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Tuesday, 16 August 1921

Senator PRATTEN (NEW SOUTH WALES) . - Many years ago Idreamed that we would some day be making our own iron by our own workmen from our own ores. That dream has been realized.

Although I have had very little to do with the development of the iron industry, I have watched it with much interest, and, so far as my own personal attitude towards it is concerned, I have laid down the principle that no act, word, or deed of mine shall in any way retard the development of the Australian iron industry. It has been pointed out that this is the greatest of the basic industries in Australia. We have heard that it employs 10,000 men in producing the iron required for our subsidiary industries. Further than that, I believe that the annual production to-day is worth £4,000,000 or £5,000,000, and practically the whole of the cost involved in converting the iron ore into material suitable for other industries is in labour.

SenatorDe Largie.- Oh, no!

Senator PRATTEN (NEW SOUTH WALES) - If we start with the iron ore, which is brought to Newcastle, consider.the coal and limestone . required, and. the many ramifications of the industry, it must be admitted that practically the whole of the cost relates to labour. This industry pays £2,000,000 per year directly in wages, and, in considering the iron duties, I may repeat that no word, act, or deed of mine shall place our iron industries in jeopardy. There is another aspect of the question which has been mentioned, but which has not been stressed, and the time at my disposal is not sufficiently long to enable me to emphasize it in detail now. Ineed only mention the fact that, without the basic iron industry in the matter of defence - irrespective of the number of fighting men we might have available - Australia would be powerless. During the war the works of the Broken Hill Proprietary Company Limited, at Newcastle, were established, and before that Hoskins' works had been in operation. For the six years following 1915, these two large iron-producing firms - the Broken Hill Proprietary Company Limited and Hoskins - produced about 1,000,000 tons of iron from native ores, and it is common knowledge that onehalf of the work carried on during the war could not have been undertaken, owing to short supplies from overseas and high prices, if these works had not been producing. I desire the Committee for a moment to consider how these two firms treated the Australian iron consumers during a period of great stress and difficulty. The prices of American and European iron rocketed to such an extent that it was almost unobtainable at any price; but the 1,000,000 tons of iron produced by these firms enabled all Australian industries to be kept going, because the producers did not take the fullest advantage of the world's markets. Did they profiteer to any extent? Did they exact the last £1 of profit from the Australian consumers ? It is to their credit, it must be admitted, that they did not.

Senator Russell - It has been estimated that they saved the Australian consumers from £5,000,000 to £7,000,000.

Senator PRATTEN (NEW SOUTH WALES) - My estimate is greater than that.

Senator Russell - That is excluding Hoskins Limited.

Senator PRATTEN (NEW SOUTH WALES) - Exactly. I have a carefully tabulated statement, the accuracy of which I do not doubt, because I have been able to check it in one or two directions, which shows that, compared with the English current prices at the time of manufacture and delivery, the Broken Hill Proprietary Company alone saved the Australian consumers between £6,000,000 and £7,000,000, which confirms the figures given by the Minister (Senator Russell). I have assumed from the statement before me that Hoskins Limited produce about 50 per cent. of the Broken Hill output, and that they saved the Australian consumers a proportionate amount, so that the total savings on the 1,000,000 tons of iron produced by the two big companies would be approximated £10,000,000 from 1915 to 1921. I have had an opportunity of checking some of the figures submitted to me, and as one ounce of fact is worth a ton of theory, I desire to put some facts before the Committee. About eighteen months ago, concerns with which I am connected ordered two large dredges in Sydney, the contracts for which were based upon a certain price for angles, channels, and shipplates. The angles and channels, which were' made at Newcastle, cost about £20 per ton, although they could not be imported at less than £30 per ton. That is evidence in support of the statement I am making that, as a result of the existence of these industries, the Australian iron consumers were saved in the region of £10,000,000 sterling. Unfortunately at that time Australian manufacturers were not producing thick plates, and the order for these had to be sent to America, the cost, including , exchange, by the time they reached Sydney, without 'duty, being approximately£40 per ton. When these duties were 'first imposed the price of commodities abroad, particularly of iron,were very high, and I do not think anybody dreamed that within two years a slump would come, and that Germany and Belgium would quote blooms, at £6 per ton, f.o.b. When these duties were imposed in March, 1920, it was considered that if they were not sufficient the world's price of iron would give the local industries every protection. What has happened since? These duties were imposed, and money has been made out of the business, but we are on the eve of a time of great stress and difficulty because the world's prices have crashed, and are at such a level that it is hopeless for us to expect Australian industries to be able to compete.

Senator de Largie - Why?

Senator PRATTEN (NEW SOUTH WALES) - Since March, 1920, when the Tariff was first introduced the effective protection which these duties were expected to give has been very seriously reduced owing to the higher price of coal and the increase in wages. The.proposed duty on pig iron is20s. per ton. Since March, 1920, the extra cost of coal owing to the Hibble award equals 7s.7d. per ton of pig iron, and the extra cost in wages since that time owing to increased awards given in the Arbitration Court and the introduction of the forty-four hour week has amounted to 5s. 7d. per ton, and . one or two other miscellaneous expenses, including harbor dues, have amounted to a few pence per ton. Consequently the increased cost of producing pig iron since the duty was first imposed is 14s. per ton, thus reducing theeffective protection from 20s. to 6s. per ton. I am somewhat in a quandary as to how to act. My first duty is to the iron industry, and my second duty is to the users of iron; but I say quite candidly that if I have to choose between preserving the iron industry and giving the many -consumers in Australia cheaper iron, I must decideto protect the iron industry, which , is absolutely essential for defenceand other national purposes..

The position is that the effective protection given to pig iron has been reduced now to only 6s. per ton, as compared with 20s., as originally designed and intended when the Tariff was imposed in March, 1920.

Senator Lynch - What about the enhanced prices?

Senator PRATTEN (NEW SOUTH WALES) - I think that the prices have come down, and that prices generally are falling.

Senator Lynch - Prices have come down whilst wages have gone up?

Senator PRATTEN (NEW SOUTH WALES) - The statements I have made are. absolute facts, and I repeat that I am in somewhat of a quandary in connexion with this matter.

The CHAIRMAN (Senator Bakhap - The honorable senator's time has expired.

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