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Thursday, 15 December 1927


Senator CRAWFORD (Queensland) (Honorary Minister) . - I move -

That the bill be now read a second time.

The bill proposes (a) to increase the bounty on galvanized sheets by 20s. per ton, and (i) to provide a bounty on tractors graduated downwards from the maximum rate, according to the proportion to which imported materials enter into their cost. No bounty is payable if the proportion of imported materials exceeds 40 per cent.

In regard to galvanized sheets, the tariff duty is, per ton, British 20s., intermediate 55s., general 60s., and the bounty is 52s. The passing of this bill will make the bounty 72s. per ton. The general tariff rate of 60s. per ton practically shuts out imports other than British, So far the amounts paid in bounty are: -

 

The imports for the past five years have been : -

 

The value of imports in 1926-27 was £2,315,000. The competition to be met by the Australian manufacturer is wholly British, and it is, therefore, against this competition that further assistance is needed. The figures of the local production are as follow : -

 

The capacity of the local mills is from 28,000 to 30,000 tons yearly, or a little over 20 per cent. of the consumption, and the industry employs about 500 hands. It is evident that scope exists for a much larger industry. The output at present is practically confined to New South Wales, and forms about 50 per cent. of the requirements of that State. A condition attaching to the payment of the bounty is that locally-produced raw material must be used. The sheet bars for rolling the sheets of galvanized iron are supplied by the Broken Hill Proprietary Company Limited. The Tariff Board has recommended an increase of 38s. per ton in bounty, which added to the present bounty of 52s., would make 90s. per ton, but, subject to this bill being passed, the present bounty will be increased by 20s. a ton, making it 72s. per ton. As the output has increased from 16,320 tons in 1923-24 to 26,121 tons in 1926-27, the Government thinks that the additional bounty of 20s. per ton should enable the industry to show an accelerated expansion.

In regard to tractors, the present act provides for bounties varying from £40 to £90 per tractor according to horse power. This bill will not alter these rates, but will make them the maximum rates for tractors wholly composed of Australian materials, and reduces the rates in proportion to the quantity of imported material used. For example, if imported materials form 10 per cent. of the complete cost of a tractor, the rate of bounty will be reduced by 10 per cent., and so on ; but the proportion of imported materials must not exceed 40 per cent. of the complete cost. In the original Iron and Steel Products Bounty Act payment of bounty on all goods covered by the act was subject to the condition that the materials used must be wholly Australian. The act, however, provided that, after inquiry by the Tariff Board, the Minister might allow the use of imported materials subject to a report to Parliament of his reasons for so doing. This provision clearly contemplated a case of emergency where Australian raw materials were not available or were not available in sufficient quantities. One of the manufacturers found it difficult to obtain a suitable internal combustion engine of Australian make without laying down a costly plant, which would not be a payable proposition. The position was further complicated by the opinion of our law authorities that an engine was not " materials " within the meaning of the act. The Minister was, therefore, prevented from permitting the inclusion of an imported engine in the tractor, and the effect of this was to prevent the manufacturer from obtaining a bounty after having spent a great deal of time and expense in perfecting a tractor specially adapted to Australian conditions, and in which the cost of Australian materials formed between 60 per cent. , and 70 per cent. of the total cost. One of the purposes of this bill is to remove that disability. So far the bounty paid on tractors under the original act has been : -

 

These figures show that the bounty owing to the conditions attached to its payment has not greatly encouraged the industry, but the indications are that "with the more liberal conditions now proposed its chances of success will be materially improved. The importations of tractors mostlv of American origin, increased from £423,000 in 1922-23 to £1,170,000 in 1926-27. Tractors are admitted free if of United Kingdom origin, or at 10 per cent. if of other origin.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 3 agreed to.

Clause 4 (Restrictions on bounty on traction engines).







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