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Tuesday, 16 August 1921

Senator RUSSELL (Victoria) (VicePresident of the Executive Council) . - This is -a very big question. Whatever success has been achieved by the iron and steel industry of Australia has been due not to a Protectionist Tariff, but largely to the exorbitant prices charged for iron and steel manufactured in other parts of the world. Those high prices in turn were due to most of the iron and steel foundries in Europe and America being devoted to the production ofwar requisites; and this circumstance, together 'with the abnormally high freights and other charges, led to our imports being materially re duced. I offer my congratulations to those who, although they had but a meagre guarantee of Tariff help, had the pluck and enterprise to establish this industry in order to help Australia in time of war. They had, of course, the vague promise of politicians that they would stand by them, but they had no definite guarantee of substantial protection; and they rendered splendid service to Australia during the war period.

Senator de Largie - But the Broken Hill Proprietary Company commenced operations before the war.

Senator RUSSELL - Since then their works have been so extended that they have been able to aid materially in the development of many of our industries. But for the enterprise of that company, such a development would not have been possible. I have had no intimation from the trade that they desire an increased duty in respect of sub-item a; and I am not prepared to accept any request for a variation of the duty in regard to that sub-item, since the whole of the iron and steel duties are based on a duty of £1 per ton on pig iron under the British preferential Tariff. If this duty were increased we should have to alter the whole of the division. This sub-item is the basis of the whole of the duties in the division, and any variation of it would involve the recasting of the division in accordance withthe altered foundation. The cost of pig iron is the first thing that has to be considered in determining the cost of iron and steel manufactures. Next in importance comes the cost of angle, rod and bar iron.Ifthe duties in respect of any of those items were altered, the foundation upon which this division rests would be knocked down, and the remaining sub-items would have to be recast. For this reason I cannot accept a request for an alteration of the first sub-item. The duty was fixed practically by agreement with the trade.

Senator THOMAS (NEW SOUTH WALES) - What does the honorable senator meanby agreement with the trade?

Senator RUSSELL - No arrangement

Was 'made with the trade, but I understand that when a request was made for a higher duty, the trade was told that this particular sub-item could not be varied, since anyvariation of it would mean the recasting of many other items. On hearing this explanation, they did not press their request.

Senator THOMAS (NEW SOUTH WALES) - When the honorable senator speaks of the " trade," does he mean those who* use this material, or those who produce it?

Senator RUSSELL - We have no ar- rangement with any trade or trading companies; but we have asked, from time to time, for information.

Senator THOMAS (NEW SOUTH WALES) - Those who are producing this material do not ask for a higher duty?

Senator RUSSELL - I believe they did at one time; but they did not press their request when the matter was explained to them. Senator Duncan has said that those engaged in 'the iron and steel trade have asked for an increased duty such as ho has indicated. I know of no such application.

Senator THOMAS (NEW SOUTH WALES) - That is a serious statement to make. Representatives of both Hoskins Limited and the Broken Hill Proprietary Company have asked many honorable senators, including myself, to suppport a higher duty on pig iron.

Senator RUSSELL - I have had no such application, and the officers of the Department of Trade and Customs know of no such request having been preferred to the Minister (Mr. Greene). We shall not save the iron and steel industry of Australia merely by the carrying of these duties^ We can save it only by putting a stop to the dumping that is going on today. I have seen tenders submitted for the supply of steel rods for shipbuilding purposes here in which the prices quoted oy Belgian contractors were 50 per cent., if not 70 per cent., below those of their British competitors. Even with a duty of 15 or 20 per cent., the local industry could not stand up against such competition. My hope is that this Tariff will be backed up by the passing of the Customs Tariff (Industries Preservation) Bill, the consideration of which, I regret, was postponed by another place. These duties, in themselves, will not save the iron and steel industry. We need to take steps to prevent dumping, and to meet the exchange position. It may be quite true that some of those engaged in the industry have discussed this question with honorable senators, but since the duty on pig iron is the basis of the whole division, I think 'that such a request should have been made direct to the Minister. It is probable that those concerned know that the Government are not prepared to support a higher duty. Beginning with a duty of fi per ton on pig iron as the basis of the division, we have gone, stage by stage, into the individual costs and charges throughout the iron industry. If the Committee alters the duty on what must be regarded as the foundation of the allied industries I shall have to send this section of the schedule back, and have it recast in accordance with the ideas expressed in this Chamber.

Senator Duncan - Then nothing can be altered?

Senator RUSSELL - Honorable senators must bear in mind that pig iron is the raw material out of which billets, bars, blooms, angles, and other steel products are made, and that all of these commodities have a distinct relationship, one to the other, in the world's market. This item covers iron in the next stages of manufacture to pig iron, which forms the raw material for the rolling mills. Both the Broken Hill Proprietary Company and the Lithgow works are . producing large quantities of these lines, and since 1916 they have practically supplied local requirements. The total imports in 1918-19 amounted to only 172 tons, so there is no doubt as to Australia's ability to meet its normal needs. The duties on this sub-item have been arranged in approximate proportion to the respective values of pig iron and ingots, blooms, &c, on the ground that the respective costs of production are" reflected in the values - that is to say, the added cost of labour for converting pig iron into blooms, &c, has to be taken into consideration. The proposed rates on ingots, blooms, &c, exceed the rates on pig iron, by 60 per cent, in the case of the British preferential Tariff, and by 62 per cent, in the case of the general Tariff. In . April, 1914, the prices quoted for the American basic pig iron and billet3 were 13 dollars and 21 dollars respectively, or a difference of 61 per cent. In March, 1920, the respective prices were 41 dollars and 60 dollars, a difference of 46 per cent. There has been some criticism of the prices charged by the Broken Hill Proprietary Company during the war, but it must be remembered that it was a struggling industry, and although prices may have been high they were not so high as. rates for the same material from any other part of the world at that time. . I am not discussing the question of profits at all. If the Broken Hill Proprietary Company made undue profits it was right that they should be prevented from continuing to do so. In December, 1919, the company were selling pig iron at £7 10s. and £S per ton, and steel billets at from £12 10s. to £14. The difference between £8 and £14 is 75. per cent., and the difference between £8 and £12 10s. is 56 per cent.

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