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Thursday, 30 April 1936

Senator GIBSON (Victoria) .- Senator Sampsonsaid that he did not want to see the cement industry stripped naked. I remind him that many industries are more healthy in the nude than when clothed in tariff garments. In its report for 1935, the Tariff Board, after ref erring to the number of items the duties on which had been reduced, stated -

The foregoing review shows clearly how important have been the reductions of duties on goods entitled, to admission under the British preferential tariff. In a number of cases the rates have been reduced by half and generally the new level of ad val. duties ranges from 10 per cent, to 25 per cent. Moreover, as has been shown, a great deal of important plant used in Australian secondary industries, which was formerly dutiable, is now admitted free of duty.

It is gratifying to be able to record that this realignment of the tariff levels has been secured with but slight disturbance of local industries. Generally, the effect has been beneficial, although individual manufacturers have been forced to adjust to the new level. When important tariff reductions are made, it is inevitable that some interests should be forced to curtail the range of their operations and that others should be compelled to reduce prices in order to meet the lower price level of imported goods, The interests of the individual and of the community are not always in common and the board is aware that frequently the adoption of its recommendations may restrict the activities of individual manufacturers to the advantage of the community as a. whole.

Whenever reference is made to a reduction of duties, we hear a woeful tale of disruption, unemployment, empty factories and ruined shareholders. But can any honorable senator give an instance of a reduction of duties having had those dire results? As the Tariff Board, has said, industries have adjusted themselves to the altered conditions. In tariff matters the Scullin Government had only one eye; it saw only the Australian manufacturer, and ignored Australia's great primary industries. In this discussion no one seems to have considered the interests of the consumers.

Senator Sampson - Are not the manufacturers and their employees also consumers ?

Senator GIBSON - The Scullin Government placed embargoes on the importation of a number of goods which previously entered this country.

Senator Collings - The honorable senator knows that that was necessary in order to save Australia from bankruptcy.

Senator GIBSON - The Tariff Board, which was appointed by a protectionist government to carry out a protectionist policy, views the matters referred to it from the standpoint of a protectionist. The Scullin Government referred many items to the Tariff Board for consideration, but it did not give much heed to the recommendations of that expert body. As a matter of fact, in some instances in which manufacturers asked for a duty of 40 per cent., that government said : " Forty per cent, is no good to you ; you want 50 per cent." It frequently gave more protection than was sought. The duties imposed by the Scullin Government were so high that they led to inefficiency in industry and unemployment. Senator Leckie has told us that the manufacturers of this country do not stand for high duties. It appears to be a matter of degree. Every honorable senator who has spoken in this debate has styled himself a protectionist, but the protectionists have not seen eye to eye; some want 10 per cent, protection, others 50 per cent., whilst the Opposition would have 100 per cent., or more. I ask honorable senators to remember that practically all the manufactures of this country were established under that lower tariff of 1928. Profits were made and reserves built up under it, without any benefit to Australian manufacturers from exchange or primage. The opportunities for profit increased when the duties were raised. Senator Guthrie and others have urged that the balance of our requirements should be manufactured in Australia. They ask why British manufacturers do not come here and establish factories, thereby making it unnecessary to import goods. It may not be generally known that already Australia manufactures four-fifths of its requirements. If factories to supply the remaining one-fifth were established, the population of this country would not be materially increased. Our only hope is in the expansion of our primary industries side by side with the growth of our secondary industries. That leads me to consider the Ottawa agreement. Unfortunately, Senator Leckie stated that the benefits of the agreement were greatly exaggerated. I am afraid that, since he left the country and went to the city, he has got out of touch with the sentiments of the primary producers. The Ottawa agreement has been of vast importance to them; it gave them a market at a time when no market could possibly be available to them otherwise.

Senator Leckie - Great Britain had always purchased those commodities, even before the agreement was made.

Senator GIBSON - That may be true ; but to-day the position has altered, and quotas have been introduced for beef and mutton. Already we are supplying the full quota of beef. If our production of this commodity increases, we shall not be able to export it, and we certainly shall not be able to eat it.

Senator Arkins - We can still export lambs.

Senator GIBSON - I remind the honorable senator- that an export quota exists even for lambs; this year it is lower than hitherto, but we are not yet supplying the full quota. It is quite possible that ultimately we shall be wanting to export 10,000,000 carcasses of lamb as compared with only 4,000,000 carcasses to-day; and Britain will not be able to take that number unless it excludes all Argentina lamb. Will Great Britain be prepared to do that? That will depend on the spirit of the Ottawa agreement, to which Senator Sampson took exception.

Senator J B Hayes - Can Great Britain afford to exclude all Argentina meat?

Senator GIBSON - That is the point. If Argentina is prevented from selling its produce on the British market, it will be unable to pay its interest on the money borrowed from British investors. In this respect it occupies much the same position as Australia. We are fast approaching the time when a quota will be imposed on the importation of lamb into Great Britain, and that will put a limit to the expansion of the lamb-export industry. Australia sells to Great Britain wheat, meat, and wool. The Mother Country is in a position to manufacture the wool and perhaps develop markets overseas for the finished article; but it can take no meat in excess of its domestic requirements. I remind honorable senators that Great Britain is also building up its rural population, and is giving its farmers the support to which they are entitled. Apart from Britain, no other country buys Australian lamb. In those circumstances, Australia is bound to carry out the spirit of the Ottawa agreement. Senator Sampson stated that the agreement was merely a matter of commercial bargaining. I disagree with that opinion. Australia, in return for concessions for its primary products on the British markets, agreed to give British manufacturers a reasonable opportunity of competing with industries in the Commonwealth. That could be done only by a reduction of duties. The Ottawa agreement incorporated a provision that the tariff should be reviewed by the Tariff Board. When the review had been completed, was the board's recommendation not to be accepted? "Of course it was. In return for the concessions on the British market, a reduction of the tariff was- the only tangible concession that the Commonwealth could extend to Great Britain. I regret that Australia has not carried out that agreement in full. I desire greater opportunities for the. placing of Australian produce on the British market. There can be no expansion of exports without an expanded market, and there can be no expanded market unless Great Britain is prepared to exclude all importations from Denmark and Argentina. I have no doubt that some honorable senators have perused the agreement, which Great Britain has made ' with Denmark and Argentina. They contain provisions, which are laid down as definitely as this tariff schedule in regard to what each of the contracting parties shall do. The Anglo-Argentina agreement declares that, in return for purchasing so many million tons of articles from Britain, the Argentine shall have opportunity to sell certain quantities of beef and mutton on the British market. The agreement with Denmark is equally specific, and legally binding: It declares that Denmark shall buy so many million tons of coal, and so many hundred thousand tons of iron and steel in excess of its previous purchases from Britain, which, in turn, shall take additional quantities of primary produce. I emphasize that the only concession that the Commonwealth can offer

Great Britain is a reduced tariff to enable the manufacturers of the Old Country to compete on the Australian market.

At this juncture I do not propose U> make any extensive reference to the duties on cement. The cement industry is essential to Australia, but the Tariff Board considers that it may be more healthy if the protective duty on the British article is removed.

While the policy of the Government has been to accept the recommendations of the Tariff Board, I regret that, m some instances, that has not .been done. I refer specifically to farming machinery. I do not contend that Australia should permit the United States of America, to export farming implements to compete with Australian machinery, but I do consider that some consideration should be extended to Canada, a sister dominion. It has practically a monopoly of the manufacture of farming machinery throughout the world, and the industry there pays higher wages than are paid in Australia. It appears to me that something must be wrong with the Australian industry - either the profits are too great, or the costs of distribution are too high. The Tariff Board has recommended that the protective duty on imported farming machinery should be reduced; the Government has not accepted the recommendation. In my opinion, the Government should explain why it has taken that course. When the individual items of the tariff are under discussion, I may have something further to say in this connexion.

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