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Thursday, 8 March 1928

Mr GREENE (NEW SOUTH WALES) . - A tariff debate in the good old days was a battle between free traders and protectionists; but we have now reached the stage where we can say that the battle for protection in Australia has been won. Although we still hear freetrade arguments from various quarters, I believe the great bulk of the people of Australia are now convinced that the policy of protection has come to stay. I congratulate the Government upon the introduction of this schedule. A tariff can never be entirely satisfactory because changes must be made as circumstances alter in consequence of the development of new industries and of existing industries engaging in new phases of manufacture. This makes it essential to review a tariff schedule from time to time and to make such changes as we consider necessary. Although I think there are one or two directions in which the Government might have acted differently from what is proposed, where the duties are not as high as I should like, I believe it has gone as far as it reasonably could. In dealing with the tariff the powers of the Senate are very limited, and consequently the opportunities for introducing new items and effecting amendments, are almost negligible.

There is one matter to which I earnestly direct the attention of the Government. I refer to the cotton industry which if properly handled should have very promising prospects in Australia, and in connexion with which the provision made by the Government has turned out to be wholly unsatisfactory. The cotton industry is at present assisted partly,, by the tariff and partly by a bounty. The clear intention of the Parliament and the -Government when it last imposed; duties on cotton, and provided for the payment of a bounty was to encourage the use of Australian cotton in our own mills. Owing to a variety of reasons which I do not intend to enumerate - it would be futile at the present time for me to do so - the arrangement has entirely broken down. It , was thought at the time that the local spinners would be able to use Australian cotton in their mills, and that they would absorb the whole of the Australian crop. Though mills are erected in Australia with all the machinery necessary for dealing with a great deal more than the last cotton crop in Queensland or the crop which we are likely to have this season - I hope it will be double that of the previous year*--hardly a bale of the Australian production will be used in the Australian mills. I do not wish to go into the detailed reasons for this unfortunate state of affairs, though it would be easy for me to do so as I have the matter at my fingers end. All I ask, at this juncture, is that the Government shall give the matter its earnest consideration in the near future with a view to recasting the present tariff and bounty provisions. Very slight alterations will make all the difference in the world to the position of the cotton growers, whose crop will then be used in Australia. Though this is important also from the point of view of the manufacturers, the alterations I suggest are more vital in the interests of hundreds of growers in Queensland. I am not a representative of the northern State in this chamber; but I am, as honorable senators are aware, intimately associated with the cotton industry, and I am glad to be able to say that during the last two or three years there has been, a considerable increase in the number of cotton growers in Queensland.

Senator Payne - Will the establishment of the spinning industry in Victoria relieve the position of the Queensland cotton growers? I understand that one or two mills have been erected in Victoria.

Mr GREENE (NEW SOUTH WALES) - No. As I have already explained, there are well equipped mills already in existence, yet owing to the manner in which the duty and bounty have been arranged, they will hardly turn a spindle.

Senator Ogden - Cannot they obtain the cotton locally?

Mr GREENE (NEW SOUTH WALES) - Yes, but they cannot compete with overseas manufacturers. It is a rather alarming position, but I do not wish to go into the details at this stage. All I ask is that the Government shall look into this question carefully, and put things right. If that is done all the mills can then be profitably employed, and will be able to use the whole of the loca'l cotton crop. Perhaps honorable senators are not aware that the fact that our cotton is shipped overseas instead of being used locally makes a difference to the growers of about f d. lb. on their seed cotton, and since it takes 3 lb. of seed cotton to make 1 lb. of lint the total on a bale of 500 lb. means a great deal to the growers. I feel satisfied that it will be only necessary for the Government to order an investigation of the position to have it set right. Unless something is done we shall have to export practically the whole of the cotton produced during the coming season. This will mean a serious loss to the growers and it will entirely defeat what was clearly the intention of Parliament when it sanctioned the impositon of the duty and the payment of the bounty.

There is one matter in connexion with the schedule to which I invite the earnest attention of the Minister. Though it may appear to be a little thing in itself it involves a big principle from which it authorizes a departure in a direction that I believe to be. entirely wrong and dangerous. I refer to the item which deals with coffee. It seems to be a small matter, but I fear that, unless we watch our step in connexion with it we may become involved in many difficulties which we can easily avoid. 1 have never had the slightest objection to the preferential treatment given by Australia to the mother country. In a tariff which some years ago I had the honour to introduce in another place

Great Britain was given a greater measure of preference than had ever pre1viously been conceded by this Parliament. The principle embodied in that tariff, and which is carried a stage further in this schedule, is entirely justifiable internationally. In giving the Mother Country preferential tariff treatment we can look the whole world in the face without fear that any nation can take serious exception to our action. We have never departed from that principle except that whenever we have extended preferential treatment to other countries we have always done so on a basis of reciprocation. That principle is definitely laid down in all our tariff legislation, and prior to the introduction of this schedule it was always adhered to. We have always given Britain a perfectly free preference. That is to say, we ask the Mother Country for such preference as she may choose to give us; we do not bargain for it.

In our attitude to other countries we have always taken the stand that the tariff concessions must be reciprocal. This again is a perfectly safe international principle in regard to tariff legislation. No nation can take exception to the Commonwealth giving preferential tariff treatment to a particular country if, in return for that special treatment, we get a similar concession. If honorable senators will turn to the item dealing with coffee they will notice that there is a departure from this principle in the addendum to the item, which reads as follows: -

The articles specified in paragraph ( I ) of sub-item b, being the produce of any part of the British Empire, shall bo admitted under the British preferential tarin".

This, as I have stated, is a departure from the basic principle to which I have alluded and which Ave have laid down in all previous tariff legislation. I question the wisdom of this course, because we shall not be able to show that the countries to which we give this preferential treatment are giving us special reciprocal treatment. Unless the Government can convince me that there is good reason for the item as it stands I intend to vote against it in committee, and will ask honorable senators to support me in requesting the House of Representatives to eliminate the addendum. If another place adopts the request it will be necessary to recast the whole item. I think it will be sufficient if this chamber indicates its desire to have the addendum eliminated. In all probability the item will be put right in another place.

Apart altogether from the principle which I have endeavoured to lay down in a brief form there is special reason why we should not depart from it in this particular item. In the first place "we should be chary about making such a departure when dealing with the tariff, which necessarily is international in its application. In this case the fact that we propose to give a certain measure of preference to India, possibly to Kenya Colony, Jamaica and one or two other dominions of the Empire will seriously hit a near neighbour of ours, Java. Honorable senators will recall that some time ago we imposed a duty on bananas, which are produced in the Commonwealth. There was a perfectly - good reason for our action then:.

Senator Carroll - That interfered with our trade with Java'.

Mr GREENE (NEW SOUTH WALES) - Possibly it did, but Parliament approved of the duty on bananas, and, as I have said, there was every justification for it. The position is entirely different with regard to the item dealing with coffee in the schedule to this bill. It will seriously interfere with o'ur trade with Java.

Senator Crawford - We buy from Java three times as much as Java buy? from Australia.

Senator Thompson - Chiefly oil.

Mr GREENE (NEW SOUTH WALES) - Is that an adequate reason for the alteration of the item? I do not think it is. Our principal imports from Java are those commodities which cannot be produced in Australia. After kapok, oil, and tea, which we do not produce in Australia, our chief import is coffee. Iri return Java buys from ns a great deal of our primary products, and as a matter of fact is one of the few countries to which we are able to sell certain of our secondary products. Java, I remind the Senate, has always' given to Australia exactly the same tariff treatment that she gives to her mother country. If the Minister examines the statistics, which I have no d'oubt are in his department, he will find that the duty on Australian butter sent to Java is the same as that levied by the government of the Dutch East , Indies on butter from Holland. We are almost the sole supplier of that butter. They buy from us also a large quantity of flour, and some meat, biscuits, jams, and canned fruits. I cannot see any reason why we should imperil that trade by giving Java a slap' in the face because of something out of which we get no return. If we were going to derive a benefit there might be some justification. Why should we cut off our noses to spite our faces ? I cannot conceive of any good coming out of this action, nor can I see any specific reason for it; but I do apprehend a great danger to our trade in the Dutch East Indies if we insist upon taking it. Having made my protest I shall endeavour, in committee, to give practical effect to it. Apart from that I shall support the proposals of the Government.

With regard to the much discussed question of timber, I merely wish to say that, for reasons which are obvious when one examines the peculiarities of the industry, it is not possible to frame a satisfactory tariff in relation to it.' One could take any set of facts and argue a perfectly good case for both a duty and no duty. I am prepared to make out as good, a case for one side as for the other. We' must, import a certain quantity of softwoods, particularly Oregon. If we made the duties mountain high that position would not be altered. There are various uses in respect of which there is no substitute for Oregon, certainly in Australia and probably throughout the world. What will happen when the Oregon supplies fail can merely be conjectured. It is equally true, however, that in Australia Oregon is put to a number of uses for which our hardwoods are eminently 'suitable. It seems necessary, therefore, to get back to. first principles and do that which will ultimately spell the greatest good for the greatest number. Starting from those premises I say that the greatest amount of good will accrue to Australia by keeping our money within our own borders and depending upon our own resources. I have never been able to understand the argument of those who say that we should leave our' iron deposits undeveloped and purchase abroad our requirements of that commodity. If we were to adopt such a policy it would be logical to allow our fields to remain un tilled and buy abroad all the foodstuffs we required. Scattered over a large area in Australia is a vast quantity of timber that is eminently suitable for many purposes. I frankly admit that the prevailing industrial conditions, some of which have been brought about legislatively, and others 'by force majeure, are responsible for a state of affairs which makes it extremely difficult and costly to produce a commodity like timber from our own hardwood forests. There is not a definite case on either one side or the other in regard to the tariff on timber, but the balance of the argument is in favour of using as far as possible what we have within our own borders. I do not refer to those uses for which a soft wood with the peculiar characteristics of Oregon is necessary. But as everybody knows there is hardly a frame of an ordinary wooden cottage in the erection of which oregon is not used. It cannot be contended that our hardwoods are unsuitable for that class of work. They are not subject to attacks by white ants to the same extent as oregon, and if faithfully put together, they make a better job. I intend to support the proposed limber duties.

I have brought under the notice of the Government two matters that I regard as of first class importance, -and I hope they will be given earnest consideration. I refer to the re-arrangement of the duties and bounty connected with the cotton industry, so that we may make use of what we produce and keep our spindles at work, and the proposed preferential duty on coffee. Unless the Government can give me a more solid reason than sentiment for the alteration of the coffee duty, I shall endeavour at a later stage to have that item amended.

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