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Wednesday, 9 June 1926

The CHAIRMAN (Senator Newlands (SOUTH AUSTRALIA) - The committee is dealing with the re quest moved by Senator McLachlan. The honorable senator must confine his remarks to the item.

Senator FINDLEY - I always obey your ruling, Mr. Chairman, but as Senator Lynch talked at large about the burdens that are imposed on primary producers, I thought I should be allowed to say a word or two in reply. However, as you have called my attention to the digression, I shall not proceed any further on those lines. In closing, I should like to say that I shall endeavour to be honest and consistent in my attitude towards Australian industries. I shall not be found, like some honorable senators, voting high protection for industries that particularly affect my State, and voting low protection in respect of items that do not directly affect the people I represent. I take a broad Australian view of this tariff, and, concerning the item under discussion, I say that whilst the engineering industry was well established up to the time when it had to meet acute competition from overseas, there is now need for additional protection. I intend to support all duties that are essentially protective in their incidence. The Government in its wisdom has submitted a schedule which proposes higher duties on certain items, and because I believe that those higher duties will give a better measure of protection for certain manufacturing industries in Australia, I shall support- them.

Senator SirHENRY BAR WELL (South Australia) [4.19].- When my time expired, I had not completely replied to the statements made by the Honorary Minister (Senator Crawford). The Minister has practically repeated the. opinions expressed by the Minister for Trade and Customs (Mr. Pratten) in another place, when he said that the action of the Chief Railways Commissioner in South Australia in placing these orders abroad was most unpatriotic. I have already pointed out that it was not the South Australian Railways Commissioner who was responsible, but the South Australian Government, of which I happened to be the leader. The Minister took exception to the manner in which Senator McLachlan used his figures, and said that he referred to the locomotives, and not to the trucks.

Senator McLachlan - I was not dealing with tracks.

Senator Sir HENRY BARWELL - That is so. The Minister said that if he had stated the position in regard to the trucks it would have shown a very different state of affairs. The tender of an Adelaide firm, which would have to import the parts and assemble them here, was £597,000, so by placing the order abroad a saving of approximately £200,000 was effected. A demand is apparently being made for all contracts to be let in Australia, regardless of the cost. That is a policy which should not be tolerated for a moment.

Senator McLachlan - It is a most dangerous policy to pursue.

Senator Sir HENRY BARWELL - Yes ; from every viewpoint. What check would we have upon inefficient Australian manufacturers if all our contracts had to be placed with manufacturers within the Commonwealth, regardless of price ? The Australian manufacturer would have an absolute monopoly; there would be no real competition. In the past, manufacturers have put their heads together, tendered at about the same price, and divided the work. I am exceedingly surprised at the way the members of the Labour party in this chamber have castigated South Australia over this matter. Senator Duncan said that the Labour Premier of New South Wales (Mr. Lang) ia prepared to allow Australian manufacturers a margin of only 5 per cent, in addition to the protection already afforded by the tariff. I said at the time that the South Australian Government was prepared to concede a margin of 15 per cent, above what the tariff, provided, because of the advantage which would accrue to Australia. What happened in Western Australia ? The Labour Government in that State did not even call for tenders in Australia. The only tenders which they called were returnable in Great Britain, and consequently the Australian manufacturer was not even given an opportunity to submit a price. The South Australian Government gave manufacturers throughout the. world every opportunity of submitting tenders, and delayed a decision to give Australian manufacturers an opportunity of revising their prices. A final decision was further postponed until it was found that it was impossible to have the work, carried out in Australia in a business-like way. It was only when it was found that over and above the high tariff protection there was a 70 per cent, margin in favour of British prices, and that it was imperative to move in the matter that decisive action was taken. If Senator Findley had been occupying the responsible position which I then held, I do not think he, as a business man, would have placed the orders in Australia. When Senator Lynch was referring to the effect upon primary producers, Senator Foll said that he would like to know in what way primary production was involved in this consideration. It has everything to do with it. In South Australia we are doing what every Government should be doing. We are attempting to reduce the railway freights, which are a burden upon - primary producers.

Senator Findley - Does not the honorable senator think it of equal importance to give consideration to Australians by providing them with employment?

Senator Sir HENRY BARWELL - Undoubtedly. But in this case we have had. to discriminate between two sections, and to decide whether it is of more importance to place our railways on a sound and economic basis, and effect enormous savings in the interests of the people, or to provide Australian manufacturers with work. If we had placed the orders in Australia , at an advance of £430,000 in the cost of rolling-stock alone, what would have been the position? The £430,000, in fifteen years, would have meant an increased burden on our railways of £1,000,000. Increased freights would have been necessary. That amount of £430,000 would have had to be added to the capital cost of the railways for all time.

Senator Lynch - And by so doing the purchasing power of the man on the. land would have been reduced.

Senator Sir HENRY BARWELL - Undoubtedly. The interests of the primary producers- have to be conserved.

Senator Findley - And are the interests of the secondary industries to be totally disregarded?

Senator Sir HENRY BARWELL - Certainly not. The secondary industries, without which the country cannot prosper, must also be reasonably protected.

Honorable senators must not overlook ihe fact that American manufacturers, who are paying higher wages and have to contend with heavy protective duties and other disadvantages in the form, of freight, insurance, and handling charges, can not only compete with Australian manufacturers, but, on the average, sell at a price very considerably below the Australian price.

Senator McHugh - The American wages are only nominally higher.

Senator Sir HENRY BARWELL - I do not think they are; but I am not permitted to go into that phase of the question at the moment-

Senator Findley - The honorable senator knows that the slogan of the American is " High wages and low cost of commodities."

Senator Sir HENRY BARWELL - And it is a very good one.

Senator Findley - -The honorable senator's slogan is "Low wages and high cost nf commodities."

Senator Sir HENRY BARWELL - Nothing of the kind. I have already pointed out that a considerable saving in price was effected by placing the orders abroad, but the time in which deliveries were promised was of even greater importance. It will readily be seen that in re-organizing a railway system every portion of the scheme, including the laying of heavier rails, the strengthening of culverts and bridges, the deliveries of freight and passenger cars, and the completion of the repair shop, must operate simultaneously in order to ensure efficiency. The only Australian tender was 70 per cent, higher than the accepted tender, but the time in which the Australian manufacturer Avas to give delivery was fo ;r years and eight months, as against twelve months in the case of the British manufacturer.

Senator Hoare - Were the locomotives delivered within twelve months?

Senator Sir HENRYBARWELL.There was a delay owing to strikes.

Senator Hoare - And they have only just come to hand?

Senator Sir HENRYBARWELL.Yes; but if an Australian tender hae! been accepted, delivery, in all probability, would not have been given in the four years and eight months promised. Strikes would, undoubtedly, have occurred, and the contractor would have been protected by the usual strike clause, exempting him from liability in the event of the cessation of operations. The action of the South Australian Government was not in any sense unpatriotic. In fact, it was the reverse. We endeavoured to conserve the interests of the taxpayers and to protect primary producers in particular, because it is they who are directly affected if railway freights are unduly high.

Senator Findley - But primary producers pass on the freight.

Senator Sir HENRY BARWELL - To whom does the wheat-grower pass on the freight? He has to sell his product in the markets of the world, and is, therefore, in a most unfortunate position.

Senator Findley - Is the wheat-grower the only man on the land ?

Senator Sir HENRYBARWELL.No. Those producing wool have also to sell their products in the open market, and cannot pass on the cost of increased freights. Notwithstanding the high rate of duties at present imposed, Australian manufacturers cannot compete with overseas manufacturers, and, consequently, the duties at present levied are of no protection to Australian manufacturers. These merely place an unnecessarily heavy burden upon the people. As a result of inquiries made concerning the Australian manufacturers of locomotives, it. was discovered that the plants in use were obsolete, and the management inefficient. The cost of production in Australia is unduly high.

Senator Findley - Are the Newport works inefficient?

Senator Sir HENRYBARWELL.In comparison with those overseas, they are.

Senator Findley - Has the honorable senator inspected the workshops of overseas manufacturers?

Senator Sir HENRYBARWELL.No. I rely entirely upon the opinions of experts. I would not know if they were efficiently conducted even if I did inspect them. Senator Findley will realize that if the American manufacturers, after paying a high rate of duty, good wages, and meeting the cost of freight, insurance and handling charges, can sell at a price 70 per cent, below that of Australian manufacturers, it suggests inefficiency on the part of Australian manufacturers.

Senator Grant - Why were not these locomotives manufactured at Islington ?

Senator Sir HENRYBARWELL.Part of the scheme is to equip the workshops in such a manner as to enable locomotives of a similar type to be manu accured there in the future. Our locomotive workshops in Adelaide are being fitted up in such a way as to make them comparable with the best works of their kind in the world. It is the intention of the Government to have all its rolling-stock manufactured at Islington in the future.

Senator Grant - That is the proper course to pursue.

Senator Sir HENRYBARWELL.It has been suggested that we should have done that before, but that would have involved waiting an unnecessarily long time to get engines and other rollingstock. Within twelve months after Mr. Webb came to South Australia I called for a report showing the economies being effected at the Islington workshops, which disclosed that the number of employees had been reduced by 387, the wages bill by £70,000, whilst the output had increased by 50 per cent. When Mr. Webb assumed control of the South Australian railways the system was not paying, but last year and the year before they not only paid full interest on the capital expenditure, but also showed a profit. The necessity of obtaining early delivery in order to place the railway system on a sound and economic footing will be apparent. The savings effected will date from the time when the new policy becomes operative, whereas if we had been compelled to wait for approximately five years, it would have been a very long time before the much needed economy could be effected.

The CHAIRMAN (Senator Newlands - The honorable senator has exhausted his time.

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