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Thursday, 22 October 1931

Mr FORDE (Capricornia) (Minister for Trade and Customs) .- I move -

That the bill be now read a second time.

This measure provides for a number of amendments to the Customs Act that from time to time have been found necessary. I propose to refer briefly to the nature of each of the amendments, but I may assure honorable members that they are mostly of minor importance. In the practical application of an act such as the Customs Act it is found from time to time that more or less minor alterations are advisable to meet changing circumstances, but these alterations, while necessary, may not be of such a pressing nature as to justify special amending acts from time to time; so quite a number of amendments are embodied in this bill. The first is covered by clauses 2 and 3, and the provisions of the act affected are sections 37 and 39. The matter concerned is the entering of goods at the customs, and the point involved is the fixing of the moment at which goods are to be recorded as having been entered. The point is of importance, as under section 132 the duty payable on goods is that in force when the goods are entered for home consumption. After an entry is first delivered to the customs, it goes through various stages until it reaches that of being endorsed as " passed," and so becomes a warrant for dealing with the goods. It may be that an entry does not reach the " passed "stage on the same day as that on which it is delivered, and the present wording of the act leaves it open to doubt whether goods for which an entry has been delivered are, in fact, entered within the meaning of section 132 until the entry has reached the " passed " stage. , The amendment makes it clear that the goods are entered as soon as the entry is delivered to the customs.

Clauses 4 and 5 of the bill are intended to amend the sections of the act relating to the prohibition of the importation of infringements of copyright works. These clauses amend sections 52 a and 57. The amendments simply bring the wording of these sections into line with that of the Copyright Act 1912. When section 52 a was included in the Customs Act, there was no Commonwealth Copyright Act, and, as section 10 of that act is the prohibiting provision, it is necessary that the corresponding provisions in the Customs Act should be similar in their scope and terms. It was suggested by the Attorney-General's Department that this amendment should be made. Clause 6 of the bill makes a minor amendment of section 59 by substituting the words " three nautical miles " for the term " one league." The latter term is used to indicate the maritime three mile limit, and it is considered that the expression " three nautical miles " is more suitable, particularly as the term " league " has different meanings in different countries. This change is made at the suggestion of the British Government. Clause 7 of the bill amends section 71, which relates to sight entries. A sight entry may be made when the importer is not in possession of sufficient particulars completely to enter the goods. Section 71 provides that within seven days of the making of a sight entry a complete entry must be made. It is found that in certain circumstances seven days is not a sufficient period, and it is desirable that in such cases further time should be allowed. The amendment gives power to the Collector to extend the time, when necessary. Clause 8 alters section 73 by substituting for the words " one league " the words " three nautical miles " for the reasons previously mentioned. Clause 9 proposes to amend section 140 of' the act, under which any part of complete goods may, when imported separately, be charged duty at the rate applicable to the complete goods. When the rate on the complete goods is specific, or is both specific and ad valorem, the Minister has power to fix the proportionate rate of duty with which the part shall be chargeable. The tariff, however, now includes a third type of duty, namely, specific or ad valorem, whichever rate returns the higher duty, and the power to fix the proportionate rate for the part when the complete goods are subject to this type of duty, is equally necessary. The proposed amendment simply makes that addition. 1 come now to the most important amendment in the bill. Clause 10 is designed to amend section 151a of the act.

Mr Paterson - It is high time that that section was amended.

Mr FORDE - Perhaps that is so. Prior to 1925, the conditions with which goods had to comply so as to qualify for entry under the British preference tariff were laid down by the Minister, and such conditions allowed a certain amount of elasticity, thereby enabling the Minister to deal with special cases. In deference to representations that were made by certain honorable members, an amendment of the Customs Act was made in 1925 prescribing the conditions of eligibility of goods for entry under the British preference tariff; or, to be more exact, specifying what goods would be regarded as the produce or manufacture of the United Kingdom. The conditions, being laid down in the law, were rigid, and gave no discretionary power to the Minister, the result .being that complaints were received from manufacturers in the United Kingdom, and importers and others in Australia.

Mr Gregory - Why are these sections of the 1925 act not being repealed ?

Mr FORDE - I shall be glad to consider any suggested amendments when the bill is being considered in committee. I believe it will be found, however, that the amendments proposed by the Government meet the case quite fully. It has been found that the existing law is difficult of administration and interpretation. Manufacturers in the United Kingdom experience great difficulty in determining whether their goods are eligible for admission into Australia under the British preferential tariff, especially in cases where materials from foreign countries arc used in their manufacture. A number of instances have come tinder notice in which distinct anomalies have arisen.

Mr Paterson - This is a case in which Australia is regarded :is :i foreign country?

Mr FORDE - Yes, where raw materials from Australia cannot be taken into account in making up the 75 per cent, cost of materials and labour so as to qualify for the British preference; they are regarded not as raw materials of the United Kingdom, but as raw materials of a foreign country. For example, a hat made wholly in the United Kingdom from Australian wool, would be eligible for admission under the British preferential tariff as wholly made in the United Kingdom, but if it were trimmed with foreign trimmings, it would not be regarded as wholly made in the United Kingdom, and the 75 per cent, condition would then be applied. Because he had used a non-listed raw material, the manufacturer would have to exclude from his calculations the value of all imported materials, including the value of the Australian wool, with the result that the hat could not comply with the conditions of preference, and would therefore be ineligible for entry under the British preferential tariff. I think honorable members will agree that such a position was so absurd as to justify the Government in making the proposed amendment. At present, the manufacturer in the United Kingdom, in order to qualify for preference, can use only the raw materials enumerated in the determinations of the Minister and published in the Commonwealth Gazette. It is now proposed to permit the use of any unmanufactured raw material without awaiting ministerial sanction. Therefore, manufacturers will be relieved of that disability under .which they - have suffered for some time. [Quorum formed.] Under paragraph a, which relates to goods of a class or kind not. manufactured in Australia, and in respect of which only 25 per cent, of the factory or works' cost must be of United Kingdom labour and/or material, provision is being made under which the Minister may substitute 50 per cent, for the 25 per cent. This complies with the request of certain United Kingdom manufacturers. In the United Kingdom there arc manufacturers who put into their goods as much United Kingdom labour and material as possible, and who comply not only with the spirit of the preference, but also with the full letter of the law. Other manufacturers, however, do only sufficient to observe the 25 per cent, condition. Although these goods do not compete with Australian-made goods, the latter class of manufacturer competes in the Australian market to the detriment of the manufacturer in whose interests the preferences were primarily granted.

A special provision also is being made in regard to cinematograph films. Producers of films in the United Kingdom have, in certain instances, experienced difficulty in qualifying for the admission of their films under the British preferential tariff. Numerous films produced .by United Kingdom producers have been photographed outside the United Kingdom, such action having been necessitated by the location of the story. I believe that some of the scenes in the film " The Battle of the Falkland Islands" had to be photographed in the Falkland Islands. Technically, those films do not qualify for admission under the British preferential tariff. I think it will be conceded that where the whole of the work is done by British subjects, and the film is developed and printed in the United Kingdom, it should be regarded as the produce of the United Kingdom.

Taking the proposed section in proper order, it will be observed that the first condition is in regard to goods which are wholly produced or wholly manufactured in the United Kingdom from "materials wholly produced or wholly manufactured in the United Kingdom or in Australia"; or from "imported unmanufactured raw materials"; or from " imported manufactured raw materials as determined by the Minister ".

Mr Archdale Parkhill - Why "determined by the Minister " ?

Mr FORDE - Certain powers have to be vested in the Minister. In the section as it now stands, paragraph a covers goods wholly produced or wholly manufactured in the United Kingdom from materials determined by the Minister as raw materials. The fact that/manufacturers in the United Kingdom had to await determinations by the Minister, before they could be sure that the materials used in the production of their goods would be regarded as raw materials for purposes of the preference, raised considerable difficulty and delays in both the United Kingdom and Australia. The section, as- amended, will provide that raw materials partially manufactured in Australia shall be included in the list of. raw materials determined by the Minister. It is proposed to insert irb sub-paragraph i of paragraph a of sub-section 1, the words, " or in. Australia ", so that there will be no> need for the Minister to include in & determination " raw materials partially manufactured in Australia ". Under sub-paragraph ii of paragraph a of subsection 1, " imported unmanufactured raw materials " have been inserted. This will remove the necessity for the Minister listing in a determination " unmanufactured raw materials".

It may be well at this juncture to mention that a definition of " unmanufactured raw materials " is embodied in the proposed new sub-section 7, so that manufacturers in the United Kingdom will have less difficulty in deciding whether their products are entitled to entry into Australia under the British preferential tariff. As this provision follows very closely a similar provision iu the New Zealand law dealing with unmanufactured raw materials, manufacturers in the United Kingdom should have no difficulty in following it.

Under the provisions of paragraph b of the present section, 75 per cent, of the factory or works' cost must be of labour and/or materials of United Kingdom origin. As I have already explained, this has proved to be a great disability to manufacturers in the United Kingdom. The alteration proposed will facilitate matters in that connexion. For a considerable time representations have been made by honorable members for the am'endment of the law to remove this anomaly.

Paragraph c covers goods of a class or kind not commercially produced or manufactured in Australia; and the percentage of United Kingdom labour or material or of United Kingdom and Australian labour or material is only 25 per cent. Provision is being made, however, under the proposed new sub-section 2, that where, in relation to any particular goods or class of goods, to which paragraph c applies, the Minister is satisfied that it is desirable that 50 per cent, should be substituted for 25 per cent., he may so determine, and thereupon that paragraph shall apply.

Mr Archdale Parkhill - "What is the reason for that?

Mr FORDE - It is necessary that the Minister should have that power. The proposed alteration has been requested. As I stated earlier, the reason for the insertion of this proposed sub-section is that certain goods which are being manufactured in the United Kingdom could easily comply with paragraph b; but other manufacturers are taking advantage of the fact that similar goods are not being made in Australia, to import foreign semi-manufactured goods, on which they carry put in the United Kingdom only sufficient work to enable them to comply with the 25 per cent, provision. Thus they arc detrimentally competing in the Australian market against the genuine British manufacturers, who are fully complying with the spirit of the preference.

The proposed sub-section 3 provides that no goods shall be deemed to be tho produce or manufacture of the United Kingdom unless the final process of their production or manufacture .has been performed in the United Kingdom. This provision wa3 previously introduced, and was designed to prevent foreign countries from obtaining the benefit of the British preferential tariff. Under the proposed sub-section 4, the provisions of this section may be applied to, goods the produce of countries with which the Commonwealth has preferential tariff agreements, such as Canada. The proposed sub-section 9 applies specially to cinematograph films, the position in connexion with which I have already explained.

I hope that the bill will have a speedy passage.

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