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Thursday, 23 April 1936

Senator ABBOTT (New South Wales) . - In view of the reply given earlier to-day to a question that I asked, to the effect that it is not customary to announce government policy in answer to questions, I may perhaps be permitted to speak to the motion so ably moved by Senator Guthrie. The honorable senator merits our best thanks for his interesting address. If he has shown us one thing more than another, it is that a real danger confronts the great wool industry, upon which the Commonwealth is at present almost entirely dependent. He has told us that our wool industry is menaced by the artificial wool textiles now being produced. The graziers very greatly fear that certain action which may be proposed and, which may be wellmeaning enough in itself, may have the effect of encouraging the development of the artificial wool textile manufacturing industry abroad to the serious detriment, of the Australian wool industry. Any tariff proposals that might have that effect should be strongly resisted. The result of certain action which we are told the Government contemplates taking may be seriously prejudicial . to our valuable export market to Japan. As Senator Guthrie has pointed out, Japan has been our second best customer. In fact, I thought the Japanese market for Australian wool was larger than Senator Guthrie stated. But even allowing for an export of 700,000 bales of wool to Japan per annum, our export trade with that country is valued at about £12,000,000.

In view of the serious position of the wool industry, which Senator Guthrie has so weil described, this . Parliament should be particularly careful in dealing with the subject. I impress upon honorable senators that the graziers of Australia are seriously alarmed at the suggestion that Japan may regard any restriction in respect of rayon and other Japanese textiles so seriously as to retaliate in respect of Australian wool. We have to be careful that our wool industry is not, as it were, murdered by unwise action on the part of this Parliament. The Manchester trade mission which recently visited Australia gave us to understand that Japan was not likely to take restrictive action against Australian wool ; but there seems to me to be a possibility that it may do even worse than that. Senator Guthrie made it clear that unwise tariff action by this Parliament may easily lead to a greatly-increased use of artificial wool textiles in Japan. A nation which felt itself hurt by the unneighbourly international treatment of another nation would steel itself to discontinue the use of the products of that nation, and unless we are careful Australian wool and other Australian products may be put under such a disability by Japan. Sir Ernest Thompson told us some little time ago that such action was not likely to be taken by Japan ; but appearances hardly justify us in coming to this conclusion. It has been said that one of the causes of the inability of Lancashire manufacturers to compete with Japanese textile manufacturers is the inefficiency and obsolence of the plant and machinery of the Lancashire firms. Although that statement was strenuously denied, I direct attention again to the article in The Economist of the 8th February, 1936, headed " Cotton in the Commons," from which I cited a passage earlier to-day. In the course of that article it is stated that -

Sir WalterPreston informed the House of Commons that, after a detailed examination, he came to the conclusion that a re-equipped mill "can sell its product in India at Japan's price, and make a profit of at least 10 per cent." He went on to say that the report of the Federation of Master Cotton Spinners had. proved his case, though their estimate of: profits, at 3i per cent., was lower than that shown by his own calculation.

I point out that that remark was made after inquiry, not by either a Japanese business man or an Australian woolgrower, but by a competent person in the business in England. The gist of the contention is that, if the Lancashire mills were re-equipped, Britain would be able to compete against Japan in India.

Senator Arkins - What is meant by " a re-equipped mill " ?

Senator ABBOTT - I presume it means a mill equipped with new machinery. It is admitted that the Japanese mills are equipped with the very latest machinery. The opinion of some one perhaps better able than I am to make an authoritative statement on this_ matter is that the inefficiency of the equipment of the Lancashire mills is one of the causes of the inability to compete. In view of that the undoubted serious alarm of the wool-growers of this country is not without justification. Some recent press cables may be accepted as the inspired propaganda of interested parties overseas; but other cables have been received which go to show that the position is taken very seriously abroad.

The world to-day is getting sick of overdone economic nationalism. I have no information as to the actual intention of the Commonwealth Government, but I hope my fear is groundless that we will cause irritation to Japan by imposing further restrictions on our imports from the second best customer we have for our wool. Our trade balance with that country is undoubtedly very much in our favour at the present time, and we shall place ourselves in a serious position if we strangle trade on which the whole prosperity of Australia is founded at the present time.

Senator Sir George Pearce - I suggest that the honorable senator would be ill-advised to discuss that question at the present juncture.

Senator ABBOTT - I desire to take that risk, only to stress the fact that the wool industry of this country is seriously and very deeply moved by the suggestion that there may be reprisals which would bring about disturbances in the wool market. The wool industry only wants to be left to carry on in the best possible way and the only assistance it seeks is that foreshadowed by Senator Guthrie - statutory authority, if necessary, to levy upon itself for the purpose of propaganda and to enable it to be put on the best advertising basis throughout the world.

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