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Friday, 15 May 1936

Senator E B JOHNSTON (Western Australia) . - I move -

That the House of Representatives be requested to make the duties, sub-item e, paragraph (2)(a)(b) and (c), per lb., British, free.

The small amendment made by the committee last night to permit certain raw panels to enter free of duty under customs by-law does not meet the serious position which has arisen throughout Australia in regard to the sale of British motor cars. During the last twelve months the distributors of British and other motor cars have been unable to obtain bodies for their purpose, and the shortage is not confined to Morris cars. I have received a mass of correspondence, some of which I shall read to honorable senators in the course of the discussion, from distributors of many types of British and American motor cars who state that they have been unable to obtain motor bodies. Firm orders have been given for the purchase of cars, and the

British distributors in Australia have been unable to supply them. Honorable senators will, therefore, realize that considerable injury is being done to the British motor car industry; the number of British cars which have been sold in Australia this year is proportionately less than during the preceding year. This decrease has come about despite the operation of the Ottawa agreement, and the efforts of the Government to extend the sale and use of British products. Last night, the Minister in charge of the bill (Senator A. J. McLachlan) appeared to minimize the seriousness of this matter to the British motor car industry. If the Customs Department is to adopt such an attitude, I fear that the importation of raw panels under licence, to which the committee has agreed, will not be facilitated by it. The British manufacturers desire the abolition of the present rate of duty on panels imported from Great Britain in knockeddown form, at present standing at 9d. per lb. for the type of panel capable of being assembled in Australia. That is the type to which my request refers. The 6d. per lb. rate applies to raw panels only - panels as they leave the press, but with the edges trimmed. I am assured by a highly competent, authority on the British motor car industry that these panels to which the concession of free admission under bylaw has been given - that means subject to the approval of the Minister for Trade and Customs in each instance - are an entirely uneconomical proposition. In any case the manufacturers and distributors of British cars should not be compelled to go. cap in hand, to the Government whenever they want to import a few panels; they want something real and tangible. If my amendment be accepted by the committee it will render valuable service to the cause of Imperial trade. It will not only give to the Australian public a greater proportion of British motor cars at lower prices, but also ultimately distribute body building and assembling works through all of the States; at the present time they are confined to two States. The recent agitation for a reduction and abolition of duties, including primage duties, comes from British manufacturers just as much, as from the Australian distributors. The suggestion which appeared to me to be made last night - that the request emanated from a limited number of Australian distributors - is certainly unwarranted. Raw panels, to which this committee granted a limited measure of relief, subject to the approval of the Customs Department, are costly to fabricate; their admission free of duty would not substantially reduce the price of the British car. But whereas the existing delays in the supply of British motor bodies would not be relieved under that alteration, it would under the' request I have submitted. The view of the British manufacturers and their Australian distributors is that, owing to the high protective duties at present in existence, they are compelled to market their cars with bodies built or assembled in Australia. They are prepared to do this, if the Government will show them when and how, under all circumstances, they can obtain such bodies at prices which will allow them to compete on an equal basis with their foreign rivals. Full evidence can be given to the committee that importers of British motor chassis, owing to Australian factors entirely outside their control, have either been unable to obtain suitable bodies at economical prices, or, where they have been able to obtain the bodies, they have been charged high prices and deliveries have been delayed. Also, in. many instances, they have been obliged to accept a compromise in the design of the car, and the British chassis is almost invariably saddled with an overweighted body. That would be entirely avoided if the committee were to accept my amendment. British manufacturers and their distributors have been told by the Minister for Trade and Customs (Mr. White) that, if they require bodies, they can obtain them from General Motors-Holden's Limited. I concede the value of the work which is being done by this firm to build up Australian industry; it has been a substantial factor in creating employment in the Commonwealth. But it is perfectly certain, too, that, under this amendment, others, if given the opportunity, can and will do the same, and employment will be more widely distributed among the States. Is it fair for the Minister to ask any motor manufacturer to place himself and his forward designs in the hands of his strongest competitors, who are the agents for American motor cars in the Australian market? Further, is it humanly likely that the strongest American competitor will supply bodies to his English rivals at a price which would enable him to be undersold? That is surely too much to expect. The position in Australia in regard to the supply of bodies for British cars should be closely studied by honorable senators. At the present time, three major firms are engaged in this business - General Motors-Holden's Limited, of Adelaide; T. J. Richards and Sons, of Adelaide; and the Ford Company, at Geelong. I shall refer to other motor body-building firms in Melbourne at a later stage. These principal manufacturers of motor bodies are primarily interested in the following makes : - 'General MotorsHolden's Limited, General Motors' products; T. J. Richards and Sons, Dodge and Chrysler products; while, naturally, the Ford Company is concerned with the supply of its own products. With the increase of business anticipated, it is unlikely that General Motors-Holden's Limited, or T. J. Richards and Sons, will be really interested in contracting for work outside their own special lines, although, for particular reasons, they will undoubtedly state that they are prepared to accept contracts for bodies for British chassis. I shall produce ample evidence that all of these firms have refused to quote for the supply of bodies, not only for British cars, but also for other makes of American cars. Under those circumstances, there is a close monopoly, and the Australian distributors of British cars are excluded from the Australian market, because they cannot obtain bodies or fabricated parts of bodies except by paying excessive rates of duty. There is no way in which this committee can relieve the position, and encourage the sale of British cars, and the transfer of some of our trade from the United States of America, with which Australia has an adverse balance, to Great Britain than by the acceptance of my amendment; it will give real legal relief to the industry, without the necessity for the British manufacturers to go cap in hand to the Customs Department, which on other occasions has refused their requests for the admission of bodies free under by-law, because some Australian manufacturer has stated that he can supply the goods. Contracts have been let in Australia for the manufacture of motor bodies, and the makers have not fulfilled their orders. In some instances deliveries have been four and five months overdue. But if they express their willingness to accept the orders it would be quite sufficient for the Customs Department to decline to admit British panels under by-law free of duty. Ample evidence can be supplied that, when General Motors-Hold en'5 limited and T. J. Richards and Sons have contracted to supply bodies for British chassis, they have charged high prices, supplied bodies of unsuitable design, or delayed deliveries. When the Britishdistributors have been unable to fulfil their orders, which were often obtained at great expense, a large number of cancellations has naturally resulted. When a person gives an order for a motor car, he generally wants it the next day, not four or six months later.

Senator Guthrie - The honorable senator has stated that the bodies were too heavy. Whose fault was that?

Senator E B JOHNSTON - I am informed that certain firms have said that they cannot build bodies of the exact design required, and that the purchaser would have to take a heavier body.

Senator Guthrie - The bodies of British cars are usually lighter.

Senator E B JOHNSTON - The distributors of British cars . complain that some of the Australian bodies are not so light as they desire. It is well known that some firms will not deliver bodies in small quantities, possibly because they are endeavouring to avoid the cost of making too many dies. There are still two independent body-builders, whose works are situated in Melbourne. One employs approximately 1,000 hands, and although for many months it has been working to capacity, its late deliveries are causing the utmost disappointment and consequent loss of business to its customers. The firm undertook the work of assembling British motor panels, and during the currency of the contract threatened to cease production unless paid more than the price agreed upon originally. This was due to the alleged difficulties in assembling, which, after full investigation, were found to be due to the overworked state of the organization and the consequent inefficiency which followed. It has been suggested that this firm would not have dared to increase its contract price had its capital been invested in the material which had been imported on account of the respective distributors in Australia.

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