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Tuesday, 23 August 1921

Senator THOMAS (NEW SOUTH WALES) . -I am sorry that Senator Lynch has been so moderate in suggesting a reduction of only 5 per cent. The general Tariff is the only one that is of any consequence in this instance. The intermediate Tariff cannot possibly be utilized in connexion with machinery, because immediately manufacturers commenced to produce a certain type of implement they would strongly oppose any reduction in duties. The figures quoted by the Minister in charge of the Tariff (Senator Pearce) show that the United States of America is our principal competitor, because out of the £41,000 worth of imports £29,000 worth came from America. I am sorry that a request has not been submitted for a greater reduction, because the debate up to the present has disclosed the sorrow ful and indisputable fact that Protection makes the manufactured article dearer to the purchaser. I am not one of those who believe that cheapness is everything. There may be times when we are pre pared to pay more for certain articles because of possible future happenings.

Senator Wilson - Will the honorable senator mention one specific article as an illustration ?

Senator THOMAS (NEW SOUTH WALES) - There are times when it may be desirable to pay a little more. I do not intend to use the figures quoted by Senator Pearce, who, some years ago, had certain Free Trade tendencies, neither shall I quote those used by Senator Gardiner, who, as a Free Trader, may also be prejudiced. But I may be pardoned if I quote the figures submitted by the Vice-President of the Executive Council (Senator Russell), because we know that he is an earnest and sincere Protectionist. When Senator Duncan movedfor the imposition of a higher duty on pig iron-, the Vice-President of the Executive Council urged him not to do so. The reason he gave was that if the duty on pig iron was increased, it would make the article dearer to the manufacturer, and consequently machinery made from pig iron would cost more. That statement has been supported upon utterances of Senator Pearce to-day. We have been told that the duties on these items are based upon the duty imposed upon pig iron, and Senator Pearce now asks us not to reduce these duties below a certain figure because we have already imposed a certain duty upon pig iron which makes the article dearer tothe manufacturer of machinery. In connexion with every item in the schedule upon which a protective duty is imposed, the argument has been used that to make the raw material dearer is to increase the cost of the manufactured article. A duty on pig iron makes pig iron dearer. That makes galvanized iron dearer, and that in its turn makes the building of a house more costly. Because the house is dearer the tenant must pay more rent. Because the tenant pays more rent, the wages paid him in the production of pig iron must be raised; and because his wages are raised, the cost of producing pig iron is increased, and so there must be a still higher duty on pig iron. So the thing goes round. I am opposed to these duties because, in my view, protective duties make things dearer in Australia. Senator Russell may be said to have been born a Protectionist, whilst I may be said to have been born a Free Trader. I do not suppose that either of us have argued the matter out very much, but have accepted the system which we saw in operation as young men. I suppose that Senator Pratten was born a Free Trader, but he has become a convinced and converted Protectionist.

Senator PRATTEN (NEW SOUTH WALES) - The honorable senator had better speak for himself.

Senator THOMAS (NEW SOUTH WALES) - I suppose that when Senator Pratten and I were in England no one really discussed the fiscal question, and it was taken for granted that Free Trade was the right system to adopt. I give the honorable senator credit for being converted to Protection by the logic of events and his view of the interests of the nation.

Senator PRATTEN (NEW SOUTH WALES) - Fair trade was the question raised in Great Britain.

Senator THOMAS (NEW SOUTH WALES) - That came later. The honorable senator, who is now a Protectionist, admitted last Friday that protective duties do increase the price of these articles to the agriculturist.

Senator PRATTEN (NEW SOUTH WALES) - Pardon me. I assumed that they did, for the purpose of my argument.

Senator THOMAS (NEW SOUTH WALES) - I will accept that. The honorable senator's assumption went so far as to justify the payment of a bonus on exports. He said that he would assume, for the sake of argument, that the farmers pay an increase in price of £40 a year, and in some mysterious way receive £20.

Senator PRATTEN (NEW SOUTH WALES) - A contra account.

Senator THOMAS (NEW SOUTH WALES) - There was still £20 left, and the honorable senator carried his assumption so far as to say, " Let us give them a bonus of £20 when they are exporters." I do not think that people are so much in need of £20 when they are in a position to produce for export as they are when they begin production.

Senator PRATTEN (NEW SOUTH WALES) - The honorable senator would say that instead of giving a bonus on exports we should give a bonus on settlement.

Senator THOMAS (NEW SOUTH WALES) - I say that we should let the man going upon the land have the best tools of trade he can get at the cheapest possible price. We should not tax him to the extent of £20 when he is struggling. If all that Protection can do for a man is to penalize him when he is starting production, and give him a bonus when he has overcome his difficulties, I say that it operates the wrong way about. I should prefer to help a man when he is starting to produce, and perhaps to tax him when he is producing successfully. I favour Senator Lynch's request, because I cannot vote for a further reduction of the proposed duty.

Senator PRATTEN (NEW SOUTH WALES) - Why not move for a greater reduction?

Senator THOMAS (NEW SOUTH WALES) - In order to enable me to do that, Senator Lynch would have to withdraw his request, and I might not be able to secure a great deal of support for that which I would be disposed to move. I prefer a reduction of 5 per cent. to no reduction at all. There are some other items in the schedule, in which agriculturists are concerned, on which greater reductions might be requested. I stand for the primary producer, and believe that the best way to help him is to allow him to have the best machinery he can get at the lowest possible price. If people on the land are prosperous we shall increase primary production, and the secondary industries will follow as day follows the night. If we hamper the primary industries we shall have no secondary industries. When I speak of primary industries I do not refer solely to the man who grows wheat I include mining, as well as the growing of wheat, in primary production.

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

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