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Wednesday, 7 March 1928

Senator KINGSMILL (Western Australia) . - Tariff schedules have come before the Commonwealth Parliament on several occasions since I have been a member of the Senate, and their consideration is intimately connected with this branch of the legislature, which was created to protect State interests. Nobody who thinks for a moment will say that in another place, where the representation is on the basis of population, the smaller States - the smaller States, being as they are, in the initial stage of development, demand at least as much consideration as the larger States - have received just treatment against the preponderating influence of the representatives of New South Wales and Victoria. These two States, rightly or wrongly - I think wrongly- are crying aloud for higher and higher protection, and predominate to such an extent that it is quite impossible for the feeble voices of the representatives of the smaller States in another place to be heard?

Senator Payne - Feeble ?

Senator KINGSMILL - Only in respect of their number. The day has passed when the people are likely to mistake noise for numbers. The only means of protecting the interests of the smaller States is provided by this House where State interests should predominate. Personally, I look upon the tariff or any amendment of it as an Australian matter. I regard is also as something affecting the State which I happen to represent. I am absolved from looking upon it from a party view-point, because however much the party to which I belong may offend in the direction I have indicated, honorable senators opposite are ready to offend much more seriously.

That, sir, if I may be allowed to bring proof, has been amply demonstrated within the last few days. It has been shown this afternoon by the Leader of the Opposition (Senator Needham) boldly backing up a claim which was unsuccessful in another place for even higher protection. He even went so far as to bewail the loss of the new protection, which was a favorite cry some years ago, but which the gentlemen for whom honorable members opposite stand, have had without the force of law behind it. Whenever any higher protective duties are imposed upon any commodity those gentlemen are always awaiting, what, I understand is technically known as their " cut " of the extra price imposed. At all events an increase in prices is, I think, always the result of higher protective duties. Therefore I say that this is essentially a subject for the Senate, and carries with it no element of party.

There is another factor which we have to consider in this connexion. We have, undoubtedly, to make Australia as self-contained as we possibly can, but we must avoid isolating ourselves from the outside world. As a primary producing people we have to produce more than we require of certain commodities and export the surplus to the outside world. Already there have not been wanting some indications that our activities in regard to tariff matters have had the effect of seriously antagonizing some of the countries with which we have to do business. Is it to be supposed that a country which we are systematically - if I may use an Americanism - " knocking " will use any more of our commodities than is necessary? Is it to be expected that such a country will gladly welcome any development in trade which carries with it the use of goods from a country which has done its level best to harm it? When I say that we must not make Australia an isolated country, I repeat, that examples are not wanting in other directions to show what is taking place. The cost of production in Australia is rendering ' our manufactured products unsaleable at a profit in other parts of the world.

Senator Ogden - They never were saleable at a profit.

Senator KINGSMILL - We are adopting the best method of insuring that they never will be. The tariff is one example which I quote.

When I consider the needs of the State I represent I find it difficult to study this subject calmly. There is one instance - I know honorable senators will anticipate what I have to say - in which we are adopting a foolish policy by a system of bounties, bonuses or duties on manufactured commodities which can be sold only at a great loss outside Australia. Honorable senators know well enough that every ton of sugar which cannot be sold in Australia is disposed of overseas at a disastrous loss. We are going the right way to bring about the same result with other commodities, and I entreat honorable senators before it is too late to see if there is not an alternative which will give the same commercial result as between country and country without unduly weighting the article we are producing. It appears to me that Australia's present position is due to three causes which I shall specify, but not necessarily in their order of importance. I refer to the tariff, the Navigation Act and the results to date achieved by the Commonwealth Arbitration Court. These three are so inextricably interwoven that it is hard to say where the bad influence of one ends and another begins ; but it seems to me that unless Australia makes a wholehearted and' earnest effort to bring about an alteration in the conditions that are attributable to these causes, one or all of them, we must go on the way our feet seem to be bent: that of making Australia isolated - an isolation that I do not think can ever be splendid, but which I fear must prove disastrous. There are ways of effecting improvements in an industry without resorting to a tariff. Indeed, I look upon the tariff in the present state of trade throughout the world as one of the worst possible ways. A good example of this can be found in the schedule to this bill. The duties on timber have been referred to. If we wish to relieve the necessities of two of the States, Western Australia and Tasmania, more intimately affected by these proposed duties, we can best do so not by imposing heavier duties or increasing the scope of these duties, but . by repealing a provision in our legislation which interferes with commercial intercourse between the two States to which I have just alluded. If we can make it easier and more profitable for those States to market their timber at a cheaper rate, and without increasing to any extent building costs, we shall be doing a good work. The remedy which I suggest is the abolition of the coastal provisions of the Navigation Act, a course which I firmly believe must be taken within the next year or two.

Senator Ogden - It will be necessary to do that without delay.

Senator KINGSMILL - Perhaps the honorable senator is right. Instead of imposing further restrictions upon the building trade, which is bound to be the outcome of these duties, it would be better to take the course which I have suggested and which, to use a French expression, leaps to the eye. These provisions' are hampering the prosperity and progress of the smaller States.

Senator Needham - Would the honorable senator advocate the introduction of black labour in shipping on our coasts ?

Senator KINGSMILL - Not at all.

Senator Needham - That is what will happen if we abolish the coastal provisions of the Navigation Act.

Senator KINGSMILL - I do noi agree with the honorable senator. The principal competition, so far as our seaborne trade is concerned, comes not from countries that sanction the employment of black labour on ships, but from Sweden.

We have heard a lot about the scientific nature of the tariff. I have also heard applied to the schedule certain other adjectives which I should not care to repeat in this chamber. If by " scientific " is meant the intention to incur the enmity of those who should be our best customers, then indeed the tariff is scientific. We should have an important trade in the Near East and in Java. Those countries should be our best customers. They should buy largely of our flour, our meat, .our fruits and many other commodities. But what has happened ? By imposing a heavy duty on bananas we have entirely alienated trade relations with Java, and have lost our trade with Fiji. The latter might not occasion much concern to an older country, but I should say that it means a great deal to Australia. Besides offering an affront to neighbouring peoples, we inflict a pecuniary loss upon ourselves. Therefore, if the term " scientific " as applied to the tariff is synonymous with the word "foolish," without a doubt our tariff is scientific.

Let me cite another instance, bearing on the same point, that came before me the other day. In the State which I assist to represent in this chamber, we have a great asset in the blackboy, better known in the eastern States as the grass-tree. There are millions of tons of it available for commercial use. As a national asset it is in the same category as important coal deposits in some countries; that is to say from the point of view of its potential value. Not long ago certain people approached me with a proposition that I should endeavour to secure tariff protection for the manufacture of acetic acid and acetate, which is a constituent of the blackboy. I told my friends that while it was not part of my political faith to advocate the imposition of duties, I would, nevertheless, put their proposal before the Minister. It may not be known generally that acetic acid is manufactured in both Sydney and Melbourne from acetates imported, not from Great Britain, but from America and Germany. In the circumstances one would have thought that since the tariff is supposed to be scientific in its incidence, some measure of protection would be given to this projected industry in Western Australia. Instead, however, of encouraging the people in that State to make use of a valuable convertible asset, the Minister for Trade and Customs, I presume on the advice of departmental officials, declined to give the measure of protection asked for. Can it be urged that this is a scientific way of building up industry? If to neglect the gifts of nature for the purpose of encouraging the trade in countries outside the British Empire, is scientific, then we may apply that term to our present tariff.

This leads me to the consideration of another aspect of the tariff which might very well engage the attention of honorable senators and the Department of Trade and Customs. I refer to the procedure sometimes adopted not by the Commonwealth or State Governments, but by business men in the eastern

States towards brother business men in Western Australia. I know of two industries in Western Australia that were absolutely crushed out of existence by what is known as dumping on the part of manufacturers in the eastern States. The Western Australia commodities were undersold by the eastern products which were marketed at below cost of production. This action, I suggest, is quite contrary to the spirit of federation. Personally I shall never regret the steps taken to bring the several States of the Commonwealth into a federation, but I should like to see more evidence of fair play in trade and commerce in the different States. In some cases at all events, there is marked hostility.

Senator Reid - Was it not scientific competition that crushed the industries mentioned by the honorable senator?

Senator KINGSMILL - Not as I understand the term. It was competition it is true, but it was not scientific. If, for example, I started an industry in Western Australia and if my friend Senator Reid, with much more money and more customers, by selling below cost sought to crush me out of existence, simply because there was a danger that I might secure a small portion of his trade, the competition, I submit, would not be fair as between people of the respective States. If it were possible to prevent what can only be described as interstate clumping, there. would be a greater feeling of security in the smaller States and certainly more evidence of progress. .

Senator Ogden - What industries has the honorable senator in mind?

Senator KINGSMILL -I am not certain if they are mentioned in the schedule to this bill. One was the boot manufacturing industry, and the other factories engaged in the manufacture of pickles, jams and other products of fruits. I am not sure that I can acquit Tasmania of some complicity in the competition which I allude to, at all events with regard to the latter industry.

Senator Ogden - Is jam manufactured in Western Australia?

Senator KINGSMILL - It could be if the local manufacturers had a fair chance against eastern competitors.

I doubt whether, without infringing the Standing Orders, which have been punctiliously observed during this debate, I could say much more concerning this bill, though possibly I may be permitted to make some observations on the schedule. I am much afraid that in our effort to make Australia self-contained, we shall make the cost of production so high that, instead of Australia being selfcontained, it will be cut off from the rest of the world. It appears to me that by means of successive increases in our tariff schedule and in cost of production, we are building around Australia a wall so high and so strong that this country will become isolated long before she is ready to be placed in that position unless we are content to produce for the home market only and are prepared to allow our people to pay almost any prices for our products. I venture to say, however, that, at' this stage in our history, with only 6,000,000 of people, we cannot afford to do that. Under present conditions, with every modern facility to encourage intercourse between nation and nation, it would be almost impossible for any country to adopt that course. I earnestly pray that that may never come about; but I fear there is very grave danger of it. I speak not alone for Western Australia, but for Australia as a whole. I believe that this piling of tariff upon tariff, and production costs upon production costs, and this placing of legislative obstacles in the way of the efficient and economical performance of the tasks that lie to our hand, will make -Australia, not the envy, but the laughing-stock of the nations. As an Australian first, and, secondly as a Western Australian, I shall certainly do all that I can to counteract any tendency in that direction, in view of the danger which lies before us. I support the second reading of the bill, but I shall endeavour to prevent the schedule from being passed in the delightfully symmetrical, if unscientific, form in which it has been presented to us.

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