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Wednesday, 17 August 1921

Senator GARDINER (New South Wales) . - Now that, we have arrived, at whatis the usual hour- of meeting; I shall address, myself to this question.. I have listened with, a good deal of interest to the way in which the- Protectionist, members of the- Committee have debated this scientific Tariff. Senator Lynch, said that he was raising a feeble voice against the request fon an increased duty. I hope to live until the voice of protest becomes normal. When that day arrives,, there will be poured upon this scientific Protectionist Tariff such a torrent of condemnation as will almost overwhelm it.

Senator Drake-Brockman - As it de- serves to be.

Senator GARDINER - Yes. Senator Lynch and Senator Guthrie- have shown that the proposed increased duty will have to be paid by the primary producers. I agree with that view, but would add that it. will have also to be- paid by- the wage earners and salaried men of the community. Public servants who, having regard to the increased, cost oi living-,, are, perhaps, the most underpaid section of the community, will be . among those who will have the privilege of paying more if this duty is increased.

Senator Elliott - Is not the cost of living going down?

Senator GARDINER - There may be a slight fall in the price of a few commodities, but no one. will contend that the cost of living has returned to the level of pre-war days. Public servants, the coal and metalliferous miners,, primary producers on the land, and wage-earners employed in industries that cannot be protected, will have- to pay this inciieased duty. That being so, I, like Senator Lynch, raise my feeble voice in protest. The Government have brought down what they describe as a scientific Tariff, but Senator Duncan thinks he can improve upon it by securing increased duties in respect of this sub-item. He hopes, by protecting a very small section of the community, to make the position better for the rest of the people. According to the figures produced by the Minister (Senator Russell) the iron industry in New South Wales is practically producing all the iron required in the Commonwealth. That being so, it cannot be said that these duties are designed to induce others to enter into the industry. There is no room for any one to set up in the industry in competition with those already engaged in it. The Broken Hill Proprietary Company have from £2,000,000 to £4,000,000 invested in the industry, and Messrs. Hoskins Brothers Limited may also have a capital of £1,000,000 or £2,000,000 invested in it, so that these increased duties are designed, not to induce others to come into competition with those two companies, but really to enable those companies to charge an increased price for their products. Senator Lynch has produced balance-sheets showing the enormous profits which have been made year after year by the Broken Hill Proprietary Company's steel works.' That a new industry should pay well from its very inception is quite an extraordinary experience. The profits made by the Broken Hill Proprietary Company's steel works are altogether beyond what the promoters of the industry imagined they would be. Free Trade England will be our chief competitor in the iron trade. For over seventy-five years England has been easily first, and is still first, in the manufacturing industries of the world. She has achieved that success without taxing the rest of the community, despite the fact that she has to obtain iron ore from Spain and elsewhere, and that the price of coal there is higher than it is in Australia. It is said that the increased price of coal in the Old Country is due to the reduced production of the coal miners. The real explanation may be that the coal mines there have been worked, in some cases, for centuries, so that the coal is obtained, perhaps, at greater depths than here, and that the machinery used is not so uptodate as that employed in coal mining in Amenca and Australia. The fact that the tonnage of coal produced per coal miner in Australia is double that produced in Great Britain is, no doubt, due to our coal seams being wider, as well as to the energy of our workmen and to the up-to-date machinery employed by us.

Senator Henderson - The face in most cases here is four times the size of the face in the average coal mine in the Old Country.

Senator GARDINER - I acknowledgedthat in my reference to the larger seams. With all these advantages, added to the fact that there is no room for others to enter into the industry here, since those already engaged in it are producing all that we require, why should we go out of our way to increase the profits of the two companies ? This industry was established by them, before they had anything like the protection for which Senator Duncan asks. Honorable senators may inquire what is going to happen when we get back to normal times - when prices fall, and Belgian iron is obtainable here at £7 or £8 per ton? When that time comes, Protective duties will be of no avail to the local industry. If the iron-masters in other parts of the world can develop more intelligent methods of production - and, as I said last night, the chief factor in the economical production of iron is the use of up-to-date plant and machinery - a Protective Tariff will not help the industry in Australia. Rather than impose additional taxation in order to keep the industry going when it cannot legitimately compete in the open market, it would be better for us to install in these works the very latest machinery. I do not think those engaged in the industry are unable to do that for themselves, but it would be cheaper for the Government to put in such plants than, for the rest of the community to be called upon to pay additional taxation to keep the industry going. The larger the profits made in some of these industries, the greater is the demand for protection. If it is beyond the capacity of those engaged in the industry at present - and I do not think it is - to install in their works the latest and most scientific machinery, let the Commonwealth do that for them. That would be described as Government interference, and some honorable senators think that Government interference in production means disaster.

Senator Wilson - Hear, hear!

Senator GARDINER - I am glad to hear Senator Wilson's approval of that statement, because I propose to give just one illustration of the result of Government interference in an industry that had hitherto been carried on by private enterprise. I refer my honorable friend to the Commonwealth Clothing Factory, which is close at hand, and may be easily visited by honorable senators. Since 1911, when the Commonwealth Government established the Clothing Factory, £91,000 has been expended in the concern, and it has made a net profit of £139,000 over working expenses.

Senator Wilson - Would that not be called profiteering?

Senator GARDINER - The honorable senator cannot say, " Hear, hear !" to the remark that Government-controlled concerns follow the go-slow policy and are badly managed, and then applaud the fact that at least one Government factory has earned a profit of £139,000 in ten years. It has paid back to the Treasury every penny spent upon it, and has a credit balance of £52,000.

Senator Wilson - What price was charged to the other Departments during the war?

Senator GARDINER - I can tell the honorable senator with a great deal of pleasure. When the war had been raging for two years, the Government were able to reduce the cost of each overcoat worn by our soldiers, in the case of mounted troops, from £2 0s. 7d. to £.1 13s., and, in the case of infantry, from £1 12s. to £1 10s., and these reductions were only made possible by reason of the fact that we -owned this Factory. Further than that, every garment made by private enterprise for our soldiers was first made in the Clothing Factory in order that we might ascertain what it would reasonably cost to make it.

The CHAIRMAN (Senator Bakhap - The honorable senator must not enter into a discussion of the Commonwealth Clothing Factory on this sub-item.

Senator GARDINER - I am arguing that it is much better to use the people's money for the development of an industry by putting it directly into that industry, and I am using this Factory as an illustration of the huge success that has followed the adoption of the method I propose. If this Factory could make the profit I have mentioned in ten years, what could be done by Government enter prise in the manufacture of iron? The profit ought to be greater, because the return would come more from the use of machinery than from the employment of labour. My illustration may be long drawn out, but I contend that it is perfectly in order. At any rate, it serves to uphold my point, that before I would apply one shilling of the public money to any industry I would see that when the profit-making period arrived the public would get a return. On the other hand, when private enterprise gets into difficulties and cannot be carried on without assistance, the hat is taken around, and the people of the community at large are even compelled to put their money into it, but when the profit-making period comes the dividends earned are not taken around and distributed to the people, but go to the individuals who control the industry.

Senator Wilson - Taxation takes all the profits now.

Senator GARDINER - Yes ; and this Tariff means more taxation.

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