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Tuesday, 2 October 1906

The PRESIDENT - I think that every honorable senator has received a copy.

Senator PLAYFORD - It is a parliamentary paper, and probably honorable senators received copies of it so long ago that they have forgotten all about it. Itis said that we must proceed with due deliberation, but it seems that we have given some honorable senators too full an opportunity to study this report.

Senator Clemons - If we wish to obtain a copy we must go outside the Chamber.

Senator PLAYFORD - The free-trade members of the Commission, consisting of Senator Clemons, Representative Fowler, Representative Fuller, and Mr. G. W. Wamsley, object to this recommendation. Honorable senators will observethat the recommendations I have read are divided into two paragraphs - a and b. In paragraph a, it is proposed that combines and agreements in restraint of trade be declared illegal, and in paragraph a of the report of the free-trade section of the Commission it is urged that that proposal is beyond the limits of the Commission ; then, in paragraph b, it is contended that the recommendation contained in paragraph b of the report of the protectionist section of the Commission that the duty be increased to 25 per cent. is not justified by the evidence.

Senator Clemons - The honorable senator is misreading the report of the freetrade section. Paragraphs a, b, and c of that report do not refer to the corresponding paragraphs in the recommendations of the protectionist section. Paragraphs a, b, and c of ourreport embody our reasons for rejecting certain conclusions derived from the evidence by the protectionist section of the Commission.

Senator PLAYFORD - The two series of paragraphs appear to fit in very well. I was lead astray by the fact that, read in the light I have indicated, these paragraphs appeared to set forth a correct statement of the views of the free-trade section, who urge that the industry is flourishing, and does not require the assistance of an additional duty. The position is that the protectionist mem- bers of the Commission have made recommendations upon which we base this Bill. There are two interesting points that I desire to bring especially under the notice of honorable senators. In the first place, the Bill provides for a fixed, and not for an ad valorem duty on harvesters.

Senator Clemons - Is the Minister going to justify the assessment made by the Minister of Trade and Customs?

Senator PLAYFORD - I do not propose to be drawn aside to a consideration of any act by the Minister of Trade and Customs. I merely intend to point out why, in certain cases, a fixed duty is preferable to an ad valorem one. If possible, it would be better to have nothing but fixed duties, but owing to the different values of articles, ad valorem duties are necessary in certain cases. We might have one article valued at £10, and another of the same trade description worth only £5, and it is clear that in such a case a fixed duty would not work fairly. But where we have to deal with a wellknown article of one type, like that under consideration, a fixed duty may be imposed with great advantage. It saves trouble and annoyance in the valuation of the article for Customs purposes. Honorable senators are aware of the trouble we have already had in connexion with harvesters in this respect. When they were first imported, they were valued at something like £26 for each machine. The importers declared that they were not worth more than that sum, and on that valuation the dutv of 12J per cent, was levied. The ReidMcLean Government raised the valuation to some .£38, and, so far as I know, the importers agreed to that, . and paid duty on the increased valuation without a word of complaint. They were either getting, their goods in unfairly at a valuation of £26, and in that way robbing the Commonwealth, or they were asked to pay an excessive amount of duty on the valuation of £38. As they did not grumble at the increased valuation, it may be assumed that they considered it fair.

Senator Clemons - Thev did not grumble?

Senator PLAYFORD - Not at the valuation of £38.

Senator Clemons - No; they accepted that.

Senator PLAYFORD - Although they had previously declared that the machines were worth only ,£26.

Senator Clemons - And they proved it by sworn evidence.

Senator PLAYFORD - Then why did they accept the valuation of ,£38 ? Subsequently, Sir William Lyne raised the valuation for Customs purposes to about £60.

Senator Clemons - No; to £65.

Senator PLAYFORD - They complained of that, and, I understand, there is a case before the Court in connexion with the matter at the present time. Some of the reasons why a fixed duty is better than an ad valorem duty may be stated in this way : It is a simple, cheap, and convenient method of raising the duty, whilst it prevents fraud in the manipulation of invoices.

Senator Drake - That applies to all articles subject to an ad valorem duty.

Senator PLAYFORD - That is so. ' There is no doubt that the ad valorem duty is vicious in that respect. The fixed duty facilitates) quick delivery and 'passage through the Customs, and its tendency is to encourage the import of the best description of articles, as compared with others. On the other hand, it may be admitted that an ad valorem duty is equitable in its incidence. Where there is a fair valuation of imports, and no manipulation of invoices, the more valuable goods pay the higher duty under the ad valorem system, and it is therefore more equitable in its incidence. It has been found to be most suitable in the majority of cases in all countries where Customs duties are levied for protective purposes, and it has been recommended by the Tariff Commission in preference to any other scheme; but its principal disadvantages are that it offers temptation to fraud by the manipulation of invoices, and tends to encourage the importation of cheaper, and at times inferior, goods, to the exclusion of better and more expensive articles. I have been advised that if honorable senators care to learn the extent to which invoices are manipulated they have only to go to the Customs Department to obtain a considerable amount of information on that exceedingly interesting subject. In my own State, unfortunately, it has recently been discovered that under the Commonwealth, and under the State Government before the Commonwealth took over the Customs Department, trickery of this description was carried on with the result of a loss to the Customs Department of some £26,000. On harvesters, therefore, we prefer a fixed duty to an. ad valorem duty. I turn now to the

Tariff Commission's progress report No. 5, which deals generally with the whole subject of agricultural machinery and implements. I shall direct the attention of honorable senators to the recommendations therein contained, and I propose to make a few quotations from the report. I refer, of course, to the report of the protectionist members of the Commission, so far as the recommendations are concerned, but so far as regards other matters I believe that the free-trade members of the Commission do not disagree with the summing up of the case.

Senator Clemons - How is the honorable senator connecting this with the question of stripper-harvesters?

Senator PLAYFORD - I have finished with the stripper-harvesters for the present. I intend now to refer to the Commission's progress report No. 5 on agricultural machinery and implements. I have finished my quotations from the report dealing with harvesters- I refer honorable senators to the Commission's progress report No. 5. The protectionist members of the Commission, in paragraph 41 of their report, state -

That in submitting this scheme, whilst we have taken into consideration the views and interests of manufacturers who have launched into great and important industrial enterprises, we have not been unmindful of the right of the workers and employes generally, without whose skill, regularity, and reliable labour, these undertakings cannot be carried on, or of the convenience and interests of the farmers and other users of these implements and machines. If we were apprehensive that local manufacturers would gain any advantage or additional security by reason of increased duties, or that the workers would not share in that advantage or security, we would not be parties to any alteration in the Tariff in the proposed direction. In like manner if we believed that this increase would be granted at the expense and to the prejudice of farmers and settlers, we would be equally adverse to any change. We are of opinion that the result will be to reduce importations and increase local production and output, and that the greater the local production and output the less will be the prime factory cost. This is the opinion of the great trusts and combinations against- which Australian industry is now engaged in deadly contest. Such being so, the selling price of these machines and implements will, in our opinion, not necessarily be raised by- reason of the increased duties pronosed. The manufacturers say that they do not "hope or desire to use the increased duties to enable them to raise the price to the consumers. We believe them, and take them at their word.

That is a summing up of the whole position. They believe that the duties should be increased, and that that will not neces sarily mean an increased price to the farmers who use these machines. They believe also that the worker should be safeguarded, and should be insured fair wages for the work he performs for the manufacturer. They say that they believe what the manufacturers told them, and they finish up by saying that they take them at their word. Their recommendations are set forth on page 43, and have been embodied in the Bill, with the exception that fixed rates instead of an ad valorem duty of 25 per cent, have been imposed on stripperharvesters and strippers. On page 43 certain provisos are set out. Of these the first is -

Providing that if the retail or selling price of any implement or machine made in Australia similar to that upon which the additional duty is hereby imposed be raised above such prices ruling in Australia during 1905, the GovernorGeneral may, in pursuance of a joint Address by the Senate and the House of Representatives, suspend the collection of such additional duty upon any machine or implement for such time as may be deemed advisable.

Effect is given to that in clause 4, which enacts that -

If the Governor-General is satisfied that the cash prices at which stripper-harvesters and drills manufactured in Australia are sold exceed the prices hereunder set out, he may, by proclamation, reduce the rate of duty specified in the schedule in respect of stripper-harvesters, but so that the reduction shall not reduce the rate of duty below one-half the rate of duty imposed by this Act.

Then follows a schedule of prices, which, after certain dates, are not to be exceeded. The second proviso reads -

That if the majority of manufacturers of the machines and the implements made in Australia similar to those upon which additional duties are hereby levied do not, after the expiration of one year from the passing of this Act, pay their workmen engaged in making such machines and implements a fair and reasonable rate of wages, the Governor-General may, in pursuance of a joint Address by the Senate and the House of Representatives, affirming that such fair and reasonable wages are not being paid, suspend the collection of such additional duty - upon any machine or implement for such time as may be deemed advisable.

Effect has been given to that by the Excise Bill, which enacts that if any manufacturer is paying unfair rates of wages, the rates of Excise set out in the schedule shall be chargeable on his productions, which will have the effect of lowering the protection which he enjoys bv one-half.

Senator Drake - Is not that unconstitutional ?

Senator PLAYFORD - I do not think so, though I am not a constitutional lawyer. The honorable and learned gentleman has made a study of the Constitution - a fact of which we have had a great deal of evidence of late - so that his opinion may be anticipated with interest. The Excise Bill provides a method of determining what are fair rates of wages, the question ultimately going before a Justice of the High Court if necessary. These two Bills are practically one, and, therefore, I shall have very little to say in moving the second reading of the Excise Bill.

Senator Pearce - Unless the honorable senator agrees to keep this Bill in Committee until the Excise Bill has been dealt with, he will not get it through.

Senator PLAYFORD - I have no objection to treating the two measures as one.

Senator Trenwith - One is the complement of the other.

Senator PLAYFORD - All I ask is that there may not be too great delay. The third proviso of the Tariff Commission is -

Provided that if within two years after the passing of the Act the retail price of stripperharvesters made in Australia has been raised above £81, or if after the expiration of two years from the passing of the Act the retail price of stripper-harvesters made in Australia has not been reduced to £70, the GovernorGeneral may, upon the receipt of a joint Address from the Senate and the House of Representatives certifying to the foregoing effect, by proclamation, suspend the collection of such additional duty of 12½ per cent. for such period as may be deemed advisable.

Effect is given to that proviso by clause 4. The free-trade members of the Commission apparently consider that there should be no alteration of the Tariff, and express their opinion in a report in which they do not say whether they agree or disagree with the provisos which I have read. The last paragraph of their report says -

That the requests, where made, for increased duties are not sustained or justified by weight of evidence, and that any such increase, if made, would be prejudicial to the best interests of the agricultural industry, the continued development of which is necessary to the industry referred to in this report.

We recommend that the present duties be not increased.

They add that certain anomalies will be dealt with in a later report. That report I have not seen. The Bill is the outcome of the report of the protectionist members of the Tariff Commission.

Senator Clemons - We know that; but it is a nice admission to make to declare that the report of half the members of the Commission has been entirely ignored.

Senator PLAYFORD - As the report of one section of the Commission is quite contrary to that of the other section, it was impossible to accept one without ignoring the other.

Senator Givens - What is the good of a Commission if the report of half of its members is to be ignored?

Senator PLAYFORD - The Government had to accept or reject the report of one section.

Senator Clemons - They might have paid attention to the reports of both sections.

Senator PLAYFORD - I do not think that that was possible, seeing that the reports are as opposed as are light and darkness. One section recommends an alteration, and the other says that no alteration is necessary.

Senator Trenwith - The Bill is a compromise ; it does not embody in their entirety therecommendations of either section.

Senator PLAYFORD - It certainly does not give effect to the desire of the manufacturers, which was the imposition of a duty of 25 per cent. on each machine. The Government proposed a duty of £16 each on stripper-harvesters, but that was reduced, on the motion of the honorable member for Barker, to£12 each, which represents something like 25 per cent. on the value of the machines.

Senator Trenwith - That would be £16

Senator PLAYFORD - That is on the value fixed by the Minister of Trade and Customs, which I am not going to say is too high, but which, at all events, is recognised by a good many persons as having that tendency. Therefore, we have reduced the value to a little over£45 or £50.

Senator Clemons - Will not the Minister express his own opinion as to that value ?

Senator PLAYFORD - No; I do not think it is right that I should.

Senator Clemons - But the honorable senator is moving the second reading of this Bill.

Senator PLAYFORD - I am not in a position to say whether my honorable colleague is right or wrong. A case is now before the Court to ascertain whether he is right or not.

Senator Clemons - The matter is before the Senate at the present time.

Senator PLAYFORD - In their report the Tariff Commission say that they believe that the price which was fixed by the Minister of Trade and Customs is too high.

Senator Clemons - Who said that - protectionists and free-traders alike?

Senator PLAYFORD - Yes. The duty which is imposed by the Bill amounts practically to that which the protectionist members of the Tariff Commission recommended, because, so far as I can make out, £12 per machine represents 25 per cent. of the fair invoice value.

Senator Clemons - On the Minister's own showing, it does not, unless he says that the fair invoice value of the machine is£48.

Senator PLAYFORD - I should imagine that it would be about£48. Although I have not gone into the question so completely as has the honorable senator, still I believe it will found that my statement is correct.

Debate (on motion by Senator Clemons) adjourned.

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