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Wednesday, 13 May 1936

Senator J V MACDONALD (QUEENSLAND) . - The Minister in charge of the bill (Senator A. j. McLachlan) became somewhat annoyed at a remark of the Leader of the Opposition (Senator Collings), which he described as misleading. At an earlier stage he made a similar charge against me, but I was not in the chamber at the time. When I spoke of national security, I referred !o Australian security. I see danger in our imports growing more rapidly than our exports. If that state of affairs con tinues, we shall have not only to regulate imports by the imposition of duties, but also to prohibit certain importations, as the Scullin Government did. Had that Government not been courageous enough to impose embargoes Australia would have become bankrupt. In an earlier speech I referred to some figures which had been supplied to me by the Industries Protection League of New South Wales. I said that, according to information supplied by the league, it appeared that between 1932-33 and 1934-35 the value of imports had increased by 27if per cent., whereas exports had decreased by 6f per cent., making the total disadvantage to Australian trade 34£ per cent. I did not say that the figures were mine, for I distinctly attributed them to the Industries Protection League of New South Wales. But when he rose to reply the Minister in charge of the bill said -

Senator J.V. MacDonald endeavoured, by n process of reasoning which is common to honorable gentlemen opposite, to make a comparison between the exports and imports of the Commonwealth in particular periods. Thu honorable gentleman culled his material from bulletin No. 2, which has been in circulation for some time and, I have no doubt, has been placed in the hands of other honorable senators.

As I have already explained, I did not get it from that source. It would appear that the Minister, not I, was misleading the committee. The speech of the Minister continued -

I f they have studied it, they will see how misleading it is to make the comparison for thu years mentioned, because in tho base year, which Senator J. V. MacDonald selected, the exports of gold from this country amounted to £14.000,000.

The exports of gold did not amount to £14,000,000, because as in other years, when it was found necessary to export gold to save Australia, gold pounds were exported, and they have been included in the Statistician's export figures. In order to get at the figure of £14,000,000, the value of gold pounds exported, £8,000,000, must be converted to its sterling valuation, £11,250,000, and then a further 25 per cent, is added for exchange. In other words, we are asked to pay another £2,750,000 on our own gold pounds. The Minister's speech continued -

Therefore, results were the reverse of those indicated by the honorable gentleman.

That is a loose statement which suggests that my remarks were upside down. I shall show that they were not. The Minister, on that occasion, proceeded -

When making any computation regarding exports and imports, it is desirable to take into account what is really capital export. The honorable gentleman did not do that.

The Minister contended that the -gold pounds which were exported in order to save Australia should not be included in the export statistics. The bulletin No. 2 referred to explained, the situation in relation to the gold pounds, and said that what was done was for a special purpose. One might as well say that a comparison of two years was not fair because at one time the price of wool rose suddenly. The increased price of wool has meant many millions of pounds to Australia, but it was due very largely to threats of war, the exigencies of other countries, and the extraordinary demand for the commodity. If items are to be selected, and a tag put upon them, honorable senators will be able to discuss the figures until doomsday.

Senator Brennan - What, has this to do with cement?

Senator J V MACDONALD (QUEENSLAND) - It is most relevant, because I propose to develop my contentions along the lines of national security. Imports into Australia are growing much faster than exports, because, even if the £14,000,000 which 1 have referred to is allowed, the disadvantage to Australia, under the Ottawa agreement, owing to imports, is not compensated for by exports. Figures show that the disadvantages under that agreement are most substantial. I cannot understand the anxiety of the

Government to give an opportunity to English manufacturers to injure an Austraiian industry. Such action would naturally decrease some of the advantages we derive from our export trade, and make our national financial position insecure.

Honorable senators who support the Government's proposal are concerned for the British manufacturers of cement. Thm, have asked us to draw back in horror from the alleged Australian combine. The Labour party has always been opposed to combines; but, if we are to have a combine supplying cement in the Commonwealth, for Heaven's sake let it be an Australian combine.

Senator Dein - There is no Australian combine.

Senator J V MACDONALD (QUEENSLAND) - I am "endeavouring to prove that point; therefore I welcome the interjection. The Leader of the Opposition (Senator Collings) quoted figures in relation to the huge cement profits made by British manufacturers of cement. This information was published in the Melbourne Herald, which stated -

While the Federal House at Canberra is bitterly debating the proposal to reduce duties on imported cement, and the British Government has hinted that failure to do so will be regarded as a broach of the Ottawa agreement, British cement companies are earning big profits in their own country.

Latest accounts show net profits ranging up to 40 per cent, on capital with dividends up to 20 per cent.

Rapid growth of earnings followed an agreement in 1034 between practically all the companies, aimed at abolishing price-cutting and stabilising prices slightly above the 1934 low level.

The agreement, together with cost reductions and the general revival of building in Britain, opened the door to substantial prosperitysays a recent issue of the Economist.

The Economist proceeded to quote particulars of the profits made by the principal British manufacturers of cement; they range from 6.3 per cent, to 41.4 per cent, in 1934-35. The dividends range from 4 per cent, to as much as 25' per cent. These figures are not collected haphazardly by the Herald writer, because, like a good journalist, he quotes his authority for them. He stated that the figures were taken from a recent issue of the London Economist. As a newspaper editor, I subscribed to the

Economistfor nearly ten years, .and that newspaper is regarded in Great Britain as being the leading authority on financial subjects. The cement combine in the United Kingdom is making enormous profits, and honorable senators are now asked to destroy the Australian industry in order to allow these British manufacturers to swell their sales. In one year, one of them made a gross profit of £1,186,000.

Senator Brennan - That is the gross profit ?

Senator J V MACDONALD (QUEENSLAND) - Yes ; I am aware that a gross profit can dwindle away when money is put into reserves, large sums are allotted for depreciation, and other amounts are tucked away by company accountants to gull the public. I emphasize that the dividends of the English manufacturers were as high as 25 per cent., while the earned percentage of profit of one company in 1933 was 43.9 per cent. The Government, therefore, cannot ask honorable senators to assist this poor, struggling industry in Great Britain.

The Leader of the Senate (Senator Pearce) endeavoured to persuade us that the intention of the Ottawa agreement was to increase both Australian and Empire trade. In my opinion the Ottawa agreement was inspired by the fact that Great Britain began to lose trade owing to the development of economic nationalism. Faced with dwindling markets abroad, it considered that the safest course to adopt was to negotiate an agreement for the greater encouragement of inter-Empire trade.

Senator Dein - To the mutual advantage of the participants.

Senator J V MACDONALD (QUEENSLAND) - When one party suggests a bargain he generally does so with the object of obtaining considerable advantage from it.

The TEMPORARY CHAIRMAN (Senator J B Hayes - The honorable senator's time has expired.

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