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Thursday, 30 April 1936

Senator GUTHRIE (VICTORIA) - Unfortunately, Australia does not export manufactured goods.

Senator Leckie - Yes, it does.

Senator GUTHRIE - The manufactured goods which are exported represent only 3 per cent, of Australia's total exports, and of that proportion only about one-third is sent to Great Britain, the balance being disposed of in countries bordering the Pacific. The home market is very valuable indeed, but it cannot absorb all our wool and wheat. Australia must export 90 per cent, of its wool and 75 per cent, of its wheat. Honorable senators may ask why Australia does not manufacture all its wool here. I point out that even if every person in Australia were compelled to wear woollen goods manufactured in Australia of Australian wool, it would still be necessary for this country to export 85 per cent, of its wool production. My tariff policy has never varied. I have always been in favour of effective protection for all economically sound and reasonably efficient industries.

Senator Brown - That is a broad generalization.

Senator GUTHRIE - I have always opposed, and always shall oppose, embargoes, combines, and profiteering. I have no sympathy with those who, under the protection of a high tariff, take advantage of the consumer by charging for their goods more than they ought to charge.

Australia has many splendid secondary industries which are economically sound and efficiently conducted. For instance, it has about 50 woollen mills equipped with up-to-date machinery and employing thousands of Australian workers. Although those mills are adequately protected - .1 do not think that they are overprotected - they have never taken advantage of that protection to make excessive profits. It is difficult to say "what protection would be necessary against the cheap labour and long hours worked in the textile factories of Japan. Australian woollen mills are turning out every variety of woollen goods, from knitted underwear to heavy cloths for overcoats. I have seen a good many of their balancesheets, but I have not yet seen one which revealed that the shareholders received excessive profits. I have known of dividends at the rate of 10 per cent., 7 per cent., or 6 per cent., but, in my opinion, those rates are not excessive for a manufacturing concern. The competition between the several knitting and woollen mills in this country is so great that the wholesaler is able to buy all classes of woollen goods at prices which are extraordinarily cheap considering the relative cost of raw wool. The great iron and steel industry also is efficiently managed. I am sure that no honorable senator desires that this key industry, or the Australian textile industry, should be placed in jeopardy. Other efficiently-conducted industries are those which produce wine, dried and preserved fruits, and biscuits. Australia has a considerable export trade in these commodities. I do not know how dried and preserved fruits are classified, but, in my opinion, they are secondary industries. Moreover, most of the locomotives and rolling-stock in use on Australian railways are made locally, and give entire satisfaction. Australia also produces large quantities of leather goods, and makes most of its own furniture, motor-car bodies, and tyres. These secondary industries are worthy of adequate protection. They should at least receive sufficient protection to ensure to them the home market.

I congratulate the Government on its policy in regard to oil. as enunciated this afternoon by the Leader of the Senate (Senator Pearce). I am glad that a sum of money is to be made available for the encouragement of the search for flow oil, but I regret that the Government has not also decided to develop more rapidly this country's shale oil deposits and the production of oil from coal. Australia is not immune from attack; and should an enemy approach our coast, the British Navy may not be at hand. We should help ourselves by building up our own means of defence. Without an adequate air force, and mechanized transport, this country would be unable to defend itself from attack. But what chance would it have to defend itself, even with the most up-to-date fleet of aeroplanes and moto]lorries, if it were without oil? How would Australia obtain oil were the British Navy not in control of the Pacific? I urge the Government to develop this country's shale oil deposits and to store in Australia huge quantities of oil for defence purposes. Australia should also manufacture its own aeroplanes. I realize that there are difficulties in the way, but honorable senators will agree that this island continent, with a coastline of 12,000 miles and a population of less than 7,000,000, needs, as its first line of defence, a sufficient number of fighting aeroplanes, first to locate an attacking force, and then to prevent transports from landing troops on Australian soil. Some honorable senators may contend that aeroplanes cannot be constructed in Australia. I understand that orders lodged in Great Britain by the Defence Department for bombing machines which are urgently required, cannot be delivered within the specified time owing to the disturbed European situation. British factories are working day and night making aeroplanes to supply the pressing needs of the British Government. If Britain is not able to supply the Australian requirements, the Government should make every possible effort to have the machines constructed within the Commonwealth. If this cannot be done, then, until we can construct them, or until we can secure our requirements from Britain, why should we not buy from a customer country like Germany? 'I propose now to deal briefly with trade treaties-. The 'Commonwealth Government, in addition to - implementing the Ottawa agreement; which has been of enormous advantage to Australia, has negotiated satisfactory trade treaties with Belgium and New Zealand. The treaty with Belgium was long overdue; honorable senators will remember that the Commonwealth Government was so foolish as to put an embargo on glass from Belgium, which previously had purchased considerable quantities of Australian wool, meat, and barley. I favour the extension of reciprocal trade with our sister dominion, New Zealand ; there remains some lines which have not been satisfactorily adjusted. The more the two dominions co-operate and trade with one another, the better it will be for them and the British Empire.

Japan has been a good friend to, and customer of, Australia; but the negotiation of an agreement between the two countries must of necessity be very difficult, especially in regard to the entry of portion of the huge Japanese output of rayon and competitive woollen textiles; these materials are produced under most efficient working conditions, but with hours of labour and scales of wages which would never bo tolerated in this country. For those reasons it is most difficult to negotiate a satisfactory trade agreement with Japan; but whatever we do, we must bear in mind that Japan is our second best customer for wool. This year alone it bought 700,000 bales, and is expected' in the near future to increase that purchase "to 1,000,000 bales. Japan also buys large quantities of Australian wheat. In. those circumstances I admit that it is not easy for any Minister to negotiate a trade treaty with that country. Some years ago Germany was Australia's second best customer for wool; to-day, to all intents and purposes, it is a dead market. The reason is to be found in the fact that it cannot establish credits in Australia, because we are not buying German goods. Every year Australia has an adverse trade balance of £8,000,000 to £10,000,000 with the United States of America, and unless a satisfactory trade agreement can be negotiated with that country, some of the present trade should be swung over to customer countries. The

United States of Ameria is a great democracy of English-speaking people with whom we should be on the most friendly terms ; I would regret any action by Australia which might jeopardize that friendship, and I suggest that we must strain every nerve to negotiate a satisfactory trade agreement with it. If the United States of America is unwilling to negotiate and we are unable to bridge the huge gap in our trading with Germany and Japan, I suggest that some of the trade which now we give to the United States of America should be given to the countries which buy from Australia. I have always adhered rigidly to the policy of first preference to Australia in all things; secondly, preference to Great Britain ; and, thirdly, preference to countries which buy from us.

Senator McLeay - Could the honorable senator persuade the Government to exchange Australian wool for German aeroplanes ?

Senator GUTHRIE - I see no objection to that proposal. German motor cars and aeroplanes are soundly constructed. As Australia stands in urgent need of bombing machines for purposes of defence, I consider that it would not be detrimental to British or Empire interests if the Commonwealth arranged an exchange on the barter system, as South Africa did, with Germany and with Japan in respect of commodities which Great Britain cannot supply and which cannot be made in Australia.

I urge upon the Government the necessity for legislation to ensure that the component parts of various goods are truthfully described. An Australian manufacturer is compelled to set out the proportions of wool, cotton and other materials which might be included in a garment; the law applying to foodstuffs is also very strict; but evidently these precautions are not taken with regard to imported materials. I found that some garments purchased by a friend from a leading Melbourne emporium were not made of wool, but of the German material " woolstra ". Yet no label was attached to them to indicate that fact, and the average purchaser would not be able to discern the difference. I admit that the country of origin was set out, as demanded by the law, but there was nothing to show the composition of those garments. In ray opinion the Government might well legislate to ensure that a truthful description of the component parts of materials, particularly clothing and commodities, is shown.

I was elected to the Senate to support this Government and advocate my policy of adequate protection for economically sound and efficient industries. The Tariff Board is composed of Australian protectionists, who are appointed to hear and sift evidence for the imposition of duties; they supply their reports to the Parliament, and I consider that this body must be better informed about the details of various industries than any honorable member can possibly hope to be. Therefore, honorable senators should surely be guided by the reports of those experts in regard to the amount of duty, if any, which may be necessary under the present, exchange conditions. The exchange not only gives a natural protection to manufacturers, of 25 per cent., but also is beneficial to the primary producers. I am determined to support the Government, whom I was elected to sUpport and, naturally, in regard to any details as to the amount of duty that should be imposed on various items I bow to the superior knowledge of the expert and unbiased board. I emphasize that I believe in the adequate protection of secondary industries within the Commonwealth, the development of which I shall continue to support.

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