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Thursday, 11 June 1970

Mr KELLY (Wakefield) (12:34 PM) - I am not goingto oppose this provision. Indeed, I would never go as far as to oppose a Tariff Board recommendation at this stage. But I am rather critical of the Board's report in relation to caustic soda or sodium hydroxide in chlorine. A rather unpleasant duty of 55% is being imposed. It is worth remembering that 3 of the biggest chemical industries in Australia - Imperial Chemical Industries of Australia and New Zealand, Dow Chemical (Aust.) Pty Ltd and Union Carbide Aust. Ltd - are the 3 manufacturers. The raw materials used in the industry are salt and electricity. It is interesting to realise that a previous Tariff Board report noted that salt could be carted to Japan, where our chief competitor is, and back again to Sydney cheaper than it could be carted from Spencer Gulf around to Sydney. This is the kind of penalty we are paying for our shipping services.

The important point is that chlorine in this case could not be increased in price because of the impact on the plastics industry. So caustic soda or sodium hydroxide had to carry the whole of the increase. The duty was increased, except in relation to aluminium manufacturers or those who are using caustic soda in the production of alumina, lt seems to be rather a queer way of making a division. The bigger export industries, such as the aluminium industry, receive the advantage of cheap raw material production, while other exporters have to carry the cost of this increased duty. The names of some of these exporters were supplied to mc by the Library. The products involved include detergent and soap, paper pulp, textile fabrics, preserved meats, rayon, rubber accelerators and weedicides. The Board recognised that the higher duty would be a burden on the economy and recommended a bounty in preference to a duty, but the Government did not accept that. I think the bounty would have cost about $l.lm. The Government turned away from that and used the Tariff as a protective instrument. This has handicapped other industries all along the line.

Tariffs are supposed to be used to protect the infant industries, and rightly so. This infant industry is becoming a bit overgrown for an infant, lt has been in existence in one form in South Australia since the early 1930s. This is the form in which sodium hydroxide-

Mr Chipp - ls that both processes?

Mr KELLY - No, that is the process that is not referred to in this report, but the same product is produced. The point that is really worrying me - I would be glad if the Minister could help mc here - is that sodium hydroxide or caustic soda comes from 2 processes, one through the chlorine route and the other through the soda ash route or Solvay process. This Solvay process has been in operation in South Australia since the early 1930s in producing caustic soda. Yet this very, very big and very, very old infant will receive protection at the rate of 55%. lt will be a recognised burden on a great many exporting industries. J would be very glad if the Minister could tell me 2 things: Firstly, why the Government did not use bounty as a protective medium and, secondly, what proportion of Australia's production of caustic soda conies from the old. old infant in South Australia.

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