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Wednesday, 29 April 1936

Senator E B JOHNSTON - Reaper binders are still extensively used. One is required on every wheat farm in order to secure the necessary hay for chaff. But the same relative figures would apply ^0 any other machine. To appreciate the full significance of the figures which I have quoted, the fact should he remembered that the Tariff Board made an exhaustive inquiry into the costs of agricultural machinery; it stated, in effect, that a general summing up of the comparisons between the costs of manufacture in Australia and abroad is that the home manufacturers are now in a position as favorable, if not more favorable, than those in the United States of America and Canada. But an Australian farmer is obliged to produce twice as much wheat in order to purchase a machine in Australia as an American or Canadian farmer has to produce to buy a similar implement. Yet the Australian producer has to compete in the open markets of the world with the producers of both of those countries. The same experience is to be found in connexion with every type of agricultural implement. No one would be more desirous than Senator Sampson to see Australian producers put in a position where they could purchase agricultural machinery at a price approximating the rates paid by their competitors in other countries. We can materially assist the Australian producer in that direction by accepting the report of the Tariff Board on this important matter.

The report of the Tariff Board dealt extensively with prices for agricultural machinery in New Zealand and Argentina; the board heard a good deal of evidence in this connexion. Even if the prices for agricultural implements in New Zealand were higher than those in Australia, these costs have not the same significance in the Dominion as in the Commonwealth. The former does not export wheat; consequently it does not have to meet the world's competition in the sale of this commodity. Both New Zealand and South Africa import flour. In regard to these matters generally, it is difficult to obtain accurate price comparisons between the implements that will do the work. Any person who proposes to buy a harvester, or other agricultural machine, will endorse that. Numerous illustrations could be found of one Australian manufacturer charging higher prices for a certain implement than are charged by competing firms in the Commonwealth; yet the more expensive implement continues to be purchased by the farmer. flitting suspended from 6.15 to 8 p.m.

Senator E B JOHNSTON - I have said that it is difficult to obtain true price comparisons in Australia for implements which do the same work. It is much more difficult to get price comparisons with other countries where little reliable information is available as to local factors which affect costs of manufacture and distribution. In any case, I cannot . in what way price comparisons between different countries, which were made by the representatives of Australian machinery manufacturers in evidence before the Tariff Board, are relevant. It has been clearly shown in evidence, and the Tariff Board has reported to this effect, that Australian costs, with regard to agricultural machinery, are generally lower than those of the principal competing countries. This being so, what reason can there be for the Government, which attaches so much weight to some reports of the Tariff Board, refusing to give effect to its recommendations with reference to the general tariff on agricultural machinery? If, however, the prices of some kinds of agricultural machinery are higher in New Zealand and Argentina than in Australia, as alleged in evidence before the Tariff Board by representatives of the manufacturers, why do not those manufacturers take advantage of the position, which they say exists, by exporting their machinery to those countries?

Apparently one of the reasons why the Government completely ignored the Tariff Board's report in respect of the general tariff on agricultural machinery was that American sales to Australia are much greater in volume and value than are the direct sales made by Australia to America. It is, however, impossible to balance trade between any two countries unless they are trading only with one another. Our present adverse trade balance with the United States of America is possible because we sell to Japan much more than we purchase from that country, and we have a favorable trade balance with other countries. It follows, therefore, that if we reduce our purchases from the United States of America, we must increase them from some other country. The real issue is whether the Government is prepared to reduce the duties on agricultural machinery, the bulk of which could be imported from the United States of America thus removing the barriers which prevent a reduction of the unnecessarily high price of agricultural implements to the Australian primary producers. If this were done, there would be opportunity for outside firms to compete with

Australian manufacturers who would still enjoy a protection of over 60 per cent, on a duty-free basis. Any efficiently conducted Australian industry with production costs below those of its competitors should be able satisfactorily to continue and even extend its operations.

The effect of the high tariff on agricultural machinery is especially important to the wheat-farmers of Western Australia. Owing to the operation of the Navigation Act and the distance from the large manufacturing centres in the eastern States, the farmers there have to pay from 10 per cent, to 12£ per cent, more for their agricultural machinery than is charged to farmers in the eastern States.

Senator Brown - How long will agricultural machinery last?

Senator E B JOHNSTON - Much depends upon the nature of the country worked. If agricultural machinery is used in some of the newly settled mallee districts, its life is short in comparison with its life when used on the well-tilled lands of older settled agricultural area3. Care in regard to storage when but of work is also an important factor in the life of agricultural machinery. I claim that an unanswerable case has been made out for the 'acceptance, by the Government, of the whole of the ' Tariff Board's recommendation for a reduction of the existing high duties on agricultural machinery in the general tariff. I also remind the Senate that the board which made this recommendation is the same board that recommended a reduction of the duty on cement which this Government is so anxious to see approved by the Senate. Cement i3, however, a comparatively small; item in the economy of the man on the land who, in measures of wheat, is compelled to pay more than twice as much for his agricultural machinery as his American competitors in the markets of the world have to pay.

The wheat industry is our greatest source of employment in Australia. The wheat-grower has to sell most of his product in the open market, yet this Government refuses to give effect to the recommendation of the Tariff Board for a substantial reduction of the general tariff on agricultural machinery which is so essential to every wheat farmer. It is no wonder that, in Western Australia alone, we have 2,500 abandoned wheat farms - a result of low world prices for primary products and high Federal tariff and taxes.

I hope that the Senate will make a stand on this matter, and give to the wheat-farmers of Australia the benefit of a reduction of the duties on agricultural' machinery as recommended by the same Tariff Board, whose proposals in regard to cement are viewed so favorably by the Government. I hope also that the Government will take similar action to inclement the Tariff Board's report on agricultural machinery as it is taking in regard to the comparatively minor item of cement.

I turn now to the duty in the general tariff on motor panels and bodies. Here again the recommendations of the Tariff Board have not been given effect, with most unfortunate results to distributors of British motor cars in Australia. These interests have submitted to the Minister for Trade and Customs (Mr. White) definite and reliable information as to the serious position in which they are placed through the inability of Australian motor body manufacturers to supply motor panels at reasonably competitive prices. I have had placed in my hands a sheaf of letters, from distributors of British motor cars in all States, complaining of the treatment meted out to them by Australian body builders some of whom _ are months in arrears with deliveries.. I am prepared to place all this information in the hands of the Minister in the hope that it will induce him to take the necessary action to give relief. The delay in the execution of orders is having a devastating effect upon sales of British cars in Australia. They have made out an unanswerable case for relief in the form of a temporary, if not a permanent abolition of the very heavy duty on British car bodies. The Government has from time to time given relief to the users of galvanized iron when they have been unable to obtain supplies in Australia, and it is contended that similar action should be taken to enable the distributors of Morris and other British cars to obtain bodies for them. The adverse trade balance between Australia and the

United States of America is greater than it should he, because distributors of British cars are unable to obtain an adequate supply of Australian .bodies to meet the demand. I therefore commend to the Government a suggestion, that in order to rectify the position, motor bodies from Great Britain should be imported duty free in sufficient numbers to meet current demands, at least until the Australian builders are in a position to fulfil their orders.

Senator Guthrie - Is the inability of British distributors to get Australian bodies due to any favoritism by Australian body builders for distributors of other cars?

Senator E B JOHNSTON - Some of the distributors complain that, Australian body builders give preference to distributors of American cars. We have beard a good deal about the spirit of the Ottawa agreement. The position of distributors of British cars in Australia is ample evidence of the contravention of the spirit of that agreement, and it is the duty of the Government to take the necessary action to give redress. This should be done by the removal of all duties on British motor bodies and panels. I am glad that the Government has given a small measure of relief, through the tariff, to the people of Australia, and I hope that the Senate will further improve the position by requesting the House of Representatives to further reduce the duties, particularly on those commodities which affect our pastoral, agricultural and mining industries.

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