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Wednesday, 13 May 1936

Senator MILLEN (Tasmania) . -I listened; carefully to all that the Postmaster-General (Senator A. J. McLachlan) had to say and also to the remarks of other honorable senators who preceded me, and I am amazed at the statement that cement companies of Australia have made inordinate profits - so great as to be altogether outside the ordinary range of profit. Statements of that nature are, of course, ridiculous. In some years, nearly all businesses make enhanced profits, but one cannot say that their average profits are excessive. All 'that Senator Hardy said about the cement industry could have been applied to almost any business, and particularly the textile and agricultural implement industries. Of nearly every industry, it is possible to say that there are too many individual competitors. No one can doubt that there are too many individual competitors engaged in the manufacture of bread in Australia. I am not contending that the existing conditions in the cement industry are ideal. It is difficult to obtain ideal conditions in any business. No doubt it would be ideal for the time being if the number of cement companies could be limited to the number required to supply all our present needs; but as Australia progresses and its population grows, thus requiring an expansion of the building and other industries, the manufacture of cement should increase pari passu with the increase of cement users. Senator Hardy also compared British and Australian prices. I have not an explanation of the discrepancy. I am glad to know that Great Britain can produce quality cement at the price mentioned by Senator Hardy, and it is significant that in government and municipal contracts let in the United States of America, an allowance is made for an increase of from 20 to 50 per cent, on local prices, in order to meet competition from British manufacturers. That is something which should not be overlooked in any comparison of Australian and British cement prices. Tasmania is vitally interested in this business. The Goliath Portland Cement Company atRailton, Tasmania, in a letter to me under date the 4th March, 1936, stated -

British manufacturers are favouredwith very easily worked raw materials, available immediately alongside their factories, and the exporting companies deliver direct from factory to overseas steamer and enjoy freight rates which are lower than certain of our interstate trade charges.

It is significant that British cement manufacturers can send cement from British ports to Brisbane or other Australian ports at freight rates lower than are charged from Tasmanian ports to Brisbane.

Senator Hardy - What is the freight from Great Britain?

Senator MILLEN - I understand that it is 26s. a ton.

Senator Sampson - During the coal strike, British ships charged only 13s. 3d. a ton for carrying British coal.

Senator MILLEN - The higher freights charged between Australian ports make it difficult for the local content companies to meet overseas competition. I repeat that I am pleased to know that British manufacturers are producing cement at the prices cited by Senator Hardy, but I remind the honorable gentleman that the day will come when Australian manufacturers also will be able to sell cement at a much lower price than that which is now charged. Senator Hardy also mentioned that 2,000 persons are employed in- the cement industry. It was absurd for the honorable senator to divide the alleged profit of the industry for a period of five years by the number of employees, and say that the companies made a profit of £225 per annum for each, person employed in the industry. I challenge the honorable senator to point to any industry in the world which earns such staggering profits. Whatare the facts? Nearly all of the cement companies have been obliged to write down their capital, limit their operations, and cut down expenses in every possible direction in order to carry on. For many years the Tasmanian company gave no return to its shareholders. On the contrary, they were required to pay calls, and eventually the company had to go into liquidation. I say definitely, that the profits of Australian cement companies are not, in ratio, greater than the profits earned by manufacturers in any other Australian industry. The declared dividend of a company is not always a true index of its trading position. In the cement industry, special provision has to be made for obsolescent machinery.

Senator Arkins - The Tariff Board has allowed 6s. a ton for depreciation.

Senator MILLEN - I know that. But is the honorable gentleman aware that the' members of the board did not visit any of the cement works? Nor have they expert knowledge of the business. I have some knowledge of engineering methods, but I could not go through the works of the Goliath Cement Company and say definitely that the whole of its machinery was up to date or that its methods represented the last word in efficiency. Although the board allowed 6s. a ton for depreciation of plant, it knows nothing whatever about the business.

Senator Hardy - Has the 'honorable senator any idea of the protection which should be given to the industry ? Does he believe in prohibition?

Senator MILLEN - No; but I say emphatically that a duty of 10s. a ton is not prohibition.

Senator Hardy - Would the honorable senator agree that protection of 100 per cent, "was sufficient?

Senator MILLEN - I cannot say if any given rate of protection is or is not adequate, but I have read the report of the Tariff Board, and also the replies of cement manufacturers.

Senator McLeay - Which would the honorable senator believe?

Senator MILLEN - I prefer to take the view of a man who gives all his attention to his business. The Tariff Board has presented certain figures. Are we to understand that the board also discharges the functions of a prices commissioner? If so, may we expect that the board, in future reports, will recommend what charges are to be made for various commodities? If this is to be the responsibility of the board, it will have a man-size job to perform. I deprecate the statements made by other honorable senators that the Australian cement companies are making inordinate profits. The same might be said of manufacturers of agricultural implements and textiles.

Senator Guthrie - The cement companies arc not making inordinate profits.

Senator MILLEN - I am glad to know that Senator Guthrie is on the side of the cement manufacturers. The Tariff Board has made a calculation of the prices which should be charged to Australian users of cement. As the board does not comprise experts in the cement industry, it was not in a position to make such a definite recommendation. I, therefore, hope that the Government's proposal will be rejected.

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