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Friday, 1 May 1936

Senator DUNCAN-HUGHES (South Australia) . - I did not anticipate that the request I have moved on this item would result in a debate over such a wide range of topics. Honorable senators have discussed, among other things, high finance, banking policy, gold blocs, inflation, bitumen, our trade balances, the United States of America, and speculation in foreign currencies. Tosome extent the request I have moved may be regarded as a test, and if it is carried a similar request should consequentially be made under certain other items. In 1934- 35, the importations of glucose which were cleared totalled 343 cwt., valued at £326. In 1933-34, our exports were valued at £6, and, in 1934-35, at £18. One would hardly have expected such a lengthy debate on such a comparatively unimportant item, but honorable senators have had an opportunity to expound their views on finance, currency and exchange. I am a good deal strengthened in the opinions I have expressed by the fact that my remarks have the support of Senator J. D. Millen, who, I think honorable senators will agree, is more capable of dealing with such subjects than perhaps any other honorable senator. I congratulate the officer who prepared the first statement read by the Postmaster-General (Senator A. J. McLachlan) this morning, but it resembled only slightly the Minister's first statement yesterday. "When Senator Brown invited the Minister to elucidate the subject, I could not help thinking that, although he had elucidated it three or four times, he submitted a different elucidation on each occasion.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - To meet different points, if any points at all had been made.

Senator DUNCAN-HUGHES - The first explanation of the Minister was that there is some mathematical catch in this proposal, and that while the difference between 2 and 4 is 2 the difference between 4 and 6 is not 2. I notice that that argument appears to have been dropped to-day; honorable senators are told that there is no problem of higher mathematics involved, and that it is a matter of simple arithmetic. I invite the Senate to descend from the high altitude of finance, currency and exchange, and consider the facts as a common-sense problem.

SenatorHardy. - It is possible that the ratios may change.

Senator DUNCAN-HUGHES - That point has not been amplified by the Minister to-day. Therefore, I assume that this contention is no longer regarded as a strong point in his defence. The Minister suggested that the proposed request would cause inconvenience with regard to some of these items, but he had to skip from page 3, item 27, to page 114, item 380, in order to find what he considered to be a typical example. The principal contention of the Minister, as I understood it this morning, was that the exchange is likely to remain almost permanently at the present figure, and he quoted ProfessorGiblin in support of that belief. He said, in effect, that there was no reasonable probability of the exchange moving in any direction. If that be correct, why should this schedule provide on hundreds of items for a fall of the rate of exchange? But having made this provision why not provide also for the possibility of a rise? Either the exchange must remain stationary, in which case the duty in the schedule operates ; or it will fall, in which case the proviso will come into operation-, or it will rise. In those circumstances we should provide for the three contingencies, not for only two of them. If such an alteration is to be made, now is the opportunity to do so, otherwise this proviso will be repeated on hundreds of items in the schedules, and when a change has to be made each one will have to be amended separately. The Tariff Board suggests that provision to counteract any rise of the rate of exchange should be deferred until the need for it arises. If. that course be adopted it will make the amendment of the schedule infinitely more difficult than it will be if done now. I also point out that the formula used in my request has not been drawn up by me; it is the formula of the Tariff Board, the Customs Department or the Minister. I am merely proposing that it be applied both ways to compensate for a rise of exchange as well as a fall of exchange. It should not be a one-sided provision. I recall that the PostmasterGeneral (Senator A. J. McLachlan) said that at present it was a matter of a one-way track, and that my amendment would have the effect of making the track lead in another direction. That is not my object. I desire that the track shall run both ways ; . but on the Minister's own admission, it runs at present in only one direction. Senator Pearce pointed out that any rise of the exchange rate would accentuate the limitation of imports; that is undoubtedly so.

SenatorCollings. - That is the honorable senator's objection to it.

Senator DUNCAN-HUGHES - I am sure that Senator Pearce did not mean that the one-way application of the formula had been adopted with that deliberate intention.' He only quoted that result as one of the arguments in favour of the schedule; he did not suggest that the provision for a rise of the rate of exchange was deliberately omitted so that imports might be further limited.

Senator Sir GEORGE PEARCE (WESTERN AUSTRALIA) - I did not suggest it, but that would be the effect.

Senator DUNCAN-HUGHES - I am gratified that that aspect has been clarified. My amendment has been amply justified, in my opinion, in one particular direction. When I delivered a speech on the tariff several nights ago, I pointed out that this schedule tended to lean too heavily towards the industrialists rather than the consumers. Will any honorable senator deny that this discussion has confirmed my contention ?

Senator Hardy - Always based on the assumption that the exchange rate will rise.

Senator DUNCAN-HUGHES - If the Government moans to be fair to all sections of the community, it must consider the possibilities of a rise, as well asof a fall, of the exchange rate. The formula laid down by the department can operate equally in both directions, and it is only fair that it should. I shall not withdraw my amendment, and I thank honorable senators for the attention that they have devoted to its consideration.

Senator JAMESMcLACHLAN(South Australia) [2.37]. - If a decision is to be reached on this item, it may be preferable to apply the principle involved to the remainder of the tariff schedule, because the same formula has been devised throughout. Would it be possible to redraft Senator Duncan-Hughes's amendment in order to give it a general application ?

The CHAIRMAN (Senator Sampson - The schedule must be considered item by item.

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