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Wednesday, 13 May 1936

Senator LECKIE (Victoria) .- Two subjects dealt with during the discussion have reacted unfairly against the Australian cement companies. One was the statement of the Tariff Board that a gross profit of £2,250,000 has been made by nine of those companies during a period of five years. Honorable senators drawing attention ' to this position refrained from emphasizing the fact that the profit was " gross " ; it is just as well to remember that out of those gross profits provision has to be made for income tax and depreciation. The income tax on that amount would be at least £450,000, and the depreciation, taking the board's own figures of 6s. per ton, would be £708,000. These two amounts would reduce the profit made to £1,100,000 for five years, or £220,000 a year, equivalent to a dividend of 4 per cent, on a capital of £5,000,000. Even if the capital were written down to the board's figure of £3,600,000, the annual net profit of £220,000 would represent a dividend of only 5-J per cent. I do not desire that the statements of certain honorable senators in connexion with the gross profits of the Australian cementcompanies to create the erroneous impression in this chamber, and throughout Australia, that the manufacturers have made an enormous profit over a period of five years. Honorable senators in this debate have referred to overseas cement in the terms of British currency, and Australian cement in the terms of Australian currency. It would have been very much fairer on their part if they had referred to both products in terms of British currency. Had they done so the Australian price of £4 ls. for cement would have been expressed in British currency as £3 4s. 6d., which makes a wonderful difference.

Apparently I was a little premature when I complimented the Minister in charge of the bill (Senator A. J. McLachlan) on not dragging the Ottawa agreement into the debate at this juncture. I thought that the Government had decided that that contention had been found untenable and had abandoned it ; I therefore expected that the Government would fight the case on its merits. Nevertheless the Leader of the Senate (Senator Pearce) made a fighting speech on nothing but the Ottawa agreement.

Senator Brennan - Various honorable senators referred to the Ottawa agreement, but the Minister in charge of the hill never mentioned it.

Senator LECKIE - Probably my attitude towards the Ottawa agreement has been misunderstood in this debate. Honorable senators should differentiate between the value of the British market and the value of the Ottawa agreement. They are entirely different. Before the Ottawa agreement was conceived, Great Britain took more primary products from Australia than it has purchased since the making of the agreement. In 1924- 25, which was a normal year, exports to the United Kingdom amounted to £69,000,000.

Senator Guthrie - That was due entirely to the boom in wool.

Senator LECKIE - Then I shall quote the statistics for another year. In 1925- 26 the United Kingdom purchases from Australia were valued at £61,000,000. This year there is another boom in wool but the purchases from. Australia total only £51,000,000. I quite agree that in the last three years Australia has been gradually selling more and more to the United Kingdom, honorable senators should realize that Great Britain has also made proportionately greater purchases from foreign countries than from the dominions. f. do not desire my view of the value .of the British market to be misunderstood ; I believe that it is the greatest trade advantage that Australia has; but at the same time the Australian market and allegiance to Great Britain are worth a great deal to the Old Country. Some honorable senators speak as though the British market we enjoy at present is due entirely to the Ottawa agreement. Great Britain took our surplus products long before the Ottawa agreement was conceived, and, even if it were abolished, would continue to purchase our primary commodities. What has appeared to me to be more remarkable than anything else in this discussion, is the great difference of opinion between the Commonwealth Government, and the British Government on the matter of the cement duties. The Commonwealth Government might state that it is entirely in accord with the Imperial authorities, but the contrary seems to me to be the case. I believe that the Commonwealth Government would not wilfully wreck any Australian industry and put people out of employment; but in this instance it has wrongly accepted a recommendation of the Tariff Board. which is not applicable to present-day circumstances. i think that this Government is perfectly sincere when it states that it does not think that its action will break the cement companies and cause unemployment ; it is perfectly sincere in stating that it does not consider that British cement will be imported into the Commonwealth. But why has the British Government made its protest? If the Imperial authorities do not consider that British cement will be sold to Australia, they would not deem it worth while to protest against the duty agreed to by the House of Representatives. I have no hesitation in saying that the Australian market for cement will bc valuable to British manufacturers. In those circumstances which Government is right ? If the contention of the British Government is correct heavy importations of British cement will enter Australia to the detriment of the local industry, and if the Commonwealth Government is right, and large quantities of British cement are not imported, the spirit of the Ottawa agreement can be regarded as so much flat soda water.

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