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Wednesday, 7 March 1928

Senator CRAWFORD - Australia was not mentioned in those resolutions. They dealt solely with the effect of European customs duties on European nations.

Senator CHAPMAN - It is true that the resolutions dealt with the position from the stand-point of European countries, but they declared also that the imposition of customs duties was a matter in which all nations were concerned.

Senator Findley - By whom were those resolutions adopted I

Senator CHAPMAN - By the International Economic Conference in May, 1927.

Senator Findley - We are dealing with Australian matters now.

Senator CHAPMAN - Exactly, but if 50 nations take the view that the imposition of customs duties is not exclusively a matter of domestic concern, is it not likely that the Australian delegates at the next Assembly of the League of Nations will be placed in an awkward position ?

Senator Crawford - Not one of the nations represented at the Assembly subscribed to the policy contained in the resolutions of the Economic Conference.

Senator CHAPMAN - I do not agree with the Minister, and in support of my own contention I quote the following conclusions of the conference: -

In view of the fact that harmful effects upon production and trade results from the high and constantly changing tariffs which are applied in many countries;

And since substantial improvement in the economic conditions can be obtained by increased facilities for international trade and commerce;

And in view of the fact that tariffs, though within the sovereign jurisdiction of the separate States, are not a matter of purely domestic interest, but greatly influence the trade of the world;

And in view of the fact that some of the causes which have resulted in the increase of tariffs, and in other trade barriers since the war, have largely disappeared and others are diminishing;

The conference declares that the time has come to put an end to the increase in tariffs and to move in the opposite direction.

The conference recommends: -

1.   That nations should take steps forthwith to remove or diminish those tariff barriers that gravely hamper trade, starting with those which have been imposed to counteract the effects of disturbances arising out of the war.

I have read very carefully the report submitted by Sir David Gordon and I can assure honorable senators that the resolutions of the conference were very far reaching in their character. If eventually they receive the endorsement of the League of Nations they must influence Australia's tariff legislation.

Senator Thompson - Does not the honorable senator think that the discussion at the Economic Conference was highly academic?

Senator CHAPMAN - I cannot say that it was; but I do know that Sir George Pearce, the leader of the Australian delegation to the last Assembly of the League, also had to protest strongly against the disposition of the League to interfere with tariff legislation. He, too, urged that it was a matter of domestic concern.

Senator Crawford - Does not the honorable senator think so too?

Senator CHAPMAN - What matters is not what I think, but what fifty other nations may think. If they declare that in the interests of world peace tariff Avails should be lowered Australia will be in a difficult position if she does not fall into line.

Senator Graham - Let us take that hurdle when we come to it.

Senator CHAPMAN - My desire is to indicate the direction in which world opinion is moving, and to suggest that Australia should take notice of what is going on. The eighth Assembly of the League, which Senator Pearce attended, reported that it " took note of the Report of the Economic Conference, trusts that the recommendations relating to tariff and commercial policy be put into effect, and invites the economic organization to prepare a summary of the replies of the various governments as to their attitude."

I am much concerned about Australia's economic position. I view with alarm the rising costs of production, and many recent visitors share my anxiety. The Tariff Board has also issued a warning with regard to the alarming increase in the production costs. Referring to the position in the textile industry, the board states in its report for 1926-27 -

This action of the Textile Workers' Union seems to have been influenced by the judgment of Mr. Justice Powers, wherein it was laid down that his court could take no cognizance of the capacity of an industry to pay certain wages, but would fix what wage it thought necessary, and the industry would then have recourse to the Tariff Board, which had been created by the Federal Parliament to make recommendations for the granting of whatever protection wasneccssary. In this case the various unions appeared before the Tariff Board to assist the employers in obtaining necessary increases in order to make it possible to work the mills at a profit instead of at a loss, and then immediately approached the Arbitration Court for their share in these increases.

Thus it goes on. Employers and employees work hand in hand. When an industry receives tariff protection the workers engaged in it apply to the Arbitration Court, so as to get their share of the loot, and prices rise higher and higher.

Senator Reid - Does the honorable senator regard tariff duties as "loot"?

Senator CHAPMAN - There is no doubt about it. The general public, and particularly the primary producers, are in a most unenviable position. Costs of production are now so high that we are unable to export profitably any of our wholly-manufactured goods.

Senator Crawford - That was always the position.

Senator CHAPMAN - I disagree with the Minister. Our production of both primary and secondary industries has increased very materially during the last few years; but our exports of whollymanufactured goods are stationary. Ten or fifteen years ago the value of Australian manufactured goods exported was £4,000,000, the figure at which it stands to-day.

It has been urged that our primary producers are not being prejudicially affected by the tariff. That is not the case. Costs of production have increased so materially that, practically with the exception of wool and wheat, our producers are unable to export without financial assistance. They have to pay world's parity for the goods which they purchase, and, in addition, have to bear the burden of a high tariff, freight, and other charges. They are thus placed at a grave disadvantage.

Senator Crawford - There is a very high protective tariff on the products which the honorable senator has mentioned.

Senator CHAPMAN - I am referring to the marketing of our surplus production. We have reached the stage at which the primary, as well as the secondary, industries are beginning to feel the effect. In spite of the warning issued by the Tariff Board, it is now proposed to increase the tariff still further. We have been informed that the increased cost of erecting a five-roomed house will amount to only about £7, and that duties on other lines mean only a small increase in prices. The result, however, will be a further appeal by the workers to the Arbitration Court on the ground that, the cost of living having risen, they are entitled to higher wages; and justifiably so. We should heed the advice of the Tariff Board, and take note of the effect of this policy, because it will eventually defeat itself. There is not the slightest doubt that we must rely upon efficiency to a greater extent than upon the tariff. If we continue to place these " plasters " on industry, we shall soon be overtaken by economic disaster.

Co-operation between employers and employees along the lines suggested by the Prime Minister (Mr. Bruce) would be the salvation of Australia. The Tariff Board has cited a number of instances of the absence of efficient machinery. One such relates to a manufacturer who asked for a higher tariff. The board said to him, "What about installing efficient machinery?" He appeared to be quite amazed, and replied, "It would cost altogether too much." We must not encourage such an attitude. In Adelaide, only the other day, a dismissed worker told me that about half of those who had been working for his former employer were put off; and, as those who were left did not wish to lose their jobs they were working at top speed, with the result that 20 were doing more than had previously been done by 40. There is a slackness in some industries; yet the unions deliberately discourage the piece-work system. Industry in Australia will be able to hold its own only if efficiency is secured, and if the men who are engaged give to the utmost of their capacity.

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