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Friday, 15 December 1905

Senator PLAYFORD (South Australia) (Minister of Defence) . - I move -

That the Bill be now read a second time.

When the Customs Tariff Act was before Parliament, the question of the desirability of giving some encouragement to the manufacture of iron and steel from local ores was seriously considered ; and it was, I think, the opinion of the majority that some assistance was advisable, and that the best method was that of bonuses. Accordingly, there was inserted in the Customs Tariff Act what is known as " Division VI. a - Metals and Machinery," which had for its object the granting of bonuses. Throughout the Commonwealth there are extensive and valuable deposits of both coal and iron ore. In New South Wales the deposits of coal and iron are in close proximity, and in Tasmania and South Australia there are also large deposits. At the present time the Broken Hill Proprietary are using iron ore flux in connexion with their operations at a place called Iron Knob, where there is a perfect mountain of ore of high percentage. I am not aware at this moment whether there are any deposits in Queensland.

Senator Drake - There are large deposits in Queensland.

Senator PLAYFORD - I know that iron ore is found in Western Australia, and, indeed, in every other State of the Commonwealth. All communities which have reached a high state of prosperity by means of manufactures have possessed) the advantages of large supplies of native iron and coal. England herself owes her manufacturing supremacy and her prosperity mainly to her wealth of resource in thatrespect, and the same may be said of Belgium and that part of Germany known as Westphalia, where the chief centres of industry are Dusseldorff and Essen. We have similar examples in Pennsylvania and other places in America. At the beginning of Federation it was, as I say, considered that the development of the iron industry could be best assisted by means of bonuses, and!, therefore, when the Customs Tariff Act was before Parliament, Division VI. a, to which I have referred, was inserted. The division reads -

To come into operation on dates to be fixed by proclamation, and exempt from duty in the meantime, except as to iron, galvanized, plate, and sheet. Proclamation to issue so soon as it is certified by the Minister that the manufacture to which the proclamation refers has been sufficiently established in the Commonwealth, according to the provisions of any law relating to bonuses for the encouragement of manufactures or to the establishment of manufactures under the direct control of the Commonwealth or State Governments, but no proclamation to issue except in pursuance of a joint address passed on the motion of Ministersby both Houses of Parliament, stating that such manufacture is sufficiently established.

When the division should come into operation, a variety of iron products, including scrap iron and steel, pig-iron, ingots, blooms, slabs, billets, puddled bars, anc? so forth, had to bear a duty of 10 per cent, ad valorem; but in the meantime, however, all these articles had to be admitted free of duty. Until the manufacture is established so as to supply all the requirements of the Commonwealth, it would be a hardship on manufacturers of machinery to impose a protective duty. A Bill,, known as the Bonus for Manufactures Bill, was introduced by Mr. Kingston, as Minister of Trade and Customs, and read a first time in the session of 1901-2, and a report of Mr. Kingston's speech, in moving the second reading, may be found in Hansard for 27 th May, 1902. On the vote on the second reading, there was twenty-four for, and eighteen against, or a majority of six in favour of the measure. On the motion of Mr. Watson, the Bill was referred to a Select Committee?, consisting of, in addition to the mover, Sir Edward Braddon, Mr. Joseph Cook, Mr. Winter Cooke, Mr. L. E. Groom, Mr. Hughes, Mr. Kirwan, Mr. Mauger, Mr. Watkins, Mr. McCay, and Mr. Fuller. That Committee was appointed on the 2nd September 1902, ,and, if I remember rightly, their report showed that the Committee were divided - four members being in favour of the Bill, and four preferring that the manufacture of iron should be undertaken by the Commonwealth Government, or by the States Governments. The Bill was further considered on the 1 8th October, 1904 - when Mr. Chapman, who was then in charge, related its history. The second reading on that occasion, 9th December, 1904. was carried by twenty-seven votes to six. That was immediately before the prorogation, and the Bill was practically dropped. The trouble was that while some honorable members were of opinion that the bonus should be given without any condition, to either States or private individuals, others confended that the assistance should be confined to a Commonwealth or State enterprise. But there is a section of the Constitution which prevents any enterprise of the kind being entered upon by the Commonwealth; and that, I think, is most unfortunate.

Senator de Largie - The present Prime Minister, when Attorney-General, was of opinion that the Commonwealth Government could undertake the industry for its own purposes.

Senator PLAYFORD - It was, unmistakably, the present Prime Minister's opinion that the Commonwealth had not power to establish' and conduct such industries. It was in regard to the Bonus Bill that Mr. Kingston, the Chairman of the Select Committee, sought the opinion of Mr. Deakin, who was then Attorney-General, and the opinion he gave was to the effect I have indicated, and may be found attached to the report of the Select Committee.

Senator O'Keefe - I understand that Mr. Deakin expressed some doubts about the matter.

Senator PLAYFORD - The opinion given by Mr. Deakin was that the Commonwealth' Government could not undertake the industry except for the supply of Commonwealth requirements.

Senator de Largie - Well, is that not what I said?

Senator PLAYFORD - But is it suggested that the Commonwealth Government should establish ironworks, simply in order to supply the little iron material the Commonwealth, may require?

Senator de Largie - Do not the Governments of Australia consume nine-tenths of the iron used in the Commonwealth ?

Senator PLAYFORD - I am now speaking of the Commonwealth Government, and not of the States Governments. There would be no difficulty about the States Governments entering into such an enterprise; indeed, they have been requested to do so, but have declined.

Senator de Largie - It would be utterly impracticable for any one State to inaugurate the industry, whereas that could easily be done by the Commonwealth Government.

Senator PLAYFORD - Does the honorable senator mean to say that it would be totally impracticable for the Government of New South Wales to inaugurate this industry ? In my opinion, the New South Wales Government could undertake this work without any trouble. However, I do not wish to be drawn into an argument on that phase of the question, but merely desire to explain the principles on which this Bill is based. The 'Government are of opinion that it is utterly futile to attempt the encouragement of the manufacture of iron by means of a bonus ; an attempt to pass a measure with that object not having met with sue- cess. It so happens that at the present time the New South' Wales Government have entered . into an arrangement with a gentleman, Mr. Sandford', to supply all the requirements of, at all events, that State, so far as iron is concerned!. Sir William Lyne has, I believe, had conversations with Mr. Sandiford, and is of opinion that if that division of the Customs Tariff Act, to which I have already called attention, were amended by means of a measure, which, without any reference to a bonus, provided for the imposition of duties under certain conditions, the object we have in view, namely, the encouragement of the industry, could be attained. The duties are to come into operation only when the Minister for Trade and Customs certifies that the manufacture from Australian ore or material is sufficiently established, " and the certificate has been affirmed by joint addresses passed on the motion of Ministers by both Houses of Parliament.""'

Senator Gray - Why should we not wait until Mr. Sandford makes application for this assistance ?

Senator PLAYFORD - Is there any harm in altering the law in such a way as to encourage people to manufacture iron and steel sufficient to supply the requirements of the Commonwealth ? Will not a Bill of this kind encourage investment in the establishment of iron works?

Senator Gray - Why should we trust the Minister, and not the Parliament, to be the judge as to the imposition of the duties.

Senator PLAYFORD - The Bill provides that Parliament shall be the judge,, as shown by the words which I have just quoted! from clause 2. To leave such a matter to the judgment of the Minister would be unwise, and, therefore, it is provided that the certificate of the Minister must be affirmed by both Houses of Parliament. As I have said, all reference to a bonus has been omitted, and the whole matter left to either private enterprise or State enterprise. Parliament will desire to be satisfied that the works have been sufficiently established, and that the output is sufficiently large to supply the wants of the Commonwealth? *

Senator Millen - I understand that the only material alteration in the present law, which is proposed in this Bill, is the omission of all reference to the bonus.

Senator PLAYFORD - That is the material alteration. The Bill contains only two clauses, and provides merely for the repeal of that part of the Customs Tariff

Act which has reference to laws relating, to bonuses 'for the manufacture of iron. It provides that if a State or private individual can prove the establishment of iron works, the output of which is sufficiently large to provide for the wants of the Commonwealth, then, on a motion passed in both Houses, the provisions of Part VI.a of the Tariff can be brought into operation.

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