can be commercially manufactured here I am sure the Government will be prepared to grant the necessary protection. Derris spraying preparations, largely used by orchardists, are to enter free from any country. Bromide salts, cyanide of potassium, cyanide of sodium, and calcium cyanide, the importations, of which are valued at £35,000 per annum, are also to enter free from any country. Calcium cyanide is an effective means of dealing with rabbits ; it is also largely used in the mining industry. The other chemicals mentioned are used for mining . purposes. Flint stones, used in grinding machines for mining and other purposes, are also exempted from duty. The duty on a number of household articles is abolished or reduced. Unground spices, which formerly carried a duty of 2d. per lb., and the importation of which represents £180,000 per annum, are to be free. Carpets valued at £1,550,000 are imported annually. The duty is reduced from 10 per cent. British and 25 per cent. general to free British and 15 per cent. general. Cotton and linen serviettes, formerly 25 per cent. British and 40 per cent. general, will now be 20 per cent. and 35 per cent. respectively. The value of these goods imported is £416,000 per annum. The duty on electric filament lamps, the imports of which amount to £508,000 per annum, will be reduced from1s. per lb. British and 3s. per lb. general, to free British and 2s. per lb. general. Writing and typewriting paper over 16 x 30 inches, now 5 per cent. British and 15 per cent. general, will be free British and 10 per cent. general. Our importations are valued at £562,000 per annum. Medicines of a class or kind not manufactured in Australia to the value of £41,000 are imported each year. These are to be free British and 10 per cent. general, instead of 15 per cent. and 25 per cent. respectively. Clocks will now be admitted free British and 20 per cent. general, instead of 25 per cent. and 45 per cent. respectively; and watches, instead of being 10 per cent. British and 30 per cent. general, will be free British and 20 per cent. general. Clocks to the value of £204,000, and watches valued at £398,000 are imported each year. Paper hangings and wallpapers representing an import value of £111,000 per annum, previously 15 per cent. British and 25 per cent. general, will now be free and 10 per cent. respectively. Vacuum cleaners for household use, valued at £31,000, are imported each year. Instead of bearing a duty of 30 per cent. British and 40 per cent. general they will be admitted free irrespective of the country of origin. Rolled-gold and similar gold-cased spectacles are to be admitted free or 10 per cent. in lieu of 10 per cent. and 20 per cent. Imported spectacles to the value of £51,000 enter Australia each year. Silk piece-goods to the value of £5,118,000 are imported annually. The duty on these goods will be 10 per cent. British and 17½ per cent. general, instead of 15 per cent. and 20 per cent. respectively.

Senator Findley - The average working girl wears silk in one form or another.

Senator CRAWFORD - We are glad to know that she is able to do so.

Senator Findley - Quite so; but why penalize her?

Senator CRAWFORD - The working girls whom I see wearing silk stockings, for instance, look very happy. They do not appear to object to the duty, and, as a matter of fact, as the honorable senator knows, silk stockings are largely made here. On ten items of the schedule deferred duties are proposed. The Tariff Act provides that such duties may be further postponed beyond the date set down in the schedule where the Minister is satisfied, upon a certificate of the Tariff Board, that the goods will not be produced in reasonable quantities and of satisfactory quality on or immediately after the date set down in the schedule. Otherwise the deferred duties will come into effect on the date specified in the schedule. The items of chief importance on which deferred duties are imposed are sheet glass and cotton yarns. Sheet glass, owing to the large consumption, approaching £200,000 yearly, provides scope for an extensive industry. The company interested in the enterprise is the largest manufacturer of glassware in Australia. The plant which it proposes to lay down will be sufficient to manufacture practically the whole of Australia's requirements of sheet glass by a special process of which it has acquired the patent rights. The capital to be invested will exceed £300,000, and employment will be given to a very large number of hands. Cotton yarn is another article of which there is a very large consumption in Australia. In 1924-5 about £450,000 worth was imported. The great expansion of the cotton-growing industry offers an excellent prospect for the establishment of a cotton-spinning industry for the utilization of locally-grown cotton. Two companies in New South Wales are spinning cotton yarns from raw cotton. One company has established extensive mills and installed the latest machinery for spinning raw cotton into yarn and weaving the yarn into piece-goods. The demand for cotton yarns will be greatly stimulated by the duties on cotton tweeds, the manufacture of which has been firmly established by the present tariff proposals. The deferred duty offers an incentive to manufacturers to increase their output to such a reasonable proportion of Australian requirements as is necessary to justify bringing the deferred duty into effect. There is also included in the schedule a new concession item, No. 415a, which is supplementary to item 174. At times all honorable senators have been asked by constituents to interview the Minister for Trade and Customs with relation to the effect of item 174. The items read -

Honorable senators will note the difference between the two items. The new item will permit of quite a number of articles not manufactured in Australia being imported free, if of British manufacture, or at a low rate" of duty if not made in Great Britain.

Senator Thompson - It might apply to mining machine tools.

Senator CRAWFORD - It will apply to every kind of machine and appliance provided it is not commercially manufactured in Australia. Under this item the Minister is empowered to exempt or reduce the duties on the goods coming within the terms of the item. Each application is referred by the Minister to the Tariff Board for inquiry and report, and no application is dealt with except in this manner. On receiving the Board's report and recommendation the Minister lias then to decide whether he will grant or refuse the application. Item 174 is not in any way altered by the present proposals. It has been included in all tariffs since the 1908 tariff. Item 415a extends the principle contained in item 174 so as to cover a somewhat wider range of goods. The fundamental idea of these items is that the concessions for which they provide cannot be granted in respect of any machine or article which can be commercially manufactured in the Commonwealth, with this further provision that item 415a (1) is applicable to manufactures of a class or kind which cannot be commercially manufactured either in Australia or in the United Kingdom.

Senator Kingsmill - Will the Minister give the Senate a definition of " commercially manufactured " ?

Senator CRAWFORD - I take it that an article which can be commercially manufactured in Australia is one that can be manufactured at a reasonable price. Presumably it would not cover anything whose manufacture in Australia would be prevented by patent rights. I believe that our engineers and mechanical experts are as good as can be found in any other country, and that there is nothing beyond their capacity to manufacture ; but it would not pay to produce one or two machines in competition with factories abroad, which turn out scores or hundreds or even thousands of those machines.

Senator Kingsmill - It is a legal phrase which is constantly used in this connexion, and I think it only right that there should be some departmental definition of it.

Senator CRAWFORD - I shall bring the honorable senator's suggestion under the notice of the Minister.

Senator Kingsmill - I shall ask the question again in committee.

Senator CRAWFORD - In any genuinely protective tariff provisions of this kind are essentially necessary. It is obviously necessary that Australian industries should be equipped with the most effective plant possible. For many reasons, such as smallness of demand, lack of information as to details, there are bound to be many machines and other appliances necessary for our industries which cannot be manufactured at a given point of time in Australia. It follows, therefore, that if Australian plants are to be kept up to date these machines and appliances must be imported. It is clearly impossible so to construct a tariff as to make specific provision for the infinite variety of particular machines. It will be noted that item 415a applies to manufactures imported for use in the development of an Australian industry, &c. In the past anomalies have arisen owing to the fact that Item 174 could only be applied to machines, machine tools and appliances, the term appliances being interpreted as covering only appliances for use in connexion with a machine. For example, an electric transformer or a furnace for steel manufacture could not be admitted under the item, although there might be no possibility of their being manufactured 'm Australia. The present item will give power to admit any article which is necessary to develop an Australian industry or the natural resources of Australia, subject to the condition that it cannot be manufactured in Australia. The same principle applies to manufactures for use in public hospitals or public educational institutions, or in connexion wih public utilities not conducted for private gain. The principle of British preference has been extended under this bill. The value of British goods imported into Australia last year is estimated to be £65,000,000, of which £27,400,000 worth was admitted free. On the dutiable goods there was a rebate of £4,600,000, and on goods on the free list £3,400,000. Preference to British goods therefore amounted to £8,000,000. It is estimated that the additional preference to be afforded under this bill will amount to £500,000 a year. The following figures, being the latest detailed British official statistics available, relate to the export trade of the United Kingdom in goods the produce or manufacture of the United Kingdom: -


Senator Findley - What is the reason for the smallness of the decrease so fains the trade with Australia is concerned?

Senator CRAWFORD - It may be fairly claimed that one of the reasons is that the substantial preference under the Australian tariff to goods of British manufacture, gives to British manufacturers an advantage over their competitors in other countries so far as the Australian market is concerned. It is believed that as a result of the increased duties, employment will be provided here for from 25,000 to 30.000 persons.

Senator Findley - Immediately?

Senator CRAWFORD - The" honorable senator knows that this additional employment will not be given immediately. He is also probably aware that although the increased duties have : not received the approval of both branches of this Legislature, they have already improved the position of a groat many of our local industries.

Senator Findley - Have not these duties been operating for some time?

Senator CRAWFORD - Yes, since September last. They have had a most stimulating effect on some of our industries, particularly those engaged in the manufacture of textiles. Not only has there been a substantial increase in the manufacture of woollen goods here, but as a consequence ofthese proposals the manufacture of cotton tweeds has been established in quite a big way. One factory is turn ing out 10,000 yards of cotton tweeds weekly, while ii is expected that two companies will be in a position very shortly to manufacture cotton goods to the extent of 1,000,000 yards a year, and that in the course of a year or two the whole of Australia's requirements incotton tweeds will be supplied by its own factories at a price, taking into consideration the quality, not higher than we have been paying for cheap imported goods, mostly from Japan. It is a fallacy that industries established under protection benefit only those directly engaged in them. In industry, as in every other department of life, no man lives to himself alone, and every producer of wealth helps to enrich the community as a whole. In this respect, little distinction can be made between classes of producers. They are interdependent. All are necessary to our national growth and to the achievement of our high Australian ideals. In Australia the effect of protection is not a matter of conjecture. It has been tested by the Commonwealth for over twenty years, and by the States for a considerable period prior to federation. Under protection most important industries have been established, and an immense amount of wealth created. During the war, the national importance of our manufacturing industries was specially tested, and their inestimable value clearly demonstrated. Without them, the equipping of our soldiers would have been practically impossible, and industrial and commercial chaos would have prevailed throughout the Commonwealth. One of the outstanding lessons learnt during the war period was the imperative necessity for making Australia still more selfcontained for the purpose of defence. Our protected industries not only assisted Australia to play her part in the war, but are now helping us to meet our heavy obligations. It has been contended that there must be an interchange of commodities between countries, and that we may be creating a difficulty in regard to our export trade by seeking to produce a larger measure of our own requirements. Such considerations have not deterred the United States of America from imposing high Customs duties, and it is to-day, and has been for many years, one of the richest and most productive countries in the world. Australia, like the United States, is a country of great areas. It is as large as Europe, omitting Russia, and it has a variety of soil and climate and an abundance of natural wealth which should enable its citizens under wise fiscal conditions to produce sufficient to provide scores of millions of people with practically everything needed to maintain a high standard of living. The protection afforded by the United States to her secondary industries has promoted- the progress of her primary industries, which to-day, besides meeting the requirements of 120,000,000 people within the States, are able to export sufficient foodstuffs to supply the needs of millions of people in other countries. There is nothing in either primary or secondary industry inherently hostile to the other. Both may be carried on side by side to their mutual advantage, as the experience of many countries, including our own, abundantly proves. In placing this bill before the Senate, I have not attempted to five details of all its numerous provisions, he fullest information will, however, be made available when the various items are under consideration in committee. I commend the proposed tariff alterations included in the bill to the sympathetic consideration of the Senate. The additional protection they will afford is urgently needed by some of our most important industries. I trust, therefore, that the measure will he passed without undue delay.

Senator Findley - What are the proposals of the Government with respect to the establishment of the newsprint industry in Australia from the point of view of protection 1

Senator CRAWFORD - That matter is not dealt with in this bill.

Senator Findley - But I thought that this was a protectionist Government.

Senator CRAWFORD - The tariff proposals contained in the bill are a sufficient reply to that observation.

Debate (on motion by Senator Need- ham) adjourned.

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