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Wednesday, 7 March 1928

Senator CRAWFORD (QueenslandHonorary Minister) . - I move -

That the bill be now read a second time.

The main purpose of this hill is to extend to other industries the same measure ofprotection as was approved by the Senate when it passed a tariff schedule in 1926. It also increases the preference given to Great Britain on a number of items, and provides for reduced duties on various articles not manufactured in Australia. Since the passing of the tariff schedule in 1926, the Tariff Board has investigated the circumstances of a number of industries, and the board's reports concerning the industries dealt with in the schedule to this bill have been made available to honorable senators. The duties proposed cover a wide range of both primary and secondary, industries, some of which are of great national importance. The imports affected by the proposals are valued at £24,000,000 - of which £6,000,000 are British, and the balance, £18,000,000, foreign goods. It is believed that the new duties, if approved by the Senate, will result in a gain to Australian production of £6,000,000 per annum, and that British will displace foreign exports to this country to the value of £5,000,000 a year. It is not expected that any substantial increase in revenue will result from the higher ' duties proposed, as the decreased collections due to the reductions on many items must he set off against any increase. These calculations do not include the revenue which will result from the increased duties proposed to raise money for road purposes.

The deferred duties proposed are to encourage the establishment of certain projected industries, the principal being iron and steel tubes, leather cloth and linoleum. Reduced duties are proposed in a number of cases. These relate to goods which are in. everyday use in the household, or to articles of general utility, and which are not manufactured in Australia.

In the schedule now before the Senate, the principle of British preference has been maintained, in some instances amounting to 25 per cent., and averaging about 20 per cent. Preferences previously granted to British manufacturers are worth over £8,000,000 per ' annum. This will be increased under the present proposals by approximately £2,000,000. It is frequently alleged that our policy of protection, notwithstanding these substantial preferences, is injurious to British trade. It may be pointed out, however, that in 1901 the value of Australian importations of British goods amounted to £6 per head of population, while in 1925-26 we imported British goods to the value of £11 per head. Our population in the meantime had increased by over 2,000,000.

These figures must not be regarded as indicating a failure of the policy of protection to encourage Australian production, but rather as proof of the prosperity promoted by protection, and the consequent high-purchasing power of the people of this country. Even when adequate protection is afforded, it is not reasonable to expect that our own manufacturers will be in a position to supply forthwith the whole of the country's requirements. In the case of new industries, before this can be done, capital has to be raised, factories have to be built and equipped, and employees trained. In many instances, consumers' prejudices against Australianmade articles have to be overcome. The latter frequently is a costly and tedious process. The same difficulties have, in some measure at least, to he surmounted in connexion with the expansion of existing industries. In spite of numerous and serious obstacles, there has been a steady expansion in mo3t of our secondary industries during recent years, as the following figures indicate: -

The value added in process of manufacture during the year 1925-26, (£152,220,554), was equal to the value of over 600,000,000 bushels of wheat at 5s. a bushel.

The 1925 Tariff has stimulated the production of many commodities. In this way it provided employment for additional labour and capital, and kept in Australia much money which otherwise would have been spent overseas at a time when it was most important that it should he retained here. It has also induced British and other overseas firms to establish branch factories in the Commonwealth, thus increasing the working capital of the country and the employment of our people.

When the previous Tariff schedule was before the Senate fears were expressed that higher duties would further increase the cost of living. Investigations made by officers of the customs department have failed to discover any material increase in wholesale prices, while it has been ascertained that substantial reductions have been made in the prices of a number of commodities.

Senator THOMAS (NEW SOUTH WALES) - What are they?

Senator CRAWFORD - I shall give the honorable senator the details later.

Senator THOMAS (NEW SOUTH WALES) - The Minister has made a bald statement. We should have the details now.

Senator CRAWFORD - It is impossible to give all the details in a second reading speech. It was also contended that the increased duties would impose further handicaps upon the primary producer, but no evidence that this has occurred has been forthcoming. Australia has just passed through a severe drought, which has reduced both agricultural and pastoral production, but in Western Australia, where conditions were normal, last year witnessed the greatest increase in wheat area under cultivation and yield which has ever taken place in that State. So far from protection hampering our primary industries, it substantially contributes to their success by providing a large and profitable home market, the bulk of all our land products, with the exception of wool and wheat, being consumed within the Commonwealth.

In the settlement and development of the Commonwealth our flocks and herds, farms, orchards, vineyards, and mines are all of the utmost importance, but to assure the progress and prosperity of almost any country, it is imperative that primary production should be reinforced and buttressed by such secondary industries as are commercially possible. This is more especially the case where primary production is so much affected as it is in Australia by seasonal variations. Even in favorable circumstances, land industries involve much casual labour, and when production is seriously curtailed by climatic conditions, as sometimes happens, much unemployment ensues. It must be admitted that some of our secondary industries occasionally suffer from periods of depression, hut on the whole they afford fairly continuous employment, and maintain from year to year a steadily increasing volume of production. The value of this constant and increasing flow of work and wealth cannot be overestimated.

Protective duties, however, are not entirely confined to secondary industries. Many of our land products are protected by comparatively high duties, and in some instances also receive the benefit of a bounty on export. Under this bill it is proposed to increase the import duties on rice, potatoes, butter, cheese, and timber. In protecting the iron and steel industry a market is provided for iron ore from South Australia; limestone from Tasmania ; fluorspar from Queensland ; and iron ore, limestone, sandstone, and coal from New South Wales, in the mining and transport of which thousands of men are engaged in addition to the many thousands who are employed in operating the smelters. In such an undertaking it is impossible to separate the interests of the primary from those of the secondary industry, the whole being interwoven and interdependent. The position is very similar in connexion with most of our productive activities. That the Commonwealth's policy of protection has not retarded the growth of our land industries is abundantly proved by the substantial increases which have taken place in most branches of primary production since federation. It is difficult to make satisfactory comparisons, owing to variations in seasonal conditions, hut the following statement showing maximum yields in a number of industries before and since federation is interesting and informative : -

Record Productions.

Prior to Federation.

Butter, 1000, 114,380,780 lb.

Cheese, 1896, 12,105,327 lb.

Wine, 1896-97, 5,336,161 gallons.

Wheat, 1900-1, 48,353,402 bushels (5,566,614 acres ) .

Wool, 1891, 543,495,800 lb.

Bacon and Hams, 1900, 32,388,029 lb.

Sugar, 1898-99, 192,834 tons.

Subsequent to Federation.

Butter, 1924-25, 313,952,291 lb.

Cheese, 1921, 32,053,003 lb.

Wine, 1925-20, 16,231,142 gallons.

Wheat, 1915-10, 179,065,703 bushels (12,484,512 acres).

Wool, 1925-20, 830,459,007 lb.

Bacon and Hams, 1925-26, 74,774,537 lb.

Sugar, 1925-26, 517,970 tons.

A frequent argument against the policy of protecting our secondary industries is that we are unable to sell our manufactured products on the world's markets, and, therefore, profitable output is limited to home requirements. Unfortunately, this is also the case- with many of our primary products, the exportable surplus having to be sold ata loss. It is a mistaken idea that there, is an assured market at remunerative prices for every form of land production, which is increasing more rapidly than population in many countries. In the official report of the Economic Conference, held at Geneva in May last, appears the following: -

A general impression of the change which has taken place since the war can be gathered from the statistics which have been compiled of the world's production of foodstuffs and raw materials. The figures show that, whereas in 1925 the world's population was about 5 per cent, greater than in 1913, production of foodstuffs and of raw materials was from 10 to 18 per cent, greater. In other words, production and consumption, both in total and per head of the world's population are greater than before the war.

This increased production of food and raw materials has, however, not been accompanied by a corresponding increase of international commerce, for the volume of trade in 1925 was only 5 per cent, higher than before the war.

The following extract from the last annual report by the Secretary of Agriculture in the United States of America describes the agricultural position in a country where conditions are somewhat comparable with those of Australia: -

On fewer acres, and with a farm population of 3,000,000 less than in 1919, the agricultural industry since 1923 has averaged a larger volume of production than in the year immediately following the war. ... In the nine years since the world war ended, agriculture has undergone far-reaching changes that have materially increased the output of both land and labour. Tractors have replaced many horses and mules, releasing land -for other uses than the production of feed and forage. Improved harvesting machinery has come into wide use. The size of the average farm has increased. More productive crops have been planted. Livestock of increased productivity has become widely dispersed. Farm management has become more efficient, a better balance has been established amongst agricultural enterprises, and progress has been made in adjusting production to market requirements. The result is an increase in farm production more rapid than the rise in the coun try's population.

From these official statements, overproduction of foodstuffs appears possible, if not imminent, and in view of such a contingency, it would be criminal folly to depart from the policy of endeavouring to make Australia as far as possible selfsupporting and self-contained.

I have refrained from discussing the details of the schedule, because this can be done more conveniently and usefully as the items come up for consideration in committee. The proposed amendments are the outcome of exhaustive investigation by the Tariff Board, and of most careful consideration by the Minister for Trade and Customs and by the Cabinet. They will, it is believed, if approved by the Senate, as they have been by the other branch. of the legislature, encourage the investment of Australian and overseas capital, stimulate production, and increase employment without adding to the cost of living or the burden of taxation.

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