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Tuesday, 8 June 1926

Senator NEEDHAM (Western Aus) (tralia) . - I move -

That the request be amended by leaving out the figures " 35 ", British preferential tariff, and inserting in lieu thereof the figures " 27½ ".

The alteration proposed by the Minister does not altogether meet my wishes. The Britishpreferential duty of 35 per cenv.. would still remain the same. It would handicap not only Western Australia, but also Queensland and South Australia, whose road development is not as advanced as that of Victoria and New South Wales. In another place the Minister for Trade and Customs (Mr. Pratten), who is the mouthpiece of the Government in tariff matters, and the member of the Cabinet most in touch with the Tariff Board, determined, apparently, after learning the view of that board, that the British duty should be 30 per cent., although next day he reverted to the higher rate. I think we ought to realize the effect this heavy duty is likely to have on the development of the States I have named. The Commonwealth proposes to advance £20,000,000 to the States to enable them to proceed with a policy of road development. It is a policy upon which the Western Australian Government embarked many years ago. It was inaugurated by the Mitchell Government, and is being ; ontinued by the Collier Government, vhich is eager to take advantage of the assistance that will be afforded by the expenditure of the money, advanced by the Commonwealth. In carrying , out its policy it will need adequate roadmaking machinery. A protective duty of 27£ per cent, is, I think, quite sufficient for the local manufacturers of this class of machinery. I said on the second reading that I was not in favour of protection run mad, and I am sure that those who are protectionists at heart, and believe in the encouragement of Australian industries, must realize that it is a reasonable request to reduce the Brtish preferential duty on stone-crushing and road-making machines which are so essential to the road development policies of the States.

Senator GRANT (NewSouth Wales) ("4.50] - The effect of Senator Needham's amendment would be to reduce the duty, so far as British imports are concerned, hy 7£ per cent., a mere trifle that is not worthy of mention. The Government has an overwhelming majority of supporters, and even the bulk of honorable senators on the Opposition side support it in its high tariff revenue policy. It seems, therefore, that it would be a waste of time to labour the subject. I am glad, however, to see a lifelong protectionist like Senator Needham receiving some of his own medicine. When this tariff is applied to Western Australia, he naturally squeals. But let him squeal as loudly as he likes. I am informed by the Associated Chambers of Manufactures ' of Australia that for the year ended the 30th June, 1924, there were 1,343 foundries and engineering works in Australia employing 33,052 hands, and paying iu wages £6,949,295. The value of the plant and buildings was £10,918,919, and the value of output £24,151,439. With reference to roadmaking machinery and plant, we are told that there are over twenty manufacturers specializing in this work and over 1,000 hands are employed; whilst from inquiries made it is found that prices have been reduced, and not increased, by the new duties. It is a matter of indifference to me whether the duty is 27^ per cent., 30 per cent., or 35 per cent. I do not know that I am prepared to adopt the view expressed by the Associated Chambers of Manufactures that a reduction in duty will lead to a reduction in prices. That may or may not be the case; it is evident that quantities of this machinery will still be imported into the Commonwealth. The Minister in charge of the bill assures us occasionally that the object of the measure is to assist local manufactures where it is commercially possible to produce particular articles in Australia, by penalizing by means of an import duty any goods that may arrive from abroad. It is useless to discuss the matter further, in view of the opinions held by honorable senators. We find that the Government can win on an important matter such as the increased tax on imported whisky, and even an ardent freetrader such as Senator Lynch supports them! L am pleased to hear the protest by Senator Needham, who assists in representing Western Australia, where it is alleged that many thousands of miles of road construction are required. The imposition of the increased duty will, no doubt, lead to an increase in the cost of production, and as soon as the workmen can reach the Arbitration Court they will certainly ask for an increase in wages. Next year, probably, the Minister will invite honorable senators to grant a duty of 50 per cent, or more on this machinery. The idea behind these duties is not to exclude foreign goods, but to produce revenue. Australia, however, cannot be made prosperous by the taxing of imported goods. Some time ago we saw the disgraceful exhibition of the various State Premiers quarrelling over the distribution of the Customs revenue. Next year, under this tariff, there will probably be £42,000,000 to divide between the Commonwealth and the States. We may as well support the schedule, and let the Minister have the bill.

Senator Sir HENRYBARWELL (South Australia) 14.54]. - I am glad that Senator Needham has been converted, and now recognizes the folly of unduly increasing the tariff. I agree with him that some protection is needed for an industry which, according to the Associated Chambers of Manufactures, has twenty factories specializing in the work and over 1,000 persons employed. But surely 27^ per cent, is sufficient. Any greater duty w.ould merely hamper production and retard the development of the resources of the country generally. It is universally recognized that the provision of good roads is of paramount importance to Australia. As Senator Needham remarked, the Commonwealth is setting aside £20,000,000 for that purpose. We know that the State Governments will be voting large sums in addition, but the money will not go very far because of the heavy, and I may say unduly heavy, cost of road making in Australia. We shall simply make that charge heavier still by increasing the duties on road-making machinery. Here is surely a case where proper discrimination should be shown by the Government. Apart from that phase of the subject, however, I should think that the industry could carry on with the protection it already has. If not, it points to either inefficiency or the suggestion that those carrying on the industry are anxious to make undue profits. In any case, surely the provision of good roads in Australia is of infinitely greater importance than the establishment and maintenance by artificial means of the industry of manufacturing road-making machinery. The Government, nevertheless, declares that these manufacturers must be bolstered up. For many years, firms in South Australia have been able to compete successfully with outside manufacturers with a duty very much less than that now in operation, and they should certainly be able to continue to do so. I suppose that every member of the committee has received protests from local governing bodies throughout Australia, and I do not wonder that they have complained, considering the heavy cost of road making and the fact that the proposed increase of duty will tend to make it more expensive than ever. These protests indicate that public opinion is becoming more enlightened on this subject. In the present case, I think that the Government ought to accept the amendment. We have a circular from the Associated Chambers of Manufactures, which simply sets out the number of employers and employees engaged in the industry. But there is no proof that further protection is necessary to maintain it. I very much doubt whether further protection is required, and in any case I claim that the provision of good roads is of infinitely greater importance than the maintenance of this industry.

Senator Grant - The honorable senator seems to think that the increased duty will increase the cost of road-making machinery.

Senator Sir HENRY BARWELL - I have not the slightest doubt that it will.

Senator Grant - The Chambers of Manufactures state that prices have been reduced since the duty has been increased.

Senator Sir HENRY BARWELL - I am not prepared to accept that statement. We know that the tendency of increased duties is to increase prices. At any rate, the Minister has put nothing before the committee to show that the proposed increase in duty is warranted to keep the industry going or develop it.

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