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Wednesday, 13 May 1936


Senator A J McLACHLAN (SOUTH AUSTRALIA) (Postmaster-General) . - The Tariff Board's report, issued in June, 1934, was made after evidence had been taken from a number of manufacturers in Australia. One of the witnesses was Mr. L. F. Chandler, director and general manager of "W. H. Plumb (Australia) Limited, Alexandria, New South Wales. This gentleman is an American manufacturer who has seen fit to establish a factory in Australia to engage in the manufacture of these implements. Apparently, he was well advised how to look after his own interests in this respect, because honorable senators will see on page 4 of the report the rates of duty which he suggested should be applied to this industry. Although I believe that Senator Herbert Hays is correct in stating that only 15 per cent, of the requirements of hooks and slashers are being manufactured locally, it is anticipated that the output will be considerably increased shortly. Certain types of hooks are at present included in the list of tools admissible under by-law. These are -

Honks, viz., grass, hop, potato, reap, sail, spud, vims, weed.

Moreover, as Senator Leckie pointed out. if certain of these implements are not being manufactured in Australia they may be admitted free of duty, upon the authority of the Minister, under by-law. If honorable senators closely study the Tariff Board's report, they will see that the board, when it reported previously on this industry, was very much inclined to do what Senator Herbert Hays desires the committee to approve to-day. On page 5 of the report, the board refers to its earlier suggestion that mallee slashers be added to the list of tools for admission free of duty under by-law. That recommendation was nor adopted by the department, because the local price of the article was reduced. In the meantime, however, overseas manufacturers of mallee slashers also reduced the f.o.b. price of their article, in some instances by as much as 37 per cent. "While there has been a general reduction of the prices of tools from overseas, the greatest reductions have been in respect of types which are being manufactured in Australia. If this industry is to expand, and to give the primary producers the benefit of a reduced price, the Australian manufacturers must have an opportunity to increase their sales on the local market. In regard to mattocks, the following opinion is given on page 5 of the Tariff Board's report: -

The c.i.f. prices of 4i-lb. mattocks imported from the United Kingdom were 33s. 3d. per dozen for one grade, and 24s. 3d. per dozen for a. cheaper grade. The local manufacturers' selling price was 43s. lid. per dozen. At that time, the rate, of exchange was 30 per cent, and primage duty 10 per cent. In addition to these charges a duty of 34 per cent, would have been required as protection against the higher grade of British mattock,, and a duty of (10 per cent, in the case of the lower-grade article.

The Tariff Board proceeded to make the following comparison of the prices of these tools in 1931 and June, 1934, when it was making its inquiries: -

 

During the same period oversea prices have shown a downward trend, and the landed costsof imported tools have been further reduced on account of the fall in the exchange rate, Australia on London, to 25* per cent, by thereduction in primage from 10 per cent, to 5 per cent., and by the exchange adjustment, on United Kingdom preferential duties.

No definite information is available as to. the yearly Australian requirements of the various tools, but witnesses representing local manufacturers estimated that the valueswould be approximately as follows: -

Ficks and mattocks - between £10,000 and £18,000.

Hooks and slashers - between £20.000 and. £25,000.

On the basis of these estimates the local output of picks and mattocks represents about one-half of the total demand for these tools. However, much of the business obtained would appear to be due to a preference extended by government and municipal bodies, which at present are heavy purchasers of tools for unemployment relief work. Australian production of hooks and slashers represents a very small proportion, approximately 15 per cent., of the stated requirements. An obvious difficulty in the manufacture of hooks is the wide variety of types and sizes required for the various uses. This renders more costly the production of a particular type, and places local manufacturers at a disadvantage with overseas competitors who have access to many markets, and are thus able to produce in larger quantities. Moreover, users of hooks and slashers are mostly men on the land, whose individual requirements are small, and who apparently prefer to buy well-tried brands.

The only way in which a reduction of imported implements can take place is by closely watching this industry and admitting hooks and slashers, under by-law, free of duty where the manufacture of them would be entirely uneconomic. I urge honorable senators to retain the present duty. The Tariff Board itself saw fit to review an earlier recommendation, because it considered that an increase of turnover would ultimately cause a reduction of prices.







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