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Tuesday, 30 April 1957

Mr PETERS (Scullin) .- This country was in serious difficulties towards the end of 1951 and during 1952 because of a vast flood of imports. During that period we were receiving overseas the highest prices that we had ever received for our exports. The Government imposed panic import restrictions and kept them in operation until such time as our overseas balances improved. In 1952, according to the Prime Minister (Mr. Menzies), we were in danger of international bankruptcy. The restrictions were eased as the position improved. However, we of the Labour party said a similar situation would arise again, and it did! In 1956, our overseas balances were diminishing and the Government again imposed restrictions upon imports - a most disastrous occurrence for the manufacturers and retailers of this country. They do not know from day to day what they should produce or what business they are likely to have in the future, because they do not know what goods will come from overseas or what goods must be manufactured in Australia to provide for the Australian market.

It was that set of circumstances which inspired the Government to take some action in connexion with the Ottawa Agreement. The Government decided that under the Ottawa Agreement, as it then operated, all the advantages were with Great Britain and the disadvantages with Australia, and, therefore, we had to provide greater markets for our primary products in Great Britain and a lesser market for Great Britain's manufactured goods coming into this country under a preferential tariff. What did it do? lt made this agreement. I do not know what vast advantages will accrue to primary producers in this country under this agreement, but I know that Great Britain. America or any other country buys only those goods which it needs and which promote its economy. Great Britain will not buy primary products that will cause unemployment in its farming community. It will buy only those primary products which its own agricultural industry is not producing. It desires to sell certain manufactured goods and we desire to buy certain manufactured goods, but the principle applied by Great Britain should be applied by us also. We should not in any circumstances buy goods which will put our people out of work or destroy the manufacturing industries of this country.

When our perambulating Minister for Trade, who is a member of a Liberal government and a member of the Australian Country party which believes in free trade, goes about the world negotiating trade agreements, he cannot get away from the ideas of free trade that animate him and the party to which he belongs. This agreement, as far as manufacturing industries are concerned, is an instalment of free trade. Article 7 of the agreement sets out the position of secondary industries. It says that Great Britain shall have its margin of preference reduced to 7i per cent, and 10 per cent, from, in many cases, 20 per cent, or 25 per cent., as the honorable member for Melbourne Ports (Mr. Crean) pointed out. How is that reduction to take place? Is the Tariff Board to investigate and say that, where it fixed a tariff of 50 per cent, or 60 per cent, on goods manufactured in Asia or in some other country, it now fixes the margin at a lower rate? On the other hand, having fixed a margin, will the Tariff Board maintain that margin and will Great Britain's tariff be increased to bring it to within 7i per cent, of the tariff that is imposed upon the goods coming from Japan or elsewhere? Of course, what will happen will be that the existing tariff on British goods will continue. Without reference to the Tariff Board, the duty payable on goods coming from Japan and cheap labour markets will be reduced.

What will such a reduction mean? It will mean a flood of imports that will be saleable to the disadvantage of goods made in Australia. It will mean a depletion of the home market as far as secondary goods manufactured in Australia are concerned. Because of that, the difficulties that existed in respect of our overseas balances will increase. If any action of this Government increases the opportunities for manufactured goods to come into this country from overseas, then inevitably our overseas credits will diminish. In order to meet that diminution, we must send out of this country an increasing proportion of primary products. However, our ability to do that is very limited; and, of course, the prices we obtain overseas for our primary products will determine to a big extent the funds we will have overseas. In the period 1951-52, we received record prices for our primary products that cannot continue indefinitely in world markets. Therefore, in the future, we will be sending greater quantities of primary products to markets overseas and will be receiving lower prices for them.

During the period when we are sending greater quantities of primary goods overseas, or a quantity equal to that which we are now sending overseas, but are receiving lower prices for them, we cannot afford, unless we endanger our overseas balances, to continue to import an increasing proportion of secondary goods. That is obvious, of course, and other countries recognize that fact. There is a resurgence among the industrial countries of the world - Japan, Germany, Italy, America and even China. They are manufacturing, at an increasing rate, vast quantities of commodities which they wish to place on markets overseas. For example, over a period of years, red China has adopted a definite plan. It is going to transfer 100,000,000 people from primary production to manufacturing industries. That, of course, will destroy a market that has been available to Japan and other nations - a market that Great Britain is exploiting at present - and will increase the competition for markets in such places as Australia. If Australia is to develop, it must manufacture goods on a larger scale. She must manufacture a more extensive variety of goods than she does to-day. If this nation is to be secure in the days that lie ahead, if it is to develop as it should do, it cannot afford to concentrate upon primary production alone. We cannot develop if we concentrate upon wheat or wool, meat or sugar, or indeed upon any of the primary products.

During the last few years relatively, a vast proportion of Australia's national income derived at home and from abroad has come, not from primary production, but from manufactured goods. The employment of our people has been increasingly dependent upon secondary industry. Why, to-day there are 36,000 fewer people employed on the farms throughout the length and breadth of this country than there were in 1939, despite the fact that our population is now 2,000,000 greater than it was then!

Where should we be but for our secondary industries? They are the source of employment of the people already here, and they are the reservoir of employment that will enable newcomers to be absorbed into the community to assist in the development of the country and to protect it in its hour of danger.

The Minister for Trade, who used to sit at the table, and who is misrepresented by the present Minister for Primary Industry, is concerned merely with markets for primary products. He is not concerned with the overall development of Australia. If we are to have overall development, we must say to other countries, " We will not tear down our trade barriers; we intend to protect our manufacturing industries, and we will devise means of meeting the devious methods whereby various nations are seeking to put their goods into other markets ". They talk of dumping! It is not only the foreign countries that indulge in dumping.

Mr Turnbull - Who talked about it?

Mr PETERS - My friend opposite, the honorable member for Fawkner (Mr. Howson). The manufacturers of Britain have engaged in dumping which, in some cases, has affected the industries of this country. We must protect our industries against such happenings.

As my time is running short, I cannot go into all the detail of what is necessary to the welfare of the industries of this country, but undoubtedly any system which permits a flood of imports, the consequent depletion of our overseas balances, the necessity to introduce import restrictions until the overseas balances position is remedied, the easing of restrictions, the depletion again of our overseas balances and the necessity to re-impose restrictions upon imports, is not a desirable one. There are other methods that can be arranged to ensure the continuity of our trade and to enable the manufacturers of Australia to know exactly where they are.

I have before me an article headed " Tariff Realism Needed ". It is written by F. G. James, chairman of the Victorian Knitting Industries Council. In it, Mr. James says -

When I visited Geneva last year as the representative of the Australian textile industry at the International Labour Office Conference, I discussed this matter of tariffs with representatives of the American textile industry.

They expressed amazement at what they called the lack of courage of the Australian Government in not having a tariff system which would guarantee to local manufacturers a major portion of the home market.

He goes on to say that in all trade agreements entered into with other nations in which tariffs on goods coming into the home market are involved, the United States has a convenient " escape " clause. The article continues -

American tariff policy with regard to the textile industry may be quoted as an example of the latest means adopted in that country to ensure that a major share of the home market is reserved for local industry.

Briefly, the Americans say that if, over a certain period, more than 5 per cent, of the home market is being served by goods from overseas, the United States will automatically raise the tariff upon those goods in order to protect the domestic manufacturing industries. Methods such as that should be adopted by this country, and they would be adopted by it if the tariff policy of Australia was not dictated by sectional interests. The dog is wagged by an insignificant tail - the free trade Australian Country party. That, of course, is what has happened. I warn this Government that, despite all the ambiguous, obtuse and incomprehensible things that have been said by honorable members on the Government side in connexion with this agreement, if the agreement becomes operative it will result in the destruction of many of Australia's industries, the restriction of the expansion of Australian industry and the unemployment of many Australian people.

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