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Thursday, 14 May 1936

Senator A J McLACHLAN (SOUTH AUSTRALIA) (Postmaster-General) . I understand, but do not share, Senator Collings's concern for the Australian boot and shoe industry. Official figures covering a number of years show that it is holding the Australian market.

Senator Brown - Then why reduce the tariff?

Senator A J McLACHLAN (SOUTH AUSTRALIA) - I might reply to the honorable gentleman by asking what purpose is served by retaining an unnecessary and provocative tariff? The United Kingdom manufacturers in their best trading years have only had £10,000 worth of the Australian trade, but the United States of America has kept a steady flow of exports to Australia, culminating in 1934-35 in exports valued at £11,000. I have no doubt that in all countries there are people who, if they had the opportunity, would prefer to wea r boots and shoes made in Australia, and I feel sure that Senator Collings, in the rarer atmosphere of the Senate, would not now approve of any retail salesman misleading an unsuspecting customer as to the country of origin of a particular commodity. There is nothing new in the information contained in the circular to which Senator Brown has directed attention. The Tariff Board had all the facts before it when it made its report, in which it stated that the local industry was efficient, that it catered for all requirements, was working on a reasonable profit margin, and used large quantities of Australian raw materials. It added that Australian factories were supplying over 99 per cent, of the local demand. The proposed rates, when compared with those iu the 1933 tariff, represent a reduction of the British tariff by8¾ per cent., and the general tariff by 5 per cent.

The Tariff Board recommended that, under present exchange conditions, reasonable and adequate protection would be afforded to the local industry by rates of 25 per cent. British, and 45 per cent. general tariff. The proposed British rate gives effect to the board's recommendation. The intermediate rate of 45 per cent, is equivalent to the general rate recommended by the board, and the general tariff of 60 per cent, is 15 per cent, above the board's recommendation. The item embodies a tariff proposal brought down on the 28th November, 1935, and an amendment made on the 2nd April, 1936. The only variation between the proposal and the amendment is that the intermediate rate of 55 per cent, in the former has been lowered to 45 per cent., at which level it gives full effect to the equivalent rate of duty recommended by the board for the general tariff. When the first proposals were given effect, the Government was not satisfied that tbe adoption of an intermediate rate of 45 per cent, would adequately protect this valuable industry, and, pending further inquiries, the rates of duty in both the intermediate and general tariffs were increased by 10 per cent, above those which, in ordinary circumstances, would have been proposed. Subsequent inquiries have shown that the rate of 45 per cent, in the intermediate rate, will give adequate protection to the industry. This rate, with the additional protective incidence of exchange, but excluding a 10 per cent, primage duty, gives a combined protection of at least 55 per cent, against principal foreign competitors. It is not proposed to vary the proposed general tariff of 60 per cent, as embodied in the November proposals. The higher margin above the intermediate rate will strengthen the hands of the Government in its trade-treaty negotiations with overseas countries.

SenatorDUNCAN-HUGHES (South Australia [4.55]. - I am glad that Senator Brown has mentioned the action of the Czechoslovakian firm in establishing factories in England, because I remember that he and I had some discussion upon this item three years ago. I noted certain omissions from the honorable gentleman's speech, when he was speaking of this particular matter. I shall endeavour to supply them, and, I hope, improve the committee's knowledge of the case somewhat. For instance, he omitted to read this portion of the Tariff Board's comments on page 7 of the report, issued on the 7th February, 1935:-

Bata's venture in the United Kingdom can only bc successful, because of superior efficiency. The board considers it reasonable to assume that, following the practice of the past, Australian boot and shoe manufacturers will not fail to take advantage of all possible improvements and developments, and feels confident that the Australian industry is quite capable of successfully meeting competition of this nature.

In other words, the board indicated that it did not consider that there was any ground for alarm on account of competition from Bata. I fail to see why, if we do not object to foreigners settling in Australia to produce commodities in this country, we should take exception to Americans settling down in Belgium to use our barley, or Czechoslovakians settling down in Great Britain to manufacture boots and shoes. What cuts one way ought to cut another. It seems to me that we are a bit too critical about the dumping of foreign goods in this country, but not nearly so critical about dumping our goods in other countries. Senator Brown would have us believe that, if there were ;: Labour Government in power to-day, the workers would get more wages. The last occasion on which the experiment was tried in the Commonwealth Parliament the objective was not achieved, though I admit that the fault was not altogether that of the Government.

Senator Hardy - That was not the experience under a New .South Wales Labour government.

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