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Thursday, 14 July 1921

Senator SENIOR (South Australia) . - The time when I declared my faith on the fiscal question has long gone by. The discussion on which we have entered covers an exceedingly wide field. There is nothing that affects the life and well-being of a nation so minutely and yet in such a far-reaching way as a Tariff does. It is an ingenious instrument that has been invented for extracting almost the last shilling out of a man's pocket in an exceedingly clumsy way. Examining this document, I am reminded of standing upon some eminence, and looking over an exceedingly wide landscape. ' To the eye only the outstanding objects are really visible, yet not only in .the far distance, but also in the almost immediate neighbourhood, there are many objects of equal interest, if not equal attractiveness. We must study, not only what the Tariff will produce for the Treasury, but the effects it will have on the whole community. Australia is still only in its infancy, but I have serious doubts whether it is still so immature that it can really afford to have what Senator Gardiner regards as Free Trade. ' There was a time in the extreme youth of this country when Tariffs of this kind were not imposed.' Even animals reared in other countries and seed grown in other ocuntries had to be introduced, and in those days it was manifestly against the best interests of Australia to raise any Tariff barrier against their importation. Before development took place the imposition of a Tariff would have been really inimical to Australia's best interests, and therefore no Tariff was imposed, but as Australia developed it became necessary to inaugurate something .'equivalent ,to a Tariff. Revenue was required, and that was one of the means suggested for raising it. It is a question now whether our fiscal garments of the past have not become too small for us. A policy which was suitable for Australia: 50 or 100 years; ago is not suitable for it today, and the man who claims that we should adopt Free Trade to-day is really abeing wholives in the past. It has. been argued here that at the time of Federation that portionof Australia which was Free Trade had grown much more quickly and expanded more greatly than the portion which was Protectionist in its principles. It is doubtful if the fiscal policy had anything to do with the development. There were many other factors which had to be considered.

Senator Gardiner - If the people pay an immense tax for a Protectionist policy, it ought to produce some results.

Senator SENIOR - I shall deal with what the people pay for Protection. All trade is practically barter: The effect of a policy of absolute Free Trade, if carried on with the people of a lower civilization, must be to bring the standard of civilization in Australia down to the level of those people. I say, without any desire to reflect upon the coloured races, that if, under a policy of Free Trade, we admit their goods to Australia free of duty the result must be to reduce those who are engaged in the manufacture of similar goods in the country to their level of civilization. .

Senator Gardiner - If the honorable senator exchanges a South Australian apple for a Fiji banana, how can that affect conditions one way or another in either South Australia or Fiji?

Senator SENIOR - I am afraid that the honorable senator permits trivial matters to obstruct his vision . We are dealing in the Tariff with questions of far greater importance than the exchange of apples or bananas. If wethrow open our ports to the products of lower-paid labour in other countries, one effect must be to reduce the standard of labour in Australia. Senator Gardiner should be able to see that the White Australia policy, is quite inconsistent with the principle of Free Trade.

Senator Gardiner - The White Australia policy has nothing to do with trading interests.

Senator SENIOR - The range of my honorable friend's vision must be exceedingly limited if he cannot see that the two things are absolutely bound together. The progress of Australia in the past gives proof, that there, has been amongst usidealistswho have recognised that the White Australia policy is. a conception of improved humanity. It can be given effectto without.any reflection upon, people of the coloured races, because its operationsshould tend to improve them as well as ourselves.

Senator Gardiner - The honorablesenator interprets the White Australia policy to mean that we should not trade with coloured races. I interpret it differently.

Senator SENIOR - Let me go further, and say that it is only by a Protective Tariff that we- are able to prevent the competition with our manufacturers of the products of the "slum" labour of other nations. The adherent of the policy of Free- Trade practically affirms his belief in using tne products of the slumlabour of other lands to the exclusion of the products of the better paid labour of Australia.

Senator Gardiner - People do not buy things unless it is to their advantage to do so.-

Senator SENIOR - The article sold at the cheapest rate is that which is bought first. If the honorable senator were to put two umbrellas of equal value in a window in Bourke-street and ticket one with a lower price than the other, it would be useless for him to expect that the one ticketed with the higher price would be the first sold.

Senator Gardiner - The worst, slums I came across in my travelling were in Belfast.

Senator SENIOR - I do not dispute that.

Senator Gardiner - Surely the honorable; senator would not, on that account, object to purchase linen manufactured in Belfast, which is the best in the world ?

Senator SENIOR - I am prepared to' admit that the honorable senator has tried sincerely to elevate the lot of the workers in Australia, but he has' been false to himself and to the workers in advocating a Free Trade policy for this country.

I have said that all trade is barter, and we have to choose what the future of Australia shall be. If we say that we shall deal only in primary products we shall find that shipping will not come here from other countries unless we are prepared to take the manufactured products of those countries. If we are to be self contained, we must establish, . manufactures here. That againhas itslimitations, because by that means we may not be able to fill the waste places of Australia as rapidly asthey should be rfilled. There are comparatively impoverished nations of the world who would be quite willing to exchange their manufactured products with us, but cannot do so, because, owing to their poverty, they cannot buy our primary products. A Tariff imposes duties upon a variety of articles. Itmay impose a duty upon an article which as required in the manufacture, for instance, of varnish, and which is not produced here. The local industries concerned with its use mayclaim that it should be admitted free,and we have to consider what, in the circumstances, is best in the interests of Australia as a whole. It is contended that Protection will assist in the manufacture of goods, but that does not contain the whole truth. A claim is made by a manufacturer1 for protection to the extent of 10 or 15 per cent. He raises the price of his goods as nearly as possible to the price of imported similar goods, plus the duty. "Then he comes again to the Minister for Trade and Customs and asks for still higher protection. Our friends interested in the productionof sugar desired protection against the importation of sugar produced by black labour. We gave it, willingly. Directly we did so they began tomanufacture sugar, but later they saidthey, were unable tp continue its manufacture without increased protection. It has to be borne in mind thatone effect of the imposition of duties which protect themanufacturer of sugar was to add to the value or rent of lands upon which sugar was grown. An indirect effect was the increase in the value of lands upon which wheat, maize, and other produce is grown.

Senator Crawford - I never heard of wheat being grown in the neighbourhood of sugar lands.

Senator SENIOR - The honorable senator has heard of maize being grown in the neighbourhood of sugar lands.

Senator de Largie - Sugar beet and wheatcan be grown on similar soil.

Senator SENIOR - That is so.

Senator Crawford - I do not think that the production of sugar beet has increased the value of land anywhere in Australia.

Senator de Largie - It has in Gippsland.

Senator SENIOR - We impose Tariff duties in three grades. We may levy a prohibitive duty for the purpose of shutting out a particular article entirely. We may levy a duty, not with a view to bolstering up any particular industry, but because the Government needs revenue.. We may again impose duties which will earn revenue to a certain extent and will at the same time assist in the building up of industries. It has to be borne in mind that when duties are imposed, whilst they may produce a certain amount of revenue, they are passed oil to the consumer; and if it were merely- a matter of obtaining revenue, the simpler andmore direct course would be to increase the income tax. _ We should in the consideration of a Tariff, have regard for the point of view of the taxpayer as well as of the manufacturer. We have to bear in mind also that the purchaser of imported goods has 'to pay not merely the duties imposed upon them, but an additional 10 or 15 per cent, to the importer.

In some directions I am in agreement with the arguments adduced by Senator Gardiner, particularly in connexion with the articles we cannot produce here.

Senator THOMAS (NEW SOUTH WALES) - What cannot be produced in Australia?

Senator SENIOR - The honorable senator, who is an . ardent Free Trader, should not ask the question, because if we can produce everything in Australia he should be a Protectionist.

Senator THOMAS (NEW SOUTH WALES) - What cannot we produce ?

Senator Reid - Do we produce newsprint ?

Senator SENIOR - I have been assured by paper manufacturers that wo cannot produce the finer grades of paper in Australia.

Senator de Largie - That is not so, as it is being produced in Western Australia.

Senator SENIOR - I have accepted advice from persons who are handling paper every day, and if I have been misled it has been by those who know the position. Those who advocate a selfcontained continent have to contend with a very important problem, because in time we may produce in excess of our requirements, and we shall then have to consider the question of markets. If we are not buyers of the articles produced in other countries we shall have to search the world over to find markets for the commodities we produce.

Senator Crawford - Our markets will be in the countries which produce less of a particular commodity. than we do.

Senator SENIOR - Although money is exchanged for goods, it is, after all, really a question of barter. Other nations will take our goods if we are prepared to accept theirs.

Senator Crawford - It is not a direct barter.

Senator SENIOR - No; but money iu exchange for goods merely disguises the barter. It will be readily recognised that vessels will be attracted only to those countries where there is a possibility of securing back loading. We are a long way from being a self-contained country, and there is much to be said, quite apart from the principle, upon the effect that a Protective Tariff will have upon Australia as a whole. It will certainly not only assist in building up local industries, but it will largely assist in peopling Australia. We have not to depend simply upon filling our vacant spaces, but we shall have to see that the' conditions which obtain in Australia afford to those who desire to come and live amongst us greater facilities than prevail in other lands.

Senator THOMAS (NEW SOUTH WALES) asked by interjection what could not be produced in Australia, and I may remind him that oil, which is so essential to the progress and development of any country, has not yet been discovered in Australia; but I am not going to despair on that account, because there are at present clear indications of oil in several parts of the Commonwealth. Oil was not discovered in any part of the world for many centuries, and we need not therefore be too pessimistic concerning the possibility of discovering supplies in payable quantities in Australia.

Senator PRATTEN (NEW SOUTH WALES) - Professor David seems to have upset South Australia's hopes. s

Senator SENIOR - Those who have condemned the possibility of oil being discovered in South Australia have based their opinion on superficial investigations. I' can remember when a leading geologist said that there was not enough silver in

Broken Hill to make a silver spoon. Undoubtedly there is a large stretch of territory across the southern portion of Australia, reaching out towards Western Australia, where the conditions are very favorable, and any one who has knowledge of the subject will admit that it is difficult to locate oil merely by boring a hole in the earth's surface.

Senator de Largie - Where have they found oil in limestone country?

Senator SENIOR - The honorable senator has had considerably more mining experience than I have ever had, but I desire to remind him that beneath the strata of limestone, which he has condemned, oil shale has been discovered.

Australia is in the making, and if we are to do our share in making the Commonwealth really great, taxation will have to be imposed in such a manner that it will be effective without being oppressive. Let me quote an instance to shew how carelessly duties are imposed. The present rates on motor cycles, which are extremely useful for many purposes, are absolutely prohibitive. If we have to do without motor cycles until the engines are manufactured in Australia, many decades will pass before we shall have a complete motor cycle manufactured in the Commonwealth.

Senator Crawford - Why cannot we manufacture the motors here?

Senator SENIOR - With the limited demand at present it would not pay to establish as an industry the manufacture of such engines.

Senator THOMAS (NEW SOUTH WALES) - I have seen winding engines working ' at Broken Hill which were manufactured in Victoria, and surely we can manufacture motors.

Senator SENIOR - Victoria is not the only place where such engines are made. Senator Thomas was with me on a visit to Renmark, where we saw a pumping engine, made, not in New South Wales, but at Gawler, South Australia ; but there is a great difference between a pumping engine and an engine for a motor cycle. We should certainly manufacture in Australia all that we can, but we should not be blind to obvious facts in any mad rush towards the consummation of a Protectionist policy. We want to move as men who know where they are going. Our purpose should be to insure the development of Australia as a whole; hot simply to build up, say, a banana farm in one State to the destruction of some kindred industry in another State. Australia can never progress satisfactorily under Free Trade pure and simple, and it is of vital importance that Australia should progress. "We must be prepared to do "without some things in order to insure the true development and prosperity of the Commonwealth. We must recognise that it is better to direct the energies of the people into certain channels, under good conditions, rather than impose a heavy Tariff burden upon certain articles of commerce which cannot be manufactured in this country. As an illustration, I may point to the duty on silk. By no stretch of imagination can it be contended that silk production is ever likely to be an Australian industry.

Senator Wilson - But silk is a luxury.

Senator SENIOR - The honorable senator is wrong. Silk, as an article of apparel, cannot by any means be regarded as a luxury in certain parts of Australia. There was a time when the motor car was also regarded as a luxury.

Senator Wilson - And so it is to-day, in the case of nine men out of ten.

Senator SENIOR - The motor car is an absolute necessity for the average business man.

Senator Wilson - It was a necessity for me to get rid of mine. I could not afford it.

Senator SENIOR - My honorable friend is now judging the community needs from his individual experience. As a means of transit the motor car to-day is a necessity in our commercial life. And so, for climatic reasons, silk is a necessary article of apparel in every day use. I see no possibility of Australia ever producing the raw material, and therefore the duty on silk cannot be regarded as scientific.

Senator Wilson - The honorable senator cannot claim that silk is worn in every-day life.

Senator SENIOR - My honorable friend must know that at certain seasons of the year silk is very largely worn both by men and women in Adelaide. We should, of course, endeavour to encourage the manufacture of silk goods in Aus tralia, but the raw material should be allowed in free.

Senator THOMAS (NEW SOUTH WALES) - But if silk is made cheaper it will compete with wool, too.

Senator SENIOR - Then the honorable senator should advise his Queensland friends not to grow cotton, because it also will compete with wool. Our aim should be to insure the development of Australia in all its parts. The war taught us this lesson, and we should indeed be dull if we failed to profit by it. There may come a time - *God grant it may be a long way off - when Australia will need to be self-contained. We should be able to produce all that is necessary for the sustenance of our people, and, -instead of being a large importing nation, we should be one of the exporting nations of the world.

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