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Wednesday, 26 May 1926

Senator PAYNE (Tasmania) .- I do not suppose that any measure which comes before this Chamber is of more importance to the community than a Customs Tariff Bill, . because tariff duties affect every section of the community. It is therefore the duty of public men to interest themselves in such legislation, in order that they may deal not only with the question of protection versus freetrade, but also closely study the items in the interests of the people. When the tariff was introduced in another place, it was referred to as a schedule which provided sane and efficientprotection for the industries of Australia. Something more than that is needed. I believe in the sane and efficient protection of the people of Australia, who, to me, are of more importance than are our industries. We have to deal with tariff reform from the community point of view, and do all we can to improve the position of the people. I. endorse everything which has been said in connexion with preferential trade with the British Empire, because we cannot forget the debt we owe to the Mother Country in connexion with the development of the Commonwealth. I am prone to resent legislation which in effect places the Mother Country at a disadvantage in the matter of trade, but after a careful investigation of the items in the schedule, one cannot but conclude that a determined effort has been made to strike a blow at the Mother Country by placing a heavy duty on the products of British industries without, at the same time, giving to our own people any special advantage. When the fiscal policy of the Commonwealth was discussed in 1921, I endeavoured to get certain amendments carried, particularly in connexion with the duties on clocks and watches. On looking through the schedule, I find that the protests which I made three years ago, without effect, were fully justified. Certain duties were imposed on articles in general use in Australia, which were not being manufactured in the Commonwealth. After three years' consideration, however, the duties have now been reduced to what they were in 1919, which shows that during the term which has elapsed the. people have been unnecessarily penalized. Provision is also made in the tariff for increased duties on textiles and wearing apparel. 1 have looked through the records to see whether the leading Australian manufacturers of these commodities have been able to carry on fairly well under the 1919 tariff, and find that one company has been paying a dividend of 10 per cent., and that the shares, which have a face value of 20s., are now selling on the. Stock Exchange at £1 10s. 41/2d. Notwithstanding this, we are asked to impose additional duty on imported commodities such as this company is manufacturing. Australia is almost wholly dependent for her progress on the development of her primary industries. At present our principal product is wool. The principal purchaser of our wool, and our best customer in every sense, is Great Britain. We expect her to give us the best possible price for our clip, and because she has done so we have made substantial progress in the last decade or so. It would be strange if we turned round now and said to her, "We expect you to take our wool, and to' give us the best possible price for it, but if you dare use it to manufacture articles for export to Australia we shall look upon it as a crime and will penalize you. In fact, we shall put such a high duty on those products that it will be impassible for you to send them to us." Such a policy is quite unreasonable. I approve of some of the items in the schedule, but I am opposed to others, and I shall take steps to express my opposition in a more definite way when the specific items are before us. As a nation, we are in an entirely different position to-day than in 1914. Notwithstanding that we earnestly desire to develop our secondary industries, we cannot ignore the fact that it is likely that we shall seriously antagonize some friendly nations if we set up such a high tariff wall that they will be unable to trade with us. If we adopt an attitude like that, our last state will be worse than our first. It will be disastrous to us. We ought to endeavour to retain the goodwill of the people of other countries, and we certainly ought to assist rather than embarrass Great Britain in her noble fight to recover the commercial position that she held prior to the war.

Senator Findley - We are here to legislate in the interests of the Australian people so far as the tariff is concerned.

Senator PAYNE - Only that? If so, we shall find ourselves, as a nation, in the same position ' towards other nations that an individual occupies towards other individuals when he tries to live only to himself. There can be no continued and unlimited prosperity for a country that seeks its own advancement in utter disregard of the welfare of other nations. We should endeavour to protect certain of our industries that require protection, but we cannot safely carry protection beyond a certain point. Reasonable and fair protection is as far as we can go legitimately. If we go farther we shall hinder rather than help our industries. I am prepared to give fair protection to any industry that is worth the name of an industry, provided that the people engaged in it are putting the whole of their energy into it; but I am not prepared to do anything that will accentuate the difficulties of our present situation. Senator Bar.well drew attention to the fact that the output per head of our population is decreasing. That should not be the case in a country like this. If we legislate to perpetuate that state of affairs we shall build up, not a strong, self-reliant community, but a spineless, jellyfish people, who will not be able to hold their own in the world.

Senator Hoare - Why has that not happened in other protective high-wage countries like America or Germany?

Senator PAYNE - That is a fair question.

Senator Kingsmill - But it would not be safe to follow it very far.

Senator PAYNE - Is it possible for any lasting good to come to Australia by the adoption of a policy of protecting uneconomic secondary industries ? If we pursue that policy we shall reach the stage where it will be impossible for our people to purchase at a reasonable price, or in reasonable quantities articles which should be well within their financial means.

Senator Hoare - I do not think anything like that will happen.

Senator PAYNE - It is happening now, and I will submit substantial evidence to the honorable senator on that point. The further we go beyond the point of reasonable and fair protection, the more difficult and unsatisfactory must become our position. Senator Ogden referred this afternoon to the vicious circle. I wish to show honorable senators how it is caused. In September of last year a tariff schedule, to which we are told this one is practically similar, was introduced in the House of Representatives. On comparing one item in that schedule with the corresponding item in this schedule, I find a marked difference. In the interim something has caused it to be increased by 70 per cent.

Senator Hoare - Which item is that?

Senator Ogden - Is it whisky?

Senator PAYNE - No; it concerns textiles that are really necessary to the well-being of the community. The alteration occurred in this way: Soon after the introduction of the previous schedule, the workers in the textile industry determined to submit a new log of wages and conditions to their employers. I propose to show how this action enlarges the vicious circle and, if persisted in, must eventually make the whole position absolutely impossible. I may introduce the matter best, perhaps, by reading the following report which appeared in the press : -

A new log of wages and conditions lias been served on the employers in Victoria, Tasmania, South Australia, and Western Australia by the Textile Workers' Union. A rate of £7 a week has been claimed for adult men and women workers. Other claims are: - Apprentices aged Ki years, £1 15s. a week; aged 17 years, £2 10s.; aged 18 years, £3 10s.; aged 10 years, £4 10s.; aged 20 years, £5 10s.; aged 21 years and thereafter, £7 a week. The log fixed the maximum number of hours to be worked as 44 a week, and overtime has been claimed at the rate of time and a half for the first hour and double time thereafter. Should an employee be required to work overtime without having been notified on the previous day an extra rate of 2s. 6d. on the overtime charges has been demanded.

Special provision has been made in the log for the training of apprentices in the industry, the responsibility for which was placed on the employers. The maximum proportion of apprentices was fixed as one male apprentice to every five or fraction of five male persons who were in receipt of at least the minimum rate of wages. It is demanded that employers should permit apprentices to attend a suitable technical school for at least eight hours a week in working hours without deduction of pay, employers to pay whatever school fees be otherwise paid by apprentices. Where there was no technical school convenient, it was stipulated that employers should provide apprentices with a technical course to cover the trade he was learning at an approved correspondence school.

Senator Needham - Has an award been made to that effect?

Senator PAYNE - No.

Senator Needham - Then why introduce the matter here? It is sub judice.

Senator PAYNE - The honorable senator knows as well as I do that any increase in the cost of living invariably means an increase in wages. Industrial tribunals always base their awards on the cost of living. You cannot increase the cost of production without placing the general community in a worse position than formerly. Practically all commodities in general use reach the consumers through an army of distributors, which is essential to the well-being of the community. Honorable senators know that, if they are suffering from kidney trouble, they cannot go to the manufacturers and buy half a yard of red flannel. Nor can they go to the manufacturers and buy half a pound of nails, or a sheet of galvanized iron. They must buy through the retail distributors. In nearly every case the distribution of these goods is based upon a percentage of profit upon the capital cost. Assume that under existing conditions an article can be produced for £1, and that 25 per cent, on that cost is reasonable to cover distribution charges, the article would cost the consumer 25s. ; but if, on account' of certain increased charges, it cost 25s. to produce, it would cost the consumer 31s. 3d., so that relatively the consumer would be ls. 3d. worse off under the new condition than under the old. Increasing our protective policy by imposing additional and unnecessary duties on commodities must inevitably lead us to the point when the whole system will collapse. I wish to make it quite clear that I believe in maintaining a good standard of living for our people. I am just as proud as any honorable member of the Opposition of the Australian people.

Senator Barnes - "We have reason to doubt that, in. view of the history of the honorable senator's party.

Senator PAYNE - I am not speaking as a party man at all. Honorable senators opposite' cannot understand how it is possible for a man to be a true Nationalist, and yet speak his mind freely. I have always stood up for the rights of the general community.

Senator Findley - The honorable senator is not an independent; he is a party man.

Senator PAYNE - I am not an independent, but a Nationalist; but one of the great advantages that a Nationalist has over honorable senators opposite is that, while conforming, to the . Nationalist policy and Nationalist ideals, he may express himself quite freely on all matters of detail.

Senator Needham - In anything that affects the Government the honorable senator must vote with his party.

Senator PAYNE - I know where the Government stands in regard to this schedule. It desires to see it adopted. Nevertheless I shall attempt to have some amendment made, and I know that I may do so without affecting my position as a member of the party. That is one of the advantages that I have over honorable senators opposite. The people should be made to realize that if Australia is to progress, they must be prepared to give of their best in reasonable competition, one with the other. Too much spoonfeeding will not enable Australia to reach that position, as a manufacturing country, which I hope she will one day occupy. Senator Needham said, a few days ago, that he looked forward confidently to the day when Australia would be able to export the .whole of her surplus manufactured products. His remarks only indicated that he had not carefully studied the position. Under existing conditions it is practically impossible for Australia to export the surplus products of her secondary industries.

Senator Grant - Canada will take our butter !

Senator PAYNE - The honorable senator knows I am referring to our manufacturing products - out textiles, our flannels, our blankets, our boots, and the hundred and one other commodities that are produced here. Is it seriously urged that they can be marketed in any country ?

Silence from honorable members opposite clearly indicates that they know we cannot dispose of these surplus products overseas.

Senator Barnes - Is it not a fact that the Commonwealth Woollen Mills were able to clothe the Australian soldiers cheaper and better than the soldiers in any other country were clothed during the war?

Senator PAYNE - There is no doubt about that.

Senator Barnes - Then why cannot we export our other products?

Senator PAYNE - The honorable senator knows that they can only be exported if other countries adopt a policy of freetrade in regard to Australian surplus products, and they are not likely to do that. There is very little chance of Australian manufactured products getting over high tariff walls in other parts of the world. And it is just as well to bear in mind that the governments of other countries are not likely to take Australian tariff duties lying down. They are erecting tariff walls of their own.

Senator Needham - Does the honorable senator want Australia always to be an importing nation ?

Senator PAYNE - I think that if we adopt a policy of common sense in relation to the tariff, we shall be able to produce a fair proportion of all our requirements. One point I wish to emphasize is that the cost of living has materially increased through the operation of the new tariff schedule, which has not yet passed both branches of the legislature, although under a special act it has become law. I am not speaking from the freetrade point of view. I am not a freetrader. Honorable senators opposite fail to differentiate between a reasonable protectionist and a hide-bound protectionist.

Senator Findley - I should like to have a satisfactory definition of a "reasonable " protectionist.

Senator PAYNE - My remarks have been made mainly with the object of awakening public interest in the tariff. I believe I shall be able to show that, in some instances, the proposals of the Government are not reasonable. If, as the result of my comments in this chamber, greater interest is taken by the public in the various items in the schedule, I shall feel that my remarks have not been made in vain. Senator Ogden this afternoon referred to an injustice which, I think, has been apparent to many people for some considerable time, namely, the collection of duties at the rates payable after the discharge of goods from the vessel that brings them to Australia. I have had many cases brought under my notice in which great injustice has been done in this way. The position could be met by an amendment of the Customs Tariff Act, and there is no reason why it should not be done. Under the Constitution preference, in regard to tariff duties, should not be given to any one State, but it is a fact that as the result of administrative policy, certain traders are enjoying a preference. Let me give an illustration. In the recent snipping strike importers on the mainland were able to get delivery of their goods from the holds of vessels, just prior to the complete dislocation of shipping, but Tasmanian importers were unable to get their goods until some weeks later. If that shipping dispute had occurred just when a revised tariff schedule had been laid on the table in another place, Tasmanian manufacturers would have been placed at a serious disadvantage because, where higher duties were levied, they would have been called upon to pay increased Customs charges as compared with those paid by importers on the mainland.

Senator McLachlan - How could that contingency be guarded against?

Senator PAYNE - A suggestion has been made that every importer should have the right to declare and pass his entries through the Customs on the day of the arrival of the vessel at the first Australian port. If this could be arranged all traders would be on the same basis. I propose now to refer to a subject which was dealt with by my colleague, Senator J. B. Hayes, namely, the omission from the tariff schedule of pro,tection for the timber industry. I do not believe in high protective duties, but I am bound to say that the timber industry has not received anything like the measure of protection that has been given to several primary industries.

Sitting suspended from 6.30 to 8 p.m.

Senator PAYNE - Before making reference to the absence of adequate protection for the timber industry, I desire to point out that it is possible for the Government, probably on the recommendation of the Tariff Board, to propose duties that are in excess of the requirements of certain industries. As a case in point, I may mention that, when the tariff was under discussion in 1921, I entered a strong protest against what I considered an exceptionally heavy impost on corsets. On account of representations made by me I obtained a reduction of the proposed duties of 50 per cent., 45 per cent., and 40 per cent, to 45 per cent., 40 per cent., and 30 per cent., and under the reduced rates the local industry has prospered exceedingly since 1921. Another feature of the schedule is the fact that the full effect of all the items cannot be easily appreciated. I might mention the proposed alteration with respect to window glass. Under the existing tariff it is provided that the duty shall be charged per square foot; but under the new proposal the duty is to be charged at so much a pound. The proposed alteration in the British rate is from 2s. to 12s. 6d. a hundred square feet, which is an increase of over 500 per cent. I mention this fact in order to show the necessity for honorable senators to consider each item carefully. Now I come to the timber industry, and I desire to point out the necessity to utilize every part of our primary product. A largs proportion of the timber cut in our forests, although not suitable for ordinary purposes, is eminently adapted for casemaking, and I desire to have a sufficient duty imposed to assist the saw-milling industry by enabling Australian-made cases to be used wherever possible. It has been proved beyond doubt that these cases can be put on the market at reasonable prices. The proposal for additional protection on case timber has the endorsement, not only of the representatives of case-making firms and the saw-millers, but also the representatives of the fruit-growers. Therefore, it cannot be said that I lay myself open to a charge of handicapping any primary industry by reason of my suggestion. This matter was considered by the Tariff Board as long ago as 1924, and its report on case timber, at page 46, contained the following: -

Tasmania has met with greater success in the manufacture of cases and boxes from their local hardwood than any other State up to the present. The timber principally used for this purpose is the stringybark, and the swamp gum, which correspond with the Victorian mountain ash. For some considerable time now in the export of Tasmanian apples, by far the largest in Australia, the hardwood case has proved an unqualified success when the timber has been carefully seasoned on The spot. The Tariff Board is of opinion that there should bc found a considerable demand for such hardwood cases for the interstate trade in Australia should proper care be given to the seasoning, which would be encouraged if Parliament adopts the recommendation for an increase suggested by the board. The Tariff Board has now set out in an impartial manner the position as it exists in each separate State of the Commonwealth, both as to its essential requirements and its supplies from local sources, from other States, or from overseas. Examining this evidence with the object of determining how the requests submitted for an increase in duties would affect the different States, the Tariff Board can come to no other conclusion than that the effect of such duties would be deleterious and cannot recommend that the requests should be granted, save with one exception, and that in regard to timber (case). In this connexion the Tariff Board desires to express its appreciation of the fairminded manner in which the applicants for an increased duty on case timber acquiesced in the desirability of the granting of a drawback on cases exported made from imported timber, in a general desire to assist in the disposal of Commonwealth primary products packed in containers.

Whilst the board makes a recommendation for certain increases, these fall short of being of any material assistance to the industry. The position of this section of the industry is so grave that it is practically threatened with extinction. Today hundreds of mills are closed down, and week by week more men are being thrown out of employment to further swell the ranks of the thousands of timber workers who are losing their means of livelihood, whilst millions of pounds sterling are annually being sent overseas to keep foreign workers employed. The imports of case timber into the Commonwealth showed an increase of no less than 5,500,000 super, feet during the year 1924-25, as compared with the year 1920-21, and compared with the year 1923-24, the imports last year increased by 10,250,000 super, feet. To show how keen the competition in price is I might mention that, under the item " Undressed n.e.i. for the manufacture of boxes as prescribed," the imports were -


Whilst under this item, the imports in 1924-25 increased by 5,500,000 super, feet, the 33£ million feet cost over £27,000 less than the 27 7-10 million feet imported in 1923-24. This is conclusive evidence that the cost of production overseas has been reduced considerably. The freight has been reduced, and whilst the cost of production under Australian arbitration awards has considerably increased, those employed in the industry overseas are either Europeans or Asiatics, whose wages are not comparable with those paid in Australia. It seems that the Government might reasonably be asked to go into this matter almost immediately, in order to prevent timber suitable for cases from being wasted. In conclusion, I desire to impress upon honorable senators my wish that the schedule shall be so framed as to place no undue burden on the people, and, at the same time, give reasonable and effective protection to those industries that are worth protecting. I quite agree with those honorable senators who hold that we can go too far in penalizing the users and consumers of our secondary products by protecting industries that are not of very much importance to the country. When the opportunity presents itself in committee, I hope to be able to corroborate my statements by presenting facts that will induce the Senate to adopt the alterations that I submit are necessary to the schedule.

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