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Thursday, 7 May 1936

Senator A J McLACHLAN (SOUTH AUSTRALIA) (Postmaster-General) . - In 1929-30, the total imports of compressors were valued at £116,953. In that year imports from the United States of America reached £91,301, and from the United Kingdom £21,992. In 1930-31 they were £24,138; in 1931-32, £2,694; in 1932-33, £5,750. ; in 1933-34, £9,131; and last year £37,494. The figures for the six months of the present financial year are £35,960. Admissions under departmental by-law have been negligible.

The rates of duty are based on the recommendations of the Tariff Board, but the recommended general tariff rate has been increased by 6^ per cent, in the case of the portable compressors, and by 8f per cent, for other compressors of a capacity not exceeding 1,750 cubic feet, to provide for treaty negotiation. Increased rates are provided when Australian currency is at par with sterling.

This sub-item covers compressors of the reciprocating and rotary types, of which the board estimated the present annual consumption at approximately £80,000, of which 85 per cent, is supplied from local sources. Compressors up to 500 cubic feet are regularly manufactured locally, and carried in stock, and manufacturers are prepared to produce compressors of greater capacity. The demand is small for compressors above the range of 1,500 cubic feet, and the board considers that those of a capacity of 2,250 cubic feet and over should be admissible free British, and 15 per cent, general. Relative costs both for wages and material show a trend more favorable to the Australian manufacturer than prior to the depression. He is, therefore, in a better competitive position with a duty of 25 per cent. and the present rate of exchange than he was when 45 per cent. was operating with exchange at par. The board considers, however, that this improved position is justified, and should enable the local manufacturer to extend his range of production.

The protective effect of the gradually reducing duty must be stressed. Over the range of compressors having a capacity exceeding 1,750 and up to 2,250 cubic feet, the duties are proportionately decreased down to the minimum duty on the compressor of a capacity of 2,250 cubic feet and over. Air compressors are largely used in mining, an industry giving employment and meriting the fullest consideration. Portable compressors consist of a self-contained assembly of compressor, prime mover and auxiliary equipment mounted on a wheeled chassis, the prime mover being a high speed petrol or fuel oil engine.

In connexion with the local manufacture of portable air compressors in which the engine is directly coupled to the plant, by-law admission under item 404 is allowed in respect of petrol engines, and crude oil engines up to and including 100 horse-power. The board considered that, as the engines are not manufactured in Australia, lower duties over the whole equipment are required, and recommended that the duty in the case of such portable compressors be 5 per cent. lower than on other types of compressors. A further amendment to the item was made on the 27th March last. The words " including air blowers " have now been included in the item. Air blowers and air compressors are machines of a similar type, being practically the same in mechanical construction. The principal difference is in the pressure at which these machines deliver air, the compressor delivering at a high pressure, and the blower delivering at a low pressure. The effect of the amendment is to ensure that air compressors and air blowers of the reciprocating and rotary types will be treated similarly for tariff purposes. The amendment has the concurrence of the Tariff Board.

On page 5 of its report, the Tariff Board stated -

In documents submitted confidentially the representative of the local manufacturers of by far the greatest number of compressors during the past ten years showed that they regularly manufacture and carry in stock compressors of various types up to a capacity of 500 cubic feet. They also have a range of what may be called " standard " machines to a much higher capacity in which the turnover is too small to warrant the carrying of stocks, but for which they possess complete designs, patterns and other essentials of manufacture. . In addition, they are prepared to quote for other compressors to purchasers' specifications up to the limit of 2,500 cubic feet capacity. The evidence indicated that the number of compressors required in the range above 1,500 cubic feet is very small.

A few compressors above this limit are at times required by large undertakings such as the largest mining companies. It is clear that no good purpose is served by the imposition of a duty on the largest compressors, and the board considers that the position will be adequately met by providing that compressors of a capacity of 2,250 cubic feet and over be admitted free of duty under the British Preferential Tariff, with a gradual increase of duty on smaller compressors up to the full rate at a capacity of 1,750 cubic feet.

The board is satisfied that the duties recommended will adequately protect the " stock " range of compressors which covers much the greatest part of the business and also will permit reasonable opportunities of expansion in the " standard " range.

Outside these ranges, in most cases even the higher rates of duty requested by the local manufacturers would not prove effective, but would simply increase the cost of the compressor to the user without any compensating benefit to local industry.

Those extracts from the board's report are, I submit, a complete answer to the contention of Senator Leckie. But, as the honorable senator is familiar with this type of machinery, I undertake to bring his representations under the notice of the Minister for Trade, and Customs, with a view to having a departmental examination of the situation, in order to ascertain if any injury is likely to be done to the Australian industry.

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