Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Wednesday, 7 March 1928

Senator NEEDHAM (Western Australia) .- The Tariff is at all times a very interesting as well as an intricate subject. We have long since passed the stage at which there was any doubt in the minds of the people of Australia as to what should be the fiscal policy of this country. Many years ago the chief question that was debated either in Parliament or outside was that of freetrade versus protection, but for many years the different governments which have held office have, at the direction of the people of Australia, determined that in order to keep this country self-reliant and self-contained it is necessary to pursue a protective policy. My only objection is that our protective policy has not been sufficiently effective, and that the incidence of the different tariffs that have been in operation has not resulted in our being as self-contained and as self-reliant as the people wish.

The Labour party has consistently advocated a form of new protection - protection for manufacturers and their employees as well as for the consumers of the manufactured article. Unfortunately the Constitution presents an obstacle to the attainment of its desire in that direction. It would, however, be wrong for us to depend entirely on imports from overseas. Australia's policy of protection has added to the number of our manufactories, and increased the number of persons employed therein. Although a young country - as a nation Australia is still in its swaddling clothes, we have made substantial progress, notwithstanding that the progress' has been slow. At the outbreak of the Great War in 1914 there were 15,428 factories in Australia in which 331,000 employees were engaged, the annual wages bill being £34,146,000. By 1925-26 the number of factories had increased to 21,242, employing 450,920 persons to whom wages amounting to £86,724,000 were paid. I am reliably informed that in the short period which has elapsed since this amended schedule was tabled in another place four or five new timber mills have been established in Tasmania.

Notwithstanding these evidences of progress the tariff ,is not sufficiently protective, for we find that, despite the splendid increase . in our secondary industries our imports continue to exceed our exports by an increasing amount each year. In the Melbourne Age of yesterday there appeared a paragraph dealing with a report from the Commonwealth Statistician, from which I have taken the following extract : -

Statistics of the oversea trade of Australia with other countries during 1920-27 have been made available by the Commonwealth Statistician, Mr. C. H. Wickens. Comparative figures for the year 1925-26 have also been included in the tabulations. The total value of Australia's oversea trade during 1926-27 was £309,011,777, as compared with £300,200,387. The value of imports increased from £151,638,178 in 1925-26 to £164,716,594 in 1926-27, which is the highest total ever recorded, while exports declined from £148,562,209 in 1925-26 to £144,895,183. Imports thus exceeded exports in 1926-27 by £19,821,411.

Senator Chapman - When the Massy Greene tariff was tabled we were told that it would mean a decrease of imports.

Senator NEEDHAM - That is because the tariff has not been sufficiently protective in its incidence. The same issue of the Melbourne Age contains the following report of a speech by Mr. Hogan, the Premier of Victoria: -

During 1927 the imports into Australia were valued at £164,000,000, and the exports at £144,000,000, which together with interest on Commonwealth and State loans, amounted to an adverse trade balance of £44,000,000. Mr. Bruce had said that the figures for the lost twelve years were quite satisfactory. He was astounded at the Prime Minister adopting such a shallow and superficial argument. The last twelve years included the war years, when imports were at a minimum and exports at a maximum, so the comparison was not fair. However, he would take those years and show how imports had grown. In 1915-16 the imports were valued at £64,000,000; in 1916-17. £77,000,000; 1917-18, £62,000,000; 1918-19, £102,000,000; 1919-207 £98,000,000; 1920-21, £163,000,000; 1921-22, £103,000,000; 1922-23, £131,000,000; 1923-24, ,£140,000,000; 1924-25, £157,000,000; 1925-26, £151,000,000, and last year, 1926-27, they were £164,000,000, the highest yet recorded. .

At this stage I venture the opinion that a great factor in bringing about the unemployment we have in Australia to-day is the adverse trade balance we have as the result of our borrowing overseas. By borrowing overseas we bring goods, instead of money, into Australia, and these are goods which could and should be made by Australians. We have not only the men and the material, but also the skill to produce them. Instead of being an importing nation to the extent I have just shown, we should be an exporting nation; or at least if we cannot be that, our importations should not be as heavy as they are..

Our manufacturers have to compete with manufacturers in parts of the world where labour is cheap, and where men are working under conditions that, under no consideration, would be tolerated in Australia.

Senator Duncan - One of our chief competitors is the United States of America, where wages are higher and the conditions of work better than, they are in Australia.

Senator NEEDHAM - In those countries people work longer hours, and receive less wages-

Senator Kingsmill - In America?

Senator NEEDHAM - No. It was Senator Duncan who referred to the United States of America. Although they are not as good as I should like to see them - there is still room for improvement - the working conditions which Australians enjoy are entirely due to the fact that there has been, and still is, an Australian Labour party. And if the worker of Australia is not getting the full measure for his labour to which he is entitled, he is, at any rate, in respect to working conditions, considerably in advance of his fellows in other countries from which we import annually millions of pounds worth of goods.

With adequate protection I dare say we might not have in our midst those pernicious trusts and combines which are so evident in other parts of the world, particularly in ' that country referred to by Senator Duncan. I am not foolish enough to say that we have no trusts or combines in Australia, but if it had not been for our legislation of the past that evil might be more rampant than it is. Until we have new protection we must do the best we can under our Constitution. Therefore, I welcome an amended tariff schedule which will help to protect the manufacturers of Australia and provide work for Australian citizens. The Minister has said that one of the results of this tariff will be the development of a foreign export to the extent of, approximately, £5,000,000 a year. I hope it will. I should like to see a more pronounced result, because £5,000,000 is a very small proportion of £20,000,000.

While I believe in a protective policy I am not a believer in . what might be termed unlimited protection which might tend to inefficiency on the part of the management of a factory.

Senator Payne - That is a very nice admission.

Senator NEEDHAM - I do not say that it will have that tendency, but it might be the means of enabling some managers to postpone the installation of up-to-date machinery in their factories. In my opinion, we could get a larger output at a cheaper cost by the installation of up-to-date machinery in our factories. When in the Arbitration Court the employers were fighting against a proposed reduction of working hours from 48 to 44 a week, they contended that with the proposed reduction in hours the output of their factories would be decreased, but I think evidence was given to show that in many of our factories we did not have up-to-date machinery - an important factor in increasing output and at the same time reducing costs of production.

Some people say that new protection interferes with private enterprise. But private enterprise frequently comes to Parliament for assistance. Time and time again this Parliament has passed bounty bills to give assistance to private enterprise.

Senator Hoare - It has passed quite a number of them.

Senator NEEDHAM - An almost unlimited number of them. If it is the dutv of this Parliament, as I think it is, to protect the manufacturers of Australia, it is also its duty to protect the people of the country against rapacious prices. On two occasions the Labour party has endeavoured to get the people of Australia to give the Commonwealth Parliament power to deal with new protection, but that power has not been given to .us, and therefore we cannot legislate along the lines that are necessary. If the worker wishes to have his wages increased or his conditions of work improved, he must present a case to the Arbitration Court, and the court will fix his hours of labour and what wages he shall receive for his labour. But I think wc ought to be able to go a step further. Wo ought to be able to tell the people whom this tariff schedule will' protect from unfair competition from abroad not only that they must pay their workers a proper wage, but also that their consumers shall not be charged exorbitant prices.

Senator Payne - Does the honorable senator say that the consumer is charged exorbitant, prices for goods of Australian manufacture?

Senator NEEDHAM - I make no such comprehensive statement, but I do say that there are unfair charges and cases where manufacturers stipulate the prices that shall be demanded for the articles they make. As one instance I may quote the firm of Bond, which sells its goods to retailers subject to the condition that they must charge a certain fixed price for them.

Senator Payne - That is quite correct, but does the honorable senator say thai the price thus fixed is too high?

Senator NEEDHAM - All that I am saying is that the firm fixes its price and tells the retailer that he must charge so much for the product of its factory.

Senator Crawford - Scores of manufacturers do the same thing.

Senator NEEDHAM - I am merely citing one instance to support my case. I might add that unless the retailer sells at the stipulated price he may find himself without the particular product of that factory. If the manufacturer who is given protection by this Parliament can say what the public shall pay for his goods, surely this Parliament ought to be in a position to say at what price he shall sell his goods.

Senator Ogden - It is a difficult problem.

Senator NEEDHAM - If the people of Australia would clothe this Parliament with the powers that have been sought in this respect, the problem would be easily solved. Under no consideration am I a revenue tariffist

Senator Ogden - Is the honorable senator a prohibitionist?

Senator NEEDHAM - No. I am an effective protectionist. Briefly, my position is that to any article that can be made in Australia - and I know of very few that cannot-

Senator Kingsmill - 'Commercially made in Australia.

Senator NEEDHAM - To any article that can be made in Australia I am prepared to give effective protection.

Senator Payne - Up to the point of prohibition?

Senator NEEDHAM - No. Any article that cannot be made in Australia - and there are very few that cannot be made here - I would admit duty free rather than have a revenue tariff.

The Minister (Senator Crawford) referred to the wheat production of Western Australia. It is true that the Western State has increased its production. In 1903 it was importing . wheat ; but in the 1927 season it had a yield of 35,000,000 bushels. I am not prepared to admit- that this yield is the result of the tariff of the Bruce-Page Government.

Senator Kingsmill - It is in spite of it.

Senator NEEDHAM - I say, unhesitatingly, that it is in spite of the tariff that Western Australia has had this yield. I was somewhat surprised to hear the Minister say that the increased wheat yield in Western Australia was one of the results of the tariff schedule that the bill now before us amends.

Senator Crawford - I did not say that; I said it was proof that a protective policy is not a handicap to primary industry.

Senator NEEDHAM - There may be room for argument in that regard. If in our tariff schedule we imposed a very heavy duty on agricultural machinery, it might handicap a State like Western Australia, which is in its infancy as a primary producing State. The primary producers have to sell their products in the markets of the world, and we should not make their conditions hard, particularly as they have to contend with the adversities which nature arrays against them.

I presume that before this debate concludes we shall have an expression of opinion from the representatives of the Country party in this chamber, and may find that even at this stage there is a freetrader in its ranks, I do not know whether the Country, party is still in existence, as its members are now so closely associated with the Nationalist party that they have almost lost their identity. When a private member the present Treasurer expressed very strong opinions concerning the tariff and its incidence which I shall quote.

Senator Chapman - He still holds strong opinions.

Senator NEEDHAM - -But he dare not express them, otherwise he would soon lose his present position. Since the Treasurer has been in office the revenue from customs and excise duties has increased to a remarkable extent, as the following figures show: In 1921-22 the revenue from this source was £27,630,000, and in 1926-27 it was £43,552,000, an increase of £15,922,000. During the same period the amount of customs and excise duties paid per head of the population rose from £5 0s. 3£d. to £7 2s. 6id., an increase of £2 2s. 3d. per head. When we remember the strong attitude adopted by the Leader of the Country party before he took office, it is difficult to understand why he should tolerate such a heavy increase of duties. On the 12 th October, 1922, the present Treasurer said : -

We wore told that the tariff was to be definitely protective: but the Treasurer is actually budgeting to secure more revenue from the tariff this year.

Later he said : -

If a protective tariff fulfils its functions the revenue derived must become less and less as industries are established within the country.

Our industries have not developed proportionately, but, as our customs revenue has increased to a remarkable extent, it suggests that the tariff is not sufficiently protective. The present Treasurer as Leader of the Country party also said : -

The Country party fought against these excessive duties all the time, and I regard the action of the Government in reducing the duties on wire netting and galvanized iron and fencing wire as a confession that the policy we advocated last year was a proper one.

The Dr. Page of to-day is entirely different from the Dr. Page of a few years ago.

If Senator Sir George Pearce wishes to honour his compact with the people of Western Australia when he was elected in 1925, he must oppose many of the items in the schedule to this bill. Both he and Senator Carroll agreed then to advocate a low tariff. Senator Pearce may or may not oppose the schedule. If he did, it would probably involve his resignation from the cabinet, and that would be a calamity to the right honorable gentleman himself. According to a paragraph in the Melbourne Age of the 13th March, 1926, the honorable member for Wimmera (Mr. Stewart), in dealing with the agreement made by the two parties in Western Australia, said -

Before the last elections an agreement had been made by the National and Country Party that as the present high tariff was inimical to Western Australia the full strength of both parties should be devoted to a substantial reduction in the duties, and that as a reduction could only be secured through united representation, neither party should give endorsement to any candidate who was not in agreement with this policy. The primary producers and united parties agreed to co-operate and the former was to have one representative, for the Senate and the other party two.

I understand that Senator Pearce and Senator Carroll subscribed to that agreement and I am waiting to see the attitude they will adopt towards this bill, particularly as the customs duties have not been reduced since Senator Pearce was returned to this Parliament. I shall watch with interest the progress of the bill through the committee stages, and I hope that the duties adopted will give to Australia more effective protection than we have had in the past. Higher duties are necessary to help manufacturers who are providing employment for many of our people and assisting Australia to become a self-contained and self-reliant nation.

Suggest corrections