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Thursday, 30 April 1936

Senator A J McLACHLAN (SOUTH AUSTRALIA) (Postmaster-General) . - In reply - On the whole, I suppose that the Government should congratulate itself on the reception that the tariff has received from honorable senators. When the Government is carrying out what it believes to be its obligations under the Ottawa agreement, and, as it were, is walking down the middle of the road, it is likely to have brickbats thrown at it from either side. When it pursues its policy of evolving an evenly-balanced tariff, which it hopes ultimately to achieve, it has to take kicks from both sides. I shall not engage in an examina tion of the detailed criticism by honorable senators; I believe that the proper time and place to consider them will be in committee. Nor do I propose to wander in those strange realms of Aristotle, as Senator Collings did, and I shall not hold an inquiry as to who does the work and who " does " the workers. I suggest, however, that the honorable gentleman had better walk warily lest he find, after inquiry, that those " doing " the workers are more closely associated with himself than perhaps he knows.

I desire to refer, in passing, to an observation made by Senator Brown. He was impressed with the nature of the Tariff Board's report on this sticky, mixed subject of cement, and he SUKgested that punitive steps should be taken against an industry which had comported itself in the manner exposed by the Tariff Board. I pointed out in my second-reading speech that this phase was amply covered by the suggestion which the Right Honorable J. H. Scullin made in the House of Representatives a few years ago. In explanation, I state that the Harvester judgment, which was referred to, was based not on a customs law, but on the Excise Tariff of 1900. It was the attempt to do something beyond the scope of that act that was held to be unconstitutional by the High Court. There can be no question regarding the powers of the Commonwealth Government under section 15 of the Tariff Board Act and the appropriate steps that should be taken if this chamber comes to the conclusion that the cement industry is making excess profits and is taking too great an advantage of the protection which it has received for so many years. If it be considered, in the light of modern conditions, that this protection has been too high, if will be for the committee of this Senate to take the necessary action. I suggest 'that it would be the most agreeable action to the industry concerned.

Some of the observations which fell from Senator Leckie's lips reflected to some extent on the Mother Country in respect of its protest against what it considers to be a violation of the Ottawa agreement. In all of my relationships and negotiations with representatives of Great Britain I have never experienced the slightest discourtesy, and although

Ihave not seen it, I am quite sure that the protest is couched in most courteous language. The facts may be simply stated. There are two parties to a certain agreement - Australia, which is a member of the British Commonwealth of Nations, and the Mother Country. They entered into certain obligations, with which I shall deal later, and one of the parties to the agreement now says to the other, " Your parliament is refusing to discharge its obligation ". A protest is of no avail after the act has been done. But if the protest is made while there is still an opportunity to remove the cause of objection, it is likely to lead to more beneficial results and smooth the way for future dealings. I feel that Senator Leckie was moved by a desire to create prejudice in this regard, rather than by any conviction that the Mother Country had been discourteous. So far from being discourteous, my experience is that such protests are couched in most courteous terms. In this instance, it is not designed to influence honorable senators; the intention of the British Government is merely to point out certain facts.

I do not propose to deal with the details which Senator Leckie and other honorable senators introduced in regard to the cement industry.When the appropriate time arrives in committee I shall place before the Senate certain considerations, apart altogether from Ottawa, which, I maintain, will fully justify the attitude adopted by the Government.

The Assistant Minister (Senator Brennan) has already explained the functions and duties of the Tariff Board, which, I reiterate, is a statutory body created by this Parliament. In regard to Senator Leckie's suggestion that the Government is seeking to " biff " certain industries, I assure honorable senators that the Government will safeguard to the utmost all industries that are comporting themselves in such a manner as to deserve assistance. There is no reason to believe that the Government will adopt a pugilistic attitude towards them, when they are operating for the benefit of Australia. One function of the Tariff Board is to protect efficient industries which arc conducting themselves in the best interests of the country.

Senator Collings - Will the admission of British cement duty free be beneficial to the Australian industry?

Senator A J McLACHLAN (SOUTH AUSTRALIA) - The Leader of the Opposition will later hear a dissertation on that industry from its inception until the present day; if, after that, he can justify his action in supporting the re-imposition of the duty to the great body of people whom he represents, I shall be very much surprised. Certain honorable senators have declared that the Ottawa agreement has been of no substantial advantage to the Commonwealth. In reply to that contention, I ask those honorable gentlemen to consult the grazier, the cattle-raiser, the sugar-grower, the apple-grower, the honey producer, and the egg producer; I ask them to question the dried fruit-growers on the river Murray and the wine producers in South Australia. Among those people they will find their answer. They have only to study the schedule of concessions to Australia to which Great Britain gave immediate effect, in order to realize the benefit that the Ottawa agreement has conferred upon us. If I could express those benefits in £ s. d. I would willingly do so; I can furnish details of the increased exportation of commodities which has resulted from that agreement. These matters are carefully weighed by the Department of Commerce. When I inform honorable senators that in every department of the export trade there has been an increased sale of goods to the one country that is apparently prepared to take them on terms most generous to us, they will agree that Ottawa has Been of enormous advantage to Australia. I ask them to consider what would have happened to the surplus production and what would have happened to the price levels of those commodities in Australia if the Ottawa agreement had not been made and Great Britain had not been prepared to accept an increased proportion of our primary commodities.

Sitting suspended from 6.15 to 8 p.m..

Senator A J McLACHLAN (SOUTH AUSTRALIA) - The prosperity that has accrued to Australian primary industries as the result of the Ottawa agreement, is reflected throughout the community and particularly in the

Customs| SENATE, j

Tariff1936. condition of our secondary industries. The following official figures, showing the increase of exports of primary products in 1934-35, as compared with the exports in 1931-32 are informative: -

Senator J.V. MacDonald endeavoured, by a process of reasoning which is common to honorable gentlemen opposite, to make a comparison between the exports and imports of the Commonwealth in particular periods. The honorable gentleman culled his material from bulletin NO. 2, which has been in circulation for some time and, I have no doubt, has been placed in the hands of other honorable senators. If they have studied it, they will see how misleading it is to make the comparison for the' years mentioned, because in the base year, which Senator J. V. MacDonald selected, the exports of gold from this country amounted to £14,000,000. Therefore, results were the reverse of those indicated by the honorable gentleman. When making any computation regarding exports and imports, it is desirable to take into account what is really capital export. The honorable gentleman did not do that.

It has been urged by some critics that we have not given full effect to the spirit or the letter of the Ottawa agreement. One of the charges made is that we have not honored our undertaking to remove the primage duty on British goods. The existing primage is 5 per cent. In 1932-33 we remitted primage duty to the amount of £50,000; in 1933-34 we remitted an additional amount of £585,000; in 1934-35 another £400,000, and the budget provision for this year gives additional relief amounting to £4-5,000. Tints the total remissions of primage on British goods amount to about £1.080,000 annually, so it cannot be said with truth that we have not endeavoured to fulfil our obligations. I understand that no complaint has been received from the mother country about our lack in that regard.

The references made by a number of honorable senators to the duties on agricultural machinery have been noted, and I shall deal with them when the bill is in committee. Senator James McLachlan spoke of the need for simplification of the tariff classification. On a previous unhappy occasion in my existence, when I was saddled with the responsibility of piloting the tariff somewhat hurriedly through this chamber, I promised that a reclassification of tariff items would be made as soon a3 possible. That has been engaging the attention of the Minister and the department, and the result is seen in the greatly simplified schedule which is now before honorable senators.

My friend and colleague, Senator Duncan-Hughes, and Senator Leckie chided the Government for the delay in presenting the schedule for the consideration of Parliament. Our excuse is that many distressful things have happened during the last eighteen months to keep Ministers in all portfolios very fully occupied. We had hoped to be able to fulfil our promise to review the tariff before the end of last year, but I regret to say that that was impossible.

Criticism has been directed against liu schedule from different angles bs Senator Duncan-Hughes and Senator Leckie. One honorable gentleman complained that we are imposing higher duties, and the other that we are imposing lower duties. Everything that has been done is part and parcel of the tariff policy of this Government. The department is heavily charged with work, and the Government is doing its best to bring the tariff up to date, as well as to give effect tq the suggestion of Senator James McLachlan for the simplification of the - classifications. It is hoped that, having regard to the diminishing schedules, there will not be much further delay.

I turn now to the observations of a number of honorable senators regarding the true interpretation of the Ottawa agreement. My friend and colleague, Senator Brennan. this afternoon illuminated the subject, and I do not propose to add another blend to the colourful picture which he presented. I approach the subject from a point of view of two honest nations desiring to achieve something for their mutual benefit. One has complete liberty to give effect to its undertakings without the intervention of an outside tribunal ; the other, by reason of its policy and its statute law - Senator Payne, will, I think, agree with me on this point - is not in a position to implement any undertaking which it gives until some other tribunal has spoken. That, briefly, was the plight in which the Australian delegates found themselves when they assembled at Ottawa. The representatives of Great Britain had full liberty to negotiate and to give an undertaking that the British Government would invite the Imperial Parliament to do certain specific things - to retain existing preferences, and to impose certain duties in the interests of Empire producers. This undertaking is to be found in article 1 of the agreement. Article 3 states that His Majesty's Government in the United Kingdom will invite Parliament to pass the necessary legislation to secure to Australian goods of the kind specified in the schedule the margins of preference indicated over similar foreign goods. The British Government, I repeat, is not hampered by any outside body. Consequently its delegates to the Ottawa Conference were able to promise that, subject to the approval of Parliament, certain things would be done. If the Imperial Parliament had withheld its approval, and if it had declined to give to Australian primary producers the benefits of preferences for beef, lamb, butter and other commodities, what would have been the fate of the agreement? "Would we have carried out our part of the contract? Every agreementimposes obligations on the respective parties. That of the British Government was to invite the Imperial Parliament to do certain things. That was done. Now the British Government is asking what counterbalancing consideration Australia intends to give for the concessions which we are enjoying in the British market, and which we appreciate so highly. There is implicit in the agreement an undertakingthat we shall not impose on

British goods duties in excess of those recommended by the Tariff Board, and in article 11 we give an undertaking that the Tariff Board will undertake a review, as soon as possible, of existing protective duties in accordance with the principles laid down in article 10. Some confusion appears to have arisen concerning the obligations of the Commonwealth, because reference is first made to the principles upon which the agreement is based. The obligation of the British Government was fulfilled when it asked the British Parliament to adopt the agreement, and similarly the obligation of the Commonwealth Government was honoured when it invited the Commonwealth Parliament to accept the proposals. Parliament has accepted the dominating principle expressed in article 12, which may or may not be interpreted as it was by the Acting AttorneyJGeneral (Senator Brennan). The agreement provides that the duties must first be considered by the Tariff Board, and its decisions accepted, so that the obligation rests upon the Commonwealth Parliament, and not upon the Government.

Senator J D Millen - The Government has not accepted the recommendation of the Tariff Board in every instance.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - When has it not done so?

Senator Badman - On agricultural machinery, for instance.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - It has accepted the recommendations of the Tariff Board in respect of British preferential duties; the honorable senator is referring to the duties imposed under the general tariff. The British Government undertook to accept the decisions of the Tariff Board, and the Commonwealth Parliament is not to increase the duties beyond those recommended by the board.

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