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Tuesday, 5 May 1936


Senator GIBSON (Victoria) .- I am unable to follow the reasoning of Senator Leckie, when he discriminates between a revenue tariff and a protectionist tariff. Both of them should operate to the benefit of Australian manufacturers. The honorable senator pointed out, on the one hand, that the primary producers of Australia receive a bounty of £10,000,000 per annum. Undoubtedly, he is referring to sugar and butter, for the home prices of these commodities are higher than the export prices. But, notwithstanding Senator Leckie's assertion to the contrary, the home manufacturer gets the opportunity, if he cares to take it, to reap the advantage of the incidence of protective duties to the amount of £30,000,000 a year.


Senator Leckie - How does the duty on petrol assist the Australian manufacturer?


Senator GIBSON - I did not suggest that it does; but the amount of revenue collected from the protective duties ' is certainly more than the £9,000,000 mentioned by the honorable senator. I am gratified that the Government has seen its way clear to reduce the duties applying to British goods from 15 per cent, to 5 per cent. Although Great Britain does not manufacture many lines of agricultural machinery suitable for Australian conditions, it does make certain implements, including mowing machines and hay rakes, which are used by our farmers. I assume that imports of these implements from Great Britain will be substantially increased in future.

The Leader of the Senate (Senator Pearce) and the Postmaster-General (Senator A. J. McLachlan) have explained why the Government has not adhered to the recommendations of the Tariff Board with regard to Canada. I am not so much concerned about the United States of America, but I do- think that the Government should at least have accepted the Tariff Board's recommendation concerning the sister dominion of Canada. I referred te this matter the other day, but I am satisfied with the explanation given by both Ministers to-night, and it seems to me that we may get some benefit from a revision of the trade agreement with Canada. I object to our manufacturers of farm implements making huge profits under the tariff protection given to them. Most honorable senators have read the Tariff Board's report closely and they must have noted its comment that it cost £266 to sell £700 worth of farm machinery - this, too, after profits had been taken into account.


Senator Sir George Pearce - That statement applied also to imported machinery.


Senator GIBSON - That is explained by the combination to which the right honorable gentleman has referred, between the Massey-Harris Company and H. V. McKay, as the result of which competition in Australia has been definitely eliminated. American manufacturers' are now making Australian farm machinery. I give full credit to the Australian manufacturers. They certainly make extraordinarily good machinery. I have a considerable amount of machinery on my property, and I think that the whole of it is Australian made. There is nothing better. Our manufacturers have met Australian requirements in every way. In some instances their machinery is an improvement on that which is imported from America. But competition now is completely stifled. I should like to see the general tariff lowered, notbecause I believe it would result in foreign competition, but because it would be a reminder to Australian manufacturers that, if they do not supply local requirements at a reasonable price, they will be faced with competition from overseas.

When I was a member of the House of Representatives some years ago, this bogy of an adverse trade balance was given an airing in every budget debate. It has always been a favorite topic with Labour members. When the Scullin Government came into power it imposed prohibitions and higher duties in order to prevent foreign goods from coming into Australia. I do not regard the tariff as the proper instrument for the regulation of trade balances between countries. If the exchange rate is allowed to appreciate or depreciate we can encourage or discourage imports, and so rectify our balance of trade with other countries. According to statements made by both Ministers to-night our aggregate adverse trade balance with the United States of America over a period of ten years was £144,000,000, but I am not aware that we owe that country anything, except the money which we borrowed and upon which we are paying the agreed rate of interest. Every country must have an adverse trade balance with some other country. On this point it might be enlightening if I remind honorable senators that, when speaking in the House of Representatives on the 23rd February, 1928, the then Prime Minister, the Right Honorable S. M. Bruce, pointed out that, during the years when Germany appeared to be capturing the world's trade, it had a large adverse trade balance, and that Canada and the United States of America had had adverse trade balances for several years, that for the United States of America in1921 being 228,000,000 dollars; in 1922, 508,000,000 dollars; in 1923, 119,000,000 dollars; in 1924, 212,000,000 dollars; in 1925, 3,000,000 dollars; and in 1926, 509,000,000 dollars.


Senator A J McLACHLAN (SOUTH AUSTRALIA) - The United States of America is not a debtor country; Australia is.


Senator GIBSON - I am not aware that any one has been able to give a satisfactory explanation of the reasons for a country's favorable or unfavorable trade balance. Trade seems to adjust itself, as the PostmasterGeneral should know, since he is the head of a department which has dealings with 86 nations. With some there are credits; with others debits. Everything is adjusted at Berne, which is the clearing house for international postal charges. I am inclined to believe that altogether too much is made of the balances of trade between countries, and I am convinced that it is a mistake to attempt to regulate them through tariffs.







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