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Tuesday, 10 November 1959

Mr POLLARD (Lalor) .- The bill before the House is designed to amend the Rayon Yarn Bounty Act 1954-1959 and to extend the operation of the bounty on sales of continuous filament acetate rayon yarn until 30th June, 1962. The historical facts surrounding this bounty to the rayon yarn industry are that from 1954 until May last the industry has had the advantage of a bounty to encourage production of this essential product within Australia. In May last year this Parliament agreed to the Rayon Yarn Bounty Act, which enabled the Government, by proclamation, to extend the operation of the bounty until 31st December, 1959. That was done pending a recommendation from the Australian Tariff Board.

The recommendation of the Tariff Board was received early in this current sessional period. The board recommended that the payment of bounty on the production of continuous filament acetate rayon yarn be extended until 1962. The Opposition does not object to this, but we are not unmindful of the fact that bounty is attracted not only by the continuous filament acetate rayon yarn produced in Australia, but also by the raw material from which that yarn is spun. Cellulose acetate is also the subject of bounty protection. In the first case, bounty is paid on the rayon yarn produced, the manufacturers being Courtaulds (Australia) Limited, which is a branch of the great international Courtaulds organization, which spins rayon yarn in many of the major countries of the world.

The Labour Party, believing that industry of an essential character should, as far as practicable, be established in Australia, has always endeavoured to encourage the establishment of the rayon spinning industry in this country. The present Government, on coming to office, endorsed this principle, and right up to the present time we have had this form of assistance by way of a bounty. It was decided to assist the production not only of the yarn itself, which is the basic product used in the weaving of certain types of cloth and is also essential for the production of tyres and other commodities, but also of the raw material, cellulose acetate. Assistance was given to C.S.R. Chemicals Proprietary Limited in the production of the raw material. To both of these forms of assistance the Australian Labour Party gave its support, based on the traditional policy of the Labour Party to encourage the production of raw and manufactured materials essential to the needs of the Australian people. While it is true that, broadly speaking, we believe in the principle of co-operative production or socialized production, and that when manufacturing industries become monopolized and operate to the detriment of the Australian people we believe they should be taken over by the Government, we are, nevertheless, realists. I do not think any political party in Australia's history has been more practical and more emphatic in the matter of assisting the establishment of Australian industries than the Labour Party.

Let me say also that we are quite cognizant of the fact that the Courtaulds organization has international ramifications, and it may seem strange that a democratic body like the Australian Labour Party should give assistance to a firm of such international financial strength, to enable it to extend its industrial operations to Australia. This is really not strange, however, because we believe that if we encourage the establishment of industry in Australia, the building of vast factories and the employment of Australian labour, while retaining the right to levy taxes and to determine the rates and conditions of employment of labour, then this is an exhibition of true Australian national sentiment.

Just as we encourage the Courtaulds organization, which, in the initial stages, found itself confronted with financial difficulty, so have we adopted a similar attitude towards C.S.R. Chemicals Proprietary Limited. I do not think that any one in this House would suggest that the Colonial Sugar Refining Company, having in mind its overall ramifications and operations in Australia and Fiji, is unable to stand, for a good number of years, a loss in the initial stages of the production of the raw material from which Courtaulds (Australia) Limited spins rayon yarn. However, the Australian Tariff Board, which was created by this Parliament and which has rendered a great service to the Parliament, has recommended, on every occasion that submissions in this matter have been made to it, not only that the producers of cellulose acetate should be entitled to receive a bounty in the initial stages of production, but also that a bounty should be payable to the firm carrying out the second process of spinning the yarn - Courtaulds (Australia) Limited - so long as it shows a loss on its operations.

Mr Timson - This is a different attitude from that displayed recently by honorable members opposite with regard to the search for oil.

Mr POLLARD - That was an entirely different matter. The honorable member is referring to oil, with which there is no parallel. The honorable member's basis of comparison is all haywire. However, that is not going to divert me from the argument that I have stated, and which I intend to continue to state. It has been demonstrated that the support of bounty payments and; indeed, of high tariffs by the Australian Labour Party has, in the long run, been amply justified, notwithstanding consistent criticism by the Australian Country Party, particularly in the early stages, of tariff impositions and bounty payments designed to encourage the establishment of local in dustry. The supporters of that party have followed their traditional policy that free enterprise the world over should be allowed free play, and that Australian industry should stand on its merits and struggle against the practice of dumping, without any protection from tariffs or bounties. Only in recent years, as the price of their participation in government, have members of the Australian Country Party accepted in part the principle of tariff protection and bounty payment.

My mind goes back over a long period of Australian history. From a traditional free-trade party the Australian Country Party now stands four-square behind the Liberal Party in support of some meagre measure of protection to Australian industry. Probably the most potent factor in its change of mind and attitude was the experience gained in both World War I. and World War II. when the industries established in this country - the outcome, initially, perhaps, of the Scullin tariffs and of the consistent support by the Australian Labour Party for the establishment of industries in Australia - revealed quite clearly that if it had not been for the existence and the creation of those industries in Australia by tariff protection, our position during World War I., and to a greater extent in World War II., would have been infinitely worse than it proved to be. After all, whatever the ramifications and exploitation of local industry might be, the plain fact remains that the Commonwealth Parliament, through its income tax and influence on arbitration courts in the determination of Australian living standards, is in a position to see that those industries which are protected by tariffs and by bounty render to the Australian community that contribution which is some recompense for the protection which, overall, the Australian people have given to them.

For those reasons, if for no others, the Australian Labour Party supports this measure as it supported the measures which preceded it dealing with rayon bounty and cellulose acetate bounty, notwithstanding that in both cases these bounty benefits were given to powerful producers. Courtaulds Limited is a very powerful international organization and the Commonwealth Sugar Refining Company is a very powerful Australian industry. We draw on them for income tax and we determine the terms and conditions under which the labour employed by them shall produce. Bounty payments have become a fairly general principle of legislation in this Parliament directed, as I have said, always to help in the establishment of new industries in this country. Only recently, during the debate on the Estimates which were before Parliament some weeks ago, I found that in the year 1958-59 bounty amounting to £110,000 was paid to the cellulose acetate flake industry, with the consent of the Australian Labour Party. The bounty on copper during that year totalled £768,000. Cotton bounty totalled £139,000, flax bounty £93,000, gold-mining industry assistance bounty £898,000, rayon yarn bounty £69,000, sulphuric acid bounty £1,300,000, and the tractor bounty £450,000. The total bounty payments for the year 1958-59 were £3,794,000. In every case the payment of these bounties was supported by the Australian Labour Party because, first and foremost, we believe that bounties should be paid to foster the establishment of industries within Australia. We believe, also, that in many cases bounties are preferable to tariff protection inasmuch as, in the final analysis, the payment of bounties comes from Consolidated Revenue.

We all know that the man on the basic wage pays a relatively small amount to Consolidated Revenue compared with the man on an income from which he pays tax at the maximum rate of 13s. 4d. in the £1. As a party, we are all for the rich paying for the establishment of industries in Australia. We are all for the man who contributes tax at the rate of 13s. 4d. in the £1 paying the major proportion of the provision for bounties for the establishment of these industries. That is common sense. To a major extent, the payment of bounties avoids a rise in price to the Australian consumer. If a tariff rate were substituted for a bounty there would be an inevitable rise in the price of woven rayon products from which are made the frocks of the wife of the working man and all essential articles which the females of the community wear.

They are the facts as I see them. I have not mentioned, of course, another bounty payment which is above the rest of those

I have quoted. I refer to the dairy industry which received, during 1958-59, bounty payments amounting to £13,500,000. That is a lot of money but it enables butter to be sold to the Australian consumer at approximately lid. per lb. less than he would otherwise pay. From that point of view it is amply justified. The man on the basic wage with four, five or six children pays a very small tax, but the man with no dependants, receiving a handsome income, can pay tax at the maximum rate of 13s. 4d. in the £1. Therefore, it can be truly said, in regard to the bounty payment on the production of butter in Australia, that the wealthy and those who have no family responsibilities are making a Christian contribution towards helping the man on the basic wage with five or six children who is struggling to make ends meet. From that point of view, the Australian Labour Party supports this measure, affecting as it does rayon yarn used for making products such as wearing apparel. We have no hesitation in doing so because this bounty will continue the production of rayon yarn and make available to the people of Australia rayon products at a price which is reasonable and within the range of their purchasing power. Otherwise that would not be the case.

As an illustration of what this bounty payment means to the Australian people, to Consolidated Revenue, and in particular to the high income recipient, let me quote the sums which are being paid to the manufacturers concerned. Courtaulds (Australia) Limited is anathema to the Australian Labour movement as far as a capitalist institution is concerned, but we are realists and appreciate that in Australia this firm is developing an essential industry. We say that so long as its treatment of its employees is kept within the bounds of decency, so long as they are subject to Australian conditions and this firm pays Australian income tax, we are prepared to assist in the development of its industry. Since its establishment in Australia, the Courtaulds organization has received as bounty in respect of yarn sold during the year ended 31st October, 1955, £39,000; for the year ended 31st October, 1956, £56,000; for the year ended 31st October, 1957, £73,000; for the year ended 31st October, 1958, £63,000; and for the nine months ended 31st July, 1959, £54,000. That is a lot of money, but the payment of it is amply justified.

I shall deal now with the firm that supplies the Courtaulds organization with the raw material for the production of this yarn, which, in some cases, goes to Wangaratta where it is woven by Bruck Mills (Australia) Limited, an organization that was established with the assistance of the Chifley Labour Government. The Colonial Sugar Refining Chemicals Proprietary Limited, a wealthy company, received bounty payments on the production of cellulose acetate of £99,000 for the year ended 30th June, 1956; £113,000 for the year ended 30th June, 1957; £100,000 for the year ended 30th June, 1958; and £124,000 for the year ended 30th June, 1959. It is, perhaps, ironical that these powerful monopolies - I must admit that they are most efficient - are able to draw on Consolidated Revenue for funds to assist in establishing these industries. The Colonial Sugar Refining Company Limited has many ramifications extending from sugar to wall boards and including chemicals, but it is not prepared to use its profits on some sections of its operations to cover losses on the production of cellulose acetate. Instead, it submits a case to the Tariff Board and asks for the payment of a bounty.

The Australian Labour Party faces realities. We realize that if companies such as these are not given a bounty, they will not establish these essential industries in Australia. We realize, therefore, that we have no choice. But although we accept the payment of bounty to these companies, we recognize that, when they reach the profit-making stage, the Parliament has the right to extract some quid pro quo. The unions are able to point out to the Arbitration Court that these companies have the benefit of bounty payments and various forms of protection, and they can demand that the companies provide working conditions which accord with our standard of living.

In those circumstances, I submit, we are justified in supporting this bill. I had intended to mention another point, but, although it was rather important, it has slipped my memory. Fortunately, the honorable member for St. George (Mr. Clay) will speak on the bill. He has had life-long experience with workers in the various spinning mills and has an intimate knowledge of the conditions under which they work. I trust that honorable members, including the honorable member for Gippsland (Mr. Bowden) - a dyed-in-the-wool member of the Australian Country Party and a free-trader in days gone by, although he has now mellowed a little - will be glad, perhaps by silent assent, to support this measure.

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