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Wednesday, 13 May 1936

Senator LECKIE (Victoria) .- I am glad that the Government has seen fit to divest its arguments to-day of the sanctity of the Ottawa agreement ; its position, in this respect was untenable. I regret very much that, in a speech which he made in Melbourne last week, the High Commissioner for the United Kingdom went so far as to say, in effect, that the British Government should be the judge as to whether either Britain or Australia was breaking the agreement.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - He said nothing of the sort. He claimed, on behalf of the British Government, the right to protest, and, I think, every honorable senator will concede him that right.

Senator LECKIE - But Australia has not violated the Ottawa agreement in any respect. I dealt with this matter fully in my second-reading speech, but my views on it have been accentuated by the speech of Sir Geoffrey Whiskard, in which he claimed for the British Government the right to interpret the Ottawa agreement on both its own and Australia's behalf. I am glad that the Government has now dropped its contentions regarding the Ottawa agreement, and is now prepared to rest its case solely upon the recommendation of the Tariff Board. If the board, on its own figures, can be shown to be wrong, will the Government change its mind on this matter? That is a fair challenge.

Senator HARDY (NEW SOUTH WALES) - Can the honorable senator show in what respect the Tariff Board is wrong?

Senator LECKIE - Yes. I am not altogether blaming the board in this matter, because its inquiry was made twelve months ago. In its report, however, it gave the price of British cement at 23s.8d. a ton f.o.b., whereas it is well known to every one. in the trade that British cement can be bought to-day for 19s. a ton.


Senator LECKIE - In London.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - From what firm?

Senator LECKIE - The Tunnel Company is one. If the Government makes an unbiased inquiry into this matter, it will be convinced of the facts which I have stated. The Tariff Board also reported that the freight rate on cement from England to Australia was 27s. 6d. a ton, and based its calculations on that figure. Will the Government find out what freight is being paid on the cargo of cement which will arrive at Fremantle this week on the SS. Stanford? The freight on that cargo is 13s. a ton, and for continuous and very large shipments, the freight rate is even less. Thus, the Tariff Board's figures are 14s. 6d. and 4s. 6d. a ton less on freights and price respectively, or a total of 19s. 2d. a ton below prevailing charges. I point out that, within the next few weeks, 11,000 tons of cement will arrive in Western Australia at a. cost of 13s. a ton, and not 27s. 6d. The board's calculation may have been correct at the time at which it was made, but the fact remains that its figures do not apply to-day.

Senator Hardy - Mr. Kneeshaw, in his evidence before the board, said the price was 27s. 6d. a ton.

Senator LECKIE - But that was twelve months ago; the price is not static.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - The board made its last review in March, 1936.

Senator LECKIE - What did it say then ?

Senator A J McLACHLAN (SOUTH AUSTRALIA) - The same as it said before.

Senator LECKIE - The Government says that the Industries Preservation Act offers additional protection to Australian companies.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - Therehas been no necessity to invoke that act.

Senator LECKIE - So far as the manufacturers of Australia are concerned, that act is a dead letter. The Department of Trade and Customs will not take notice of any evidence put before it by Australian manufacturers; invariably the reply given by the department is that the evidence is not sufficient to place before the Tariff Board. Even in cases in which complaints are placed by the department before the board, six months elapses before a manufacturer can gain relief.

Senator Hardy - The price of 13s. a ton was not put before the board by the cement, manufacturers? Mr. Symonds submitted c.i.f. and e. costs.

Senator LECKIE - His price was f.o.b. £1 3s. 8d. sterling; and that is the estimate which the board accepted. Much has been said in this debate in regard to over-capitalization and overextension of plant in this industry. From such remarks one would judge that the industry was a single entity which suddenly stretched out and established extra plants and over-capitalized itself. What arc the facts? Each of these companies operates independently. If an honorable senator were engaged in business, how could he stop another manufacturer from setting up a plant in the same trade. How could cement manufacturers in New South Wales and Victoria stop the Goliath Company in Tasmania from being established? How could they stop similar companies from being formed in Queensland or in other parts of New South Wales and Victoria? Are the original Australian cement companies to be held responsible for the fact that other companies thought that the cement manufacturing business was a good one to enter? How could they stop other people from putting their money into the industry? The only way in which this industry can be controlled as a single unit, operating at a uniform price, is for the Government to take control of it; in that way only will it be possible to stop other cement factories works from being established.

Senator Collings - That is what will happen if the Government persists in its present policy in respect of the duty on cement.

Senator LECKIE - Possibly that will be one result. The chairman of the Kandos Cement Company has been quoted as having said that undoubtedly there are too many cement works operating, and that the industry is overcapitalized. I ask honorable senators to bear in mind the fact that he made the statement at a time when another company had just sent out its prospectus prior to engaging in this industry. Do any honorable senators know anything about bluffing in business?

Senator McLeay - Was not the statement true?

Senator LECKIE - I know" what the object of it was; it was to bluff those who were proposing to form other companies - but in this discussion the statement has recoiled somewhat to the detriment of the man who made it. When I was starting in business a prominent manufacturer in the trade approached me and poured a fearful tale into my ear about the troubles which would confront me. He said that every one in the trade was insolvent, that the trade was over-capitalized, and could not get half enough work, and that if I went into the business I would be insolvent within six months. Nevertheless, I went into it and my business increased ; 1. am not " broke " yet. The statement attributed to the chairman of the Kandos Cement Company is akin to that made to me; he wanted to bluff those who were contemplating the formation of other companies. Now that the Government has come to the aid of the Kandos Cement Company, I cannot say whether it will succeed in bluffing other companies. It is well known that competitors will arise not only in this industry, but in all other industries which promise success.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - Hear, hear !

Senator LECKIE - For the information of the Minister I point out that under the circumstances which have arisen in the cement industry, works in the smaller States will be forced to close. Possibly the companies in New South Wales and Victoria will be able to operate, despite the abolition of the duty on British cement, in the restricted markets in their particular States ; they have capital reserves upon what they can draw. The companies in the other States, however, especially in Tasmania and South Australia, will go to the wall.

Senator Duncan-Hughes - Will the honorable senator stake his reputation on that statement?

Senator LECKIE - Yes. Furthermore I point out that in the event of the proposed duties being accepted, the Victorian and New South Wales companies will not be able to send their cement to the other States, because the freight rates will be a good deal higher than those from Great Britain. I believe that I have made a fair examination of this matter. The Government is depending upon the recommendations of the Tariff Board. The board's calculations have been proved to be wrong; consequently the Government should be prepared to revise its proposal. It was stated to-day that reductions of the cost of cement which will be effected through the new duties, will make it possible to construct concrete roads at approximately the present cost or bitumen roads, and that the cost of cement buildings will be greatly decreased. In one mile of concrete road18 feet wide and 6 inches deep there are 445 tons of cement. The cost, including. the 7s. 6d. which the Government now wishes to take off, would be £7,392. Without the British duty the cost would be £7,224, a difference of slightly over 2 per cent., or £168 a mile. Will any honorable senator contend that that small amount would justify any public authority in constructing a bituminous, instead of a concrete road? The cost of the cement used in the largest building in Melbourne or Sydney, costing up to £500,000, would not be more than 6 per cent. of the total, yet it is held by some honorable senators that the retention of the British duty would retard building operations. The statement is ridiculous.

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

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