Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Tuesday, 21 August 1906

Senator MULCAHY (Tasmania) . - I join with Senator de Largie in congratulating the Senate upon the highly intelligent and learned way in which the subject-matter of the Bill has been discussed. We are dealing with a most complex question, and it will be no reflection upon the Seriate, I think; if I suggest- that it is being dealt with in a most complex way. The most able speeches which have been made have certainly been against the Bill. Only Senators Trenwith, McGregor, and Best have really spoken in its favour. The able speeches have been made by those who are strongly opposed to the Bill, and who do not believe that it will do any good, but who are, all the same, going to vote for it. It seems to me that it would be just what one might expect from the tone of the debate, and the action of honorable senators, if Senators Millen and Pulsford were to vote for the Bill, as Senator Dobson, who has just condemned it right and left, has announced his intention to do. I do not propose to support the Bill, because I do not believe that it would accomplish what most of us desire. While I give the Government credit for anticipating a state of things which might arise - not so badly in Australia as perhaps in other countries - I do not think that this Bill would accomplish the purpose for which it has been framed.

Senator Findley - If the Government would propose legislation dealing with matters here and now, and not for the dim and distant future, we could understand their policy.

Senator MULCAHY - Do honorable senators really think that this Bill will achieve the results that we desire?

Senator Playford - Let us try it.

Senator MULCAHY - I should be glad to try it if my common-sense did not convince me against it. The question of trying to prevent monopolies is nothing new to me. Although Senator de Largie was disposed to sneer at an interjection that I made, if he looks up the records of Tasmanian politics, he will find that in our small State there has been no stronger enemy of local monopolies than the senator who is now addressing himself to this Bill.

Senator Findley - Tasmania is the home of monopolies. What about Tattersalls ?

Senator MULCAHY - I never address the Senate and mention Tasmania without Tattersall's being dragged in.

Senator Playford - It is a great blot upon the State.

Senator MULCAHY - If it is a "blot " I have never been ashamed of it. It has always appeared to me that Tasmania has shown her strong common-sense in regulating what we all know it is impossible to prevent.

The PRESIDENT - I hope that the honorable senator will not be led astray by irrelevant interjections.

Senator MULCAHY - In addition to being an anti-monopolist, I am also a protectionist. I believe in doing all that we can by legislative means to encourage production and manufacture in this great country. The possession of a country with such an enormous territory, such varieties of climate, and such vast resources, warrants us in doing everything possible to make it self-contained and self-supporting, providing all that we need within our own borders. There are various ways of accomplishing that purpose. The method that I prefer is the honest and straightforward one of imposing Customs duties on goods such as we can manufacture for ourselves.

Senator Gray - Does the honorable senator mean prohibition?

Senator MULCAHY - No, I mean a reasonable Tariff that will give the Australian manufacturers a fair "show" against outside competition. It may be that high duties will be necessary at the start to enable manufacturers to overcome the initial difficulties. But if the goods came in we should derive revenue from them, and they would be imported in decreasing proportions if we had reasonable protection. Although a protectionist, I am not a prohibitionist ; I am a believer in protection on common-sense lines. I do riot believe in protecting small and insignificant industries. We should deal with the matter in a statesmanlike way, selecting those large industries that will give employment to hundreds and thousands of people, and which are worthy of consideration by Parliament by reason of producing a raw material from the use of which will spring larger manufactures. For that reason I am in favour of protection for the purpose of establishing the iron industry on a firm foundation. I have already said that the Bill is very complex. It is complex because it tries to deal with two things, one of which is really opposed to the other. Strange to say, however, one is very often the result of the other. By means of this: Bill we are going to try by the one measure to kill competition and monopoly. Can we do that by one Act of Parliament? I intend to deal with the measure as a business man who knows something about importing, and to point cut. the difficulties that we have to face. Here I may say that there has been a tendency in our recent "legislation to try to do things that are difficult of accomplishment, and at the same time to hand over too much arbitrary power to the Minister. That practice should be guarded against, and when the Minister is endowed with large powers, as he must be under such a, measure as the Customs Act, he should be scrupulous in exercising them with discretion. Under various Acts, we have given enormous powers to make regulations. The worst feature of this procedure is that there seems to be a disposition to abuse those powers, even to the extent of providing by regulation for something that is unconstitutional, or, at any rate, for something that seems to me to come very near to the border line of unconstitutionality. I am not accustomed to make charges against the Labour Party, but in this respect I must say that there is from time to time a tendency manifested on their part to try to exercise powers which the Constitution has not conferred upon us. When I was speaking in favour of Federation before my constituents in Tasmania, I told them that in everything which was not handed over to the Commonwealth the sovereignty of the States would be preserved. When I see this disposition to assume powers not given to us by the Constitution - as, for instance, when it is proposed by the Labour Party to impose a land tax in order to break up large estates-

The PRESIDENT - Does the honorable senator think that the Labour Party and its proposals have anything to do with this Bill?

Senator MULCAHY - I am giving an illustration of the straining of our constitutional powers.

The PRESIDENT - Nolegislation with regard to land is proposed in this Bill.

Senator MULCAHY - But there are proposals to do certain things that, in my opinion, are not constitutional.

Senator Findley - The Constitution does not say that we shall not impose land taxation.

Senator MULCAHY - The members of the Labour Party should be amongst the strongest upholders of the Constitution because it was adopted by the votes of the people.

Senator O'Keefe - When Parliament does anything unconstitutional, the High Court will pull us up.

Senator MULCAHY - We should do nothing to give the High Court cause to pull us up. There is a proper way to alter the Constitution, if it is desired to assume further power, and we should not endeavour to attain our end in an indirect way. This Bill gives an instance of what I mean. In certain of its provisions we endeavour to deal with hours of labour and conditions of employment.

Senator Findley - That is one of the best features of the Bill.

Senator MULCAHY - The Bill has been drafted by a very astute lawyer, and it seems to me, speaking as a layman, that he has tried to get outside the boundaries of the Constitution in an indirect manner. I totally disapprove of, and shall vote against, any such proposal. When we are dealing with Bills of this character, and representations are made to us by bodies such as Chambers of Commerce, or associations or merchants, we are, I am afraid, apt to treat them very lightly.

Senator Stewart - We do not.

Senator MULCAHY - There is a tendency to do so, and I do not think thatit is justifiable. We should not assume that every man in trade, every importer, every merchant, belongs to a dishonest class, if indeed he is not personally dishonest. We should listen with the greatest respect when men of known integrity, whose characters are above reproach, meet as members of Chambers of Commerce, and make representations to us. I have tried to obtain the opinion of one or two business men regarding this Bill, and wish to read a short extract from a letter from one of the largest warehousemen in this city - a man whose record is absolutely above reproach, a law-abiding, good specimen of the British merchant. He says -

As to monopoly, it is a common thing, in order to avoid undue and unfair competition, for manufacturers to select one or more houses in each State with whom to do business. Although competition with goods of a similar character prevents an inflation of prices, and so prevents detriment to the public, such a method of business would not be allowed under the Bill -

Senator McGregor - Who says so?

Senator MULCAHY - The Bill says so.

Senator McGregor - It says nothing of the kind.

Senator MULCAHY - The honorable senator might as well listen to the context of the letter - as the contracting parties would constitute technically a commercial trust. My firm was approached last week by the representative of a firm of manufacturers giving us the option of being one of four firms who should receive consignments of goods which compete with Australian production, but the condition laid down was that each of the four houses should bind themselves not to sell at less than a given price.

Senator Playford - That is restraint of trade.

Senator MULCAHY - It is done beneficially every day of the week, and honorable senators are aiders and abettors of it. All those who buy Jaeger's underclothing are aiders and abettors of the practice, for that material is the subject of a monopoly, and cannot be sold for less than a certain price. That practice is adopted for the purpose of assuring fair competition and fair profits.

Senator Playford - If the practice is to the detriment of the public, it will be affected by this Bill; if not, it will not be affected by it.

Senator MULCAHY - It is very easy for the Minister to say "if" such and such is the case the Bill will operate, and "if" it is not the case the Bill will not. But what is meant by some of the terms used in this Bill? What, for instance, is meant by " detriment of the public"? Who are the "public" in this regard? The letter from which I quote goes on -

This would manifestly prevent unfair competition with the Australian production ; but we are precluded from entering into such an agreement, because we should become a commercial trust by reason of a common agreement.

Senator Playford - A commercial trust does not come under the purview of this Bill unless it does something injurious to the public.

Senator Sir Josiah Symon - The Bill says that a commercial trust shall be prima facie evidence of unfair competition.

Senator MULCAHY -The honorable senator who introduced this Bill does not seem to understand what it means. Senator Pulsford proved quite clearly last week that the very existence of a trust ipso facto is to be accepted asprima facie evidence of unfair competition under the Bill. Another feature that strikes me is the want of proper definitions. Terms are used, and we are not told what we are to understand by them. The letter from my friendproceeds -

In order to understand the effect of this Bill, two of its terms need to be clearly defined without any vagueness or ambiguity, namely, the words "restraint of trade" and "detriment of the public." If it is to the detriment of the public to pay a higher price than could otherwise be charged, then this Bill, by destroying competition, compels traders to trade to the detriment of the public. We are on the one hand compelled to have regard to the interests of the buying public, but in doing so, any common agreement between two or more separate traders to sell at such a price as will give reasonable remuneration to all concerned in the production and distribution of the goods, becomes an indictable offence under the Bill.

Every one must recognise that in the Bill the Government is trying to do two things that are entirely opposed. Again, what is meant by "Australian industry" ?

Senator Playford - I should imagine that the honorable senator would be able to answer that question.

Senator MULCAHY - But what constitutes an Australian industry under the Bill? Isit an industry employing 10, 100, or 1,000 people?

Senator Playford - We have a tribunal to decide those questions.

Senator MULCAHY - When Senator Playford replies, I should like him to tell us what the draftsman of this Bill considers to be an Australian industry, because the term, if left undefined, will, probably lead to different definitions being given in different places, and to an unequal administration of the law.

Senator Playford - I think the High Court will manage that all right.

Senator Sir Josiah Symon - But there is an appeal from the High Court to the Minister.

Senator Playford - Surely not.

Senator Sir Josiah Symon - Yes, in the dumping clauses. The Government would do better to withdraw the Bill, and reintroduce it with alterations. It will be no credit to them.

Senator Playford - If we do not have a Bill of this sort, it will be found that the people of this community will go in for nationalizing these monopolies.

Senator Findley - Now we know.

Senator Sir Josiah Symon - How do our labour friends like that?

Senator Findley - Now we can understand what the object is - to "dish" the Labour Party.

Senator Playford - Oh, no.

Senator Sir Josiah Symon - The object is to prevent the policy of the Labour Party being carried out.

Senator MULCAHY - The climax is gradually arriving. To make the inconsistency more inconsistent the Labour Party, one and all, ought to vote against the Bill, bearing in view its real object, which has just been confessed by the Minister.

Senator Sir Josiah Symon - The Labour Party are going to vote for the Bill, because it is intended to stop nationalization !

Senator MULCAHY - I do not intend to deal fully just now with many matters which can be more properly discussed in Committee. I should like, however, to say a few words on the question of dumping. First, I desire to know whether it is intended to apply the restrictionslaid down in the Bill to all varieties of imports, or whether certain imports are to be selected, and, if so, on what principle the selection will be made? There seems to be some difference of opinion as to what constitutes dumping. According to the Bill, the importation of any goods which have been bought at a price under thecost of manufacture is to constitute dumping.'' Apparently, it does not matter under what circumstances such materials or goods are bought - if they are bought at a price which is under the cost of manufacture, their importation will constitute dumping. The Bill provides that the competition shall be unfair -

If the imported goods have been purchased abroad by or for the importer, from the manufacturer or some person acting for or in combination with him or accounting to him, at prices greatly below their ordinary cost of production where produced, or market price where purchased :

If that provision is given effect to it will practically stop the importation of a vast quantity of goods which it is very desirable that we should have. I have the strongest objection to Ministers informing us, either in Parliament or by means of some publication, that Bills we pass are not going to be administered in a certain way. Here, for instance, is a statement, published by the authority of the present Minister of ' Trade and Customs, relating to the Commerce Act -

With reference to paragraph 3 above, and similar paragraphs in other sections, it may be observed that it is always the practice of the Department to take a lenient view of any case, and that the Minister would not sanction any attempt to unduly enforce the law to the disadvantage or loss of innocent importers. The surrounding circumstances will always be taken into consideration, and only such evidence will be required as to want of knowledge or intent as should satisfy any reasonable man. It is hoped that it will seldom be found necessary to enforce forfeiture or to prosecute for fine.

Senator McGregor - That is very good of the authorities, is it not?

Senator MULCAHY - It is very good of the Minister of Trade and Customs; but what does the assurance amount to? It means that the Minister of Trade and Customs, after the passing of a Bill, announces that he is not going to do what the Bill says he shall do.

Senator Playford - It means that a Bill will not be administered in an arbitrary or harsh manner.

Senator MULCAHY - Senator Playford and the other members of the Government can only speak for themselves ; they cannot hold office for all time.

Senator Playford - But we believe in the common sense of any gentlemen likely to hold office.

Senator MULCAHY - The present Minister of Trade and Customs might be succeeded by a man with very arbitrary ideas.

Senator Playford - Then he would not be Minister long.

Senator MULCAHY - It is quite imaginable that a certain Mr,. McKay, who is a maker of harvesters, might become a politician, and hold the office of Minister of Trade and Customs, and he might be found to possess very strong views with regard to the importation of certain goods. We know that in business it is the practice, at the end of the season in the old country, to clear out large stocks of goods at low prices. Our season and that of Europe fit in so nicely one with the other that we here are able to make use of stocks which otherwise might prove of great disadvantage to manufacturers, merchants, and tradesmen at home. This is particularly the case in regard to fashionable goods, prepared, it may be, for a summer which turns out to be of a severe nature, or goods may have been manufactured for a certain fashion which has not caught on." This presents an opportunity, which isvery properly taken advantage of by business men, bearing in view the fact that the fashions in Europe are the basis of our fashions in Australia.

Senator McGregor - Does the honorable senator think that in this respect Australia will never get ahead of the old country ?

Senator MULCAHY - It will be a long time before Australia gets ahead of Europe in the matter of fashions; as a matter of fact, even the fashions in the United States are entirely based on those of Europe. Such goods as I have indicated are sometimes bought in very large quantities, and at very low cost, at the end of a season, and one purchaser may be more lucky than another in securing a considerable stock. Under the Bill, however, a lucky buyer of the kind would, on importing the goods to Australia, be liable to have a complaint made against him under the Bill, on the ground that he had purchased the goods at a price greatly below their ordinary cost of production, or below the market price in the country of origin. In some cases, the marketprice may be 100 per cent., or even 150 per cent., higher than that paid by the representative of the importer; but under the Bill the goods could not be sent to Australia without the risk of punishment at the instance of dissatisfied competitors.

Senator McGregor - Not unless the competitor were an Australian manufacturer.

Senator MULCAHY - There must be Australian competitors in such a case.

Senator McGregor - Then they ought to have consideration.

Senator Playford - They ought to be protected against dumping.

Senator MULCAHY - And so they will be considered. The manufacturers themselves are often importers too, and introduce goods to copy the patterns and fashions, and sometimes, under the circumstances, they find it better to bring them in and sell them. On the question of intent, the lawyers have taken opposite views. To me, there is no doubt that " unfair competition " has, in all cases, reference to an Australian industry, the preservation of which may be deemed to be advantageous to the Commonwealth; and in the clause I have already read, we are told that competition shall be deemed to be unfair if the imported goods have been purchased at a price below the ordinary cost of production, and so forth.

Senator Sir Josiah Symon - According to the Bill the competition is unfair if the man who makes similar' goods here does not get enough profit.

Senator MULCAHY - If a man has been fortunate enough to buy at a low price a large stock of jackets or mantles in the old country; and he imports them to Australia, will he not be guilty of unfair competition with intent, in the event of his being able to compete successfully against other traders in Australia? Surely, if a man is proved guilty of unfair competition, it will be assumed that he had the intent to unfairly compete.

Senator Sir Josiah Symon - There would be the intent, at any rate, to undersell the other man.

Senator Playford - There must be the intent to injure or ruin the Australian manufacturer.

Senator MULCAHY - If to undersell is unfair competition, will the intent not be established by the act itself? I think we should help our producers and manufacturers, but we ought to help them in an honest and straightforward way.

Senator Playford - That is what the Bill will do.

Senator MULCAHY - Our business men would then know where they were, and not be subject to harassing interference at the hands of Customs officers, who must very often find it difficult to do their duty, owing to want of knowledge. This Bill is either going to impose an enormous amount of work on the Customs authorities, or, as I predicted of the Commerce Act, it will be a dead letter.

Senator Gray - And a nuisance.

Senator MULCAHY - The Bill will either be a nuisance and embarrassmentto business men, and will be very soon removed from the statute-book, or it will be a dead Act.

Senator Sir Josiah Symon - But the Minister tells us that the Bill will stop the nationalization of industries.

Senator MULCAHY - That is a point on which the Minister, I Rave no doubt, will presently have to render an account. I intend to vote against the Bill, for the reasons I have indicated. We have already placed very heavy obligations on importers, who have to instruct their Home buyers to describe a large amount, of the goods sent out. If the buyer at Home desires to know what sort of description he shall send, the importer is not able to tell him; it is an absolute truth that the importer cannot inform his buyer or agent what he is expected to describe, or how he is to describe it.

Senator Playford - If the buyer described his goods truthfully there would be no trouble.

Senator MULCAHY - The latest proposal is that buyers and agents at Home are to ascertain the actual cost of production, and the market price of goods they send out ; they are to be forbidden to buy any article below the market price at Home, if that article happens to be manufactured in Australia. I shall vote against the Bill, because I believe it will prove impracticable and ineffective, and do more mischief than good.

Suggest corrections