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Wednesday, 7 March 1928

Senator DUNCAN (New South Wales) , - The Minister in charge of this bill (Senator Crawford) and his colleagues must be gratified at the preans of praise which have come from the Opposition to-day. First, we had the Leader of the Opposition (Senator Needham) singing the praises of the Government, and later Senator Findley, who in his concluding remarks said that however high the duties proposed by the Government the Labour party would support them. Such a position must be unique in the history of parliaments. I well remember the time when the then Leader of the Opposition in this chamber (Senator Gardiner) criticized the present Government because of its protectionist policy.' He assured the Senate that if effect were given to that policy it would spell the ruin of Australian industries. But today those whom he at one time led say that the Government is doing right in increasing duties ; their only complaint is that the duties proposed are not high enough. Senator Findley has declared himself to be in favour of adequate protection. We have heard of scientific protectionists, reasonable protectionists, geographical protectionists, and more recently of new protectionists; but to-day a new brand has appeared - adequate protectionists.

Senator Findley - Senator "Duncan is a freetrader, revenue tariffist, and protectionist combined.

Senator DUNCAN - I shall have pleasure in telling Senator Findley where I stand in fiscal matters and explaining why it gives me a great deal of pleasure to support, almost in their entirety, the recommendations contained in this schedule. I regret that in one or two instances I may have to offer some opposition.

Senator Needham - Why complain?

Senator DUNCAN - I am not complaining; I am supporting this tariff as I was sent here to do.

Senator Needham - Then do it cheerfully.

Senator DUNCAN - I propose to do so. Indeed the task' is not difficult, because of the lead given by the Opposition, which has made it clear that it finds no fault with the Government.

Having listened to honorable senators opposite, I find that some doubts which 1 previously entertained as to the wisdom of these proposals are disappearing. Like the poor who are always with us, we seem never to get entirely rid of tariff schedules. In the past when tariff schedules were introduced, we were told that the duties proposed were sufficient to establish various industries in our midst, and that no requests for higher duties would be made. But, unfortunately, our experience has been that almost before the ink on the schedule was dry, there was an agitation for further duties.

Senator Foll - To a great extent the States have been responsible for that.

Senator DUNCAN - I do not blame the unfortunate manufacturers for asking for higher duties. They have been forced to do so by reason of circumstances over which they have had no control. Having based their manufacturing costs and the future of their industries upon existing conditions, they have found that conditions in industry change more in Australia than in almost any other country, with the result that they have experienced difficulty in meeting not only the competition from overseas, but also, at times, that from within Australia.

Senator Thompson - One of their problems is that every increase in duty is followed by an increase in the wages of their employees.

Senator DUNCAN - That is one of the contributing factors; but other factors need only to be mentioned to show how difficult it is for manufacturers to meet changing conditions. Recently I had the opportunity to visit the Lustre Silk

Hosiery factory, one of the finest factories I have seen in this country, which manufactures a magnificent article. The tariff schedule now before us increased by 20 per cent, the cost of its raw material, notwithstanding that the duty on the finished article with which it has to compete was not increased. That increased duty may mean the difference between success and failure to that industry. Unfortunately, that state of affairs is not confined to the industry I have mentioned. The trouble is that the finished article of one industry is in many instances the ' raw material of another, so that any increased cost of the article produced by the one has to be borne by the other. For that reason we should consider carefully some of the proposals contained in this schedule.

Although to-day we have not the fights between freetrade and protection which we had in the past, there is by no means unanimity on fiscal matters. To-day the issue before this chamber is net whether protection should be given or withheld, but what degree of protection should be given to the industries mentioned in the schedule. Protection has become the settled policy of the Commonwealth, and the fight now is for ever and ever-increasing duties. Honorable senators of the Labour party have pointed to statistics which show that the importations of Australia are constantly growing, in spite of an ever-increasing tariff. But why is this so? The goods would not be sent to this country unless there was a sale for them here. Who buys them? The statistics of importations show that they are largely manufactured articles, made, as Senator Needham has said, iu countries whose workers are paid lower wages than are paid in Australia. They are sent here, and bought here because they are cheap, and the people who buy them are those who want cheap goods - the working people of Australia. In any of the 6d., 9d., and ls. shops which are now becoming the vogue, or in any other shops having big sales of imported goods, can be seen long queues of workers and workers' wives, fighting and struggling to buy cheap imported articles. The muchvaunted policy of protection sounds all right; but unless it has behind it .the actual backing of the people who say they believe in it, it must fail, even if the duties are fixed at the 200 per cent, level supported by Senator Findley. The people who return the honorable senator to this Parliament will buy the imported article if they can get it at -Jd. or Id. cheaper than an article manufactured in Australia under decent conditions of labour.

These are facts which cannot be denied, and if honorable senators opposite have at heart the interests of the manufacturers of Australia to the extent they say they have, I urge upon them the advisability of going among their own people and telling them that they do wrong when they buy other than Australian-made goods, or when they look for cheapness instead of quality. It is not easy to do this. The unfortunate worker's wife who finds herself at the end of the week with only a trivial sum of money with -which to do a very great deal for herself and her family, buys where she can get the most for what she has to spend. Is she wrong in doing so? She has either to do that or to allow some member of the family to go without something which is required. When one is faced with a problem like that, when one has either to go without something, or to buy imported goods because they are cheap, the scale always has a tendency to fall on the side of the imported article. Are we to blame the worker's wife for taking a. course of action we should probably take in similar circumstances.

To my mind, the reason for this bigstream of importations to Australia is that we have for the last few years had a larger purchasing capacity than the people in any other part of the world, with probably the exception of America. We have had the ready cash, and have spent it more willingly and more readily perhaps than people in other countries. When we make a purchase, we do not ask whether the article is made in Australia or Germany, or anywhere else. We ask how much it is, or how many articles we can get for a certain sum. People will_ take what they can get the most of for the money they have to spend. Until we bring home to them the realization of the fact that Australia's industries, despite what Senator Findley may have said, are dependent not so much upon the tariff or the height of our tariff wall, as upon the desire on their part to purchase Australian goods the position in which we find ourselves to-day is not likely to improve to any considerable extent.

Senator Thompson - When production exceeds consumption, what is likely to happen?

Senator DUNCAN - I can see with Senator Thompson the dangers of the day when production exceeds our local consumption. We can go on building our tariff wall and establishing factories, but when we have reached the point at which we have not only met all Australia's requirements, but also built up a huge surplus of products, what are we going to do about it? As Senator Findley knows, that point has already been reached in the case of the boot industry, and the industry has met it by closing factories for certain periods of the year.

Senator Findley - At the same time there were large importations of boots.

Senator DUNCAN - The boots imported were not to any extent similar to those made in the factories which were closed. They were higher quality boots. The trouble was that the boot factories in Australia had reached the point at which it was possible for them to supply all local requirements, and build up a huge surplus of boots, which they found it impossible to export. With the high cost of production in Australia they could not afford to sell their output in other coun- tries at a price which would give them an adequate return on the cost of production. Therefore, they shut down their factories for a time. I think it can be said definitely that it was the policy of protection that compelled them to do so. We held out to the people who put their capital into those establishments the hope that our high tariff wall would give them immunity in Australia from overseas competition, and that there would . be a definite market for everything they might produce here. But because the tariff was so high, or the protection so effective, so many rushed into the boot industry that over-production took place, and as a consequence the industry very largely collapsed. It. would have been infinitely better Ibelieve had it been regulated more effectively by the imposition of an even lower rate of duty than was imposed, leaving it open to the overseas manufacturer to provide a certain amount of competition for the local manufacturer. There would then not have been put into the boot factories in Australia so much capital, and there would not have been that over-production we have had. There would have been a far healthier condition of affairs in the boot industry.

Senator Findley - On that same line of reasoning the more importations we have the better it is for the establishment of industries.

Senator DUNCAN - I am referring not to the establishment, but to the stabilization of industries, in which we are somewhat deficient in Australia.

Another aspect of the tariff before us has given me some little trouble. The parties supporting the Government have from time to time endorsed the policy of protection, and by the adoption of that policy and its application we have been responsible for the building up of a great many vested interests in Australia. We are, therefore, under a definite moral obligation to see that these interests are not permitted to suffer through any neglect of ours. We have to see them through so far as it is possible for us to do so, remembering all the time what is fair, and also what is more than fair. It has been clearly shown to the Tariff Board that many of these interests find that it is almost impossible for them to carry on their industries unless they are given more protection.

The Tariff Board was set up by the Federal Parliament to investigate industries, find out what theyneeded, and what their actual position was, and recommend to the Minister and to Parliament what course of action should be taken. The board relieved legislators of a great deal of work in some respects - it did for Parliament work that it was not possible for Parliament itself to do - but, unfortunately, its recommendations, made after the most searching investigations, have not always been endorsed in the tariff schedule before us. On the contrary, in one or two instances they have been ruthlessly swept aside in another place. For instance, in regard to Oregon, the Tariff Board after the very fullest investigation reported against the course of action that is now set out in the tariff schedule. The Government endorsed the Tariff Board's recommendations in regard to this matter. But the Minister's proposals were altered in another place, despite his opposition and that of his colleagues, and this chamber is now asked to endorse what was then done. I shall have a good deal to say about that matter when we are dealing with the schedule in committee. I am opposed to the course of action taken in another place, and I shall not vote for it because I believe that something entirely wrong has been done that will re-act very much upon Australian industry in general, and will have an effect that will perhaps be greater than it is possible for any of us to foretell to-day.

Senator Needham - In what respect does the schedule differ from the recommendations of the Tariff Board?

Senator DUNCAN - The Tariff Board was opposed to the increased duty on

Oregon. Despite that, the Government is now sponsoring a tariff schedule in which it is not proposed to give effect to the Tariff Board's recommendations.

Senator Needham - The Tariff Board has not the last word in tariff matters.

Senator DUNCAN - It made the fullest investigation.

Senator Payne - Did not the board recommend increased duties on Oregon?

Senator DUNCAN - Not nearly to the extent proposed

On the second reading of a Customs Tariff Bill it is customary for honorable senators to confine their remarks more particularly to general principles, and when the schedule is under consideration, to deal with the items in detail. With most of the proposals I am in entire accord, and with some I differ but I am not to be swayed by cajolery or threats of what may be done by certain individuals and interests if I do not see the light as they see it. In connexion with tariff matters it is most unfortunate that we should find our letter-boxes littered with letters, telegrams and printed matter circulated by certain persons solely in their own financial interest. I am not likely to be influenced in that way. I shall give my close attention to the consideration of the schedule, and trust I shall be able to justify every vote I record on the various items. In concluding I wish to point out that there are some industries to which the general principles I have referred cannot be applied. I have in mind key industries, which are of greater importance than ordinary manufacturing concerns; they are national necessities to any country. The iron and steel industry already mentioned in this debate has been referred to as a New South Wales industry. It is not an industry belonging to any State, but an Australian industry, the existence of which is absolutely essential if this country is to remain under our control. If Ave believe in a definite defence system the iron and steel industry is as essential to us as are battle ships, cruisers or aeroplanes.

Senator Payne - Or primary industries ?

Senator DUNCAN - Yes, but I am now referring 'to manufacturing industries. If it is necessary to give a greater degree of protection to the iron and steel industry, even though it may mean a temporary increase in the cost of production, we 'must be prepared to give it for the reasons I have mentioned. I shall have pleasure in supporting increased duties on certain items in the schedule. I join with the Leader of the Opposition (Senator Needham) and Senator Findley in congratulating the Government upon introducing the bill, and am pleased to note that in this instance we are holding the same views - a state of affairs which I trust will long continue.

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