Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Thursday, 3 December 1936

Senator A J McLACHLAN (SOUTH AUSTRALIA) (Postmaster-General) . - I move -

That the bill be now read a second time.

The principal purpose of this bill is to amend section 7 of the Customs Tariff (Industries Preservation) Act 1921-1933 with a view to providing to Australian industry the full measure of protection which was contemplated when the act was originally framed. The existing section provides for the imposition of dumping freight duty on goods exported to Australia, which are of a class or kind "produced or manufactured in Australia, and which have been, or are being, carried either free of freight charges or at rates of freight which are lower than the prevailing rates for such goods. These concessions may be on account of the goods being carried in subsidized ships or as ballast, or they may take the form of rebates, which are granted in certain circumstances. Under the section as it at present stands, the dumping freight duty payable on goods coming under its provisions is 5 per cent, of the fair market value of such goods at the time of shipment. Honorable senators will appreciate that a dumping duty calculated on this basis bears no direct relationship to any freight concession which has been granted, or may be granted, in respect of goods imported under conditions which bring them within the provisions of the section. In respect of goods the fair market value of which is high in relation to their weight or bulk, dumping freight duty calculated on the 5 per cent, basis at present set down in the act has proved more than sufficient to give the desired protection to Australian industry. On the other hand, there are goods of low value in comparison with their weight or bulk, as for example, coke, cement and steel. It has been found that, in some instances, the dumping duty payable under the existing section is not nearly sufficient to provide the protection necessary on account of freight dumping.

The position may be illustrated by a shipment of cement which was recently imported in a new vessel, which was brought to Australia to engage in trade. The cement was carried as ballast at a freight charge of 15s. 2d. sterling per ton, whereas the normal rate of freight on cement is approximately 26s. sterling per ton, the difference of 10s. lOd. sterling per ton representing the actual freight concession allowed on the shipment. Under the existing section 7, however, a freight dumping duty of only ls. 6d., Australian currency, can be collected. Even after this freight dumping duty is collected, the importer is still advantaged to the extent of 12s. Id., Australian currency.

The object of the Customs Tariff (Industries Preservation) Act is to protect Australian industries from goods exported to Australia in circumstances which constitute unfair competition. It is obvious that section 7 of the act, as it stands at present, does not achieve this objective, seeing that, in some instances, the amount of dumping freight duty which can be charged is quite inadequate to bridge the difference between the concession freight at which goods are not infrequently carried, and the ' normal freight. Furthermore, the present method of calculating dumping freight duty is unsound, in that the amount of dumping freight duty chargeable on a shipment of goods carried freight free would be the same as that on a similar shipment in respect of which an appreciable proportion of the normal or prevailing rate of freight was paid.

In this bill it is proposed that dumping freight duty, instead of being 5 per cent, of the fair market value, shall be the difference between the actual freight paid or payable and the normal rate of freight. The Minister will determine the normal rate of freight in respect of any goods, but the amendment provides that he cannot determine a rate higher than the highest rates of freight payable on similar goods carried by general cargo vessels trading regularly with Australia. A necessary condition of the operation of section 7 in regard to any class or kind of goods is that the Minister shall be satisfied, after inquiry and report by the Tariff Board, that, by reason of the low freight, detriment may result to an Australian industry. "Where the Minister is so satisfied, he publishes a notice in the Gazette specifying the goods concerned, and, thereupon, all importations of such goods come within the operation of the section, provided in each case the charges of dumping and detriment to local industry are established. In practice, however, action under the section is not always delayed until the receipt of a report by the Tariff Board. In cases where the information available indicates the possibility of dumping to the detriment of local industry and there appears to be need for immediate action, the importer is required to lodge a cash deposit to cover any dumping duty which may, subsequently, be found to be payable. If, as the result of the Tariff Board inquiry, the goods are gazetted by the Minister, the deposit is then adjusted by retaining the amount found to be payable and refunding the balance, if any, to the importer. On the other hand, if the Minister does not consider that the circumstances justify the gazettal of the goods, the full amount of the deposit is refunded. The great restraint which Ministers have exercised in using section 7 is evident from the fact that, during the fifteen years the act has been in existence, only three classes of goods have been dealt with under this section, viz. : Portland cement, calcium carbide, and certain types of grease. Nevertheless, it is essential, in the interests of Australian industry, that proper provision be made to meet cases in which goods are carried freight free or at concession rates, and it is considered that the proposed amendment, as set out in the bill, will achieve this purpose.

A further amendment proposed to the act is the insertion of new section 12a providing for conversion of the amount of dumping duty under sections 4, 5 and 7 to Australian currency. The reason for this addition is that, owing to depreciation of Australian currency in relation to sterling since the act was passed, Australian manufacturers are not receiving the protection against dumping which was intended. I should explain that section 4 relates to goods which are sold to an importer in Australia at an export price which is less than the fair market value of the goods in the country of export. The amount of dumping duly under this section is the difference between the fair market value of the goods at the time of shipment and the export price. Section 5 covers goods which are sold to an importer in Australia at a price which is less than a reasonable price. The amount of dumpingbelowcost duty under this section is the difference between a reasonable price of the goods at the time of shipment, based on cost of production, and the export price of the goods. Section 7 is the provision for dumping freight duties, the amend ment of which is provided for in this bill.

The following example based on goods gazetted under section 4 will illustrate the necessity for the provision in the bill for conversion of the amount payable as dumping duty into Australian currency: Assuming the fair market value in: the country of export to be £5 sterling, and the selling price to the Australian importer to be £4 sterling, the difference is £1 sterling. As the act stands at present, however, the dumping duty actually paid is £1 Australian currency, and as £1 Australian currency -represents considerably less than £1 sterling, it is obvious that under present conditions the amount of dumping duty paid is not the actual extent of the dumping. The act envisaged that Australian manufacturers would be protected against dumping to the full extent of such dumping, and proposed new section 12a in this bill ensures this protection by providing for the 'conversion into Australian currency of amounts of dumping duty calculated in any other currency. The amendments are equitable to all interested parties. They give no additional protection- to Australian industry, but they ensure that the protection intended by this Parliament shall be a reality.

Suggest corrections