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Tuesday, 5 May 1936

Senator A J McLACHLAN (SOUTH AUSTRALIA) (Postmaster.-General) . - In order that the committee may understand the policy of the Government in regard to this item, I suggest that subparagraphs b, c, and d be taken together. The classes of goods covered by those subparagraphs are similar, and my remarks in regard to one will, to a great degree, applY to the others also. The two main classes of cloths concerned are a cotton tweeds for men's or boys' outer clothing, and b denims, drills, dungarees, jeans, and canvas and duck for men's and boys' outer clothing. Honorable senators will be able to make their own comparisons of the small increases of duties over the 1933 rates.

Prior to the introduction of the tariff proposals of August, 1934, cotton tweeds were the only cotton fabrics produced locally. The Government's proposal to extend the protective duties to cotton drills, denims, jeans, duck and dungarees, was influenced by two main factors - first, the absorption of greater quantities of Australian-grown cotton; and, secondly, the utilization of idle weaving looms in weaving the cloth, and of idle machinery for spinning the yarns to be used in such cloth.

The manufacture of cotton tweeds has been in progress in Australia for a considerable number of years, and local producers have captured practically the whole of the market for this classof fabrics. Australian production in 1933-34 was 2,617,000 square yards, valued at £254,000. Imports, which in that year were approximately 85,'000 square yards, fell to 60,000 square yards in 1934-35. The local industry is, therefore, catering for about 98 per cent, of the market. In the past, however, the value of this industry to Australia waa limited to the employment it gave in the weaving of cotton tweeds from imported yarns admitted at rates of free British, and 15 per cent, general tariff. Under the present proposals, protective duties have been imposed on cotton tweed yarns in order to promote the use of greater quantities of locally-grown cotton. The position to-day is, therefore, that the cotton tweed industry is of three-fold value; it has to do with the growing of cotton, the spinning of cotton into yarns, and the weaving of the yarns into cloth.

The Tariff Board's recommendations show that if yarns were still admitted at rates of free British, and 15 per cent, general tariff, a lower protection . than that which existed under the 1933 tariff would be necessary. But, consequent upon the imposition of protective duties on yarns; the board considered that higher duties were necessary on cotton tweeds in order to offset the higher cost of yarns.

As already explained, the manufacture of denims, drills, dungarees, and similar cloths, was not commercially undertaken in Australia prior to the introduction of the protective duties of 1934. The Tariff Board pointed out that in the past Queensland crops have contained a large proportion of the inferior grades of cotton, and that with regard to both the cotton tweeds and denims groups of cloth, the cotton mostly used is inferior to that necessary for spinning into yarns foi' the knitting industry. The board consequently came to the conclusion that the manufacture of yarns for tweeds, denims, &c, presented an outlet for the consumption of these lower grades of cotton. Moreover, it was thought that numbers of idle looms could readily be adapted to the weaving of drills, denims, and similar cloths, and that in addition to utilizing the inferior cotton, the economic waste .represented by idle machinery could be obviated by extending the protective field to drills and similar coarser types of cloths. The imposition of protective duties on these fabrics, besides creating employment in .their manufacture, also causes additional employment in the production of the necessary yarns, and brings idle spinning machinery into operation. In regard to the goods covered by item 105 Alc and d, the Tariff Board's recommendation for protective duties on drills, &c, was designed to apply only to such cloths weighing 6 oz. or more a square yard when of the types principally used for certain classes of men's or boys' outerwear. In order that such piece goods for other purposes - such as shirts and pocket.ings and the manufacture of waterproofed cloth - should not be saddled with the substantial duties provided under subparagraph b provision has been made in sub-paragraph d for the continued admission at rates of 5 per cent., British preferential tariff, and 25 per cent, general tariff, of such cloths when used for these other purposes. Undyed sheetings were not intended to be subject to the protective duties; these also have been included in sub-paragraph d. The provision of fabrics for these purposes in subparagraph d is in accordance with the board's intention and is concurred in by that body. Sub-paragraph c covers drills, dungarees and jeans weighing 6 oz. or less a square yard or 18 oz. or more a square yard. The board intended that cloths in these weights should not be sub- ject to protective duties and the rates proposed are the same as those which operated under the Customs Tariffs 1933 on drills, &c, in the weights specified.

The Government feels that the manufacture of cotton tweeds, denims, drills, &c, from locally spun yarns will provide a greater avenue for the disposal of surplus Queensland cotton and bring into use some idle spinning and weaving machinery, and thereby increase employment. It would be idle to suggest, however, that local manufacturers can capture the whole of the trade within a few brief months. Neither the Government nor the

Tariff Board visualized an immediate capture of the local market. On page 10 of its report the board stated -

It is possible that for a time after the imposition of the protective rates either weavers may not be able to supply all the variety required in sufficient quantities or spinners may not be able to supply weavers with the quantity or variety .of some particular yarns.

Thinking back over a number of years to the time when protective duties were imposed on cotton tweeds, honorable senators will recall that a considerable time elapsed before the local industry could claim that it had secured a substantial proportion of the Australian market. The fact remains that protective duties are' now proposed to. be extended to a class of fabrics previously admitted at low revenue rates and, in the words of the Tariff Board -

Grower*, spinners and weavers should be placed on their mettle to ensure efficiency in every branch of the industry and so secure the extensions with as little added cost to the community as possible.

This statement of the position is in accordance with the policy of the 'Government with regard to the cotton industry, with which honorable senators, having passed legislation dealing with the matter some time ago, are familiar. In regard to this matter the board made a most exhaustive examination, and the Minister for Trade a.nd Customs, after going through these items thoroughly with officers of the department, was satisfied that what is proposed is in the best interests of the community as a whole, and will not harshly affect that section of the workers on whose behalf Senator Payne spoke.

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