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Wednesday, 9 June 1926

Senator McLACHLAN (South Australia) . - The effect of my requested amendment would be to make locomotives dutiable at 27½ per cent. British, 35 per cent, intermediate, and 40 per cent, general, instead of 40 per cent., 50 per cent., and '55 per cent., as proposed in the schedule. As I mentioned yesterday, the South Australian Government some time ago calledfor tenders for ten locomotives each, of the Mountain, Pacific, and Mikado types. For the Mountain type, no Australian tender was received, but one was submitted by Messrs. Armstrong, Whitworth, & Co., of England, the price for the ten being £140,000. With a duty of 27½ per cent., the price of those locomotives, landed in Australia, would be increased by £35,600, making the total cost £175,600. The proposed duty of 40 per cent., which. I desire removed, would increase their cost by £51,810, making the total cost £191,810. The difference, be tween a duty of 27½ per cent. and a duty of 40 per cent, is £16,210. Messrs. Armstrong, Whitworth, . and Company also tendered for the ten Pacific locomotives required, their price being £117,500. With a duty of 27½ per cent,, or £28,800, the total cost of the ten locomotives is increased to £146,300. With the duty at 40 per cent., representing £41,910, the total cost would be £159,410. For this type of locomotive, one Australian manufacturer - the Perry Engineering Company - submitted a tender. Their price was £252,000, as against £117,500 submitted by the English tenderer. Allowing for a duty of 27½ per cent., there is still a difference of nearly £106,000 between the two tenders. For the ten locomotives of the Mikado type, Messrs. Armstrong, Whitworth and Company asked £108,000. Adding £26,600 for duty at 27½ per cent., the total cost would be £134,600. With the duty at 40 per cent., representing £38,720, it would be £146,720. The tender of the Perry Engineering Company for these locomotives was £202,500. By accepting the tender of Messrs, Armstrong Whitworth and Company, the saving effected by the South Australian Railways Departmentis, in the case of the Pacific locomotive, £105,700, and, in respect of the Mikado type. £67,900. With the duty at 40 per cent., the saving would be respectively £92,590 and £55,780. Economical and efficient management is as essential for the successful' running of our railways as it is in our primary industries. For the progress of the Commonwealth greater railway development is necessary. But increased duties on locomotives will retard development. I point out that the South Australian Government invited tenders for these locomotives many months before the introduction of the tariff schedule. Moreover, seeing that their purchase was part of a scheme to improve the South Australian railway system - a scheme involving the expenditure of £3,500,000 on improvements in the State itself, improvements which would remain nonearning until these engines were running - the time required for delivery was an important factor. The whole of that capital would have been idle until the engines, which are designed to reduce the train costs per mile, had been put into commission. The Austra- lian tenderer required four years' and eight months for the completion of the contract, whereas the British tenderer undertook to give delivery in twelve months. From this point of view, it was good business for the South Australian Railways Commissioner to accept the British tender. Lately, in connexion with the financial relations of the Commonwealth and the States, we have heard references made to the moral claims of the States to a certain proportion of the Commonwealth revenue. It appears to me that the same argument, with much more force, may be applied to this request for lower duties in respect of the contract which the South Australian Railways Commissioner accepted for the type of engines referred to. The measure of protection hitherto afforded to Australian engineering firms enabled them to compete against outside tenderers for the construction of the less powerful type of engines, but apparently it was not sufficient to justify the installation of equipment necessary for the production of the heavier types of engines which modern railway practice demands. I understand, however, that the South Australian Railway Department now proposes to install this machinery at the Islington Workshops. It would be a grave injustice to the department, and would . tend to retard the efforts of those who are placed in charge of important branches of the Public Service, or secondary industries, as they have been described, if relief were not given. The increased duties will not help, because if the department had to place another order for the same type of engines, it would still be £92,000 to the good if it accepted the British tender.

Senator Kingsmill - Does that £92,000 include also the loss of time referred to by the honorable senator ?

Senator McLACHLAN - No; if the Australian . tender had been accepted the loss would have been very much greater to the department because of the extended time required for delivery. I may explain what I mean by stating that important railway works have been put in hand in that State, including a new bridge over the river Murray to take the heavier train loads, the extension of the broad-gauge system beyond Hamley Bridge, on the western system, and the strengthening of culverts and permanent way. All this expenditure would be nonrevenue producing for over three years' and eight months, the difference in the time of delivery as between British and Australian tenderers, if the order had been placed with the Australian firm. There is, I submit, a strong case for a reduction of the duties. The increased tariff will not lead to the establishment of new industries. The Pacific and Mikado types of railway engines are not bought every day. They will last for a considerable time. But, as I have stated, it is anticipated that the various Governments will equip their workshops to manufacture future requirements in this direction. It is probable that the Australian tenderer made some provision in his contract price for the purchase of new equipment necessary to turn out this type of engine. It would have been foolish not to have done so. The use of the heavier types of engine for the South Australian railways is now generally favoured by competent railway authorities. Mr. J. M. Ashworth, Chief Engineer for Maintenance and Ways in Victoria, who recently visited America to inquire into, the latest railway practice, recommends that the Victorian Railways Commissioners should build this type of engine for future use. He states that in America engine loads of 5,000 tons are quite common as compared with 1,200 tons in Australia, and that their passenger locomotives are 50 per cent. heavier, and freight engines quite 60 per cent. heavier, than Australian engines. I submit that if the increased duties are imposed, considerable injury will be done to many State-controlled railway services - services which have been described by more than one honorable senator opposite as standing in the relation of secondary industries to our primary producers - that development will be retarded, and our primary industries will suffer.

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