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Thursday, 2 June 1921


Mr CHARLTON (Hunter) .- I followed very closely the speech of the Minister for Trade and Customs (Mr. Greene) uponthis item, and if ever a case was made out in favour of higher duties the Minister made one. I was very much surprised when he asked the Committee not to support an increase in the rates he proposed, because in view of the statements he made he evidently desires to protect the industry. ' If that is so, there is no course left to the Committee but to increase the duties.


Mr JAMES PAGE (MARANOA, QUEENSLAND) - That is proved by the Minister's statement.


Mr CHARLTON - Yes. The Minister dealt with the cost of converting iron ore into pig iron. He showed that wages had increased in Australia since the duties appearing in the schedule were imposed. If that is so, there is every justification for imposing still higher rates, because the cost of production has increased. He also said that costs on the other side of the world had decreased considerably. Consequently higher duties must be imposed if our industries are to be protected.


Mr Corser - Did not the Minister say that the industry was protected by the shipping freights ?


Mr CHARLTON - The Minister has made out a good case in favour of higher duties, and I shall be very much surprised if the Committee accepts the rates he proposes. This is the hey industry of Australia - not one of them - but the most important, and it is the duty of this Parliament to protect it in the interests of the whole community. If we are to remain here until the end of the year, I shall fight this matter to the last ditch, because I feel that we should not be content until the Minister is prepared to make some concession in the direction I have indicated. I do not wish my statement to be regarded as a threat; but I feel very keenly on the matter. What did the Minister say in regard to. currency? I . am surprised at the arguments that have been adduced. Since this Parliament met we have been informed that during the present session our time is to be devoted to consideration of the Tariff, and that during the absenceof the Prime Minister. (Mr. Hughes) contentious matters that might jeopardize the Government would not be introduced. The Government appealed to the Country party to grant them immunity from, attack during the absence of the Prime Minister ; but we are now told that it is necessary to deal with the, question of exchange by legislationduring the current session.


Mr GREENE (RICHMOND, NEW SOUTH WALES) - It will be purely a Tariff Bill.


Mr CHARLTON - If it is to be a Tariff Bill, when does the Minister propose introducing it?


Mr GREENE (RICHMOND, NEW SOUTH WALES) - When the Tariff is disposed of.


Mr CHARLTON - The Minister has not made such an admission before. We have never been informed that it was the intention of the Government to introduce a Bill dealing with exchange.


Mr GREENE (RICHMOND, NEW SOUTH WALES) -We must do it.


Mr CHARLTON - If it is necessary, it should be done promptly.


Mr GREENE (RICHMOND, NEW SOUTH WALES) - It is necessary.


Mr Corser - That was generally understood.


Mr CHARLTON - I do not believe one-half the members of this Committee knew that it was the intention of the Government to introduce such a measure.


Mr Corser - How are we to remedy the evils which exist without such a Bill?


Mr CHARLTON - It is useless for the honorable member to speak in that way. We have to deal with the facts as they have been presented to the Committee. I knew that it was the intention of the Government to appoint a Board to deal with firms who were abusing the privileges they enjoyed under a Protective Tariff.


Mr Corser - The Minister referred to-day to the question of exchange.


Mr CHARLTON - Yes ; and the honorable member for Wide Bay (Mr. Corser) is now' endeavouring to protect the Minister. It was never publicly announced, and the Minister knows that as well as I do.


Mr GREENE (RICHMOND, NEW SOUTH WALES) - I made such a statement, but not in this chamber.


Mr CHARLTON - But we are guided by what we hear here. It was clearly , stated that it was the intention of the Government to deal only with the Tariff. The Minister for Trade and Customs has said that a Bill dealing with the rate of exchange is dependent on the Tariff. If the franc has fallen from 25 to . 60, what hope can this industry have of. carrying. on? We do not know what damage may be done within the next three or four months. The Minister has frankly admitted that there is already dumping from Belgium. Manufacturers there are getting coal from Germany, and because of the rate of exchange they are able to land their steel and iron in Australia more cheaply than it can be produced here.


Mr Gregory - The world's demand is so great.


Mr CHARLTON - Exactly; but if that is the position, are we to allow it to continue to exist until this industry collapses in Australia?


Mr Gregory - I admit there might be a higher duty on Continental importations.


Mr CHARLTON - I contend that higher duties should be imposed for the protection of this industry in Australia. We must, beyond all doubt, make its position secure. I speak from memory, and am subject to correction, but when we built the transcontinental railway, and were faced with the difficulty of getting rails, to which the honorable member for Maranoa (Mr. James Page) has alluded, we had to pay, I think, £8 17s. per ton for them. This industry was then coming into existence. It was only in its infancy. I do not think that the Newcastle works had then started the manufacture of rails.


Mr Gregory - Hoskins made a good many.


Mr CHARLTON - That is so, and I believe they cost a little over £9 10s. per ton.


Mr Gregory - No. The pre-war price was £81 6s. per ton, at Port Augusta.


Mr CHARLTON - What was our prewar price?


Mr Gregory - That was our price.


Mr Watt - That was the Broken Hill Company's price for rails, landed at Port Augusta.


Mr CHARLTON - Then at that time we were purchasing rails abroad at something like the same price. The point I make is that if this industry in its infancy could supply us with rails at a price anything like that charged for imported rails, it was very greatly to its credit. An increased duty to-day is absolutely necessary because of the changed conditions. The Minister admitted that twelve months ago the duty now proposed was necessary.


Mr Gregory - He pointed out that it had no value as a Protective duty at that time.


Mr GREENE (RICHMOND, NEW SOUTH WALES) - What I said was that at the time the duty was imposed no duty was necessary, but what we did was to endeavour to forecast, as well as we could, future conditions, and to impose a duty that would meet them.


Mr CHARLTON - At the time the Minister made that forecast he will admit that conditions were altogether different from what they are to-day. The price of coal has gone up considerably. It has been increased to the extent of 4s. per ton, and as it takes 3 tons of coal to produce a ton of pig iron, that means an increase of 12s. in the cost of produc tion of a ton of pig iron. There have been two or three increases in wages under awards of the Arbitration Court. These have been necessary to enable the workers to cope with the increased cost of living. Then wharfage charges and harbor dues have increased. All these increases must have placed the Broken Hill Company in a very different position with regard to the cost of production from that which it occupied at the time when the Minister for Trade and Customs made his forecast of the duties necessary to meet future conditions. The Minister has pointed out that since the war, and in the last few months especially, conditions abroad have materially changed. Wages have . come down, unfortunately, in many industries, the cost of coal has (been reduced in Belgium, and, on top of all this, we have the difference in the rate of exchange to consider. In these circumstances, how can the local industry continue to exist if some additional protection is not afforded to it? It will be admitted that the Broken Hill Company has done well for the Commonwealth.


Mr Gregory - It has been on a good wicket, too.


Mr CHARLTON - I admit that all manufacturers have been on , a good wicket. Can the honorable member tell me any one who was not on a good wicket during the war?


Mr Bell - Many people were not.


Mr CHARLTON - Many people who were consumers were not; but there were very few manufacturing industries that were not on a good wicket during the war.


Mr Bell - The honorable member is helping the consumer a lot now.


Mr CHARLTON - I think that I am. I am endeavouring to secure employment for people in Australia to tide them over the difficult times ahead. Whether the honorable member can see it or not the position staring us in the face now is avery serious one.. No one knows what may happen here in the near future. The conditions from which the Old Country is suffering at the present time may be repeated here. We may have to suffer to some extent in the same way, no matter what we can do, but I think we should do what we can to prevent that.


Mr Bell - The course which the honorable member proposes would intensify our difficulties.


Mr CHARLTON - I do not think so. If we accepted the views expressed by the honorable member, and some other honorable members, we . would do nothing to protect this industry. We wouldallow it to collapse, and would send money from Australia to keep people in other parts of the world at work for lower wages than are paid here, whilst our own people would be left to walk about in idleness.


Mr Bell - Of what use are high wages if we continue to increase the cost of commodities as the honorable member proposes that we should do?


Mr CHARLTON - The honorable member does not . appear to see the difference between endeavouring to stabilize matters, and protect the country . from reductions in wages, and the. question of the cost of commodities. No one took a more active part. than I did in trying to prevent high prices. Throughout the war, the period when those in power should have grappled with the question, my voice was always heard against the continuous increase in the cost of living. Now., when we should be getting back to normal conditions, the honorable member is content to. allow everything to drift, and he would permit the workers who, for years past, have been earning less than sufficient to meet the increased cost of living, to go right down to bed-rock.


Mr Bell - The honorable member is proposing to increase the cost of living.

Mr.CHARLTON.- Not- at all. I believe that the effect of an increase in the- duty on- this item would' be to decrease the cost of living. The honorable member- does not, or will not, see that I am endeavouring to prevent this industry going down because of competition from abroad, due to conditions, that we all deplore, existing in other countries at the present moment.


Mr Watt - We all want to do that.


Mr CHARLTON - I am afraid that the honorable member for Darwin (Mr. Bell) does not.


Mr Watt -The honorable member is accusing , the honorable member for Darwin of being a foreign trader, but he is not one-


Mr CHARLTON -I am not so sure about that. Judging by the honorable member's interjections,' I should- say that he favours giving work to the people of other countries rather than to Australians!


Mr Bell - The honorable member wishes to attain a certain object, but is going the wrong way about it.


Mr Watt - There is. no general sentiment in the Committee in favour- of foreign manufactures as against Australian manufactures-. The votes that have been recorded show that.


Mr CHARLTON - I do not know that they do.


Mr Watt - This is the most Protectionist House that has ever been seen in Australia.


Mr CHARLTON - I am in agreement with the honorable member, ifhe says that, there is a substantial majority here in favour of Protection.


Mr Watt - That is all I say.


Mr CHARLTON - I understood the honorable member to suggest that the whole of the members of the Committee are Protectionists, but we know that there are some who take another view. The honorable member who preceded me said that those engaged in this industry are not able to supply the requirements of Australia. I do not know whether, at the moment, they are or are not ; hut I do know that they are making every en deavour to do so. They are at the present time extending their works.


Mr GREENE (RICHMOND, NEW SOUTH WALES) - A new blast furnace is being erected which will have a capacity of 500 tons, a day.

Mr.CHARLTON. - That is so, and the company is laying- down additional machinery plant.. A large number of men were employed in connexion with the extension of the works- and plant, But I can inform honorable members' that a- few weeks ago, when I was at the works, numbers of men who- had been employed on the extensions were being paid off because of the uncertainty of the position of the company. They realized that they would not be justified in expending more millions if they were not able to hold the market here. What I am anxious about is that they should be placed in a position to hold the market. If we have to pay a few shillings more per ton forsteel rails and other materials manufactured here, we shall not have much to complain about if at the same time we are finding employment for our own people.


Mr Hill - No one grudges paying a few shillings extra, but an increase of a few pounds is a horse of a different colour.


Mr CHARLTON - I do not know that there is such a difference. The price of rails here to-day is between £17 and £18 per ton, and it is very little less in Great Britain. These high prices have been occasioned by the Avar, and are operating everywhere. Prices will gradually fall here, as elsewhere, when we settle down. We shall never get back entirely to pre-war conditions, and I am one of those who hope that' we never will. I hope that we shall not get down to bedrock, as we did before the war. I think that it is in the best interests of the people as a whole that prices should be fairly high, so long as they are not exorbitant, if wages are also high. Under those conditions, the people will be more contented, and we shall have a better race as the result. The whole question is whether, in Australia, we should be selfcontained. Without this industry we cannot be self-contained. If we did not have the steel and iron industry firmly established, everything else would go by the board. What would happen to us in time of war if we did not have this industry established in Australia? I do not wish to see any more wars, but they may come in spite of us, and, if they do, and this industry is not in existence here, what will happen to us? Where should we have been three or four years ago if we had not established this industry? Have we nothing to learn from the history of the last few years? The lesson we should have learned is that we must be self-contained. No greater lesson was ever taught the people of Australia and their representative men. We should have been helpless during the war if it had not been for our steel and iron industry.


Mr Considine - The trouble is that Australian statesmen do not seem to have learnt the lesson.


Mr Watt - The statesmen we have have learned the lesson.


Mr CHARLTON - I hope that the statesmen, not only of Australia, but throughout the world, have learned that everything possible should be done to prevent war in the future. But we have to deal with things as they are, and so must make sure that we are giving ample protection to this industry. The Minister for Trade and Customs desires that the duty should be left as proposed. I do not know what actuates him in that desire. I do not know whether he is trying to please the Corner party or not, but it does seem strange that when he explained that he is not prepared to consider an increase of the duty on this item, honorable members who have been opposing the Tariff have suddenly disappeared from the chamber.


Mr Watt - No; they have left one sentinel in the Corner.

Mr.Hill. - Yes; and one who is prepared to move an amendment for a lower duty, so that the honorable member can go ahead.


Mr CHARLTON - I believe that it is our duty to make all provision necessary for the' carrying on of these works continuously. The Minister has pointed out the necessity of continuity of operations in this industry. To allow a blast furnace to go down involves the expenditure of a lot of money. If those engaged in this industry cannot secure sufficient orders in Australia to keep their furnaces going constantly, their . enterprise must be a failure. If any one of us had a plant with two blast furnaces, and could get sufficient orders to keep only one going, he could not make . his enterprise pay, in view of the capital invested in it. It would be impossible on the capital that had been put into it.


Mr GREENE (RICHMOND, NEW SOUTH WALES) - The company must have continuity.


Mr CHARLTON - Exactly; they must be working all the time. During the late shipping trouble the company was compelled to let the furnaces go down, and very heavy expense was involved in getting them going once more. The founders of this industry were led to believe that if they laid down a plant they would be able to keep their furnaces going, and it is essential that we should provide them with a market.


Mr Considine - And after they had asked us tosee that they got a market for their product they told us to mind our own business.


Mr CHARLTON - That is the other side.


Mr Watt - That is the silver side; but the honorable member is dealing with the steel side of the question.


Mr CHARLTON - T am dealing with the bread-and-butter side. There are probably 20,000 people directly and indirectly engaged in this industry.


Mr GREENE (RICHMOND, NEW SOUTH WALES) - More than 20,000 workers.


Mr CHARLTON - We must see that they are kept in employment, and employed under reasonable conditions. We shall have trouble if we allow iron and steel from Belgium to be dumped into Australia, and so deprive our own industry of its market. Some time ago a company was- formed to carry on coal-mining operations in the vicinity of Sydney harbor. After boring through shale to a great depth coal was reached; but the company found it impossible to make the proposition pay. It spent over £1,000,000 and, after all, had to close down. These steel works might have a like experience. Unless the shareholders can get a fair return for their money they will have to close down, and their huge plant may be scrapped. It is our duty to see that that does not .occur. We are not anxious to increase the cost of iron and steel to the general public, and if, as the result of increased duties, the prices are raised, it will be to only an infinitesimal extent. Increased duties will be the means of keeping out cheap foreign material. If, as the Minister has said, the rate of exchange is such as to assist very materially the importers of steel, what hope can we have of the continuance of these works unless we afford them adequate protection? The Minister has said that he intends to introduce a measure dealing with that phase of the question ; but we do not know that it will 'prove satisfactory. We do know, however, that we can to-day adequately protect this great industry. I am sure that the majority of honorable members are favorable to increased duties, and that the Minister would consult the wishes of the Committee by supporting the proposed increase. If it were found desirable later on to vary the rates, it would be within the power of the Minister to do so. This industry's chief competition comes not from within the British Empire, but from outside. Why should we give employment to' a lot of Germans? The coal that is being used in the Belgian ironworks to-day is coming from Germany, where it is cut at a much lower rate than that prevailing in Australia, and it is being used in the manufacture of steel and iron that will compete with our own products unless we provide for adequate protection. I hope that the Minister has not finally made up his mind to refrain from supporting an increase, and that the whole question will be thoroughly threshed out. We know what the closing down of this industry would mean.


Mr Considine - But the honorable member does not believe that it is going to close down?


Mr CHARLTON - I do not know whether or not it will close down.


Mr Considine - The honorable member has a shrewd idea that it will go on.


Mr CHARLTON - I intend to do all that I can to keep those engaged in the industry at work.


Mr Considine - .Yes; while they are working they will not be thinking.


Mr CHARLTON - At all events, I do not want to see people walking our streets in idleness and in a state of semistarvation because of lack of legislation on our part to protect Australian industries. Our conditions of labour are in advance of those of Belgium and other European countries, and I want them to be maintained. This is a key industry, and we have to stabilize it. Among its many subsidiary industries is that of nailmaking; but that industry in New South Wales at the present time is closed down. The men tell me that they will not be able to resume operations unless the Tariff is increased. They have been out of work for a couple of months, and they say that it is impossible to carry on while the present dumping continues. If we take a sane view of this question, we shall provide for full protection for all our industries. I ask honorable members to give this subject careful thought. Every word that the Minister uttered was really in favour of an increase of these duties. He did not say a word in favour of retaining the present rates or of reducing them. He stressed the point that this was a key industry, and that it should bc protected. I give the honorable gentleman credit for the way in which he is handling the Tariff schedule, and also for the speech made by him on this question ; but, in view of his utterances, I find it difficult to understand why he is not prepared to move for increased duties. The honorable member for Corangamite (Mr. Gibson) has. said that there are 6,500 tons of steel now on the water for Australia, and that if these duties be increased that shipment will, have to pay the increased rates. No doubt,, the importers would regard that as a hardship, but it is a by no means uncommon occurrence. I regret to hear that there is so much coming in. It is only within the last two or three weeks that wages in European countries have fallen, and if already large . quantities of steel are on the way to Australia, we may be sure that, unless we raise the Tariff, other big shipments will follow. Why should we import material that we can manufacture for ourselves? We shall be able to more than meet our requirements, so far as steel is concerned, when the additional furnace to which the Minister has referred is set going. The fact that there is certain steel on the water is no justification for refusing the proposed increase in the duties. Reference has been made to what is termed the " natural protection " ; but what is that ? It is true that there is a good deal of water carriage, and that freight has to be paid; but I can remember the time when steel products' were brought out here as ballast.


Mr GREENE (RICHMOND, NEW SOUTH WALES) - There is no natural protection.


Mr CHARLTON - I venture to say there is not.


Mr GREENE (RICHMOND, NEW SOUTH WALES) - '"The boot is on the other foot."


Mr CHARLTON - I think so, too. Freights have been coming down very fast. Prior to the war, I have known iron and steel brought out for about £1 a ton; and, as I say, in some cases as ballast, the exporters being glad to get some return for this ballast, and take back coal . and other commodities. We have to look at our position here.' We have a huge coast line, and manufacturers in, say, New South Wales, have to supply orders in Western Australia or the Northern Territory, . covering' distances nearly as great as those from other countries. Thus we see what is the. value of the " natural protection " we hear so much about. As a matter of fact, this industry depends entirely on what we do in this Parliament. If I were certain that the present duties were adequate, I should not be. taking up my present, position,, but I feel that they are not adequate. Changes are taking place throughout the world which must inevitably be felt here, and my desire is that we should be prepared, as. far as possible-, to meet the situation. The aftermath of war is already reflected in the unemployment in all the States, and the position must be intensified unless we do something by way ofprevention. The proper- course is. to provide as much employment as possible, and see that wages are not permitted to run down on a sliding scale. Once wages begin to drop to any considerable extent, the country is injured,, with benefit to no one; there is less money in circulation, and the position becomes acute. This is a time when we should do our best in the way of economy, and for- the- next few years obtain as much revenue as possible; and to this end it is necessary to provide avenues of employment. Indeed, the provision of employment is the very object of the Tariff, and we have to face the fundamental question whether, in the interests of the country, steel and ironworks shall be established.. ' It is true that' such works are already here, but there is the danger and possibility . of stagnation ahead; andonce operations are suspended, it will be extremely difficult, if not impossible, to resume them. I remember, a few years ago, oil works being established near to Hamilton, the operations of which were interrupted by the war ; and to-day beautiful machinery there can be seen rusting away. If the wheels of the steel works are not kept well oiled and going, we must look forward to similar results, and Australia will be unable to claim that she is a self-contained country. As a matter of fact, Australia is not self-contained now ; and we are looking to this Tariff to make her so. The first step is to start the key industry, which, of course, is that of iron and steel. There is not a member in this House but will admit that duringthe last twelve months conditions have altered all over the world, and we cannot hope to escape ; yet, it is proposed that we should absolutely refuse to do the fair thing by this industry. This will -mean either the industry "going to the wall," or a big inroad on wages. So far as I can learn, this industry affords very satisfactory terms to the employees; I have heard very few complaints in this regard, and there seems a general idea that the " fair thing " is being done. Surely, then, we ought to see that the fair thing is done by the companies which so treat their employees. I hold no brief for any company, but regard the question from the national point of view. What is the use of talking about immigration if we do not provide avenues of employment - if, in the case of the key industry, we refuse to impose duties sufficient to enable it to live and grow as it should? I agree with the Minister's statement that in America the high duties which prevailed for many years havebeen lowered, and that it is possible that we here may, after a period, be able to reduce the duties considerably. We must not forget that this industry is in its infancy, and requires the parental care and control of this Parliament; and that, unless we rise to the occasion, we may strangle the infant. I venture to say that when the industry is thoroughly established it will produce material as cheaply as in the Old Country, or in most countries of the world. We ought not to he told that we must come down to the level of manufacturers abroad who get labour at half the price paid in Australia. This matter is too important for any game of " ducks and drakes." Personally, I do not propose to allow these items to go through without their being thoroughly threshed out. This particular item is the main one in the Tariff - the main consideration for this country, and on -what we may do depends our future. Every honorable member, with the exception of a few in the Government corner, are in favour of increases in the duties, and my surprise is that the Minister does not accept the amendment. No one more than the honorable gentleman realizes the importance of the industry,for he has spent more time than most of us in ascertaining the facts connected with it ; indeed, his speech to-day showed that, really, he is convinced that the duties ought to be increased.

Sitting suspended from 6.30 to 8 p.m.







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