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Tuesday, 12 August 1902

Mr THOMSON (North Sydney) - The honorable member's rising upon this hat question to-night may remind the committee that when we previously discussed the question he poured forth some terrible lamentations, accompanied by many exhibits of hats, as to the result which would accrue to this industry if the duty of 30 per cent., which he nowclaims to be a compromise, should become law. Sufficient time has now elapsed - and it is only to new arguments of this' sort that I intend to direct attention in any discussion upon these items at this stage - to show whether we were correct in our statement that the industry with that duty, and even with a lower duty, would, under the new conditions of federation, which gave it a larger market, flourish to a greater extent than it did in the past. We have had evidence that the trade in these particular hats has been more active, that more overtime has been worked, more employment has been given, and a successful balance-sheet has been shown.

Mr Mauger - The honorable member is talking of one mill now.

Mr THOMSON - Is not that an indication of the effect upon others ?

Mr Mauger - Not necessarily.

Mr THOMSON - Are we to level our duties according to the degree of incapacity in the manufacturer? Is that the new principle which the honorable member enunciates? If so, we shall have to schedule the capacity of the different firms engaged in an industry, and give the benefit of the highest duty to the most incapable firm. The best evidence of the correctness of our contention is the business which has since been done by the firm which the honorable member told us would lose business. We were told that its employment would be decreased, and its workmen would be injured. That firm has shown that it has improved its business under the new conditions. I say that, in spite of the lower duty, the new conditions are better for the business than the higher duties with the previously restricted market. Representations were made to us that this particular mill could not stand such a reduction in duty as was proposed. Now the honorable member for Melbourne Ports is here again as the advocate of this hat industry, and I say that the best friends of the hat industry are on this side. A reduction of the duty to 25 per cent. would not be an injury to the industry, but would enable those engaged in it to continue to do a larger business than they have been doing in the past.

Sir George Turner - If they are to do a larger business we must import less.

Mr THOMSON - That does not follow at all. They had access to only one-third of the Australian market for hats before, and they have access to the other two-thirds now, and the contention that their business will be reduced by a lower duty is not borne out.

Sir George Turner - I was speaking of the present time.

Mr THOMSON - At the present time they have not overtaken the trade in the other States. We agreed to the so-called ruinous duty of 30 per cent., and the Treasurer tells us that under that ruinousduty a hat factory has been started in New South Wales. That factory would hardly have been established if those who established it thought they had to face ruin ; or if a reduction of 5 per cent. in the duty would so affect their profit, as to mean ruin.

Mr Tudor - The honorable member knows why they have gone into the new industry. It is because the State clothing factory which has been started has taken away all the work they had previously.

Mr THOMSON - The honorable member says so, but I am sure I do not know whether that is the case. In the first place I do not think' the State clothing factory has started, and consequently it cannot have taken away their work. While . they may be influenced by some outlook of that sort, I can only say that they are not likely in seeking for a new industry to establish one from which there will be no profit.

Mr Mauger - It is not established yet.

Mr THOMSON - Here the honorable member differs from his own colleague, and I cannot answer the two opposing statements. The honorable member for Melbourne Ports made another extraordinary statement. He told us that the lower duty would ruin the small manufacturer, and also said that when they had the highest duty in Victoria on boots the competition was keenest, and prices were lowest. How could low prices and keen competition be a benefit to the small manufacturer the honorable member is talking about ?

Mr Mauger - I was not discussing the small manufacturer.

Mr THOMSON - Not then. The honorable gentleman had got away from the small manufacturer then, but I am asking him how he reconciles the two aspects of the position of the small manufacturer which he puts before us. The honorable member cannot reconcile the different conditions. He first of all turns the big end of the telescope upon him, and then the small end, and he says he is quite different. But it is not the manufacturer who is different. It is the honorable member's argument.

Mr Mauger - I was discussing the question of monopoly, not the question of prices.

Mr THOMSON - The honorable member said that when duties were highest, competition was keenest and prices were lowest, and he said also that these low duties would entirely destroy the small hat manufacturer. Now, keen competition and low prices mean the destruction of the small manufacturer, and that, according to the statement of the honorable member, is the result of high duties.

Mr Mauger - That is not a fact.

Mr THOMSON - I do not say it is. It is the honorable member who said it was. I am saying the contrary. Everything goes to show that 25 per cent. ought to be a sufficiently high duty. It will cause neither injury nor destruction to this industry, and that being so, and the Senate having requested us to fix the duty at that rate, I certainly hope we shall agree to make the requested amendment.

Mr. CONROY(Werriwa).- The honorable member for South Sydney omitted to refer to the revenue aspect of the question. If we are to accept the statement of the honorable member for Melbourne Ports, we must remember that Tasmania, Queensland, New South Wales, South Australia, and Western Australia have no hat factories, and in so far as the hats they require are drawn from Victoria, while they will be taxed, they will obtain no revenue from this duty. That may not be a matter of importance to New South Wales, but it is a matter of great importance to

Tasmania, South Australia, and certainly to Queensland at the present time. This duty of 30 per cent, is equivalent to 6s. in the £1, and the Minister for Trade and Customs has pointed out that we have to pay the duty when there is no import. He told us that in connexion with the duties upon chaff, grain, and pulse, and he asked us why the producers should not take advantage of the duty now. That is exactly what is happening here. The manufacturers of this particular article having a protective duty to the extent of 6s. in the £1, are naturally tailing advantage of it. If they are not, they deserve that their names should be published in the newspapers as public benefactors, who refuse to take a business advantage which the law allows them.- If they are not taking advantage of it, how is it that the honorable member for Melbourne Ports tells us that we shall be doing them an injury if we reduce the duty? If they are not raising the price of the articles they manufacture by 30 per cent., but only by 20 or 15 per cent., to cut down the duty to 20 per cent, will not affect them in any way. If, on the other hand, the statement of the honorable member for Melbourne Ports is not correct, and they are increasing the price of this article, it is time we cut down such a high duty. This is a duty which falls upon the great mass of the people, and whatever the Minister for Trade and Customs may do, surely the honorable member for Melbourne Ports is not here to argue that a particular firm should be allowed to exploit the people of Australia ? So far as the revenue goes, Ministers themselves have admitted that they expect that the importations of this article will be diminished from about £650,000 to about £180,000. Since this duty has been reduced, in spite of what honorable members opposite told us at the time, there has been increased employment given in these factories. The same result followed the reduction of duty in 1895. From 1892 to 1895 the duty in Victoria was 36s. per dozen. In 1895 it was reduced to 30s. and 24s. per dozen, and subsequently to the reduction of the duty by 12s., the number of men employed in the hat trade increased nearly twofold. Those are the official figures. Of course, from my point of view, they do not bear upon the argument, because there may have been a dozen other causes for the reduction ; I quote them to show that the honorable member for

Melbourne Ports has not properly taken the matter into consideration. As one-third of the population of the Commonwealth previously paid no duty upon hats, a duty of even 20 per cent, would be an extremely high one, and, therefore, we might very well accede to the request of the Senate.

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