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Thursday, 18 August 1921

Senator PRATTEN (NEW SOUTH WALES) . - I desire to draw the attention of the Committee to this item in so far as it affects one of the most important industries in Australia - important not only because of the numberof men engaged in it, important not only because of its connexion with one of our basic industries, but important also because, if successful, it will very substantially affect the balance of trade in connexion with the excess of our exports over imports. I propose to place before the Committee the whole of the facts at my disposal, and to appeal to honorable senators, in the interests of fair play, to considerwhether a slightly higher duty is not both justifiable and equitable. The statistics show that since 1915 the average yearly importation of galvanized sheet and corrugated iron has been about 47,500 tons. Before the war the quantity was somewhat greater. The statistics further show that the average f.o.b. value - that is to say, the Customs value of this 47,500 tons of imports since 1915 - was about £50 per ton.We have not until this year produced much, if any, galvanized iron in commercial quantities. I believe that a few years ago a spasmodic attempt was made at Lithgow to produce galvanized iron, but that attempt died of sheer inanitionand competition.

Senator Gardiner - Was it not killed by the Tariff?

Senator PRATTEN (NEW SOUTH WALES) - If the honorable senator Will make himself conversant with the facts, he will . find that that spasmodic attempt failed because of the want of a Tariff to give it life. If the whole of this galvanized iron, were made in Australia, it would mean, directly and indirectly, the employment of about 4,000 men, and so, averaging five persons to a family, would ?support a population .of 20,000 people. An output of 60,000 tons :a year would mean the .use of about -51,000 tons of blooms made by the Broken Hill. Proprietary Company, and 9,000. tons of zinc made ;by the Electrolytic Company carrying on operations in Tasmania. It will thus be seen that .the .industry is of very great importance to .the iron producing industry .and .the zinc companies here. It would mean, further, the consumption of a considerable quantity of sulphuric .acid. The whole df Australia's requirements in respect of galvanized iron df produced locally would be made absolutely by Australian workmen from all Australian products, and at an average ;price of £30 per ton would mean nearly £2,000,000 additional "values from primary production in Australia.

Senator Drake-Brockman - What guarantee have we that the price would not soar beyond £30 per ton if we passed this duty?

Senator PRATTEN (NEW SOUTH WALES) - I shall endeavour to answer that question as I develop my argument. I was glad that the Minister (Senator Russell) last night, in the course of the discussion upon black sheets, referred to the visit paid to Australia by very large manufacturers of galvanized iron at a time when that iron was both scarce .and dear, and could hardly be obtained for love or money for the protection of our wheat stacks. I understood the .honorable senator to make that statement, and to say that during 'that visit the question cropped up as to whether galvanized iron could not be made in considerable quantities in Australia. -If I understood the Minister rightly, conferences were held with the Wheat Board in regard to the manufacture of galvanized iron, and certain proposals were made, >with .the result .that this ^visiting .firm .promised to .establish the industry here in a big way.

Senator Russell - And also to bring out for us certain supplies.

Senator PRATTEN (NEW SOUTH WALES) - And also to bring out the necessary machinery and other supplies for the establishment of the industry in a big way. I am aware that when those negotiations took place no bargain was 'made as between the Wheat Board and this firm; but I think 1 am right in placing upon the negotiations the construction that the .present Government .assured that firm that it would receive fair play. The Minister indorses that .observation.

Senator Russell - The firm ultimately ran out of supplies, and we had then to get galvanized iron from America. They supplied us until their local stocks were exhausted.

Senator PRATTEN (NEW SOUTH WALES) - They -had here stocks of iron that had been made 'in England, and they gave .the whole of those stocks to the Wheat Board, but could supply no more during the war. In order to prevent a repetition, not only of the scarcity of supplies, but of the very high prices that were charged during the war for galvanized iron from America, an arrangement was made with this firm to start the industry here in a large way.

Senator Russell - The iron obtained from America was much lighter than the British iron ; it 'was not .of equal quality.

Senator PRATTEN (NEW SOUTH WALES) - I am glad to hear that, because the industry whose cause I am advocating is a British one. At the time I do not think any bargain was made as to what duty should be imposed. The 'firm left itself entirely in the hands of the Government, and I believe that' it has not, until quite recently, approached the Government for any consideration.

Senator Russell - -It approached the Government at the time. The Board of Trade made full inquiries, and recommended the payment of the bounty, under which it is now working.

Senator PRATTEN (NEW SOUTH WALES) - But, in March, 1920, the Minister for Trade and Customs (Mr. Greene) brought down a proposal to place upon galvanized iron >a duty of £3 12s. per ton. I believe that since then this -firm has submitted to the Government its working costs, and has shown that this item, as compared with other items in the Tariff, covering the raw material which it must use, is not sufficient to enable it to carry on. A request was therefore made some months ago for an ad valorem duty of 20 per cent, under the British preferential Tariff. Since then - and I draw special attention to this fact - there has been a great deflation in prices abroad. The best brands of galvanized iron at the beginning of this month were quoted at about £30 per ton f.o.b., and,, with respect to second-grade brands, I have here a quotation, so recent as 3rd August,, of £17 per ton for 18 gauge and £19 per ton for 24 gauge c.i.f. and e. Australian ports, and shipment probably within four or five weeks from receipt of the order; In. connexion with tie policy agreed upon with the Board of Trade, this firm has recently erected and completed one unit, of its galvanized-iron works, which has cost £400,000, inclusive of £70,000 spent on erecting seventy cottages for the workers. It has so rapidly developed the arrangement made with the Government that I am informed that, as and from 1st October next, it will be' in a position to turn out 2,000 tons of galvanized iron per month from this first unit alone. If it can carry on its operations at a reasonable profit, it is prepared to spend some hundreds of thousands of pounds more, and to make practically the whole of Australia's requirements of galvanized iron. I want to say quite frankly that, with the prices of the world's parity twelve months ago, this protection of £3 12s. per ton would. have been sufficient - in fact,, no protection at all would have been required. But the position is that when this firm was ready to start it found itself faced with the- fact, that it would have to pay £14 10s. per- ton for blooms to make into sheets- for galvanized iron, whereas prices abroad had fallen to £8 per ton., Thus there was, and is today, a difference of £6 10s. per ton. between the price paid for the Broken Hill Proprietary Company's blooms and the price which this firm's competitors: are paying- abroad for blooms for' the manufacture of the article ultimately to1 be imported.

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