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Thursday, 18 August 1960


Mr McEWEN (Murray) (Minister for Trade) . - in reply- Mr. Deputy

Speaker,having listened to the speeches from the Opposition, culminating in that made by the honorable member for Yarra (Mr. Cairns), I cannot help observing that it would be a bad thing for any business enterprise if there were so little confidence in it on the part of those managing it as there is in the Australian nation on the part of the Labour members in this House. We have heard nothing but despair from them. They say that we are going into national bankruptcy and that it is terribly wrong that industries established here are owned partly or wholly by overseas interests -industries that employ countless thousands of Austraiian people at good award wages or better, with plenty of overtime. Opposition members say that all this is completely wrong. They suggest that something should be done to quench the demand for imports which seems to trouble them so much. New motor cars have been registered in this country at the rate of 1,000 a day in recent years. Here is an example of something that has an import component. Opposition members say that there is something terribly wrong about this and that something should be done about it. What do they suggest should be done? Do they suggest that the wage-earners who are buying 1,000 new motor cars a day should be put out of work? That is the only conclusion that follows from the analysis made by the honorable member for Yarra.

What has the Australian Labour Party come to when its members who sit in this place as representatives of the people denounce the Government's proposals to safeguard labour and industry in this country and to preserve the well-being of the nation, and say that something ought to be done to reduce the capacity of the Australian people to obtain the good things of life? I am astonished to hear this sort of thing from members of the Australian Labour Party, and I think that the party will live to regret the attitude that its members have taken here to-day.

The honorable member for Yarra said that some one was told that he could not buck the machine. Why is the honorable member in this Parliament now? He is here because his predecessor could not buck the Labour machine. Yet he talks about bucking : a machine.


Mr Cairns - Will you tell us something about your machine?


Mr McEWEN - The honorable member ought to deal with his own problems. Where are 'the members of the Australian Labour Party who sought to buck the Labour machine? Where are Vic Johnson and Cyril Chambers? They are not ad-j herents of the Australian Democratic Labour Party, but they had only to say one word against the leader of the Labour machine and out they went. Yet people who support that machine tell us here; that somebody could not buckra machine. What wonderful logic is brought to this place , by Opposition members.

Members of the two Government parties have made speeches which have exhibited confidence in Australia and belief in the growth of the nation - speeches which show that we recognize that growth causes problems and that we are willing to meet new circumstances that have to be dealt with administratively or legislatively as growth proceeds, even though some of the things that have to be done might have been challengeable in earlier days. This is a growing nation, and we on this side of the House have confidence in it and propose to deal with the problems that are created by the very pace of the nation's growth. Indeed, I am proud to say that the growth of this country in recent years has brought with it the problems that rapid growth always brings, whether the growth be that of a nation or of a business. Constructive suggestions have been made by a number of Government supporters, including the honorable member for Wentworth (Mr. Bury), the honorable member for Darling Downs (Mr. Swartz), who is my aide in the administration of the Department of Trade, my colleague, the honorable member for Gwydir (Mr. Ian Allan), and the honorable member for Barker (Mr. Forbes). All have spoken with confidence and with constructive capacity on this.

But from the Opposition side of the House, apart from the oddities of logic which I have already mentioned, we have heard what seem to be two points of principle. One was enunciated by the honorable member for Lalor (Mr. Pollard), who led for the Opposition in this debate, and his line has been followed, by and large, ' by Labour Party speakers who have supported him. His criticism seems to be in two parts. The first is that this is a proposal which, he alleges, will deprive the Parliament of some of its powers, which will place the power to impose what he describes as taxation - and I do not challenge the word - temporarily in the hands of somebody outside the Parliament. He objects to that, and will not have it. He says that it is not necessary. He says that the thing to do, if it is necessary to use a power, is to continue to employ import licensing. I think that that is a fair statement of his views.

I will deal with the two points, but first I remind the House that the honorable member for Scullin (Mr. Peters) takes a completely different line. He makes a broad attack on the Government for pursuing policies which permit the entry to this country of investment from overseas. He resists and denounces policies which involve some overseas borrowings by the Government and some inflow of capital from overseas.

Let me not take too much time to deal with the two things. The basic questions are: Do we want this country to grow fast and strong? Do we want it to have a great industrial base? Do we want to have diversified industries? If we want this country to have a great base to provide work for both our own natural increase and the increase from whatever level of immigration the government of the day may decide on, we have to have factories here. Can they all come from Australian capita] and Australian know-how? I just say to members of this Parliament that I do not believe that the pace at which we want to expand can, be generated entirely from Australian resources. I do not believe that this country has had the capital, the technical know-how and the marketing connexions that would have enabled us. of our own resources, to spend more than £100,000,000 in a few years in the establishment of oil refineries and all the things that flow therefrom - the petro-chemical industries, oil lubricants, the synthetic rubber industry which will grow, and the plastics industry. These are all off-shoots of oil refining as are many more activities which do not come readily to my tongue. They all come from this enormous new enterprise on the Australian scene. We have not, indigenously, the know-how or the resources of capital for these things, and I stand here for the Government and say that we are delighted to have overseas capital and knowledge come into partnership with us here and provide for this country this broadening of the industrial base, this added capacity to provide employment.

The problem of balance of payments has been mentioned at length. The establishment of oil refineries here is important in this respect, because they make a tremendous contribution to our ability to avoid the need to import refined petrol, aviation petrol, lubricating oils, synthetic rubber, plastics, resins and other resources that run like a thread through industry to-day. Who can say how much of our overseas funds is being saved to-day by the fact that we have these great industries, and above all the automotive industry, established in this country. If we had not here the General Motors, Chrysler, Ford and British Motor Corporation interests, does any one think that we would have had an Australian automotive industry of the dimensions we have to-day? Nobody in his right senses would claim that we would have. And, without that great automotive industry, where would be the employment avenues now provided by it? What is the alternative? Is the Labour Party saying that we should do without motor cars made in Australia if they have to be made here by a company whose principal capital, or part of whose capital, comes from overseas? Is that what is suggested, because that is the logical end of what is being argued here by the Opposition? I am sure that no nation, no company and no farmer can expand activities rapidly without reliance on borrowed money.

The honorable member for Scullin (Mr. Peters) spoke vehemently, lucidly, clearly and forcibly on the subject, but I completely dissociate myself and the Government from the thesis he submitted.

Now let us look at the proposition put to us by the honorable member for Lalor, and the criticisms that he levelled. What he says, in short, is this: Here is a problem that probably arises from the slowness and deficiencies of the Tariff Board. To correct that slowness and the deficiencies that he alleges, we are proposing the novel device of authorizing a member of the board to make a report on whether a temporary duty is necessary to hold the line for Australian industry - and in this sense industry means employment. Not only to hold the line but, if necessary, if the Parliament is not in session, to put into operation a holding duty. The honorable member for Lalor makes it clear that the Labour Party would not support that proposal, and the ground stated by him for the Labour Party's opposition to it is that this is an impairment of the prerogatives of the Parliament. It is not, I say to honorable members, any greater an impairment of the prerogatives of the Parliament than has been established by the Parliament many times before. The last occasion on which I spoke in this Parliament on a matter relating to emergency duties was when I proposed, before the negotiations for the Japanese Trade Treaty - and I explained at the time quite clearly why I was doing so - an amendment of the Customs Tariff (Industries Preservation) Act. The section being amended was section 11a. The proposal I brought to the Parliament was that in certain circumstances which would threaten an Australian industry there should be an arbitrary authority on the part of the Executive, which would be exercised through the Department of Customs, to increase the rate of duty.

The Parliament passed the measure. The Labour Party supported it. Why the turnabout now? That happened only three years ago. This is just a proposal completely comparable to that which the Labour Party supported three years ago. There is no novelty in it. For as long as this country has had a Department of Customs there has been power in the hands of the Executive, exercised undoubtedly on the advice of experienced officials in the Department of Customs, to impose an antidumping duty, to revoke a by-law admission or to impose, often, a higher rate of duty, in a procedure which not only can be followed without special sanction by the Parliament, but in relation to which there is no necessity for parliamentary ratification or confirmation of the action taken. There has been for years a complete power given by the Parliament to the Department of Customs which provides that where, in the judgment of an officer of the department, an imported item can be substituted for some other item upon which there is a specific rate of duty or an ad valorem rate of duty, that duty, although not provided in the schedule, may be imposed in full upon the substitute, upon the advice of the officer. That system is known, in the Customs jargon, as gazettal of substitute notices.

There is nothing completely novel in the new procedure. I suppose that the greatest power deputed by Parliament to a person outside the Parliament was the decision of Labour when in office, since supported by this Government, that some one within the central bank could require the trading banks to deposit over £300,000,000 of their money at a nominal rate of interest. That is not done on the decision of the Parliament and it is not brought before the Parliament for ratification. I recall that in the 'thirties we passed a Flour Tax Act for the stabilization of the wheat industry. It authorized the excise on flour to be varied at any time. It was intended to, and in fact did, result in there being an alteration in the rate of excise on flour almost weekly. That was done by a person outside the Parliament and the decision was never subsequently brought before the Parliament. The honorable member for Lalor was assistant to the former Minister for Commerce and Agriculture, Mr. Scully, and later was Minister for Commerce and Agriculture. While he was assistant, the Wool (Contributory Charge) Bill was introduced. It said in most stark language that there would be a percentage levy on the value of wool, as determined by the Minister on the recommendation of the appropriate body.

I do not say that I think it completely proper and desirable that the Parliament should recklessly depute to people outside the Parliament the right to impose obligations on citizens. It has been done rarely but it has been done by both sides of politics for good, explainable and defensible reasons. If we are to take violent objection to some one outside the Parliament placing a duty of 3d., ls. or 2s. a yard upon some textile, are we to take no exception at all to the same Minister or official outside the Parliament having an unrestrained right to forbid the entry of an item? If the principle is that no one outside the Parliament should be able to interfere with the rights of a citizen in a commercial ^transaction, surely it is a vastly greater violation of a citizen's right to tell him that he. can not land in Australia goods that the may already have on a ship on the way to Australia. Yet the Labour Party proposes this as the alternative to the procedure put forward by the Government.

We have examined the alternative, and We say that it is not fair, adequate or practicable of application, nor would it effectively protect Australian industry. We propose that the whole apparatus of the Tariff Board should continue to operate, with some delay - I will say with considered and deliberate delay - as it has operated with great success for many years. It has won admiration in many countries. As honorable members know, it has been my fate

The honorable member for St. George (Mr. Clay) referred in complimentary terms to the protection of the rayon industry. I assure him that I did not, as Minister, ask the Tariff Board to hurry up consideration of the rayon industry. I was asked to do so. but I said that I had such a respect for the independence of the Tariff Board that it would be wrong for me to ask it to give priority of consideration to one issue, although obviously urgent, over another. Various industries have their views as to which is the most urgent matter, and it would be wrong for the politician who happened to hold my portfolio to set himself up as a judge of the most urgent issue. The Tariff Board itself decided that the matter of the rayon industry was urgent and commenced to hurry up the procedures. What was the result? The rayon industry asked the Tariff Board not to hurry too much. Industries, with scores of millions of pounds of investment, that are to have their fate decided must prepare their cases in great detail, and ' they are amongst the first to ask that the procedures of the Tariff Board be not hurried too much.

During my second-reading speech I said that we have now achieved sufficient streamlining in the Tariff Board for me to have confidence that for the future the normal period between the reference of an item and the recommendation of the board will be seven or eight months. I do not think that industry takes exception to that. That is the normal period, but in an emergency when an industry is suddenly threatened by something quite unexpected and devastating, not only is six, seven or eight months too long, but six, seven or eight weeks may be too long. In this situation, we have thought that the right procedure, while preserving the structure of the Tariff Board system, is to refer the matter to a single member of the board, a deputy chairman. He will have the wealth of 40 years' experience of Tariff Board hearings behind him and all the machinery of the Tariff Board to aid him in his investigations. He will be asked to report quickly - in not more than 30 days - whether in his opinion some action ought to be taken. If he decides that action should be taken, the bill requires that, before the Minister shall have power to act, he must refer the matter to the Tariff Board for normal consideration. So it has to get into the machine for normal consideration before the temporary duty can be applied; and then, if the Parliament is not in session, Opposition members say that you should not be allowed to protect an industry. The honorable member for Lalor (Mr. Pollard) faces this quite clearly and says, " Why cannot you call the Parliament into session? " Let me deal reasonably with that. I had a question from a Labour member a couple of days ago about frozen peas, an industry which gives employment to farmers and factory hands and in which money is invested, and there is a demand. Then it suddenly appears that peas are being imported from New Zealand o" the United States of America or somewhere else. I do not know whether it is necessary to take special action on that, but that could well be. I put this fairly to the Parliament: Does the Parliament want to be called into session so that the Minister might make a proposal to it that an emergency duty be imposed on frozen peas? Is that seriously put to me? 1 do not think that can be seriously proposed by any one in this Parliament.

So, if the Parliament is not to be called together, at great expense, to take this kind of action, is no action to be taken until the Parliament normally comes into session? Is that what the Labour Party is saying to Australian industry? If it is saying that, J have enough regard for it to say I do not believe it is doing so with sufficient knowledge; and I believe the Labour Party will realize it is making a mistake in that respect. So, the bill provides that it shallbe possible for the Government to impose a holding duty. Then the bill requires that a matter having first been referred to the Tariff Board, if the Parliament is in session the Minister must table the board's report within seven days, and from that moment the Parliament is completely in control; or, if the Parliament does not happen to be in session, the bill proposes that within seven days of its coming into session such a report must be tabled, and then the Parliament is in full charge.

Let me remind the House how tariffs are normally made to-day. This is the procedure: When the Tariff Board has made a recommendation and the Government has decided to act on it, when the House is in session the appropriate Minister in this House, my colleague the Minister for Air (Mr. Osborne) who represents the Minister for Customs and Excise (Senator Henty), tables a paper, utters a few words and sits down. And from that moment, without a word of debate, the duty is leviable. In all the history of the Parliament the duty has been leviable for many months after that simple action has been taken. 1 have been here for 26 years and have not once seen action taken in the Parliament to initiate debate on the tabling of a tariff measure until the Government of the day listed it for consideration. And I am told that in 60 years there has not been an instance in which the Parliamenthas sought to produce on its own initiative a debate on a tariff issue.

What I am now proposing is a complete safeguard of the prerogatives of Parliament in tariff-making, a preservation which is far in excess of what exists in the United Kingdom, the United States of America or New Zealand but preserving what we believe is best. It has produced around the world admiration of our system of tariff-making.


Mr Crean - But the tariff system is different in the United States of America.


Mr McEWEN - That is true. In the time left to me I will deal with import licensing. Take rayon, for instance. What was done before was done by asking the Japanese Government to act - and it did - in the terms of its treaty; but if rayon from any other country was threatening Australian industry and import licensing had to be resorted to - there are thousands of importers of piece goods into Australia - how would any government know to whom to give licences except on a known structure of import licensing with attendant records and experience? One cannot get the necessary knowledge and experience except out of circumstances of restriction; you cannot get it when there are no restrictions at all. Does the Labour Party propose that import licensing should be used to protect Australian industry on the basis of " first in, best served " - that whoever first lands 8,000,000 yards of rayon in this country gets priority whilst the unfortunate who has his consignment at sea, paid for and perhaps has even contracted to sell his rayon before the axe falls, is to be shut out and not even allowed a chance to sell and recover his investment? That is what the Labour Party is proposing; and I am sure it does not know that that is the essence of what it is proposing. What is best to protect industry and employment in this country, and what will bring us most respect overseas and be most orderly at home, is that which the Government is proposing to do.

Question put -

That the bill be now read a second time.







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