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Wednesday, 29 April 1936

Senator McLEAY -We are not bound to accept the recommendations of the Tariff Board; they should be taken as a guide. The Leader of the Senate (Senator Pearce) dealt effectively with Senator Leckie when he asked that honorable senator to name any efficient industry that had been adversely affected by a lowering of tariffs, and received no reply. I think that Senator Leckie was rather unfair to members of the Tariff Board, and I endorse what Senator DuncanHughes said regarding the work of that body which is rendering useful service to Australia. I am convinced that the Tariff Board desires to do the right thing, and to encourage efficient secondary industries in this country. In commenting on the method adopted by the board in dealing with complicated and difficult problems, Professor Copland said in 19341-

By the application of these tests and of its own searching examination of witnesses, the Australian tariff is being steadily overhauled by the board. Naturally, the board develops a technique of its own and its members become expert in handling the special problems before it. In these circumstances it is desirable that Governments should, as far as possible, put into operation the recommendations it receives from its own expert body, and that political parties should seek to establish a tradition that the tariff is not a matter that can be suitably handled by political controversy.

That is a very strong statement. I do not propose to go into details as to the merits of protection and the interests of the primary industries. The principal question raised by this bill iswhether we are to encourage industries that make excessive profits or have as their chief concern the making of profits-, regardless of the interests of the people? I was particularly interested to hear the Leader of the Opposition (Senator Collings) and the Leader of the Country party (Senator

Hardy) say that their parties favoured adequate protection. I hope that these duties will be considered from that point of view. Professors Brigden, Copland and Giblin further stated in their report -

Excessive protection has a demoralizing effect upon self-reliant efficiency throughout all forms of production.

That is very true. I hope that honorable senators will concentrate on this issue, and come to a decision as to whether or not some industries are receiving too much protection or are abusing the shelter which they enjoy. On this point, it is of interest to note that the chairman of an Australian company engaged in the manufacture of hosiery- one of the biggest industries in Australia - when speaking to his shareholders some time ago, dealt with this matter, and pointed out that his company was unable to carry on at a profit because its plant was too big for the trade that was offering. He said -

Strange to say, it was too much protection that killed us.

Under the hot-house stimulus of the tariff, many hosiery factories came into existence, with the result that their productive capacity was much in excess of the demand. Consequently, this big organization suffered heavy losses. In discussing the tariff, we should keep developments of this nature clearly before us. From facts presented in this debate, it is clear that, if we view the tariff problem in true perspective, we must realize that secondary industry and primary industry are interdependent. The prosperity of one is essential to the prosperity of the other. Both sections are important, and Parliament should, like the Tariff Board, endeavour to hold the scale of justice evenly between them, and take care not to injure either section, or to help one at the expense of the other.

As a protectionist, I submit that Australia to-day is confronted with four important problems, which we can do much to overcome by encouraging efficient, industries. The first is the need for increasing our population. This can largely be accomplished by establishing new efficient industries and : by maintaining industries which have been established on a sound basis. I notics with pleasure that this Government is considering the manufacture of aeroplanes in Australia. It would be a groat relief to me to know that we could make aeroplanes in Australia instead of having to send orders for planes to America which is one of our smallest customers. All nations to-day criticize the extreme policy of economic nationalism as practised by others. No country is more forward in such criticism than is America, but it continues to follow such a policy. I sincerely trust that this Government will act courageously in the negotiations which it is now conducting with the Government of the United States of America concerning the trade balance.

The second of the four problems to which I have referred is the improvement of the home market for our primary producers.It is clear from the lessons we have learned since the Great War, particularly in respect of wheat, that whether or not we adopted a protectionist policy other countries which impose a high tariff against Australian primary products to-day, would, in any event, have imposed such restrictions.

The third problem is that of unemployment. From statistics already cited in this debate, we know that this evil can be greatly minimized. Already a considerable improvement is evident. The fourth problem is that of the trade balance. This can be solved if we continue to encourage the establishment of efficient industries in this country. Senator Johnston referred to the manufacture of motor-car bodies. Most honorable senators, I think, received the letter to which he referred. The chairman of directors of Holden's Ltd., which is the largest motor-body manufacturing firm in Australia, replying to that letter told me that his company could make bodies for British cars, and would be only too pleased to quote for such orders. He added that on the occasion referred to, his company looked forward to securing such orders, but was not given an opportunity to quote. Further, he assured me that it could and would give prompt delivery, although the firm which secured the orders was unable to do so.

In dealing with tariff schedules, we must jealously guard the rights of the consumer and ensure that manufacturers donot abuse the protection they enjoy. To any industry which abuses its protection by slackness of deliveries, or by making excessive profits, the Government should give a warning similar to that which it issued to the manufacturers of cement. If the motor-body manufacturing companies in this country were not able to maintain deliveries, I would be among the first to bring that fact under the notice of the Government, but at this stage, on the advice I have received, I say confidently that the present companies can supply all Australian requirements.

Much controversy has taken place as to the effect of the tariff on the economic life of this country. On this point I shall again quote from the remarks of Professor Copeland. We do not always agree with what the economists say, but when, as experts, they utter sound and independent opinions on such a complex problem as the tariff, we must give their views due weight. Professor Copland said -

In face of the growth of economic nationalism throughout the world and of industrial and agricultural development in . Australia I am unable to resist the view that our tariff policy has, on the whole, made a substantial contribution to our economic welfare.

I support that contention. Whether we like it or not we must face the economic position in the world to-day. We can talk about this intense economic nationalism as much as we like, but we should realize that we ourselves are pursuing just such a policy. While America and other countries continue their selfish nationalism, and persist in their refusals to negotiate with us on trade matters we have no alternative but to take steps to protect our own interests. We should concentrate on our market in the Mother Country, which to-day takes more than half of our exports of primary products.

The party represented by the Opposition was responsible for raising the tariff to an extreme height, and in doing so perpetrated a grave injustice against a primary industry in South Australia. Although the Leader of the Opposition was not a member of the chamber at that time, I dare say, judging from his remarks in this debate, that Labour's fiscal' policy had his full support. Instead of accomplishing the end which itssupportershoped it would, the Scullin tariff had just the opposite effect ; as the duties were raised unemployment increased.To-day a very great improve- ment has been effected in the economic lifeof this country through a review of those duties. I heard it stated this afternoonthat the revival which has taken placein commerce and industry has beeri dueto the policy of this Government. I congratulate it on that fact. Bankers, accountants and other independent economic authorities substantiate theclaimthatour economic recovery has been due mainly to Australia's number one asset, the wool industry.When we read in the press that the wool cheque last season . was£10,000,000 over that received for the preceding year, we must admit that this industry helped considerably torestore confidence and prosperity in this country. Being interested in secondary industry I point out that,as improvements take place in our primary industries, and as the financial position of the man on the land becomes stronger, additional orders amounting in value to hundreds of thousands of pounds will begiven to our manufacturers, and the whole community will share in the benefits. I trust that, in considering this schedule we shall view our economic problems in their true perspective. As to the points raised in respect of the Ottawa agreement,' let us remember that during the year 1935 our exports of lamb, mutton, beef and butter, which are the subjectof negotiations in London to-day - and perhaps at this very moment - were worth £15,000,000. Judging from the improvement which is now taking place in prices for these products, we can confidently say that during the year 1936 our income from sales of these products will be approximately £20,000,000. If our representatives in London are able to negotiate a long term agreement with Great Britain in respect of meat supplies arid so give security to our producers for five or ten years, additional lands can be opened up for the production of lamb, mutton and pig meat . If assured of a firm, market in Great Britain the value of our exports in this direction should increase from £20,000,000 to £30,000,000, and no one will receive greater benefit than will those engaged in secondary production. If our efforts in that respect are successful, and if, while using our own judgment we give due weight to the recommendations of the Tariff Board, we should be able to look forward to a period of greater prosperity and happiness.

Debate (on motion by Senator Guthrie) adjourned.

Senate adjourned at 10.1 p.m.

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