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Wednesday, 2 December 1936

Senator LECKIE (Victoria) (2:20 AM) . - There seems to be an idea in the minds of some honorable senators that this tariff schedule was designed for the purpose of benefiting secondary industries in Australia, and that it is part of the protectionist policy of this country. As a matter of fact, the tariff is not worth twopence to Australian manufacturers at the present time, though it may be of some value to them in the future, when the motor manufacturing industry is established. The restrictions imposed upon imports from Japan and United States of America, will be of no benefit to the secondary industries of Australia. This tariff represents an extension of what I may call the policy of Empire protection. Australia first adopted that policy many years ago, when it granted preference to British goods, and it was still pursuing the same policy when it placed its signature to the Ottawa Agreement. Whether Empire protection is a good thing or not, I am not called upon to debate at this time, but the fact remains that the chief purpose of this tariff was to assist Australia's primary producers, and the effect of it is to assist the British manufacturers rather than the Australian manufacturers. I do not say that the Government is to be blamed for that, but I do say that it will very soon have to impose restrictions upon imports into Australia, because the balance of trade is tipping against us. We are buying more than we can pay for, and we are seriously depleting our London funds. Ere long the Government will have to consider whether the present restrictions are sufficient to preserve a balance of trade that will enable us to pay for goods and services and to provide the interest payments due on the other side of the world.

I am inclined to agree with those who have complained of the abrupt manner in which the Government's tariff policy has been put into effect. Of course, if the Government had given notice of the proposed alteration of duties its object would have been defeated, and this country would have been flooded with imports that should be excluded. I shall support the new duties. The Government had good reasons for introducing them, despite their effect upon Japanese trade with Australia. The total imports of cotton and rayon goods from Japan increased from 30,000,000 square yards in 1930 to 162.000,000 square yards in 1935.

Senator Sir George Pearce - They would have amounted to 200,000,000 square yards this year.

Senator LECKIE - Yes. The imports of these goods from Great Britain dropped from 187,000,000 square yards in. 1926 to 125,000,000 square yards in 1935. It would be absurd to suggest that the Government should have been content to see our trade with Britain absolutely destroyed, without making a strong effort to avoid it. Drastic steps will have to be taken to correct the balance of trade, which is strongly against Australia.

I was rather amused at the suggestion that difficulty would be experienced in completely manufacturing motor engines and chassis in this country. Some people say that, if the industry were established here, the supply of cars would soon exceed the demand, but I point out that, in Italy, two immense motor ear factories are kept in operation, although that country does not enjoy a large export trade.

Senator Duncan-Hughes - But it has a population of many millions.

Senator LECKIE - Yet, there are not so many motor vehicles in Italy as there are in Australia. If those who would be prepared to undertake the manufacture of cars in Australia received sufficient protection to guarantee that their capital would not be wasted, the enterprise would be' successful. I am surprised that the Government did not take into their confidence some of the leading manufacturers in Australia when it launched its proposal to enable motor engines and chassis to be made in this country. Why were not the chambers of manufactures consulted ?

Senator Badman - Did the Government not consult them?

Senator LECKIE - No ; there ' was merely a departmental investigation. The Government should have taken into consultation those who could have given it expert advice on the matter, as was done in connexion with the legislation passed with regard to dried fruits and butter, and wool. The Australian manufacturers should not be treated as pariahs. Considerable sums of money will be required to enable this industry to be established successfullynot £3,000,000 or £4,000,000, as has -been suggested in some quarters - but between £750,000 and £1,000,000. People who would be willing to find that money require a guarantee that three or four years hence, when the bounty disappears, the Australian market will be largely preserved to them. Propaganda put forward by powerful interests in Australia to prevent the establishment of the industry is so ridiculous that it ought to help the people generally to make up their minds that the importers are getting too much out of the motor industry.

Senator BADMAN (SOUTH AUSTRALIA) - Do not the manufacturers get any benefit from motor-body building?

Senator LECKIE - Yes, but they desire that motor cars should be completely manufactured in this country. A visit to General Motors-Holden's new factory at Port Melbourne convinces one that firms with the experience necessary for this work are already established in

Australia. The beams of the chassis are rivetted together, the engines are placed in position, the bodies are mounted, and the whole car completely assembled by the approved mass-production methods.

Senator Duncan-Hughes - Has any great motor car undertaking been established in Great Britain or the United States of America by means of a government bounty?

Senator LECKIE - I do not think so.

Senator Duncan-Hughes - If the proposal is economic, why not let the enterprise be conducted without a bounty?

Senator LECKIE - When the motor industry was established in the United States of America, there were very few motor cars in Australia. At that time it would not have been profitable to commence the manufacture of cars in this country. Since then, however, Australia has 'become motor car minded, and I believe that at the present time there are in proportion to population more cars in Australia than in any other country in the world except the United States of America. An analysis of the figures in relation to the number of cars in the various countries of the world would reveal that not only in proportion to its population, but also in actual numbers of cars, Australia is ahead of many other countries which have five or six times its population. There is no miracle in the manufacture of motor engines, or chassis. All that is needed to establish the industry successfully in Australia is the assurance of a certain' amount of stability. Those interested in the establishment of the industry in Australia only require a guarantee that a fair proportion of the market will be reserved for them. It is true that we shall not turn out as many types of cars as are now available on the market ; I think it will be found that four or five models will be quite sufficient to meet Australia's transport requirements for both business and pleasure. Some of the propaganda indulged in by certain vested interests against the manufacture of motor cars in Australia has been, to say the least of it, amazing. First it was said that an Australian-built car would cost £200 more than a comparable imported car. Great emphasis was also laid upon the statement of the number of men who would be thrown out of employ ment in the motor industry because of the diminishing numbers of cars that would be used. If cars were manufactured in Australia the additional cost which each purchaser would have to bear would not exceed £40 ; taking the bounty into consideration, it would probably be even less than that. It may take two years to establish the industry successfully in Australia; but after it had been established on a firm footing its products would be equal to those of any other country in the world. Although I believe that the Government initiated this policy in the wrong way, I commend it for its efforts to establish such an important industry in Australia. When the industry has been firmly established in Australia I believe that the price of the Australian product will not be 10 per cent, above present prices for comparable imported cars. The imposition of that small burden on Australian transport users will be more than offset by the increased employment which will naturally flow from the establishment of the industry in Australia. Again, from a defence point of view the establishment of the industry in Australia would be well .worth while.

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