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Tuesday, 5 May 1936

Senator A J McLACHLAN (SOUTH AUSTRALIA) (Postmaster-General) . - The Tariff Board made a very searching investigation of every aspect of the protection of agriculturalmachinery, and the manufacture of such machinery in Australia. It made a comparison between the price of a typical group of locally manufactured implements and the estimated selling price of a similar group of imported implements, based on present costs of importing free of all duty. The result of this examination caused the board to state that the operation of the tariff on agricultural implements involves the Australian farmers in no excess costs. After making allowance for all circumstances which might affect the comparisons, it arrived at the conclusion that, at the present time, the Australian farmers are obtaining their requirements of harvesting implements at prices which are lower than those paid by farmers in New Zealand, where protection is given only in respect of a few lines. The evidence, therefore, indicates that, if the demands for reduced duties on agricultural implements were agreed to, no benefit would accrue to the Australian farmer; the only result would be to jeopardize the local agricultural implement manufacturers, and possibly divert some trade to countries with which Australia has adverse trade balances. For the year 1925-26 and the four succeeding years, our excess of imports from Canada over exports to that country was as follows: -


In the succeeding five years our excess of imports from Canada over exports to that country totalled £7,137,126, or a total excess of imports of £22,423,183 during the last ten years. Honorable senators are aware of what is occurring in regard to Australia's trade with the United States of America, and I would press them not to take any action which is not in accordance with the accepted policy of the Government on this matter. Thus we shall be given an opportunity to handle this situation in such a way that we may be able to bring about some redress.

The Tariff Board compared the prices of certain agricultural implements in Australia with the prices of similar implements in Canada and the United States of America. It is explained that the implements listed are not fully representative, owing to the difficulty experienced in selecting overseas machinery which could fairly be compared with the Australian product. Nevertheless, this comparison serves to show that the Australian farmer is paying very little more for his machinery than do his Canadian and American competitors on the world markets. Some of the prices shown in this table are as follows : -


.   . It is of interest to note that the present retail price of a 4½-ft. mower in the United States of America is 79.75 dollars, and that if aix Australian farmer could purchase it f.o..b. Kew York at this price, the landed cost in Australia would be approximately as under: -


This includes duty calculated on the retail price, and yet a machine imported under such conditions would be landed at costs lower than the present retail price of £31 4s. for an Australian machine, and lower than the retail price of £37 charged by the International Harvester Company of Australia for an identical machine.

It is clear that the local manufacturers are using the whole of the existing protection (including exchange) on mowers, and that if the importing interests choose to make an attack, the existing Australian selling price could not be maintained.

From the financial standpoint alone, it is simply impossible for us to continue one-way trading with the United States of America and Canada. Negotiations are now proceeding with a view to remedying the present trade position in the interests of all parties; it must be obvious to the United States of America and Canada that we cannot carry on as we are doing; that there will have to be a little more reciprocity in trade, and that we shall have to get a greater market for our products in those countries, through a revision of their tariffs. At this juncture, I submit, the attitude of the Government is in the interests of Australia as a whole, and this industry in particular. Therefore, I ask honorable senators to endorse the Government's stand, and not to put it in an invidious position. If the present adverse balances with the United States of America and Canada, are increased, the position will certainly become very grave.

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