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Wednesday, 13 May 1936

Senator J V MACDONALD (QUEENSLAND) . - Senator James McLachlan seems to be too sensitive about the Ottawa agreement. I remind him that the duty on imported British cement, when that agreement was entered into, was1s. per h undredweight.

Senator Collings - Hear, hear!

Senator J V MACDONALD (QUEENSLAND) - The Opposition appears to have outraged every principle that is holy by supporting an amendment to make that duty 3d. per hundredweight. While I am just is British as is Senator James McLachlan, if I were asked to choose between taking my lead from Great Britain or New Zealand on a matter which affects both dominions, I would unhesitatingly declare my preference for the sister dominion. I find that the duty on British cement in the patriotic dominion of New Zealand is 8d. per hundredweight.

Senator Leckie - That has been imposed since the Ottawa agreement was signed.

Senator J V MACDONALD (QUEENSLAND) - I am grateful to have that information from the honorable senator because it strengthens my case. New Zealand, as well as Australia, cannot be accused of violating the Ottawa agreement, which I am satisfied has not been broken in this country. The Commonwealth is keeping the pact it entered into with Great Britain.

Senator Dein - It is a good agreement unbroken.

Senator J V MACDONALD (QUEENSLAND) - In my opinion it has not been broken by the imposition of a duty on British cement. Honorable senators have raised the matter of freight. Having some knowledge of the conditions on the shipping fronts in Australia and New Zealand, I know that captains of ships which are arriving or leaving in ballast prefer to use wet sand because it coheres well and does not shift as gravel does. A common occurrence, when a ship is not loading out or in, is to give it ballast, which is ' obtained for nothing. Ballasting is carried out to ensure the security of the vessel, and a number of steamers which come to Australia and New Zealand bring ballast in their holds. Inquiries which I have made have elicited that a considerable quantity of cement from Great Britain is introduced at freight charges practically equal to the cost of ballast ; I made a note of that fact long 'before I read in the Melbourne Age an article which I propose to quote to honorable senators.

Senator Gibson - Are not the remarks of the honorable senator a reflection on the Labour Government of Western Australia ?

Senator J V MACDONALD (QUEENSLAND) - Not at all.

Senator Dein - The Western Australian Government was endeavduring to break a strike.

Senator J V MACDONALD (QUEENSLAND) - No ; the Government was unable to obtain sufficient cement from local manufacturers and was, therefore, obliged to import a shipment in order to enable an important public work to be carried on; otherwise the men who were employed on it would have lost their positions. If a strike occurs, a Labour Government is bound to take steps to control it. Although it has more sympathy for the ordinary worker engaged in private industry, it must take steps to control any strike which extends to public utilities.

Senator Dein - i Would the Labour Government in Queensland take such action ? *

Senator J V MACDONALD (QUEENSLAND) - Yes, and for that matter a Labour Government in any State of Australia. The following editorial statement was published in the Melbourne Age -

Much was made by importing interests of an extravagant and unbalanced charge of profiteering. Those who make such charges conveniently ignore the initial losses incurred in launching new enterprises and the long periods that frequently elapse before the profit-making stage is readied: Neither Parliament nor public would tolerate excessive profit-making under Protection, but those who wish to be Fair realize that current dividends do not tell the full story of many Australian industries which owe their existence to the commercial pluck and patience of shareholders. More over, there is reason to suspect that as part of the campaign against Australian manufacturers, British cement has been dumped in various States during tho past few months.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - The Government knows that the cement cannot be dumped.

Senator J V MACDONALD (QUEENSLAND) - This article was published on the 28th April last. It continued - lt was stated in the House of Representatives - and not refuted - that importers were selling cement in Australia at little more than one-half the prevailing price in England.

Those are serious charges which have been made by a responsible newspaper and I have no doubt that these things do happen with our British cousins, as they have happened in the past with foreign countries. Tor some time rumours concerning the alleged profits made by Australian cement manufacturers have been subtly circulated through the lobbies. So subtle indeed were they, that they might have been almost convincing if I had not taken the pains to verify the facts concerning the profits of the various companies. One gentleman said to me: " Senator MacDonald you will be shocked to learn that the cement industry is making a profit of 32 per cent." I said in reply that I had heard of profits of 100 per cent, and as much as 500 per cent, being made in other countries; but I could not believe that the cement industry generally was making a profit of 32 per cent. Upon referring to the Tariff Board report of 1935, I discovered the following illuminating facts : -


Although the highest profit was 32 per cent., that cannot be. taken as a criterion for all the cement manufacturers; the profits of the various companies must be averaged. If the present duty is lifted the factory which manufactures cement in Queensland will, undoubtedly, be wrecked.

Senator Arkins - Does the honorable senator consider, that 32 per cent, is an undue profit?

Senator J V MACDONALD (QUEENSLAND) - Yes ; but many companies in Australia are malting up to that profit. The 1935 report of this precious Tariff Board which has not visited the cement works, stated further -

The percentage net profit on the capital employed - as adjusted by the board - by individual manufacturers in the last trading year for which returns were submitted to the board, is shown in the following table . . excluding the taxation on capital employed in the industry.

I have already submitted that table to honorable senators for their consideration; apparently taxation and perhaps other charges had still to be deducted from what is shown as the profits of the cement manufacturers. Even the Tariff Board can be loose in the manner in which it deals with the economics of an industry. The profits of six, seven and eight per cent, are common enough, but one is inclined to blink an eye when they become as high as 24 per cent.

Senator Sampson - How do the profits compare with those made by the breweries ?

Senator J V MACDONALD (QUEENSLAND) - I have not made that comparison; but probably every honorable senator holds some shares in one enterprise or. another. I, myself have held a parcel of 40 shared in a business enterprise for twenty years and have never received a dividend from them. Compared with the figures in reference to the cement companies mentioned in the report of the Tariff Board, other enterprises are making far more substantial profits.

Senator Dein - One of the cement companies has made a profit of 32 per cent.

Senator J V MACDONALD (QUEENSLAND) - But we have to consider the average profit, which in this case is 11.4 per cent. According to the statement of one honorable senator who supports the Government, some shareholders in the. cement, companies lost money. Whilst dealing with this matterI consider that some of the shareholders in gold-mining companies should be protected against the sale of shares. In one big venture the promoters made profits totalling hundreds of thousands of pounds, but the market price of shares is now one-quarter or one-fifth of their former value. The Minister, who said that excessive profits' were being made by the cement companies, also stated that two new companies have been formed, and I remarked that, if that is so, the alleged combine cannot prevent, the formation of other companies which act as a corrective. It would, therefore, appear that the industry can be regulated and that with greater competition prices will be reduced.

The TEMPORARY CHAIRMAN (Senator J B Hayes - The honorable senator has exhausted his time.

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