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Wednesday, 5 September 1928

Mr BRUCE (Flinders) (Prime Minister and Minister for External Affairs) . - The subject raised by the honorable member is one that I have discussed recently with him and with other honorable members from Queensland. When in that State I received a deputation from the Cotton Board, whose members set forth the case for the growers, and mentioned, I think, all the points to which the honorable member has referred to-day. We should bear in mind the position of cotton growing and cotton' manufacture in Australia in considering, the matter that has been raised. In presenting his case,' the honorable member rather suggested that the Government had been recreant to its duty, and he certainly gave no indication of appreciation on behalf of the cotton growers whom he represents of the action that the Government has already taken to assist them. It would have been more generous if he had done so, because, although the growers are pressing now for further assistance they recognize generally, I think, that the Government has treated them with considerable generosity in the past. It has displayed considerable understanding of their industry, has taken steps to assist in establishing them in it, and has helped to provide a certain market for their product for the future. It is desirable to outline briefly the position with respect to the growing and the manufacturing sides of the industry.' For some time the Queensland Government and the Commonwealth Government acted together in trying to stimulate the production of cotton in Australia. Payments were made by the Queensland Government, with financial assistance from the Commonwealth Government, in an effort to encourage the growth of cotton in the areas in Queensland considered suitable for its production, and in 1925 it was considered by the Commonwealth Government that the industry could be most satisfactorily assisted by means of a bounty. Representations were made to me on several occasions by deputations that this course should be taken. In May of 1925 a deputation of growers interviewed me, and asked for a bounty of lid. per lb. on cotton. That figure I regarded then, and for a long time afterwards, as being that which the growers were prepared to accept, and which they regarded as a fair and reasonable bounty. In January of the following year the Tariff Board went to Queensland and heard representations from the growers. It was then that the request for 2d. per lb. was first made. The Tariff Board heard the representations of the growers, and afterwards fully investigated the whole position. It made a recommendation that a bounty of 2d. per lb. should be granted for a period of six years, specifying certain grades of cotton, and that for a period of four years after that a bounty should be paid on a diminishing scale, this being lid. for the seventh year, lid. for the eighth, lid. for the ninth, and Id. for the tenth year. That recommendation was considered by the Government, but it was decided that the bounty should be paid for a period of only five years at a rate of 1½d. per lb. over the whole period. I do not think that it is necessary for me to deal with the exact reasons which led to this decision. It was decided to pay a bounty of l£d. per lb. when cotton was bringing 9.9d. per lb., and remembering the fact that 3 lb. of seed cotton go to 1 lb. of lint cotton, it will be seen that the assistance which the Government was affording the industry amounted to 66 per cent, of the value of the commodity. When the Bounty Bill was brought down the Government took the view which was very fully set out by the then Minister for Customs when introducing the bill, that it was not possible to find a satisfactory solution of the cotton marketing problem unless we could in some way link up the cotton growing industry with the manufacture of cotton yarn in Australia. Accordingly, the two questions were considered together in this Parliament, the bounty on seed cotton, and the bounty on cotton yarn. The request for a bounty on cotton yarn had been already considered by the Tariff Board, and a report had been made, but the position of the yarn industry was not dealt with at that time. There was a gap of some months between the two investigations, and the subjects were not linked together in the Tariff Board's report. I am quite certain, however, that if they had been- considered simultaneously, the board would have recommended the same course as was afterwards adopted by the Government, namely, the linking up of the two industries. The board recommended that a flat rate of 6d. per lb. should be paid a3 a bounty on cotton yarn. When the tariff schedule was being considered by Parliament, that recommendation was varied, and I do not think that either the growers or the manufacturers have really challenged the alteration made, because a flat rate of 6d. a lb. would have led to the most extraordinary anomalies. Cotton yarn is sold according to count, the quality or grade being determined by the number of yards which go to the pound. Thus cotton which goes 840 yards to the pound would be called ~No. 1 grade, and when you arrive at a high count the yarn is the very finest, taking possibly ten times 840 yards to make up 1 lb. We could not pay a flat rate of 6d. a lb. on all these different counts, and for that reason a graduated scale was introduced when the Bounty Bill was before the House. The whole purpose of paying bounties on seed cotton and yarn, and of imposing deferred duties on imported cotton goods, was to give the local manufacturers an opportunity to supply the cotton yarn necessary for local requirements. It was laid down that 50 per cent, of the cotton used in making yarn had to be Australian grown before the bounty could be claimed. I mention these matters merely to show that it was the Government which evolved this plan of linking up the two branches of the cotton industry, so as to. provide a sure market for seed cotton. When the cotton bounty of 1½d. per lb. was introduced, together with a graduated bounty on yarn manufactured in Australia, it was felt that a practical step had been taken towards assisting the industry. That step was taken in August of 1926. At the beginning of the present year, representatives of those interested in the industry approached the Minister for Customs, and stated that there were certain other things which would have to be done if this policy was to become effective. The suggestions made, however, were of such a nature that it was necessary to refer them to the Tariff Board. Under the law there was no possibility of the Government acting in regard to those suggestions, even though it had been in the fullest accord with them, until they had been referred to the Tariff Board. The honorable member who introduced this matter to-day implied that the Government might have acted without reference to the Tariff Board, and he referred to one instance which I recollect when the question was raised as to whether there was legal power for the Government to impose a duty without the recommendation of the Tariff Board. The view of the Government is that when a duty is brought in purely for revenue purposes, such as that imposed on petrol for road building purposes, the Government has the right and power to take action without consulting the Tariff Board. The imposition of such a duty is merely a revenue measure, having no relation to the protectionist policy of Australia, which is the peculiar concern of the Tariff Board. There may be some doubt as to whether duties either for revenue or for any other purpose can be brought down by the Government without reference to the Tariff Board. I do not wish to argue that matter now, but merely to point out that on no occasion, and in no circumstances, has the Government brought down other than a purely revenue duty without first referring the matter to the Tariff Board.

Mr Forde - What about the duties on motor chassis and bumper bars?

Mr BRUCE - That has nothing to do with the matter under discussion. These requests were made by the Cotton Board to the late Minister for Customs, just prior to his death. He listened to their arguments, andgave an undertaking that he would refer the proposals, with one exception, to the Tariff Board, in the following June. Unfortunately, before he was able to do that, he died, but on the 24th May the proposals were referred to the Tariff Board. Actually, there was no delay; the question was referred to the board rather earlier than the late Minister thought would be possible. After the reference I received various communications asking me to expedite the hearing by the board. I replied that I could not do so. When I was in Queensland recently the request was revived by a deputation. In reply, I pointed out that I had no legal power to insist upon the Tariff Board dealing with the cotton application immediately, and that even if I had such power, I would not be prepared to exercise it. The Tariff Board had informed me that on its agenda paper were a number of references which had priority over the application from the cotton industry, and that it was prepared as soon as they were dealt with, which would be about October, to investigate the conditions of that industry. I was informed by the board that if the inquiry was opened in October, a report might be available early in November. The honorable member for Capricornia assumes that I have power to insist upon the

Tariff Board giving priority to the cotton industry's application, and he complains that I will not so insist. I have stated quite clearly that I will not do what is asked, and I think the House generally will endorse my attitude. When a Minister yields to pressure from one quarter, the way is open for preferential treatment of other industries, each of which considers that its own requirements are the most urgent.

Mr SPEAKER - The Prime Minister's time has expired.

Mr Scullin - I think the right honorable gentleman should have an extension of time.

Mr SPEAKER - Because of the fact that the debate on a motion of this character may not proceed for more than two hours after the meeting of the House, the time allowed to individual members is also strictly limited, and it is not usual to grant any extension of time to an honorable member except by a motion for the suspension of the Standing Orders.

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