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Wednesday, 13 May 1936

Senator FOLL (Queensland) .- When speaking on the second reading of this bill, I stated definitely that, in view of the absolute necessity for honouring the Ottawa agreement in every particular, I intended to cast my vote with the Government. I regret, as other honorable senators have done, that the Ottawa agreement has intruded itself into this discussion.

Senator Sampson - It was pushed in.

Senator FOLL - Both the Commonwealth Government and the British Government have declared that they regard the action taken by the House of Representatives as a breach of the Ottawa agreement. For that reason alone I shall record my vote on this occasion in support of the proposal of the Government.

Senator Collings - The honorable senator did not say that until the Minister in the House of Representatives invited honorable senators to state that it was a breach of the Ottawa agreement.

Senator FOLL - Responsible Ministers of the Parliament of the Commonwealth, as well as the British Government, through its representative in Australia, have declared that they regard the imposition of a duty of 6d. per cwt. on cement, after the Tariff Board had recommended admission free of duty, as constituting a breach of the Ottawa agreement. Whatever our personal views may be, the fact remains that the two parties to the agreement consider that it has been violated. I am of the opinion that the contract is so vital to the primary producers of Australia that nothing should be done to endanger its existence. Later, I shall suggest to the Government what I think is a way out of the difficulty that has arisen in connexion with this item. One of the greatest dangers that I foresee from the placing of imported British cement upon the free list is that British manufacturers, whose production costs are less than those in Australia, could flood the market before local manufacturers have had an opportunity to re-organize their industry and reduce costs, in order better to compete with imports. It is almost unprecedented for a substantial tariff on imported goods to be completely withdrawn at one fell swoop. The Tariff Board would have been better advised if, after it had received the statistics relating to operations of the various companies in Australia, it had suggested that, in order to allow them the opportunity to reorganize their business and delivery arrangements, and reduce their costs, there should be a gradual paring down of the duty instead of its immediate abolition. I do not propose to refer at great length to the Tariff Board's report, but I endorse the remarks of the Leader of the Opposition (Senator Collings) with regard to the Queensland Lime and Cement Company. Only in comparatively recent years has that company made any profits; and hundreds of citizens of Queensland are small shareholders in this concern. When the company was formed, to make Ace Brand cement, the large majority of the shareholders took an interest in the enterprise, but not in anticipation of receiving high dividends immediately on their investment. They were actuatedby the fact that Queensland, unlike Victoria and New South Wales, is not in the fortunate position of having a large number of secondary industries in proportion to its population. Figures show that the State is now making satisfactory progress in secondary production. But honorable senators who are familiar with the personnel of the shareholders in this cement enterprise will realize that many of them invested their money in order to give the industry a start. For many years they waited, but no dividends were declared ; only during recent years have they been able to obtain some small return on their investment. I do not think that it is fair merely to cite, as an example of a company's prosperity, the rate at which its shares are quoted on the stock exchange. A surplus of money is awaiting investment and people are prepared io accept a much lower rate of interest now than probably at any other time in the last 40 years. Some shares are standing at a high premium on the stock exchange and people are willing to take 3£- per cent, and 4 per cent, on industrial stocks, a return which would not have attracted any investor a few years ago. That has been the reason why the prices of many such shares have risen as they have done. If honorable senators compare the stocks of the cement company with, for instance, those of the Australian Glass Company, whose £1 shares are quoted at £4 10s., or with those of the Swan Brewery, in Western Australia, whose shares are quoted at a high premium, they would realize that the price of the cement shares are not on an abnormally high level. The company in Queensland has been handicapped up to the present time by reason of the fact that it has been obliged to cart its limestone from Gore, which is over 200 miles from the factory itself. It has also been handicapped by the freight charges on the cement it sends to various parts of the State. Certain statements were made this afternoon in connexion with freight rates on cargoes from Great Britain. In my opinion, the assertion that cement is likely to bo brought from the Old Country to Australia at a figure as low as 13s. a ton is extravagant; but the freights between coastal towns in Australia are to-day very considerably in excess of the cost of bringing goods of this description from the United Kingdom to Australian ports. like the Leader of the Opposition, I am particularly interested in the welfare of the cement company in Queensland; I leave honorable senators from other States to defend similar enterprises in their constituencies. But I emphasize that the Queensland company , is handicapped because it is required to transport its limestone supplies over 200 miles to Brisbane. I am gratified, however, that it has now taken steps to secure supplies of coral from Moreton Bay, which stands in close proximity to its works. Thus, it will be able very considerably to reduce the cost when it puts its new plant into operation. The company is also building a concrete road to the wharf on the Brisbane River, from which the coral supplies will be taken to the works ; con sequently, the considerable freight charges incurred in bringing limestone from western Queensland will be avoided. In view of the fact that the Government considers that the action of the House of Representatives in restoring the duty to 6d. per cwt. is a breach of the Ottawa, agreement, I suggest, as a fair compromise, that the duty of 7s. 6d. be continued for twelve months, in order to enable the companies to adjust their costs. On numerous occasions when new tariff items have been placed on the schedule, the operation of the duty has been deferred. Therefore, we shall not create any precedent if my proposal be adopted. During the twelve months the companies will have the protection of 4£d. a bag, and they will be well aware that at the expiration of that term that advantage will cease. In the interim, therefore, they can re-organize, reduce their costs and re-adjust 'their prices, and the Government will be able to ascertain whether dumping of overseas cement occurs. I have not discussed my proposal with the Government, but I -suggest that it offers a way out of the existing difficulty. The Queensland company, which has been battling along under adverse conditions for so long, would have its new plant in operation before the expiration of the twelve months, and would thus be able to make an effort to reduce costs. If this compromise arrangement were adopted by the Government, it would not constitute a breach of the Ottawa agreement.

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