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Thursday, 14 May 1936

Senator BROWN (Queensland) . - The previous British preferential duty - that is the duty existing at the time the Ottawa agreement was signed - was 45 per cent., which it is now proposed to reduce to 25 per cent. What is the reason for this big reduction? I ask this question particularly in view of the following statement in the report of the Tariff Board dated the 20th February, 1935-

The local industry is efficient, caters for all requirements, is working on a reasonable profit margin, uses almost entirely Australian material, is a large employer of skilled labour, and has been developed by the investment of a considerable amount of capital; its future is, therefore, a matter of paramount importance to the community as a whole.

At the board's last inquiry into this industry representatives of the Australian manufacturers made certain representations. Will the Miniser explain the reason for this reduction? Why should not the British preferential duty remain at that existing at the time the Ottawa agreement was signed? I recall that about two years ago Senator DuncanHughes, speaking in this chamber, made a very pathetic plea on behalf of some poor man who had no boots, and the honorable senator contended that if we could only reduce the tariff on these articles, persons in such a plight would be enabled to secure the necessary footwear. Answering the honorable senator's argument at that time, I dealt with the Bata factory in Czechoslovakia - I notice that the board, in its report, also referred to it - and I pointed out that this enterprise was producing huge stocks of boots and shoes which were being sold at prices ranging from ls. 6d. to 12s. a pair. I have shown that if the tariff were lowered it might be possible for the Bata Company to flood the Australian market with cheap boots and shoes. According to reports of the Tariff Board, this enterprise has established factories in Great Britain, and there is every possibility of 24 factories .being conducted in the Old Country on Bata economic lines. The Australian boot manufacturers are apprehensive of this development, because they foresee that Bata boots manufactured in England may be exported to Australia and admitted under the British preferential tariff.

Senator Dein - Branches of the Bata Company, if established in Great Britain, would have no advantage over the British manufacturers when exporting to Australia.

Senator BROWN - The Bata Company is a foreign corporation, which has highly developed the manufacture of footwear. If its methods are introduced into Great Britain, boots and shoes made under the Bata system will be admitted to the Commonwealth at a cheaper rate than if they were exported directly from Czechoslovakia. I make no apology for quoting the following statement issued by the Victorian Chamber of Manufactures, and taken from the English trade journal, TheFootwear Organizer: -

One aspect of j,Ir. Bata's plans, and one of the most important, appears to be completely overlooked. By establishing a factory in this country, he can bring his productions inside any tariff which may be imposed on foreign shoes entering Great Britain. In addition, his shoes made hero will enjoy the benefits of British preferential duties in the dominions and colonies, and most-favoured nation treatment elsewhere.

That danger is realized by English manufacturers of footwear.

The action of the Commonwealth Government in reducing the duties on imported footwear even below the rate permissible under the Ottawa agreement will give an inducement to a foreign concern to flood the local market, thus causing widespread unemployment. The Australian boot trade is, therefore, confronted with a serious prospect; I hope honorable senators will view it in that light before arriving at a decision. Boots manufactured in Australia are produced principally by factories in New South Wales and Victoria, but several concerns are now operating in Queensland. I am informed that the Government of Victoria has amended the Factories Act. to prevent the working of overtime in this industry. In this way, increased employment will be brought about. I am heartily in accord with that legislative action to diminish unemployment ; the governments of other States should follow suit. In Queensland the industry is governed by a. federal award, and the rates of wages have not been so high as they should, be. If the trade were governed by an award of the Arbitration Court of Queensland, I am confident that they would be increased. When dealing with the subject of reasonable and unreasonable competition, the Tariff Board should take into consideration the fact that the footwear industry in Australia is endeavouring to increase employment. Honorable senators should ensure that the industry is adequately safeguarded. Seme honorable senators may deny that we are competent to restore the proposed duty of 25 per cent, to the original rate, on the ground that it would conflict with the Ottawa agreement. The Opposition declares emphatically that Parliament has the power to take that action without violating the agreement. Last night the Leader of the Senate (Senator Pearce) yarded the senatorial sheep on to his side by his bluff that the action of the House of Representatives, in respect of the duty on cement, violated the Ottawa agreement; but the Chief Justice of the High Court (Sir John Latham), has definitely stated that it is possible for the Commonwealth Parliament not to accept the recommendation of the Tariff Board, without causing a breach of the agreement. Sir John Latham is the highest legal luminary in the Commonwealth; in view of his statement, I, for one, will not accept the doctrine laid down by

Senator Pearceto Government supporters. Sir Herbert Samuel, when discussing the dominion agreements in the House of Commons on the 18th October, 1932, also stated very clearly the powers of the various Governments under that agreement, and he cited tlie opinion of Sir John Latham. If honorable senators desire, I can obtain that statement from the House of Commons' Ilansard. Speaking last night on the item dealing with cement, Senator Pearce made an eloquent plea to honorable senators not to cast a vote which would violate the Ottawa agreement. This plea was advanced in order to induce honorable senators not to go back on their party. In my opinion the right honorable gentleman advanced an astounding and utterly false argument.

Senator Gibson - What has this to do with boot3?

Senator BROWN - The two are closely related, as I shall proceed to demonstrate. If the Senate so desires, it can request the House of Representatives to restore the duty on imported footwear to the original figure without violating the Ottawa agreement. I am confident that this can bc. done. 1 repeat that Senator Pearce made an astounding statement that if honorable senators did not. accept the duty on cement, article 12 of the agreement would be broken and th. entire agreement would be jeopardized. If those were not the actual words used by the right honorable gentleman, he certainly conveyed that meaning. Such a contention is utterly specious. Under article 10 of the Ottawa agreement this Government undertakes, during the currency of the agreement, that the tariff shall be based on the principle that protective duties shall not exceed such a level as will prevent the producer of the United Kingdom from competing on a reasonable basis, with Australian manufacturers.

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