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Tuesday, 5 May 1936

Senator DUNCAN-HUGHES (South. Australia) . - Two or three points arise from this discussion with some of which, but not all, the Minister has dealt. The first is that the cotton industry has received perhaps more favorable treatment than any other industry in Australia, for, apart altogether from the tariff, it hasbeen greatly assisted by means of bounties. During the last five years the bounties paid on seed cotton, cotton yam and raw cotton have been respectively £157,000, £158.000, £92,000, £89,000 and £117,000, Those payments might appropriately be remembered when considering the duties on this item.

Senator Foll - The bounty takes tha place of a. home-consumption price.

Senator DUNCAN-HUGHES - Thai may be. The honorable senator's interjection leads me to ask whether the industry can sell its cotton at a profitable price in any market other than the home market.

Senator Foll - The honorable senator's question might well be directed to other primary industries also.

Senator DUNCAN-HUGHES - Arcwe to understand that every bale of (otton sent overseas represents a loss on the- actual production cost?

Senator Foll - It would bc a losswithout the bounty.

Senator DUNCAN-HUGHES - Then we get back to the position that the- grower is "worse off for every: bale of cotton that he produces over and above the requirements of the Australian market. There is dancer that we may be stimulating production beyond the industry's capacity to expand economically, and the question arises whether we should not forthwith apply the quota system and say that the production of cotton shall- not be allowed to proceed beyond a certain total. In that event, Senator Payne's argument is sound, » for Australia, would be in the same position as regards cotton as it is in regard to sugar. The production of sugar or cotton is all right so long as its sale is confined to Australian consumers, whom we can compel to pay a high price for it; but rather than sell sugar or cotton overseas at prices which involve a loss on every pound exported, it would be better to restrict production.

Senator Brown - It would be better to use in Australia more locally produced cotton. *

Senator DUNCAN-HUGHES - That raises another difficulty. The producer of cotton might contend that more cotton goods should be worn, whereupon he would immediately come into conflict with the grower of wool, who advocates the use of garments made of wool. There is danger that we shall reach a stage when everything that we produce over and above our own local requirements will represent an absolute loss. It does not seem to me that that would be a good position for us to be in.

Senator Foll - With the exception of wool, all our primary industries are in that position.

Senator DUNCAN-HUGHES - A person who gets into a bog usually tries to get out of it ; he does not intentionally "flounder deeper and deeper into the mire. When SenatorJ. V. MacDonald was speaking I interjected that for over 100 years attempts had been made to grow cotton in Australia. Private individuals, companies, and, I think, governments, tried without success to produce cotton, and it was only when a system of bounties :and protection by tariffs was introduced that the industry flourished. As Senator Leckie said that there was grave danger of this industry being destroyed, I draw ibc attention of the Senate to the figures contained in the Quarterly Summary of Australian Statistics for the quarter ended December, 1935. The imports of raw cotton fibre during the first six months of the financial year 1935-36 were valued at £30,726, compared with £16,S93 for the corresponding period of the previous year, an increase of approximately £14,000. That is a relatively small sum. But. when we come to cottonpiece goods, we find that the imports of canvas and duck have dropped from £301,678 to £279,620. That is a considerable reduction. In cotton and linen the reduction has been about onesixth from £3,017,342 to £2,468,393. Those figures indicate not greater, but less importations of these goods. In respect of cotton yarn the position is even more pronounced, the value of the imports for the first six months of this year having been £194,562, as compared with £300,913 for the same period of the previous year. Far from substantiating Senator Leckie's argument, those figures contradict it.

Senator Arkins - They prove that there is a good home market for cotton goods.

Senator DUNCAN-HUGHES - They prove that, instead of the value of the imports of these items from all sources having increased, there has been a substantial reduction. In the light of those figures, I cannot understand how any one can claim that there is danger of this industry being destroyed.

Coming now to exports, we find that the value of the raw cotton fibre exported dropped from £17,937 for the first six months of 1934-35 to £14,515 in the first half of 1935-36. In regard to these goods, as in respect of others, it is clear that Australia cannot manufacture to export. Senator Payne has presented a carefully prepared resume of the position in regard to this item, and I propose to support his request. I do so with greater confidence because of the opinion expressed by Mr. W. S. Kelly, a member of the Tariff Board, in his minority report -

The rates proposed, were Australian yarn used and with existing exchange, would represent an ad valorem duty of approximately 73 per cent., (British preferential tariff) and 170 per cent, (general tariff) for dyed cloth and even higher for cloths in the grey.

I do not propose to vote for extremely high duties on cotton-piece goods, particularly when I reflect that they are worn principally by the working class. During this discussion it has been stated that the worker will not object to paying an extra 2s. 6d. in order to obtain an Australianmade article. I say deliberately that he cannot afford to pay that extra sum, and I for one, will not do anything to force him to do so.

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