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Wednesday, 2 December 1936

Senator DUNCAN-HUGHES (South Australia) (1:31 AM) .This has been a most pleasant debate, because we have had tlie Leader of the Opposition (Senator Collings), who so frequently appears to be in. accord with the Government, in a rather fulminatory frame of mind, whilst the Leader of the Country party (Senator Hardy), who always supports that Government, has distinguished himself by opposing some of its proposals, although I imagine that he will support them when the vote is taken. It is always a rather feeble thing to Come in after the damage has been done and say, " This is a regular muddle ". Some honorable senators, however, are in a position to say that before trouble actually occurred, they drew the attention of the Government to the danger. About a month before this lamentable schedule was introduced into the House of Representatives, there was a debate in this chamber on the wool industry. Three honorable senators spoke then and said that they hoped nothing would be done to spoil Australia's export trade in its most important product. One of them was Senator Guthrie, who to-night rather applauded the Government's action. On the 23rd April the honorable senator said -

Japan is a very valuable customer of Australia, a vitally valuable customer, not only for wool and wheat. but also for other commodities. Therefore, I know that the Government, when dealing with international agreements or the tariff, will take seriously into consideration the value of the Japanese demand for our greatest product. . . .

Who are our customers? First of all there is Great Britain, and, in recent years, although it is only 25 years since it first purchased wool from Australia, Japan has taken the place of Germany as customer number two. This year Japan has purchased from thi3 country no less than 700,000. bales of wool. It has taken as much as the whole of the countries of Europe combined, this despite the fact that Germany formerly was our second best customer.

Another of the three was Senator Abbott, who was reprimanded by the Leader of the Senate (Senator Pearce) for having mentioned Japan at all when negotiations with that country were still proceeding. Speaking of the wool-grower, I, myself, said -

He sees, too - and this is why Senator Guthrie has raised the question - that in one foreign country his sales have been increasing and thus compensating him to some extent for what he has lost elsewhere. He merely asks the Government to be very careful to avoid imperilling the interests of this industry in that particular country, as it has imperilled those interests in other countries.

It will be seen, therefore, that there are at least three members of the Senate who can now stand up and say, "We warned you a month before you did this thing of what would happen. Are you now satisfied that we were right ? If you maintain that we were wrong, why are you prepared to come to any agreement at all? Why not stand to your guns?"

Senator Hardy - How does the honorable senator know that the agreement will not be an improvement?

Senator DUNCAN-HUGHES - In that event, the previous action could not have been right.

Senator Sir GEORGE Pearce - We were always willing to come to an agreement.

Senator DUNCAN-HUGHES - Assuming that this was done purely as a means of bargaining, are we to take no notice whatever of the bad feeling that has been engendered throughout the Pacific during the last seven or eight months? Is that to count for nothing compared with a few hundred yards of textiles ?

Senator Sir George Pearce - Millions of yards.

Senator DUNCAN-HUGHES - Even so, the value is trifling compared with the amount paid by Japan for Australian wool and other commodities. This is not a matter for scoring debating points.

Senator Sir GEORGE Pearce - Hear, hear !

Senator DUNCAN-HUGHES - The Government has not been successful in making many good points during this debate; but, as I have said, it is a matter for deeds rather than words. It is useless for any Minister of the Crown, however great a Minister he may be, or however important his position, to go to Brisbane, or elsewhere, and say that Australia can play a great part in improving Pacific relations, when, at the same time, his Government has just taken an action which in no way improves those relations. It is not of the least use for a Minister of the Crown, however important he may be, to say that the Government has never lost sight of the importance of the wool industry to the people of Australia, when the Government of which he is a member has just dealt that industry the most annihilating blow that has ever been struck at it in this country.

Senator Sir George PEARCE - The industry seems to be flourishing fairly well.

Senator DUNCAN-HUGHES - I shall have a word or two to say on that point; but there are other factors than the immediate question of the price of wool to be considered. Does the Minister say that the price of wool is as good as it was two years ago? Two or three times to-day Senator Hardy has interjected, " How much has wool fallen?" The price of wool has not fallen, but. on the contrary, has risen.

Senator Badman - Wool is bringing higher prices in South Africa and in New Zealand than in Australia.

Senator DUNCAN-HUGHES - I am not astonished, but I do not wish to overemphasize the fact that the Japanese are buying wool heavily in South Africa and New Zealand. That may be a premeditated movement.

Senator Hardy - The price of wool may fall if they buy here.

Senator DUNCAN-HUGHES - It is also possible that the price of wool has risen in anticipation of an agreement with Japan being arrived at. I shall not give an answer to the question which has been asked to-day in my own words, although I could quite well do so; but I shall answer it in the words of Professor J. B. Brigden, who, writing in the Australian Quarterly for September, 1936, said, on page 16 -

The immediate position is not at all serious, if the interests of our own consumers are ignored, as they commonly are. Our womenfolk can do without cheap Japanese dressgoods. Our wool-growers will not seem to lose much if the price of wool does not fall. A failure to rise in price is not nearly as impressive, although the loss is just as great.

That is what I put to the Senate. It is idle to say that wool is selling at good prices. We know that, whatever the price, it is lower than it would have been if Japanese buyers were in the market. I have actually seen statements by one who is a leader in the wool industry and also in newspapers questioning whether Japanese competition would have made any difference to the price of wool.

Senator Hardy - Many people think that the price of wool can go too high.

Senator DUNCAN-HUGHES - I agree; but shall we then attack wool in order to keep its price down?

Senator Hardy - Tie honorable senator is submitting a hypothetical case.

Senator DUNCAN-HUGHES - We cannot say what the price of wool would have been if the Japanese were buying it; but we can say definitely that it would have been higher than it is. Whatever the price, it is undoubtedly a fact that it is less than it would have been had Japanese buyers attended the sales.

Senator Hardy - That is only the honorable senator's opinion.

Senator DUNCAN-HUGHES - Does ' the honorable senator deny the accuracy of my statement?

Senator Hardy - I say that it is purely hypothetical.

Senator DUNCAN-HUGHES - Then competition means nothing, and the law of supply and demand needs revision! The absence of our greatest foreign purchaser of wool apparently makes no difference at all to the price of the commodity! If that is a hypothetical argument in the opinion of the honorable senator, it is not so in my opinion. Any business man of standing in the community, unless he is trying to score a point, will say that the absence of a buyer like Japan from the wool sales must mean- a reduction of the price obtained for wool. Whilst I do not wish to over-stress the importance of Japanese buyers operating in South Africa and New Zealand, it is known that the price of both greasy and scoured wool in South Africa is pennies per lb. higher than for the same class of -wool in Australia. Is that a hypothetical argument?

On another occasion recently I ex- . pressed my objection to the way in which this matter has been dealt with, not because I personally pin myself to the Tariff Board, but because that body has always been set up by the Government as a sheet-anchor. The country is entitled to expect that, the sheet-anchor will not be removed by the Government.

Senator Leckie - The sheet-anchor is the whole ship.

Senator DUNCAN-HUGHES - I do not think that. Instances have been before us lately in which the Government has completely ignored the recommendations of the Tariff Board and imposed duties on goods higher than those recommended by the board. It cannot be considered, therefore, that the Tariff Board is the whole ship. There must be a captain of the crew somewhere. Sir Henry Gullett has been mentioned frequently as being responsible for the Government's trade diversion policy. I have no wish to disparage that honorable gentleman: and I do not think he should be regarded as being solely responsible. We cannot get away from the fact that the Cabinet as a whole is responsible and each member of it must accept his share of responsibility. It is grossly unfair to attribute responsibility for this policy to the honorable gentleman who was in charge of the negotiations.

I understand that Senator Hardy regards a trade balance as a hypothetical thing ; but I have always been encouraged to believe that it is good for any trade balance to be favorable to Australia. I cannot understand why a government should hit the United States of America with one hand because it sells too much to Australia, and hit Japan with the other hand because, presumably, it is buying too much from Australia. The trade balance with Japan is heavily in our favour. I do not suggest that bilateral trade balances can be arranged with exactitude.

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