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Thursday, 14 May 1936

Senator A J McLACHLAN (SOUTH AUSTRALIA) (Postmaster-General) . - Action taken by the Government in connexion with sub-item e followed the receipt of the Tariff Board's report on the 24th October, 1935. The British rates proposed are in accordance with the board's recommendation, and the intermediate rates, subject to a correction of 2½ per cent. to provide the formula margin under the Ottawa agreement, express the level of protection recom mended by the board for the general tariff. The general rate has been increased above the intermediate rate in order to provide the usual margin for trade treaty negotiations with overseas countries. The principal raw materials used in the industry comprise crude rubber and cotton fabric. Both materials are subject to revenue duties. Crude rubber is dutiable at 2d. per lb., irrespective of origin, whilst cotton fabric pays a 5 per cent. duty under the British tariff. On representative lines of garden hose the revenue duties on the raw materials, plus primage, represent approximately 5 per cent. of the total manufacturing cost of Australian-made hose, and offset the duty on the imported article by approximately 1d. per lb. of hose. Allowance has, however, been made by the board in its recommended British rates to offset the extra cost in Australia of the revenue duties payable on these raw materials.

At the board's inquiry concern was expressed by some local manufacturers that importations of rubber and other kinds of hose in 1934-35 to a value of £9,062 were approximately £3,500 in value above the importations made in the previous year. That factor, however, when reviewed in conjunction with the increased output of Australian hose in the same period, merely reflects an expanding market, and certainly is no indication that the competitive position of the Australian manufacturer is in any way impaired by these importations. In 1929-30 the importations of hose from all countries were valued at £28,800. The 1934-35 import figures show that, in a period of six years, the Australian manufacturer captured and held at least 70 per cent. of the former import trade. Fully 95 per cent, of the Australian demand is met by the local industry. The small quantities of hose which, in the past, have been able to surmount the high rates of duty in the 1933 tariffs, are practically all of United Kingdom origin. Imports from other countries are negligible.

The proposed British rate of 5d. per lb., even after allowing for the additional cost of duty and primage on raw materials represents a. protection of 40 per cent. on the main selling lines in Australia. This gives a generous measure of protection to the local industry, and permits a disparity in costs above material greater than that allowed for the manufacture of other goods of a similar nature.

Item agreed to.

Item 333 agreed to.

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