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Wednesday, 26 May 1926

Senator DUNCAN (New South Wales) . - Senator Findley began his remarks in such a dolorous tone, and drew such harrowing pictures of the effect of protection as revealed in Victoria in prefederation days, that I almost wept: As a protectionist he staggered me for a moment. I began to wonder whether I was on the right track, and whether a system which could produce the results he described was, after all, worth serious consideration. Later in his address he told us that the condition of affairs in Victoria in those days was not due to, but in spite of, protection. He said something else was needed, and that that something else came along from a certain quarter. To a certain extent that is true. The state of affairs to which the honorable senator referred was ended because the people of Australia realized that every section of the community was entitled to fair treatment; they were determined that the workers should get a fair deal. Much of the humanitarian legislation that is on our statute-books to-day is the outcome of agitation, not of one party, but of all parties and Governmentsin the Commonwealth and the States.

Senator Thompson - Disraeli's novels started the reform long ago.

Senator DUNCAN - Quite so. This advance in social legislation is not peculiar to Australia. In all countries an awakened public opinion has demanded improved conditions for the working classes. Those who are familiar with the parliamentary history of Australia will no doubt remember the keen debates that took place in the early days of Federation on free trade versus protection. In those days it was a very live question, and there can be no doubt that there were fiscal giants contesting the rival claims of free trade and protection. We recall the names and careers of many of the men who took a prominent part in those debates when the fiscal policy of Australia was determined. In spite of the efforts of the freetraders, whose ranks included men of remarkable resource, and in spite of the fact that the most powerful State of the group - I refer to New South Wales - was free trade, the people of Australia through the Federal Parliament declared solidly in favour of protection.

Senator H Hays - And the question now is, how much protection are we to have?

Senator DUNCAN - Exactly. The issue now is whether the measure of protection afforded to our industries is adequate. I approach this question in an inquiring frame of mind. Whilst I am a protectionist, I am not prepared to vote for any duty which this or any other Ministry thinks fit to submit, merely because it calls itself a protectionist Government, or because certain industries may have demanded increased duties upon commodities produced by them. I want to know in each case if any measure of protection is justified. I am not in favour of certain duties that appear in the schedule, arid when we are considering them I shall do my best to have them either reduced or struck out. On the other hand, I believe that certain duties are insufficient, and at the proper time I shall endeavour to have them increased. In determining what duties shall be levied, we should have regard to not only existing Australian conditions, but also the industrial conditions in other countries that are likely to be competitors in the Australian market. As we all know, the people of many other nations are in a serious position as the result of the war. Their purchasing power has been so materially reduced that it is almost impossible for them to buy a considerable proportion of their own manufactured products. They are engaged in a desperate struggle to regain their pre-war position of affluence, and they can only do so by disposing of their manufactured products in some other country where the people enjoy a greater purchasing power. Because of the high wages and improved conditions of living in Australiawe have a greater purchasing power than the people of any other country with, perhaps, the exception of the United States of America. Australians, generally speaking, can afford to buy just what they want. It is natural, therefore, that the people of other lands should seek an outlet for their manufactured commodities in the Commonwealth.

Senator Barnes - Is that because they cannot afford to buy their own products?

Senator DUNCAN - Very largely, because, as I have already stated, their pur. chasing power is now limited, and so they are forced to find an outlet for their manufactured products in other countries.

Senator H Hays - In other words, they have to live upon their exports.

Senator DUNCAN - Yes. And as Australia offers them one of the very best markets, they are turning their eyes to this country. In their determination to get a footing here they will have no re- gard whatever, to the difficulties of Australian manufacturers. It should be the duty of this Parliament to protect Australian secondary industries that are threatened by unfair competition from overseas. Several honorable senators have argued that our primary producers are suffering under certain disabilities through the operation of the tariff. What those duties are, it is almost impossible to say, but I presume they refer to the machinery duties and certain other items. I do not agree that cur primary producers are receiving no benefit from the tariff.

Senator Crawford - There have been heavy remissions of duties as well as increases.

Senator DUNCAN - I know, andI propose to show that, in common with other sections of the community, our primary producers are reaping fairly substantial benefits from the tariff. Many of our secondary industries require enormous quantities of primary products which, but for this increased demand in the home market would have to be exported and sold at world's parity.

Senator Sir Thomas Glasgow - Australian beef is sold at world's parity, and the only State that exports is Queensland.

Senator DUNCAN - The same may be said of other lines of primary produce. People engaged in those industries would have to be satisfied with world's parity for the whole of their output were it not for the home market. Butter, to cite one product, is selling in London and in other markets overseas at a price considerably lower than is charged to Australian consumers.

Senator Sir Thomas Glasgow - -That is because of the operation of the Peterson scheme, which was introduced to enable dairymen to get the full benefit of the duty of 2d.pound on butter.

Senator DUNCAN - That only demonstrates the true value of the local market. Enormous quantities of butter are required by certain manufacturing industries, especially in connexion with confectionery and biscuit making. Also enormous quantities of milk are used by manufacturers in the production of condensed milk, chocolate, and other lines. But for these manufacturing enterprises the dairying industry would be in a much worse position than it is.

Senator Lynch - If our dairymen do not sell their butter locally, there is an unlimited demand for it overseas.

Senator DUNCAN - But not at the price paid by Australian consumers.

Senator Sir Thomas Glasgow - It was being sold at the same price overseas until the Paterson scheme came into operation.

Senator DUNCAN - Let me take another of our primary products. An enormous quantity of sugar is used in the manufacture of jams, preserves, confectionery, and similar commodities. The local market for sugar is of immense benefit to the sugar-growers of Queensland, and therefore it is to the advantage of those primary producers that we should encourage the particular secondary industries to which I have referred.-

Senator McLachlan - Would the Queensland sugar-grower receive less for his product if there were no duties?

Senator DUNCAN - He might.

Senator McLachlan - It is problematical.

Senator DUNCAN - The surplus sugar that has to be exported is sold at a considerably lower price than that charged for sugar consumed locally.

Senator Sir Thomas Glasgow - That remark would apply to any secondary industry if its product had to be sold overseas.

Senator DUNCAN - But it is of infinite value to the sugar producers to have a local market, and this is dependent on the maintenance of tariff protection. Even in regard to wheat a local market is of the utmost value.

Senator Sir Thomas Glasgow - World parity rules in that case.

Senator DUNCAN - But the day will come, I venture to say, when the Australian wheat producers will be very grateful for a large local market. Great wheat-producing countries like Russia will probably come into full, if not increased, production, and some such scheme as was brought into operation with regard to our butter may have to be put into effect. A good local market must stabilize the position of any primary producer.

Senator H Hays - It does not stabilize the market.

Senator DUNCAN - I claim that it does in the case of sugar, and a number of other primary products.

Senator Sir Thomas Glasgow - -A smaller proportion of our butter than of our wheat is exported.

Senator DUNCAN - But despite that difference, there may come a time when the producers of wheat will be very glad of a large local market.

Senator Sir Thomas Glasgow - It will be very much to the disadvantage of Australia when it does not have a large exportable surplus of wheat.

Senator DUNCAN.It will, indeed. Senator Ogden had a good deal to say about the tariff. The State from which he comes produces a considerable quantity of fruit; and is it not of immense advantage to the fruit-growers that the jam industry should be adequately protected?

Senator Ogden - It would be much better if the market could be encouraged by fair anstead of by artificial means.

Senator DUNCAN - By what other plan can this result be achieved than by means of the tariff ? I could enumerate numbers of other primary products that are used by protected secondary industries, and therefore the tariff is of immense benefit to the primary producers. Whilst I admit that in some ways the primary producers suffer under it, the benefits they reap more than compensate them for the disablities under which they suffer.

Senator Ogden - Where does a miner derive any benefit under the tariff?

Senator Crawford - Our secondary industries use a lot of coal.

Senator DUNCAN - But Senator Ogden probably refers to gold-miners.

Senator Ogden - Metalliferous miners.

Senator DUNCAN - Coal-miners certainly benefit under the tariff, and metalliferous miners do also to a certain extent. They produce the ores used by the great steelworks at Newcastle and Lithgow, which could not exist if it were not for the tariff. Therefore, the miners are indirectly benefited by the imposition of duties.

Senator H Hays - But steel works are a national need.

Senator DUNCAN - Yes, and that is why they are protected. It cannot be denied, however, that the producers of the ore are benefited.

Senator Barnes - The honorable senator stated that the primary producer suffers under the tariff. In what respect is he worse off than other people?

Senator DUNCAN - I have already said that although he suffers in some respects he benefits so materially in other ways that he is no worse off in the long run.

Senator H Hays - The primary producers have to rely upon their efficiency to enable them to succeed in their industry.

Senator DUNCAN - All of them are by no means efficient, and that is why many of them fail when they experience bad years.

Senator Payne - Does the honorable senator apply a similar remark to those engaged in secondary industries?

Senator DUNCAN - I am not in favour of bolstering inefficient industries that look to increased duties to enable them to carry on.

Senator Ogden - I am afraid the majority of them come under that category.

Senator DUNCAN - I should not care to place such a stigma as that upon Australian industries as a whole. Speaking generally, the Australian manufacturer and the Australian workman are as efficient as, and in some respects more efficient than, those in other countries. The tariff is not designed to protect inefficient manufacturers. All the items in the schedule have been the subject of the fullest inquiry by the Tariff Board, which has never sought to encourage an industry unless it has languished on account of unfair competition. I disagree with some of the recommendations of the board, because it appears to me on the evidence that it has somewhat erred. Consequently, when the time comes, I shall not hesitate to give my vote or raise my voice in favour of a reduction of those particular duties. I shall not enumerate them now, because I shall have an' opportunity to do so when the schedule comes before us for detailed consideration, but I should like to learn from the Customs Department the reason for what seems to me its extraordinarily strange action in regard to one or two of them.

Senator Ogden - The honorable senator has quite an open mind in regard to all the items.

Senator DUNCAN - Yes, that is always my attitude in regard to tariff proposals, with the reservation, however, that where there is any doubt the local manufacturers should get the benefit of it. I hope that the Senate will seriously consider two or three of these items when it has the opportunity of doing so in detail.

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