Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Friday, 24 April 1936

Senator BROWN (Queensland) . - Senator Hardy lias just made a violent attack upon my leader (Senator Collings) and the Labour movement to which I have the honour to belong. He has grossly misrepresented not only the views of Senator Collings, but also the policy and platform of the Labour party. I trust that in the time allowed to me in this debate I shall be able to prove to the satisfaction of all honorable senators that the honorable gentleman has handled the truth very carelessly.

The Labour party is not a party of isolation. It is not- so stupid as to approve any action that will impede international trade. It does, however, believe that no fiscal action should be taken to undermine any Australian industry. Labour has always fought strenuously for the protection of Australian primary and secondary industries. Since this Government has been in power it has reduced the duties on over 1,000 tariff items, and in attempting to meet its obligations under the Ottawa agreement it has encouraged the importation into this country of goods which clash with Australian products. This is in direct opposition to Labour's policy to protect the Australian market for Australian producers. We contend that it is foolish to encourage competition in basic materials and basic industries. The best way to improve international relationships is to raise the standard of living in all countries, and thus promote world trade.

Sitting suspended from 12.J/S to 2.15 p.m.

Senator BROWN - We of the Opposition approach this matter with no vested interests to serve. The majority of those who have risen from the ranks of Labour have no investments in manufactures, breweries, or pastoral properties, and, generally speaking, represent a large section of the community which does not derive any portion of its income from profits. Therefore, we are without bias. The tariff should be dealt with from a national viewpoint. Private manufacturing interests and the interests of those who are engaged in primary production should be subordinate to the national welfare. That, those who have large vested interests of any kind should desire to foster governmental action that will bring to their coffers greater returns than they have hitherto enjoyed, is quite understandable. A private person cannot be condemned for assisting to effectuate that, to him, desirable state of affairs. On the Government side of the Senate are men who not only have big interests, but also represent big interests. Consequently, their efforts towards the implementing of a tariff policy designed to promote national interests, must be somewhat vitiated. That is not a derogatory remark, but merely the statement of a fact which cannot be gainsaid. Any class or section of the community which advocates a particular tariff policy because it will improve its balance-sheet, will naturally support a party which will achieve that particular object. Our aim is, not to give an impetus to one particular industry so that it may improve its financial position, but to advance the interests of Australia as a nation in relation to the economic position of the world. When the time arrives for the Labour party to implement its tariff policy, it will have to take full cognizance of what is happening in the world. Senator Hardy, and other honorable senators, would ignore that factor. They prefer to hark back to the good old days; they would put back the hands of the clock. But the economic system operates inexorably, and no government in any part of the world can stay the march of time. We recognize that fact, others do not; therein lies the difference between the Labour party and the tory party, which at present is charged with the administration of the affairs of this country. I admit that governments can assist in some measure the development of a country. A wise government keeps abreast of evolutionary development, and so shapes its policy as to give impetus to it. The members of the party to which I belong have been charged with having continually bolstered up or assisted the manufacturing industries. One section of the community regards the manufacturers as industrial vampires who suck the lifeblood of the community. Senator Johnston holds that view. On the other hand, some manufacturers imagine that they are industrial innocents who are being slaughtered to make a freetrade holiday. These and many other views are held by members of this chamber. Senator Johnston expresses the view of the real Country party, while that of the official conservative Country party is sponsored by Senator Hardy, who espouses his cause without real regard for the truth. There is also the policy of the Government as enunciated by Senator A. J. McLachlan. A Jew other honorahle senators have personal policies. This multiplicity of policies may be a good thing, because in the multitude of counsellors there is wisdom, and among them may be found some common denominator or some principle which embraces the greatest measure of truth.

Senator Dein - Would vested interests approve of the honorable senator's tariff policy ?

Senator BROWN -Some would. They are naturally anxious to do their utmost to promote their own welfare, and recognize that a party which is free from bias and desires to improve the position of Australia in accordance with world happenings, is worthy of support. I have nothing to hide. I wish to be quite frank. Some industrialists who have had a fair deal from the Labour party have shown their appreciation by giving it a kick in the political pants. They have placed their trust in this Government, which, during the last twelve months, has effected reductions in over 1,000 items of the tariff. The following statement was made recently by Mr. Curtin, the Leader of the Opposition in the House of Representatives: -

(1)   Henceforward, manufacturers could not take the Labour party's support on tariff matters for granted. (2) Greater vigilance would he exercised by the party to ensure that manufacturers provided satisfactory conditions for their employees. (3) Protection would depend also upon the consumers being given a fair deal by the manufacturers. This did not mean that what might be called the new economic policy of the Labour party was a weakening of the Labour party's policy of protection, as the national policy. It really meant that it had been strengthened.

Mr. Curtinis the very able leader of a very able party, which some day will be in control of the government of this country.. There are some who say that the Government has not the power under the Constitution to implement - a muchabused word - the new protection policy. During his second-reading speech the Minister made a statement in regard to the powers conferred by section 15h of the Tariff Board Act. I draw his attention to the fact that the board has the power to call before it and deal with any manufacturers who take undue advantage of the protection afforded to them by the tariff. Section 15 of that act states, inter alia -

The Minister shall refer tothe board for inquiry and report -

(k)   Any complaint that a manufacturer is taking undue advantage of the protection afforded him by the tariff, and in particular in regard to his -

(i)   charging unnecessarily high prices for his goods; or

(ii)   acting in restraint of trade to the detriment of the public; or

(iii)   acting in a manner which results in unnecessarily high prices being charged to the consumer for his goods.

When the Minister was making his second-reading speech this morning, he quoted something which Mr. Scullin had said on this subject. I asked the Minister, by way of interjection, whether this section of the Tariff Board Act had ever been put into operation, but he ignored my interjection as he was quite entitled to do. My point is that if punitive action is taken against manufacturers in accordance with the provisions of the relevant section of the Tariff Board Act, such action might very well be regarded as a contravention of section 55 of the Constitution, upon which a decision was. given by the High Court in, I think, 1908, in the Harvester case. Section 55 contains the following: -

Laws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall he of no effect.

Laws imposing taxation, except laws imposing duties of customs or of excise, shall deal with one subject of taxation only; but laws imposing duties of customs shall deal with duties of customs only, and laws imposing duties of excise shall deal with duties of excise only.

If the High Court was right in 1908 in holding that the New Protection involved the bringing in of foreign matter, it would be equally right, I think, in condemning any government action under section 15 of the Tariff Board Act for the punishment of manufacturers who exploit the public.

The Labour party holds no special brief for manufacturers; we regard these matters from a national view-point, but 1 remind honorable senators that on several occasions the Tariff Board has made direct accusations against certain manufacturers to the effect that they have, under cover of the tariff, exploited the public. Only recently such a case was cited in this Parliament, and no doubt we shall hear more' of it. When such accusations are made, it is surely only just that the accused persons should be given an opportunity to defend themselves. As things stand now, the Tariff Board seems to be prosecutor, judge, jury and executioner all rolled into one.

I am not convinced that a.11 the facts are being placed before the Tariff Board in regard to English manufacturers who seek to obtain a footing in the Australian market. The Australian manufacturers arc continuously subjected to attacks from certain sections, and the impression is sought to be created that they are, in fact, an economic menace, operating contrary to the best interests of the community. Their competitors in Great Britain, however, are free from such attacks ; they are not brought before the Tariff Board and forced to make a full disclosure of their manufacturing costs, distribution charges, &c. Certain general information regarding British goods and manufacturers is submitted to the board, but we know very well that complete information is never forthcoming. For instance, it is well known that certain commodities suitable for ballasting ships coming to Australia receive the benefit of very favorable freight rates, but that fact is not placed before the board, although it gives to the British manufacturer an important advantage over his Australian competitors. The board calls for invoice prices, freight charges, &c.. in respect of imported goods, and from those figures arrives at its deductions, but the figures do not tell the whole story. Yet, in the terms of the Ottawa agreement, the protection afforded Australian manufacturers is based upon information of that kind, inadequate though it may be.

The Labour party is not opposed to the importation of commodities, but it is opposed to permitting the importation of such commodities as can be produced abundantly and cheaply in Australia. It must be borne in mind that there are hundreds of commodities not produced in this country, and which can with advantage be imported, but it is stupid and foolish to think that we are going to improve the general economic condition of Australia or of the world by entering into a battle for markets in respect of basic commodities. When certain basic commodities can be produced in Australia, the market here should be conserved for them, and there should be no question of admitting such commodities from abroad. Primary and secondary industries have been established in Australia at great cost, and we have had to fight to make it possible for them to succeed. There should be no question of outside competi- tion. We should do everything possible to conserve our primary and secondary industries and so to arrange markets for our export products that the imports,, which we must take in exchange, will raise rather than lower the standard of living. The policy of this and many other governments in the past has brought, about a relative reduction of the standard of living in Australia, whereas, the policy of the Labour party is to use international trade for the general improvement of the standard of living.

I have frequently been charged with-, labouring the subject of self-sufficiency. Senator Hardy enlarged upon this subject, and like a good many others condemned the Labour party because itbelieves in self-sufficiency and selfreliance as a means of world peace; lie"even went so far as to say that such apolicy is the cause of war - a mostridiculous statement. As a matter of fact, I think it can be proved conclusively that the old-fashioned form of international trade, in which there was a constant fight for markets for commodities-, that can be produced in abundance, has be?n one of the chief causes of war. Yet,, we heard the " Cromwell of theRiverina ", the gentleman who has seen the light, saying that if we can only foster international trade, if we- can only put more butter, more wheat.. and more- wool on the markets of the world, international problems will be solved. Any man who uses his brains must see that a policy of self-reliance and of selfsufficiency, of letting the world generally know frankly and freely that we stand on our own resources, and will not be dependent on reciprocity and bi-lateral agreements, will do more for the preservation of world peace than all the recent efforts in Europe of the Minister directing negotiations for trade treaties (Sir Henry Gullett) to sell an extra hundredweight of meat here, and an extra pound of butter there. The nations of the world will then respect Australia just as we respect European countries, the United States of America and Japan when they say that as they can produce certain commodities, they have no desire to import them. When we have reached that stage in our internal develop ment, we can approach other countries with a view to the exchange of surplus commodities. The world is rapid reaching the stage where the standard of living can be raised, and international trade can be placed upon a far better basis than that of a struggle to sell goods which can be produced in super abundance. War, in the main, is the direct result of the constant conflict which is going on between the various countries to sell commodities which each can produce in abundance. Only yesterday, we listened in this chamber to a discussion on wool. Honorable senators know the difficulties presented to the wheat industry because Canada and other countries besides Australia can produce wheat in such large quantities. We know also of the struggle which is constantly going on between Australia and Argentina because the latter country is flooding the market of Britain with its surplus products, and producing in abundance meat which comes into direct competition with Australian meat.

Senator Duncan-Hughes - There is no talk of war because of that.

Senator BROWN - But these things lead to international bitterness, and when war comes, some of the small nations will be on the side of the bigger ones which make the best proposition to them. Surely Senator Duncan-Hughes must be fully aware of that. There is talk of war in Europe at the present time.

Senator Duncan-Hughes - I am referring to Argentina.

Senator BROWN - That country will side with any country which offers it the best trading terms. I think it cannot be denied that the struggle for markets is, to a very large extent, the cause of war. Under our present system the purchasing power of the people does not rise in consonance with our productive power, and the need for one country to sell its commodities . to another which itself produces the same commodities in abundance leads to international antagonism and war.

Senator Duncan-Hughes - If the honorable senator said that the exclusion of others from the markets of the world was the cause of war, he would be closer to the truth.

Senator BROWN - We should be interested in these basic questions. This is no parish pump affair, but a matterof national policy. Unfortunately, many honorable senators are not interested in these big questions, but we on this side are vitally concerned with them. Some day this Parliament will be forced to take cognizance of them whether we like it or not. Lancelot Hogben, writing in the Australian Highway, says : -

The parties to the left of die-hard conservatism are united in a vague conviction that some sort of world state is a desirable goal. Liberal and Socialist politicians reiterate the dogma that economic nationalism means a general lowering of the standard of life. Since we are largely dependent on other countries, this means that in time of crisis imperialism can always reap the benefit of a situation in which sentimental internationalism offers us the alternatives of war and starvation. Both beliefs rest on a ubiquitous, tacit, and all the more dangerous because never explicit, creed that increased material resources placed at our disposal by advancing scientific knowledge make nations more interdependent. It is only necessary to state it in explicit terms to expose its utter falsity. Our mediaeval wool industry had to import incinerated charcoal from the forests of Eastern Europe as a source of potash. The sixteenth century gunpowder industry relied on the manure dumps of India for nitrates. The entire textile production of the world till the middle of last century depended on natural plant dyes. We can now produce all the alkali we wantby electrolysis of brine ... In short, the most significant advances in the application of science to social life during the past two centuries has helped us to find universal substitutes for the endowments which nature distributes in localised areas.

The increased application of science to industry has caused developments in Australia similar to those taking place in other parts of the world. We cannot shoot or imprison the scientists, nor can we prevent the dissemination of their ideas. Yet the modern troglodytes say, " Let us put back the clock-, and return to the old days of international trade." According to Senator Hardy, some magic result may be expected from shipping our primary products 10,000 miles or more overseas, and bringing them back to Australia in the form of manufactured goods ; but we have to deal with the facts as we find them. Australia produces large quantities of raw materials, and it has sufficient man-power and intelligence to use them to the best advantage. It is the height of folly to send raw materials overseas, seeing that by manufacturing them in Australia we could develop local industries, which would employ our people in producing the goods they need. We on the Opposition side will continue to denounce the utter absurdity of destroying our own industries merely because a certain section prefers to export our raw materials and import manufactured goods. It would be well for honorable senators to recognize the foolishness of the doctrines advocated by the conservative die-hards. In a pamphlet issued by the Victorian Chamber of Manufactures, the following passage occurs: -

Economic nationalism may be described as a policy with a domestic emphasis. It postulates that the employment of labour and the development of resources are of more importance to a country than the profits of foreign traders. Moreover, many people hold the view that the pursuance of a policy of economic nationalism will eventually make for peace between nations. In this they are supported by the redoubtable Mr. J. M. Keynes, who urges the view that it will " minimize rather than maximize entanglements between nations." For that matter, most modern economists readily agree that frectrade is not the harmless dove of peace that it is claimed by some to be. Actually, freetrade is but another name for maximum international competition and strife. As such it is wholly antipathetic to the maintenance of peace between nations.

Moreover, it must be recognized that the growth of the general idea of national selfreliance or economic nationalism is the inevitable corollary of modern technical, agricultural and industrial education, and of scientific research in general. This economic development was therefore inevitable in any case, even had there been no war blockades, submarines, food shortages, and food rationing experiences to hasten it. The lamenting of the inevitable is never a profitable occupation; such, however, occupies a considerable proportion- of the time spent in fiscal controversy. The explorer, Dampier, commenting two centuries ago on some of the natives he saw in the north-west of Australia, described them as " the most miserablest people in the world." To-

It is clear that science, as applied to industry, has made it essential for a country like Australia to adopt a policy of self-sufficiency. I like to quote from statements made from time to time by the general manager of the Bank of New South Wales. A circular issued by him recently contained some wise observations, among which was the following : -

If, in face of persistent economic nationalism, the typical policy of predepression Australia - namely, ' producing raw materials for export and borrowing from abroad for development purposes - has to be modified considerably, the problem which presents itself is how to make further readjustments of our economy to meet the situation. While demanding of private and public enterprise alike a continuance of that increase in efficiency which the depression has occasioned, we shall have to look at some public policies from a new view-point.

It will be no solution of our problem to urge more land settlement, to produce those things which the world refuses to buy. Eather it will be necessary to take thought to facilitate the transfer of some producers from a sphere of activity which has ceased to be profitable to one which offers greater hopes of success. A transfer of this kind on any large scale is a difficult matter to handle. Meantime, some of the resulting unemployment will have to be met by a continuance of public works.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - What is the date of that circular?

Senator BROWN - The 17th June, 1935. Some men on the conservative side fail to take due notice of their own leaders.

The Minister for Commerce (Dr. Earle Page) is now in the Old Country, trying to arrange a long-term policy with regard to Australia's exports, and I wish him good luck in this work. I trust that, with the assistance of the Premier of Queensland, Mr. Forgan Smith, he will be able to do something of great value to the Commonwealth; but the arrangements which he is endeavouring to make cannot be more than a temporary expedient. Sometimes I feel disposed to agree with much of what Dr. Earle Page says. He certainly speaks quite bluntly. Addressing a meeting of the Australian Country party at Grafton on the 18th April, 1934, he attacked Great Britain with regard to its treaty with Russia. He said -

At the same time as Britain is bringing this pressure to bear on the dominions, she signs a treaty with the Soviet in which, though it does not provide for the immediate equalization of direct exports of merchandise between the two countries, sets up a sliding scale that will approximately .balance each other's exports by easy stages, and in 1938 Russian exports to Great Britain shall be in the ratio of 11 to 10 in terms of British exports to Russia.

He proceeded -

It is necessary to do something through closer treaty between Britain and Australia, which gets down to every individual line of merchandise and produce, to make sure that where we can, without injury to our own people, we should admit British goods while Britain gives unrestricted entry to our goods.

Dr. EarlePage is evidently a realist to the extent that he would deal with individual items, and decide whether or not we should enter into trade agreements with regard to them. In my opinion, that policy should be applied to individual items which cannot be produced in Australia. The transitional stage through which we are passing should compel us to be frank with the Old Country and with foreign countries. We should adopt the definite stand that we are determined to preserve Australian industries, but that we are prepared to purchase any commodities which are not manufactured in Australia from Great Britain in preference to any other country. The Opposition maintains that that policy is right ; Australia should trade with its own kith and kin before buying from a foreigner. I urge honorable senators to be realists; instead of taking action which would be detrimental to the existence of Australian industries, we should negotiate in regard to individual lines of merchandise and produce, with a view to admitting only those goods which, as Dr. Earle Page has stated, cannot be manufactured in the Commonwealth. If honorable senators decide upon a course which will destroy an Australian industry, we shall warn the Australian people of what is being done; but if the item concerned is not produced in Australia, every member of the community will welcome its importation from Great Britain, and in exchange for it we shall be pleased to sell our primary products. That attitude does not warrant the stupid accusation by Senator Hardy that members of the Labour party are isolationists. We would be utterly devoid of common sense if we closed outdoors against all importations regardless of their nature or derivation. By all means, let us rely upon international trade to improve our standard of living. The Labour party advocates the preservation of Australian industries, and we shall not tolerate interference from any oversea manufacturer, whether British or foreign. It also considers that Parliament should be supreme; that it should not delegate its responsibilities to the Tariff Board or permit itself to be bound by any agreement whether signed in Ottawa or Timbuctoo. In my opinion, the view that the improvement of trade in recent months justifies the policy of the Government, the signing of the Ottawa agreement, and the recommendations of the Tariff Board, is utterly fallacious. Practically every country reports an improvement of trade; the majority of them have either actually or almost balanced their budgets. Great Britain has recorded substantial improvements, and other countries report that the depression is passing. But latterly a pessimistic note has been struck, many of the leaders in economics stating that the tempo of improvement has been too rapid and that a tightening up of the money market must take place. Honorable senators will realize what that means. The Lyons Government was criticized in the House of Representatives because it did not know what the Commonwealth Bank was doing in regard to the issue of treasury-bills, and because it professed not to know that the interest rate was being increased in order to reduce the purchasing power of the community, and so lessen the volume of imports and safeguard, the London funds. The Prime Minister (Mr. Lyons) contended that there was nothing wrong with the trade balance, but seven days previously, he had informed the National Club in Sydney that he was worried about the trade balance and the depletion of London funds.

In the near future Australia will experience more and more difficulty in finding markets in Europe. Although an improvement of trade has recently -taken place, Britain cannot be flooded indefinitely with primary products. That wonderful old country has done marvellously well to absorb the huge quantity of commodities that have been unloaded upon it, but the saturation point must some time be reached. The Minister directing negotiations for trade treaties (Sir Henry Gullett) recently made a tour of Europe in an endeavour to find markets for Australian meat, and make bi-lateral trade agreements, which have been criticized by Senator Hardy. In an interview upon his return, Sir Henry Gullett said -

Apart from wool, the prospects of the sale of Australian produce in Europe are limited, but a few openings will doubtless be created when treaties are made. We must first obtain the right of admission by quota or under a reasonable tariff. Then the entry of imports will be conditional on the Government's allocation of sufficient credits.

A few weeks ago in this chamber I asked how many trade treaties had been arranged up to date; the answer was that no trade treaties had so far been signed. Apparently we are still living in hopes, and, like Mr. Micawber, are waiting for something to turn up. Sir Henry continued -

Nothing could bc more complex or more hopeless than European trade. Nationalism has reduced every government to distraction. We encountered teams of treaty-makers of every nationality in every capital, negotiating trade agreements, mostly for a year only. Short-term treaties are due to the constantly hanging conditions, combined with infinite entanglements. Exchange makes the plight of trade tragic. Self-sufficiency madness is deep-rooted in post-war suspicions, fortified by the political power of the peasants, ll would be foolish to anticipate an early return to saner trading.

In a speech recently, I informed honorable senators that the honorable member for Macquarie (Mr. John Lawson) and the honorable member for Eden-Monaro (Mr. Perkins) had expressed the same sentiments. At the Sydney Royal Show recently I had the pleasure of a long conversation with Mr. McCormack, a former. Premier of Queensland, who lately spent a considerable time in Russia and Germany, while making an extended tour of Europe. He referred to the wonderful developmental work that is taking place on the continent, and agreed with the honorable member for Macquarie, ex-Senator Elliott and others, that European states will never return to the old conditions of dependence upon international trade. I stress this matter because I believe that we are living in a fool's paradise if we imagine that we shall solve our problems by putting back the economic clock. Often I cannot refrain from smiling when honorable senators attack the Labour party's policy of self-sufficiency. Australians themselves are involved in the development of self-sufficiency, and neither the United Australia party, the Labour party, the Douglas Credit party, the Communists or any other party can escape it. Recently the United Australia Review, which. I believe, is one of the official publications of the United Australia party, came into my possession. I shall quote a passage in it to support my contention that the United Australia party and the Country party, apart from their sneers and foolish antagonism to the development of a self-reliant Australia, are proud that the Commonwealth h .becoming more independent of the other countries of the world. It states -

Question.- What Australian basic industry has shown extraordinary development during the past year?

Answer!-- The iron and steel industry, which, in all producing countries, is regarded as a reliable barometer in general industrial conditions. The Australian production in 1935 was 668,000 tons over the previous year. This is 79 per cent, of the entire Australian consumption. The number of employees increased from 13,243 in November, 1934. to 14,710 in November, 1935. Large extensions have been arranged for. A plant is to be added to manufacture the Australian requirements in tin-plates ( treated iron), last year's importations of which were 58,82(5 tons. Another plant capable of producing the entire requirements in pipes and tubes (of which the yearly importation has averaged 60,000 tons), came into production dunnar the year. An additional mill to cope with the increasing demand for sheets was laid down. Sheets for motor bodies will be included in the production. It is calculated that in two years' time 90 per cent, of the tin-plates. pipes, tubes, and sheets used in Australia will be locally produced. Australia will then be in a position. in case of emergency and for all practical purposes, to be practically independent of the world as far as iron and steel products are concerned.

That is only one illustration of what is actually happening in Australia, and we are pleased to know that such progress is being made. Some time ago I mentioned the possibilities associated with, the proper development of the fishing industry, and I suppose that some day the Government will purchase a vessel to conduct research work in Australian waters, when it will be ascertained that we can dispense with the necessity of importing large quantities of fish, as is done at present. There are indications that before long we may be practically independent of supplies from other parts of the world. "We should import those commodities which we know we are not yet proficient in manufacturing, until such time as they can be economically made in this country. Senator Hardy accused the members of the Labour party of wishing to isolate Australia. I am surprised that the honorable senator should be guilty of such asinine stupidity.

Suggest corrections